LACLEDE GROUP INC 
By ST. LOUIS, Jan. 26, 2012 /PRNewswire/ -- The Laclede Group, Inc. (NYSE: LG) today reported consolidated net income for its first quarter ending December 31, 2011 totaling $25.2 million, or $1.12 diluted earnings per share, compared to $23.4 million, or $1.05 per share for the first quarter of fiscal 2011. On a non-GAAP basis, net economic earnings totaled $24.9 million, or $1.11 per share, compared to $23.4 million, or $1.05 per share, for the same quarter last year. A chart of net economic earnings and reconciliation to GAAP follows.
Laclede Energy Resources, Inc. (LER), Laclede Group's non-regulated natural gas commodity service provider, generated the year-over-year increase in earnings, as LER's ongoing cost reduction actions improved margins during the quarter. Laclede Gas also achieved slightly higher earnings.
"The improved earnings for LER reflect our efforts to position ourselves to realize greater margins and acquire additional business through renegotiation and renewal of pipeline transportation contracts during fiscal 2011," said Douglas H. Yaeger, chairman and chief executive officer of The Laclede Group. "Laclede Gas Company also turned in a solid performance for the quarter as it continues its investments to achieve high levels of customer service and operating efficiencies."
RESULTS OF OPERATIONS
Laclede Gas Company
Laclede Gas Company, the Company's core utility subsidiary, reported net income of $21.7 million for the first quarter of fiscal 2012, compared to $21.5 million for the first quarter of fiscal 2011. The higher year-over-year earnings reflected the effect of higher infrastructure system replacement surcharge revenues and lower maintenance costs, partially offset by higher pension and benefit costs. Laclede Gas continues to ramp-up its investment in both distribution system improvements as well as its multi-year effort to replace its major technology platforms, and capital spending for the quarter increased by approximately $2.8 million (or 18.2%) compared to last year.
Laclede Energy Resources
LER reported net income of $3.7 million for the first quarter of fiscal 2012, compared to $1.9 million for the same quarter last year. Net economic earnings totaled $3.4 million for the first quarter of fiscal 2012, compared to $1.9 million for the same quarter last year. The improved results reflected higher margins primarily due to lower transportation costs resulting from the renegotiation of contracts that were renewed during fiscal 2011.
ABOUT THE LACLEDE GROUP
The Laclede Group's earnings are seasonal in nature and generally correspond with the heating season for Laclede Gas Company, its largest subsidiary.
For additional details on The Laclede Group's fiscal 2012 first quarter results, please see the accompanying unaudited Statements of Consolidated Income.
Headquartered in St. Louis, Missouri, The Laclede Group, Inc. is a public utility holding company committed to providing reliable natural gas service through its regulated core utility operations, while engaging in non-regulated activities that provide opportunities for sustainable growth. Its subsidiary, Laclede Gas Company, the regulated operations of which are included in the Regulated Gas Distribution segment, serves approximately 625,000 residential, commercial and industrial customers in St. Louis City and parts of 10 counties in eastern Missouri. Laclede Group's primary non-regulated business, Laclede Energy Resources, Inc., is included within the Non-Regulated Gas Marketing segment. For more information about Laclede Group and its subsidiaries, visit www.TheLacledeGroup.com.
CAUTIONARY STATEMENTS ON FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company's future operating results may be affected by various uncertainties and risk factors, many of which are beyond the Company's control, including weather conditions, governmental and regulatory policy and action, the competitive environment and economic factors. For a more complete description of these uncertainties and risk factors, see the Company's Form 10-K for the year ended September 30, 2011, filed with the Securities and Exchange Commission.
Net Economic Earnings
This news release includes the non-GAAP financial measures of "net economic earnings" and "net economic earnings per share." Management also uses these non-GAAP measures internally when evaluating the Company's performance. Net economic earnings exclude from net income the after-tax impacts of fair value accounting adjustments and other timing adjustments associated with energy-related transactions. These adjustments, which primarily impact LER, include net unrealized gains and losses on energy-related derivatives resulting from the current changes in the fair value of financial and physical transactions prior to their completion and settlement, lower of cost or market inventory adjustments, and realized gains and losses on economic hedges prior to the sale of the physical commodity. Management will also exclude from net income the after-tax costs related to acquisition, divestiture, and restructuring activities, if any. Management believes that excluding these items provides a useful representation of the economic impact of actual settled transactions and overall results of ongoing operations. These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than, GAAP measures such as net income.
Add:
Net Unrealized
(Millions, except Economic Gain Net
per share Earnings (Loss) Net Income Economic Diluted
amounts) (Losses) (1) (Loss) EPS (2) EPS
----------------- -------- ----------- (GAAP) (Non-GAAP) -------
(Non-GAAP) (GAAP)
---------- ------
Quarter Ended
December 31, 2011
Laclede Gas
Company $21.7 $ - $21.7 $0.97 $0.97
Laclede Energy
Resources, Inc. 3.4 0.3 3.7 0.15 0.17
Other (0.2) - (0.2) (0.01) (0.02)
---- --- ---- ----- -----
Total $24.9 $0.3 $25.2 $1.11 $1.12
===== ==== ===== ===== =====
Per Share Amounts
(2) $1.11 $0.01 $1.12
Quarter Ended
December 31, 2010
Laclede Gas
Company $21.5 $ - $21.5 $0.96 $0.96
Laclede Energy
Resources, Inc. 1.9 - 1.9 0.09 0.09
Other - - - - -
--- --- --- --- ---
Total $23.4 $ - $23.4 $1.05 $1.05
===== === === ===== ===== =====
Per Share Amounts
(2) $1.05 $ - $1.05
(1) Amounts presented net of income taxes. Income
taxes are calculated by applying federal, state, and
local income tax rates applicable to ordinary income
to the amounts of unrealized gain (loss) on energy-
related derivative contracts. For the quarter ended
December 31, 2011, the amount of income tax expense
included in the consolidated reconciling item above
is $0.2 million.
(2) Consolidated net economic earnings per share (EPS)
are calculated by replacing consolidated net income
with consolidated net economic earnings in the GAAP
diluted EPS calculation.
Note: EPS amounts by company represent contributions
to Laclede Group's consolidated EPS.
STATEMENTS OF CONSOLIDATED INCOME-UNAUDITED
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
Three Months Ended
------------------
December 31
-----------
2011 2010
---- ----
OPERATING REVENUES
Regulated Gas Distribution $250,902 $277,443
Non-Regulated Gas Marketing 158,588 166,408
Other 1,423 351
----- ---
Total Operating Revenues 410,913 444,202
------- -------
OPERATING EXPENSES
Regulated Gas Distribution
Natural and propane gas 146,751 173,365
Other operation expenses 37,565 34,862
Maintenance 5,308 6,140
Depreciation and amortization 10,089 9,638
Taxes, other than income taxes 14,667 15,748
------ ------
Total Regulated Gas Distribution
Operating Expenses 214,380 239,753
Non-Regulated Gas Marketing 152,559 163,353
Other 869 345
--- ---
Total Operating Expenses 367,808 403,451
------- -------
Operating Income 43,105 40,751
------ ------
Other Income and (Income
Deductions) -Net 1,939 1,845
----- -----
Interest Charges:
Interest on long-term debt 5,739 5,942
Other interest charges 575 744
--- ---
Total Interest Charges 6,314 6,686
----- -----
Income Before Income Taxes 38,730 35,910
Income Tax Expense 13,556 12,541
Net Income $25,174 $23,369
======= =======
Weighted Average Number of Common
Shares Outstanding:
Basic 22,193 22,041
Diluted 22,263 22,120
Basic Earnings Per Share of Common
Stock $1.13 $1.05
Diluted Earnings Per Share of
Common Stock $1.12 $1.05
SOURCE The Laclede Group, Inc.
