UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from ________ to ________
Commission File Number 1-1822
LACLEDE GAS COMPANY
(Exact name of registrant as specified in its charter)
Missouri 43-0368139
(State of Incorporation) (I.R.S. Employer
Identification Number)
720 Olive Street, St. Louis, Missouri 63101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-342-0500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
17,511,199 shares, Common Stock, par value $1 per share at 2/12/96.
Page 1<PAGE>
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LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
PART I
FINANCIAL INFORMATION
The interim financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. These financial statements should be
read in conjunction with the financial statements and the notes thereto
included in the Company's Form 10-K for the year ended September 30, 1995.
Page 2<PAGE>
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<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
(In Thousands, Except Per Share Amounts)
<CAPTION>
Three Months Ended
December 31,
1995 1994
---- ----
<S> <C> <C>
Utility Operating Revenues $154,981 $122,203
--------------------
Utility Operating Expenses:
Natural and propane gas 88,677 65,467
Other operation expenses 18,339 18,904
Maintenance 4,421 4,581
Depreciation and amortization 6,072 5,830
Taxes, other than income taxes 9,470 9,303
Income taxes (Note 3) 8,313 4,130
--------------------
Total Utility Operating Expenses 135,292 108,215
--------------------
Utility Operating Income 19,689 13,988
Miscellaneous Income and Income Deductions - Net
(less applicable income taxes) (Note 3) 827 162
--------------------
Income Before Interest Charges 20,516 14,150
-------------------
Interest Charges:
Interest on long-term debt 3,312 3,136
Other interest charges 1,466 1,804
--------------------
Total Interest Charges 4,778 4,940
--------------------
Net Income 15,738 9,210
Dividends on Preferred Stock 24 24
--------------------
Earnings Applicable to Common Stock $ 15,714 $ 9,186
====================
Average Number of Common Shares Outstanding 17,466 15,709
Earnings Per Share of Common Stock $ .90 $ .58
Dividends Declared Per Share of Common Stock $.315 $ .31
<FN>
See notes to consolidated financial statements.
</TABLE>
Page 3<PAGE>
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<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
Dec. 31 Sept. 30
1995 1995
---- ----
(Thousands of Dollars)
(UNAUDITED)
ASSETS
<S> <C> <C>
Utility Plant $754,100 $745,629
Less: Accumulated depreciation and amortization 315,801 311,293
--------------------
Net Utility Plant 438,299 434,336
--------------------
Other Property and Investments 22,423 22,744
--------------------
Current Assets:
Cash and cash equivalents 3,003 1,555
Accounts receivable - net 96,600 34,398
Materials, supplies, and merchandise at avg cost 5,394 5,377
Natural gas stored underground for current use
at LIFO cost 37,879 41,629
Propane gas for current use at FIFO cost 13,560 13,566
Prepayments 2,862 1,484
Unamortized purchased gas adjustments 6,685 9,776
--------------------
Total Current Assets 165,983 107,785
--------------------
Deferred Charges 75,498 71,829
--------------------
Total Assets $702,203 $636,694
====================
<FN>
See notes to consolidated financial statements.
</TABLE>
Page 4 <PAGE>
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<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (Continued)
<CAPTION>
Dec. 31 Sept. 30
1995 1995
---- ----
(Thousands of Dollars)
(UNAUDITED)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock (19,332,018 shares issued) $ 19,332 $ 19,285
Paid-in capital 59,302 58,401
Retained earnings 183,796 173,584
Treasury stock, at cost (1,865,638 shares held) (24,017) (24,017)
--------------------
Total common stock equity 238,413 227,253
Redeemable preferred stock 1,960 1,960
Long-term debt (less sinking fund requirements) 179,296 154,279
--------------------
Total Capitalization 419,669 383,492
--------------------
Current Liabilities:
Notes payable 72,000 59,500
Accounts payable 37,655 21,069
Refunds due customers 748 4,110
Advance customer billings 5,262 13,058
Taxes accrued 15,799 8,430
Deferred income taxes 900 167
Other 19,579 21,442
--------------------
Total Current Liabilities 151,943 127,776
--------------------
Deferred Credits and Other Liabilities:
Deferred income taxes 80,479 83,563
Unamortized investment tax credits 7,931 8,018
Other 42,181 33,845
--------------------
Total Deferred Credits and Other Liabilities 130,591 125,426
--------------------
Total Capitalization and Liabilities $702,203 $636,694
====================
<FN>
See notes to consolidated financial statements.
</TABLE>
Page 5 <PAGE>
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<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
December 31,
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net Income $ 15,738 $ 9,210
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,082 5,844
Deferred income taxes and investment tax credits (2,204) 546
Other - net (10) 49
Changes in assets and liabilities:
Accounts receivable - net (62,202) (34,655)
Unamortized purchased gas adjustments 3,091 577
Deferred purchased gas costs 7,637 (771)
Accounts payable 16,586 8,852
Refunds due customers (3,362) (4,301)
Taxes accrued 7,369 (2,062)
Other assets and liabilities (10,574) (2,810)
--------------------
Net cash used in operating activities $(21,849) $(19,521)
--------------------
Investing Activities:
Construction expenditures (9,834) (11,402)
Investments - non-utility 319 (388)
Other (55) (92)
--------------------
Net cash used in investing activities $ (9,570) $(11,882)
--------------------
Financing Activities:
Issuance of short-term debt 12,500 36,500
Dividends paid (5,424) (4,804)
Issuance of first mortgage bonds 25,000 -
Other 791 815
--------------------
Net cash provided by financing activities $ 32,867 $ 32,511
--------------------
Net Increase in Cash and Cash Equivalents $ 1,448 $ 1,108
Cash and Cash Equivalents at Beg of Period 1,555 1,588
--------------------
Cash and Cash Equivalents at End of Year $ 3,003 $ 2,696
====================
Supplemental Disclosure of Cash Paid/(Refunded)
During the Period for:
Interest $7,478 $8,187
Income taxes (2,452) 607
<FN>
See notes to consolidated financial statements.
</TABLE>
Page 6<PAGE>
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LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, this interim report includes all
adjustments (consisting only of normal recurring accruals) necessary
for the fair presentation of the results of the periods covered.
2. The registrant is a natural gas distribution utility having a material
seasonal cycle; therefore, this interim statement of consolidated
income is not necessarily indicative of annual results nor
representative of succeeding quarters of the fiscal year.
3. Net provisions for income taxes were charged (credited) as follows
during the periods set forth below:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------
1995 1994
---- ----
(Thousands of Dollars)
<S> <C> <C>
Utility Operations
Current:
Federal $ 9,002 $ 3,066
State and local 1,513 516
Deferred:
Federal (1,930) 558
State and local (272) (10)
--------------------
Subtotal $ 8,313 $ 4,130
--------------------
Miscellaneous Income and
Income Deductions
Current:
Federal $ 190 $ 72
State and local 22 1
Deferred:
Federal (2) (2)
State and local - -
--------------------
Subtotal $ 210 $ 71
--------------------
Total $ 8,523 $ 4,201
====================
</TABLE>
4. This Form 10-Q should be read in conjunction with the Notes to
Consolidated Financial Statements contained in the Company's 1995 Form
10-K.
Page 7 <PAGE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Earnings for the quarter ended December 31, 1995 were $.90 per share
compared with $.58 per share for the same quarter last year. The increase
in earnings was primarily attributable to higher gas sales arising from
colder weather this quarter. The weather for the quarter was 42% colder
than last year and 2% colder than normal.
Utility operating revenues for the quarter ended December 31, 1995 were
$155.0 million compared with $122.2 million for the quarter ended December
31, 1994. The $32.8 million, or 26.8%, increase was principally due to
higher therms sold and transported (arising from the colder weather) and, to
a lessor extent, increased wholesale gas costs (which are passed on to
Laclede's customers under the Company's Purchased Gas Adjustment Clause).
Therms sold and transported increased by 76.3 million therms, or 27.4%,
above the quarter ended December 31, 1994.
Utility operating expenses for the quarter ended December 31, 1995 increased
by $27.1 million, or 25.0%, above the same quarter last year. Natural and
propane gas expense this quarter increased $23.2 million, or 35.5%, above
last year mainly due to increased volumes purchased for sendout (resulting
from the colder weather) and, to a lessor extent, higher rates charged by
our suppliers. Other operation and maintenance expenses decreased $.7
million, or 3.1%, principally due to reduced pension expense reflecting the
recognition of gains on significant lump-sum settlements, lower charges for
maintenance, and other cost reduction efforts. These decreases were largely
offset by pension credits recorded in the quarter ended December 31, 1994 to
establish a regulatory asset (necessary to reflect pension costs consistent
with the regulatory accounting treatment ordered by Missouri Public Service
Commission Case No. GR-94-220), higher wage rates and other increases in the
costs of doing business. Depreciation and amortization expense increased
4.2% due to additional property. Taxes, other than income taxes, increased
1.8% primarily due to higher gross receipts taxes (reflecting increased
revenues), partially offset by lower property taxes this quarter. The $4.2
million increase in income taxes is principally due to higher taxable
income.
Miscellaneous income and income deductions increased $.7 million due to the
Company's new, non-utility gas marketing efforts through a wholly owned
subsidiary and other variations. The 3.3% decrease in interest expense is
mainly due to reduced interest on refunds due customers, partially offset by
an increase in interest on long-term debt resulting from the issuance of $25
million of 6-1/2% First Mortgage Bonds in November 1995.
Page 8<PAGE>
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On December 15, 1995, the Company filed a rate request with the Missouri
Public Service Commission for a general rate increase which would add $23.8
million to operating revenues on an annual basis. This increase is
necessary to offset generally higher operating costs as well as the added
costs of operating, maintaining, and financing the increased investment in
new facilities the Company has installed since the filing of its last
general rate case in January 1994. By law, the Missouri Commission has up
to eleven months before it must act on this 1995 request, but the Company is
hopeful the Commission will allow new rates to be implemented prior to
November 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's short-term borrowing requirements typically peak during colder
months, principally because of required payments for natural gas made in
advance of the receipt of cash from the Company's customers for the sale of
that gas. Such short-term cash requirements have traditionally been met
through the sale of commercial paper supported by lines of credit with
banks. In January 1996, the Company renewed its primary line of bank credit
under which it may borrow up to $40 million prior to January 31, 1997, with
renewal of any loans outstanding on that date permitted to June 30, 1997.
This, along with a previously obtained $50 million supplemental line of
credit which runs through March 1, 1996 (the supplemental line was increased
to $60 million for one day on November 20, 1995), provides a total line of
credit of $90 million for the 1995-1996 heating season. The Company
anticipates that the supplemental line of credit will be reduced after
March 1, 1996, since seasonal cash needs typically decline at the end of the
heating season. During fiscal 1996 to date, the Company sold commercial
paper aggregating to a maximum of $91.5 million at any one time, but did not
borrow from the banks under the aforementioned agreements. Short-term
borrowings amounted to $67.5 million at January 31, 1996.
On November 16, 1995, the Board of Directors received competitive bids from
various underwriters related to the issuance and sale of $25 million of
First Mortgage Bonds. The Board elected to sell $25 million of First
Mortgage Bonds to the lowest bidder, at an overall cost to the Company of
6.55%. The bonds mature on November 15, 2010. The Bonds were rated AA- by
Fitch, Aa3 by Moody's, and AA- by Standard & Poors, the same ratings
applicable to the Company's then outstanding bonds.
Construction expenditures for the quarter were $9.8 million compared with
$11.4 million for the same period last year.
Capitalization at December 31, 1995 increased $36.2 million since September
30, 1995 and consisted of 56.8% common stock equity, .5% preferred stock
equity and 42.7% long-term debt.
The seasonal effect of the Company's financial position affects the
comparison of certain balance sheet items at December 31, 1995 and at
September 30, 1995 such as Accounts Receivable - Net, Notes Payable, and
Accounts Payable.
Page 9<PAGE>
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LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
Part II
OTHER INFORMATION
Page 10<PAGE>
<PAGE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
Item 1. Legal Proceedings
During the quarter ended December 31, 1995, there were no new
legal proceedings required to be disclosed.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index
(b) Reports on Form 8-K
The Company filed a Form 8-K Report during the quarter
ended December 31, 1995.
Item Reported:
Pursuant to an Underwriting Agreement, effective November
16, 1995 (the "Underwriting Agreement"), Laclede Gas Company
(the "Registrant"), on November 21, 1995, sold to the
Underwriters named on Schedule I attached to the Underwriting
Agreement $25,000,000 aggregate principal amount of its First
Mortgage Bonds, 6 1/2% Series due November 15, 2010 (the
"Bonds"). The Bonds have been issued under a Mortgage and
Deed of Trust, dated as of February 1, 1945, under which
Mercantile Bank of St. Louis National Association is successor
Trustee. Such Mortgage and Deed of Trust had previously been
amended and supplemented and has been further supplemented by
a Twenty-Second Supplemental Indenture, dated as of November
15, 1995 (the "Supplemental Indenture"). The registration
statement on Form S-3 with respect to the First Mortgage Bonds
of the Registrant, including the Bonds (File No. 33-60996),
was filed by the Registrant on April 13, 1993 and declared
effective by the Securities and Exchange Commission on April
21, 1993. Copies of the Underwriting Agreement and the
Supplemental Indenture were attached to the Form 8-K Report as
Exhibits 1.01 and 4.01, respectively.
Financial Statements Filed: None.
Date of Report
(Date of Earliest
Event Reported): November 16, 1995.
Date Report Filed: December 12, 1995.
Page 11<PAGE>
<PAGE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LACLEDE GAS COMPANY
Date: February 9, 1996 G. T. McNeive, Jr.
-------------------
G. T. McNeive, Jr.
Sr. Vice President - Finance
(Authorized Signatory and
Chief Financial Officer)
Page 12 <PAGE>
<PAGE>
Index to Exhibits
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- ------------
10.1 Further Extension dated November 1, 1995 of
Supplemental Line of Credit Agreement dated
October 18, 1993 as amended and/or extended
by letters dated April 18, 1994; August 18,
1994; October 18, 1994; March 1, 1995; May 23,
1995; and September 1, 1995 among Laclede Gas
Company, Chemical Bank, The Boatmen's National
Bank of St. Louis, and Mercantile Bank of St.
Louis National Association 14
27 Financial Data Schedule UT 17
Page 13
November 1, 1995
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Mr. Robert Gillham
The Boatmen's National Bank of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63166-0236
Attention: Mr. Thomas Guyton
Mercantile Bank of St. Louis National Association
Eighth & Locust, 12th Floor
P.O. Box 524
St. Louis, Missouri 63101
Attention: Mr. John A. Holland
Ladies and Gentlemen:
Re: Further Extension of line of credit agreement dated
October 18, 1993, as amended and extended by letters
dated April 18, 1994, August 18, 1994, October 18, 1994,
March 1, 1995, May 23, 1995 and September 1, 1995 among
Laclede Gas Company ("Laclede"), Chemical Bank
("Chemical"), The Boatmen's National Bank of St. Louis
("Boatmen's") and Mercantile Bank of St. Louis National
Association ("Mercantile") (said banks being hereinafter
collectively called the "Banks" and said line of credit
agreement, as thus amended and extended, being
hereinafter called the "Line of Credit Agreement").
This amendatory agreement will confirm our agreement to
further extend the above-referenced Line of Credit Agreement from
November 1, 1995 to March 1, 1996 on the same terms and conditions
set forth in the above-referenced Line of Credit Agreement; subject
only to the terms and modifications expressly set forth in numbered
Paragraphs 1 through 5 below, each of which Paragraphs shall be
effective on November 1, 1995.
Page 14 <PAGE>
<PAGE>
Chemical Bank
The Boatmen's National Bank of St. Louis
Mercantile Bank of St. Louis National Association
November 1, 1995
2
1. Maximum Amounts of Advances. The combined aggregate
principal amount of Advances at any time outstanding from any
Bank under the Line of Credit Agreement shall not, on or after
November 1, 1995, exceed the amount set forth opposite the
name of such Bank below (such Bank's "Maximum Amount"), and
shall be in a combined aggregate principal amount at any time
outstanding which shall not exceed $50 million:
Name of Bank Maximum Amount
Chemical $25,000,000
Boatmen's $12,500,000
Mercantile $12,500,000
2. New Termination Date. The phrase "Termination Date"
as defined in the Line of Credit Agreement is hereby amended
from November 1, 1995 to March 1, 1996. Accordingly, all
references in the Line of Credit Agreement to the Termination
Date shall hereafter refer to March 1, 1996.
3. New Form of Note. Each executed Note in the form of
Exhibit A to the Line of Credit Agreement, as previously
amended, as to which no sums are then due and payable
thereunder shall be returned to Laclede immediately for
cancellation, upon the holder Bank's receipt of an executed
Note to that Bank in the form attached as Exhibit A to this
amendatory agreement.
4. Absence of Material Adverse Change. The making of
Advances under the Line of Credit Agreement as amended by this
letter agreement is also subject to the absence of any
material adverse change since September 30, 1995, in the
financial condition of Laclede.
5. Interest Rate on LIBO Rate Advances; Facility Fee
Rate. The interest rate on LIBO Rate Advances and the
Facility Fee shall remain as specified respectively in
Paragraphs 3 and 4 of the letter of Amendment and Extension
dated August 18, 1994.
6. Ratification of Remainder of Line of Credit
Agreement. Subject only to the amendments expressly set forth
in numbered Paragraphs 1 through 5 above, the Line of Credit
Agreement is hereby ratified, confirmed and approved in all
respects.
Page 15 <PAGE>
<PAGE>
Chemical Bank
The Boatmen's National Bank of St. Louis
Mercantile Bank of St. Louis National Association
November 1, 1995
3
Please indicate your acceptance of this amendment and extension
by signing in the appropriate space below and returning to Laclede
Gas Company the enclosed duplicate of the original of this letter.
This letter may be executed in counterparts, each of which shall be
an original, and all of which when taken together, shall constitute
one agreement which shall amend and extend the Line of Credit
Agreement as hereinbefore provided.
Very truly yours,
LACLEDE GAS COMPANY
By: /s/Vernon O. Steinberg
Name: Vernon O. Steinberg
Title: V.P.-Treas. & Asst. Secy.
Accepted and Agreed to as of
the date first written above.
CHEMICAL BANK
By: /s/John F. Gehebe
Name: John F. Gehebe
Title: Assistant Vice President
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By: /s/Thomas C. Guyton
Name: Thomas C. Guyton
Title: Vice President
MERCANTILE BANK OF ST. LOUIS NATIONAL ASSOCIATION
By: /s/John Holland
Name: John Holland
Title: Vice President
Page 16
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 438,299
<OTHER-PROPERTY-AND-INVEST> 22,423
<TOTAL-CURRENT-ASSETS> 165,983
<TOTAL-DEFERRED-CHARGES> 75,498
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 702,203
<COMMON> 19,332
<CAPITAL-SURPLUS-PAID-IN> 35,285
<RETAINED-EARNINGS> 183,796
<TOTAL-COMMON-STOCKHOLDERS-EQ> 238,413
1,960
0
<LONG-TERM-DEBT-NET> 179,296
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 72,000
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 210,534
<TOT-CAPITALIZATION-AND-LIAB> 702,203
<GROSS-OPERATING-REVENUE> 154,981
<INCOME-TAX-EXPENSE> 8,313
<OTHER-OPERATING-EXPENSES> 126,979
<TOTAL-OPERATING-EXPENSES> 135,292
<OPERATING-INCOME-LOSS> 19,689
<OTHER-INCOME-NET> 827
<INCOME-BEFORE-INTEREST-EXPEN> 20,516
<TOTAL-INTEREST-EXPENSE> 4,778
<NET-INCOME> 15,738
24
<EARNINGS-AVAILABLE-FOR-COMM> 15,714
<COMMON-STOCK-DIVIDENDS> 5,502
<TOTAL-INTEREST-ON-BONDS> 3,312
<CASH-FLOW-OPERATIONS> (21,849)
<EPS-PRIMARY> .90
<EPS-DILUTED> .90
<FN>
Capital-surplus-paid-in is net of $24,017 of treasury stock.
Page 17
</TABLE>
