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 June 30, 1996
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.
17,557,540 shares, Common Stock, par value $1 per share at 8/13/96.
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>
<PAGE>
<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
(In Thousands, Except Per Share Amounts)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Utility Operating Revenues $86,022 $67,598 $487,596 $381,428
----------------- ------------------
Utility Operating Expenses:
Natural and propane gas 43,241 28,487 285,691 203,873
Other operation expenses 20,301 19,156 63,202 60,971
Maintenance 4,366 4,267 13,799 13,369
Depreciation and amortization 6,223 5,954 18,434 17,679
Taxes, other than income taxes 9,620 9,391 37,515 33,988
Income taxes (Note 3) (823) (1,811) 20,971 12,943
----------------- ------------------
Total Utility Operating Expenses 82,928 65,444 439,612 342,823
----------------- ------------------
Utility Oper Income - Distribution 3,094 2,154 47,984 38,605
Other Utility Operating Income -
Off System Sales - Net (less
applicable income taxes)(Note 3) - - 2,017 -
----------------- ------------------
Total Utility Operating Income 3,094 2,154 50,001 38,605
Miscellaneous Income and Income
Deductions - Net (less
applicable income taxes) (Note 3) 621 163 2,996 944
----------------- ------------------
Income Before Interest Charges 3,715 2,317 52,997 39,549
----------------- ------------------
Interest Charges:
Interest on long-term debt 3,542 3,136 10,396 9,408
Other interest charges 572 1,152 3,221 4,833
----------------- ------------------
Total Interest Charges 4,114 4,288 13,617 14,241
----------------- ------------------
Net Income (399) (1,971) 39,380 25,308
Dividends on Preferred Stock 24 24 73 73
----------------- ------------------
Earnings Applicable to Common Stock $ (423) $(1,995) $ 39,307 $ 25,235
================= ==================
Average Number of Common
Shares Outstanding 17,558 16,487 17,512 15,982
Earnings Per Share of Common Stock $(.02) $(.12) $2.24 $1.58
Dividends Declared Per Share
of Common Stock $.315 $.31 $.945 $.93
<FN>
See notes to consolidated financial statements.
</TABLE>
Page 3<PAGE>
<PAGE>
<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
Jun. 30 Sept. 30
1996 1995
---- ----
(Thousands of Dollars)
(UNAUDITED)
ASSETS
<S> <C> <C>
Utility Plant $773,181 $745,629
Less: Accumulated depreciation and amortization 324,113 311,293
--------------------
Net Utility Plant 449,068 434,336
--------------------
Other Property and Investments 22,432 22,744
--------------------
Current Assets:
Cash and cash equivalents 5,237 1,555
Accounts receivable - net 47,669 34,398
Materials, supplies, and merchandise at avg cost 5,749 5,377
Natural gas stored underground for current use
at LIFO cost 23,196 41,629
Propane gas for current use at FIFO cost 10,581 13,566
Prepayments 2,487 1,484
Unamortized purchased gas adjustments 219 9,776
Deferred income taxes 2,989 -
Delayed customer billings 13,613 -
--------------------
Total Current Assets 111,740 107,785
--------------------
Deferred Charges 81,883 71,829
--------------------
Total Assets $665,123 $636,694
====================
<FN>
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (Continued)
<CAPTION>
Jun. 30 Sept. 30
1996 1995
---- ----
(Thousands of Dollars)
(UNAUDITED)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Capitalization:
Common stock (19,423,178 shares issued) $ 19,423 $ 19,285
Paid-in capital 61,235 58,401
Retained earnings 196,342 173,584
Treasury stock, at cost (1,865,638 shares held) (24,017) (24,017)
--------------------
Total common stock equity 252,983 227,253
Redeemable preferred stock 1,960 1,960
Long-term debt (less sinking fund requirements) 179,329 154,279
--------------------
Total Capitalization 434,272 383,492
--------------------
Current Liabilities:
Notes payable 12,000 59,500
Accounts payable 24,691 21,069
Refunds due customers 1,347 4,110
Advance customer billings - 13,058
Taxes accrued 22,025 8,430
Other 18,249 21,609
--------------------
Total Current Liabilities 78,312 127,776
--------------------
Deferred Credits and Other Liabilities:
Deferred income taxes 76,958 83,563
Unamortized investment tax credits 7,756 8,018
Other 67,825 33,845
--------------------
Total Deferred Credits and Other Liabilities 152,539 125,426
--------------------
Total Capitalization and Liabilities $665,123 $636,694
====================
<FN>
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
June 30,
1996 1995
---- ----
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net Income $ 39,380 $ 25,308
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 18,475 17,719
Deferred income taxes and investment tax credits (12,748) 1,778
Other - net 55 434
Changes in assets and liabilities:
Accounts receivable - net (13,271) 4,278
Unamortized purchased gas adjustments 9,557 1,620
Deferred purchased gas costs 33,149 2,062
Delayed customer billings - net (26,671) (7,210)
Accounts payable 3,622 (298)
Refunds due customers (2,763) (24,217)
Taxes accrued 13,595 6,131
Natural gas stored underground 18,433 28,751
Other assets and liabilities (8,322) (10,425)
--------------------
Net cash provided by operating activities $ 72,491 $ 45,931
--------------------
Investing Activities:
Construction expenditures $(32,231) $(33,783)
Investments - non-utility 104 (241)
Other (462) (156)
--------------------
Net cash used in investing activities $(32,589) $(34,180)
--------------------
Financing Activities:
Repayment of short-term debt $(47,500) $(28,000)
Issuance of common stock 2,972 31,241
Dividends paid (16,491) (14,605)
Issuance of first mortgage bonds 25,000 -
Other (201) -
--------------------
Net cash used in financing activities $(36,220) $(11,364)
--------------------
Net Increase in Cash and Cash Equivalents $ 3,682 $ 387
Cash and Cash Equivalents at Beginning of Period 1,555 1,588
--------------------
Cash and Cash Equivalents at End of Period $ 5,237 $ 1,975
====================
Supplemental Disclosure of Cash Paid
During the Period for:
Interest $15,669 $16,755
Income taxes 19,399 4,760
<FN>
See notes to consolidated financial statements.
</TABLE>
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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 the succeeding quarter of the fiscal year.
3. Income Taxes
Net provisions for income taxes were charged (credited) as follows
during the periods set forth below:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Utility Operations
Current:
Federal $ (880) $(6,880) $29,764 $ 9,554
State and local (159) (1,170) 4,992 1,605
Deferred:
Federal 136 5,301 (10,834) 1,492
State and local 80 938 (1,694) 292
------------------ -----------------
Subtotal $ (823) $(1,811) $22,228 $12,943
------------------ -----------------
Miscellaneous Income and
Income Deductions
Current:
Federal $ (207) $ (91) $ 503 $ 254
State and local (17) (1) 74 31
Deferred:
Federal (122) (2) (191) (5)
State and local (18) - (29) (1)
------------------ -----------------
Subtotal $ (364) $ (94) $ 357 $ 279
------------------ -----------------
Total $(1,187) $(1,905) $22,585 $13,222
================== =================
</TABLE>
4. The Company and the EPA have determined that manufactured gas residuals
are present at one of the former manufactured gas plant sites operated
by the Company. While no conclusion has been reached as to the extent
of any remedial action that will be required, the Company and the EPA
have entered into an Administrative Order on Consent (AOC), effective
March 31, 1994, with regard to this site. The AOC provides for the
Company to conduct certain investigative activities (i.e., a removal
Page 7<PAGE>
<PAGE>
site evaluation and an engineering evaluation cost analysis), and to
reimburse the EPA for response costs under the AOC. The AOC requires
only investigations and does not cover any removal action. If remedial
action is necessary, then a subsequent order will cover such action.
The investigative activities required by the AOC have been completed
and, on July 31, 1995, the Company submitted a draft removal site
evaluation report to the EPA, which concludes that no further action is
necessary. The EPA has advised that such overall conclusion may be
premature because the Company's report does not contain a full
characterization of the contaminants on certain small areas of the
site. EPA has observed that a limited removal program may be more
reasonable than to continue to characterize these areas in order to
determine any actual degree of risk. Although the Company and the EPA
are further analyzing the site, if the aforementioned limited removal
action is taken, the cost thereof is estimated by the Company to range
from approximately $40,000 to as much as $110,000. The Company is also
seeking the approval of the Missouri Department of Natural Resources
(MoDNR) of the limited removal program. While the MoDNR and the
Company continue to discuss whether there is a need for additional
testing and removal beyond that suggested by the EPA, the cost of any
such additional action is estimated by the Company to range from
$10,000 to $15,000. Based on currently available information, the
costs of any such removal actions, together with EPA oversight costs
and other associated legal, investigation and engineering consulting
costs relating to the site, would likely aggregate approximately
$600,000. At June 30, 1996, $470,000 of such amount has been paid and
the additional $130,000 balance has been reserved by the Company. The
Company has notified its insurers that the Company intends to seek
reimbursement from them of its investigation, remediation, clean-up and
defense costs in regard to the foregoing. In addition to pursuing
insurance proceeds to the extent feasible, the Company also plans to
seek recovery, if practicable, from any other potentially responsible
parties.
In a separate matter, the MoDNR has advised the Company that it
believes that hazardous substances may be present on the site of a
different former manufactured gas plant (which was also used as a site
of a coke facility), which site was sold by the Company in 1950. The
Company has made application to the MoDNR for the placement of that
site in the Missouri environmental remediation program, and has offered
to conduct a preliminary assessment and site evaluation investigation
to determine the nature and extent of any hazardous substances that
may be present on such site. The Company's application has been
accepted by MoDNR, and the Company has entered into an agreement
regarding the investigation and MoDNR oversight costs. In addition,
the MoDNR has conducted some environmental testing on the property.
The Company is in the process of reviewing and analyzing such test
data. The cost of the investigation, including MoDNR oversight costs
and associated legal and engineering consulting costs relating to that
site, is presently estimated by the Company to be approximately
$75,000. At June 30, 1996, $5,000 of such amount has been paid and the
additional $70,000 has been reserved by the Company. The Company has
requested that other former owners and/or operators participate in the
cost of such an investigation, but none has as yet agreed to do so, and
the Company plans to seek reimbursement, if feasible, from such parties
and any other potentially responsible parties, as well as from its
insurers, to the extent practicable.
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 8 <PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the quarter ended June 30, 1996, the Company incurred a loss of $.02
per share compared with a loss of $.12 per share for the comparable quarter
last year. The weather for the quarter was 16% colder than the same
quarter last year and 15% colder than normal. The improvement in earnings
was primarily due to increased gas sales resulting from the colder weather
this quarter compared with the same quarter last year.
Utility operating revenues for the quarter ended June 30, 1996 were
$86.0 million compared with $67.6 million for the quarter ended June 30,
1995. The $18.4 million, or 27.2%, increase was due to higher wholesale
gas costs (which are passed on to Laclede's customers under the Company's
Purchased Gas Adjustment Clause), increased gas sales volumes (arising from
the colder weather) and other variations. Therms sold and transported
increased by 24.6 million therms, or 17.1%, above the quarter ended
June 30, 1995.
Utility operating expenses for the quarter ended June 30, 1996 increased by
$17.5 million, or 26.7%, above the same quarter last year. Natural and
propane gas expense this quarter increased $14.8 million, or 51.8%, above
last year mainly due to higher rates charged by our suppliers and increased
volumes purchased for sendout (resulting from the colder weather). Other
operation and maintenance expenses increased $1.2 million, or 5.3%,
primarily due to increased pension expense reflecting lower gains
applicable to lump sum settlements this quarter, increased pension costs
and higher wage rates. This increase was partially offset by a lower
provision for uncollectible accounts and decreased group insurance charges.
Depreciation and amortization expense increased 4.5% due to additional
property. Taxes, other than income taxes, increased 2.4% primarily due to
higher gross receipts taxes (mainly reflecting increased revenues) largely
offset by lower property taxes this quarter. The $1.0 million increase in
income taxes was principally due to a lower taxable loss.
Interest expense decreased 4.1% compared to the corresponding quarter last
year. The decrease was mainly caused by lower short-term interest expense
because of lower total borrowings and reduced interest on refunds due
customers, but was 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.
Earnings for the nine months ended June 30, 1996 were $2.24 per share
compared with $1.58 per share for the corresponding period last year. The
weather for the nine-month period was 22% colder than last year and 3%
colder than normal. The increase in earnings was primarily due to
increased gas sales resulting from the colder temperatures experienced in
the Company's service area this year. Earnings also benefitted from income
realized due to new non-traditional gas marketing efforts, which commenced
this fiscal year through the Company and its wholly-owned subsidiary,
Laclede Energy Resources, Inc.
Utility operating revenues for the first nine months of fiscal year 1996
increased $106.2 million, or 27.8%, above the corresponding period of
fiscal year 1995. This increase was due to higher gas sales volumes
(arising from the colder weather), higher wholesale gas costs (which are
passed on to our customers under the Company's Purchased Gas Adjustment
Clause) and other minor variations. Therms sold and transported increased
by 163.6 million therms, or 18.7%, above the level experienced during the
nine months ended June 30, 1995.
Utility operating expenses for the nine months ended June 30, 1996
increased by $96.8 million, or 28.2%, above last year. Natural and propane
gas expense during the first nine months of fiscal year 1996 increased
$81.8 million, or 40.1%, above the same period a year ago. This increase
was primarily due to higher volumes purchased for sendout (resulting from
the colder weather) and increased rates charged by our suppliers. Other
Page 9<PAGE>
<PAGE>
operation and maintenance expenses increased $2.7 million, or 3.6%,
principally due to higher net pension costs which resulted partly from
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 the Missouri Public
Service Commission Case No. GR-94-220), higher wage rates and a higher
provision for uncollectible accounts. These increases were partially
offset by the recognition of higher gains on lump-sum pension settlements
and lower group insurance charges. Depreciation and amortization expense
increased 4.3% due to additional property. Taxes, other than income taxes,
increased 10.4% principally attributable to higher gross receipts taxes
(mainly reflecting increased revenues), partially offset by lower property
taxes. The $8.0 million increase in income taxes is mainly due to higher
taxable distribution operating income.
Other utility operating income reflects the Company's new non-traditional
gas marketing efforts which commenced this fiscal year. Miscellaneous
income and income deductions increased $2.1 million primarily due to the
new gas marketing efforts of the Company's wholly-owned subsidiary, Laclede
Energy Resources, Inc. The 4.4% decrease in interest expense is mainly due
to lower short-term interest expense reflecting lower total borrowings and
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.
As noted in our previous report, the Company filed a request with the
Missouri Public Service Commission (MoPSC) on December 15, 1995 seeking
approval of a general rate increase which would add $23.8 million to
operating revenues on an annual basis. A settlement among all active
participants to the proceeding has recently been reached which, among other
things, would allow the Company an annual increase of $9.5 million. The
parties have submitted the settlement to the MoPSC and, if approved, the
increased rates are to be effective on September 1, 1996. In addition, the
settlement provides for a Gas Supply Incentive Plan to be effective October
1, 1996, for a three-year period ending September 30, 1999. Under the
incentive plan, the Company and its customers will share certain gas cost
savings which the Company may be able to realize in connection with the
procurement of gas supply and transportation services. The incentive
mechanism will also apply to the Company's new non-traditional gas
marketing efforts. The Company believes this settlement is reasonable and
anticipates that the new incentive plan will be mutually beneficial to both
share owners and customers.
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 lines 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 ran through March 1, 1996 (the supplemental line was
increased to $60 million for one day on November 20, 1995), provided a
total line of credit of $90 million for the 1995-1996 heating season.
Since seasonal cash needs typically decline at the end of the heating
season, the Company reduced the supplemental line of credit to $15 million
from March 1, 1996 through April 1, 1996. On April 1, 1996, the
supplemental line of credit expired. The Company's total lines of credit is
currently $40 million. The Company plans to obtain an additional
supplemental line of credit shortly, the extent of which has not been
determined at this writing.
During fiscal 1996, 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
$12.0 million at June 30, 1996.
Page 10<PAGE>
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The Company's Shareholder Rights Plan, adopted in 1986, expired on May 1,
1996. The Company decided to keep such protection in place by adopting a
replacement plan. On March 14, 1996, the Company declared a dividend of
one Common Share Purchase Right for each outstanding share of common stock
as of May 1, 1996, each of which common share purchase rights gave the
Rightholder the right to purchase one common share for a purchase price of
$60, subject to adjustment. The rights expire on May 1, 2006, and may be
redeemed by the Company for one cent each at any time before they become
exercisable. The rights will not be exercisable or transferable apart from
the common stock, until ten days after a person or group acquires or
obtains the right to acquire 20% or more of the common stock, or commences
or announces its intention to commence a tender or exchange offer for 20%
or more of the common stock. Following the former event, a right will
entitle its holder to purchase, at the purchase price, the number of shares
equal to the purchase price (initially $60 per share) divided by one-half
of the market price. Alternatively, the Company may exchange each Right
for one share of Company common stock. A total of 17,557,540 rights were
issued on May 1, 1996.
The Company and the EPA have determined that manufactured gas residuals are
present at one of the former manufactured gas plant sites operated by the
Company. While no conclusion has been reached as to the extent of any
remedial action that will be required, the Company and the EPA have entered
into an Administrative Order on Consent (AOC), effective March 31, 1994,
with regard to this site. The AOC provides for the Company to conduct
certain investigative activities (i.e., a removal site evaluation and an
engineering evaluation cost analysis), and to reimburse the EPA for
response costs under the AOC. The AOC requires only investigations and
does not cover any removal action. If remedial action is necessary, then a
subsequent order will cover such action. The investigative activities
required by the AOC have been completed and, on July 31, 1995, the Company
submitted a draft removal site evaluation report to the EPA, which
concludes that no further action is necessary. The EPA has advised that
such overall conclusion may be premature because the Company's report does
not contain a full characterization of the contaminants on certain small
areas of the site. EPA has observed that a limited removal program may
be more reasonable than to continue to characterize these areas in order to
determine any actual degree of risk. Although the Company and the EPA are
further analyzing the site, if the aforementioned limited removal action is
taken, the cost thereof is estimated by the Company to range from
approximately $40,000 to as much as $110,000. The Company is also seeking
the approval of the Missouri Department of Natural Resources (MoDNR) of the
limited removal program. While the MoDNR and the Company continue to
discuss whether there is a need for additional testing and removal beyond
that suggested by the EPA, the cost of any such additional action is
estimated by the Company to range from $10,000 to $15,000. Based on
currently available information, the costs of any such removal actions,
together with EPA oversight costs and other associated legal, investigation
and engineering consulting costs relating to the site, would likely
aggregate approximately $600,000. At June 30, 1996, $470,000 of such
amount has been paid and the additional $130,000 balance has been reserved
by the Company. The Company has notified its insurers that the Company
intends to seek reimbursement from them of its investigation, remediation,
clean-up and defense costs in regard to the foregoing. In addition to
pursuing insurance proceeds to the extent feasible, the Company also plans
to seek recovery, if practicable, from any other potentially responsible
parties.
In a separate matter, the MoDNR has advised the Company that it believes
that hazardous substances may be present on the site of a different former
manufactured gas plant (which was also used as a site of a coke facility),
which site was sold by the Company in 1950. The Company has made
application to the MoDNR for the placement of that site in the Missouri
environmental remediation program, and has offered to conduct a preliminary
assessment and site evaluation investigation to determine the nature and
extent of any hazardous substances that may be present on such site. The
Page 11<PAGE>
<PAGE>
Company's application has been accepted by MoDNR, and the Company has
entered into an agreement regarding the investigation and MoDNR oversight
costs. In addition, the MoDNR has conducted some environmental testing on
the property. The Company is in the process of reviewing and analyzing
such test data. The cost of the investigation, including MoDNR oversight
costs and associated legal and engineering consulting costs relating to
that site, is presently estimated by the Company to be approximately
$75,000. At June 30, 1996, $5,000 of such amount has been paid and the
additional $70,000 has been reserved by the Company. The Company has
requested that other former owners and/or operators participate in the cost
of such an investigation, but none has as yet agreed to do so, and the
Company plans to seek reimbursement, if feasible, from such parties and any
other potentially responsible parties, as well as from its insurers, to the
extent practicable.
The Company, through a non-utility subsidiary, has agreed to finance,
construct and maintain a fast-fill compressed natural gas (CNG) facility
for the Bi-State Development Agency, the operator of the area's mass
transit system. The fast-fill station is the first phase of a planned
four-phase, $4.4 million, CNG fueling facility. When the $1.9 million
first phase is completed in early 1997, it will enable Bi-State to fuel 50
CNG buses within a short time period. Later phases now planned will
increase the capacity of the fueling facility to accommodate the 205-bus
CNG fleet Bi-State plans to be operating in the next decade.
Construction expenditures for the nine months ended June 30, 1996 were
$32.2 million compared with $33.8 million for the same period last year.
Capitalization at June 30, 1996 increased $50.8 million since September 30,
1995 and consisted of 58.3% common stock equity, .4% preferred stock equity
and 41.3% long-term debt.
Page 12<PAGE>
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LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
Part II
OTHER INFORMATION
Page 13<PAGE>
<PAGE>
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
Item 1. Legal Proceedings
During the quarter ended June 30, 1996, there were no new legal
proceedings required to be disclosed. In addition, for discussion
of environmental matters, see Note 4 to the consolidated financial
statements.
Item 2. Changes in Securities
The Shareholder Rights Plan, adopted in 1986, expired on May 1,
1996. The Company decided to keep such protection in place by
adopting a replacement plan. On March 14, 1996, the Company's
Board of Directors declared a dividend distribution of one Common
Stock Purchase Right ("Rights") for each outstanding share of
Common Stock, par value $1.00 per share ( the "Common Stock") of
the Company (other than shares held in the Company's treasury).
The dividend distribution was payable on May 1, 1996 to the
stockholders of record at the close of business on May 1 ,1996.
The dividend distribution was declared subject to and conditioned
upon approval of the Rights by the Missouri Public Service
Commission, which approval was granted effective April 16, 1996.
Except as otherwise provided in the Rights Agreement identified
below, each Right entitles the registered holder to purchase from
the Company one share of Common Stock at the purchase price of $60
per share, subject to adjustment. A description and terms of the
Rights are set forth in a Rights Agreement between the Company and
Boatmen's Trust Company, as Rights Agent, which was filed as an
exhibit to the Form 8-A and to the Form 8-K, each of which was
filed with the Securities and Exchange Commission on April 3,
1996.
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 during the quarter ended June
30, 1996.
Item Reported:
On March 14, 1996, the Board of Directors of Laclede Gas
Company (the "Company") declared a dividend distribution
of one Common Stock Purchase Right (the "Right") for
each outstanding share of Common Stock, par value $1.00
per share (the "Common Stock"), of the Company (other
than shares held in the Company's treasury). The
dividend distribution is payable on May 1, 1996 to the
stockholders of record at the close of business on May
1, 1996. Except as set forth below, each Right entitles
the registered holder to purchase from the Company one
share of Common Stock at a price of $60.00 per share,
subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Company and Boatmen's Trust Company, as Rights Agent
(the "Rights Agent").
Page 14<PAGE>
<PAGE>
Until the earlier of (i) the close of business on the
tenth business day following the public announcement or the
date that a person or group of affiliated or associated
persons (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) (an
"Aquiring Person") has acquired, or obtained the right to
acquire, 20% or more of the outstanding shares of Common
Stock of the Company without the prior express written
consent of the Company executed on behalf of the Company by a
duly authorized officer of the Company following express
approval by action of at least a majority of the members of
the Board of Directors then in office (the "Stock Acquisition
Date"), or (ii) the close of business on the tenth business
day (or such later date as determined by the Board of
Directors but not later than the Stock Acquisition Date)
following the commencement of a tender offer or exchange
offer, without the prior written consent of the Company, by a
person (other than the Company, any subsidiary of the Company
or any employee benefit plan of the Company) which, upon
consummation, would result in such party's control of more
than 20% or more of the Company's voting stock (the earlier
of the dates in clause (i) or (ii) above being called the
"Distribution Date"), the Rights will be evidenced, with
respect to any of the Company's Common Stock certificates
outstanding as of May 1, 1996 (other than shares held in the
Company's treasury), by such Common Stock certificates. The
Rights agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights),
new Common Stock certificates issued after May 1, 1996, upon
transfer, new issuance or issuance from the Company's
treasury of the Company's Common Stock, will contain a
notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), the surrender for transfer of
any of the Company's Common Stock certificates outstanding as
of May 1, 1996 will also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of
business on the Distribution Date and such separate
certificates alone will then evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on May 1, 2006, unless earlier
redeemed or exchanged by the Company, as described below.
The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subvision, combination or reclassification of the
Common Stock, (ii) upon the issuance of Common Stock or
rights to subscribe for shares of Common Stock or securities
convertible into Common Stock at less than the then current
market price of the Common Stock, or (iii) upon the
distribution to the holders of Common Stock of securities
(other than those described in (ii) above), evidences of
indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings).
Page 15<PAGE>
<PAGE>
If any person or group (other than the Company, any
subsidiary of the Company or any employee benefit plan of the
Company) acquires 20% or more of the Company's outstanding
voting stock without the prior written consent of the Board
of Directors, each Right, except those held by such persons,
would entitle each holder of a Right to acquire such number
of shares of the Company's Common Stock as shall equal the
result obtained by multiplying the then current Purchase
Price by the number of shares of Common Stock for which a
Right is then exercisable and dividing that product by 50% of
the then current per-share market price of Company
Common Stock.
If any person or group (other than the Company, any
subsidiary of the Company or any employee benefit plan of the
Company) acquires 20% but less than 50% of the outstanding
Company Common Stock without prior written consent of the
Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one
share of Company Common Stock.
If the company were acquired in a merger or other
business combination transaction where the Company is not the
surviving corporation or where Company Common Stock is
exchanged or changed or 50% or more of the Company's assets
or earnings power is sold in one or several transactions
without the prior written consent of the Board of Directors,
each Right would entitle the holders thereof (except for the
Acquiring Person) to receive such number of shares of the
acquiring company's common stock as shall be equal to the
result obtained by multiplying the then current Purchase
Price by the number of shares of Company Common Stock for
which a Right is then exercisable and dividing that product
by 50% of the then current market price per share of the
common stock of the acquiring company on the date of such
merger or other business combination transaction.
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require
an adjustment of at least 1% in such Purchase Price. No
fractional shares will be issued. In lieu of fractional
shares, an adjustment in cash will be made based on the
market price of the Common Stock on the last trading date
prior to the date of exercise.
The Rights can be redeemed by the Board of Directors for
$.01 per Right at any time prior to the tenth business day
following the Stock Acquisition Date (as defined above).
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and the right to exercise the Rights
will terminate and the only right of the holders of Rights
will be to receive the redemption price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders
of the Rights, including, but not limited to, an amendment to
lower certain thresholds described above to not less than the
greater of: (i) any percentage greater than the largest
percentage of the Voting Power (as defined in the Rights
Agreement) of the Company then known by the Company to be
beneficially owned by any person or group of affiliated or
associated persons (other than an expected person); and (ii)
10%; except that from and after such time as any person or
Page 16<PAGE>
<PAGE>
group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company in certain
circumstances. Accordingly, the existence of the Rights may
deter certain potential acquirors from making certain
takeover proposals or tender offers. The Rights should not
interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be
redeemed by the Company as described above.
The form of Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights, which
includes as exhibit A thereto the form of Right Certificate,
was attached to the Form 8-K Report as Exhibit 1. The
foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the
form of Rights Agreement (and the exhibits thereto).
Financial Statements Filed: None.
Date of Report (Date of Earliest Event Reported):
March 14, 1996.
Date Report Filed: April 3, 1996.
Page 17<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: August 8, 1996 G. T. McNeive, Jr.
-------------------
G. T. McNeive, Jr.
Sr. Vice President - Finance
(Authorized Signatory and
Chief Financial Officer)
Page 18 <PAGE>
<PAGE>
Index to Exhibits
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ------------
27 Financial Data Schedule UT 20
Page 19
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 449,068
<OTHER-PROPERTY-AND-INVEST> 22,432
<TOTAL-CURRENT-ASSETS> 111,740
<TOTAL-DEFERRED-CHARGES> 81,883
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 665,123
<COMMON> 19,423
<CAPITAL-SURPLUS-PAID-IN> 37,218
<RETAINED-EARNINGS> 196,342
<TOTAL-COMMON-STOCKHOLDERS-EQ> 252,983
1,960
0
<LONG-TERM-DEBT-NET> 179,329
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 12,000
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 218,851
<TOT-CAPITALIZATION-AND-LIAB> 665,123
<GROSS-OPERATING-REVENUE> 487,596
<INCOME-TAX-EXPENSE> 20,971
<OTHER-OPERATING-EXPENSES> 418,641
<TOTAL-OPERATING-EXPENSES> 439,612
<OPERATING-INCOME-LOSS> 47,984
<OTHER-INCOME-NET> 5,013
<INCOME-BEFORE-INTEREST-EXPEN> 52,997
<TOTAL-INTEREST-EXPENSE> 13,617
<NET-INCOME> 39,380
73
<EARNINGS-AVAILABLE-FOR-COMM> 39,307
<COMMON-STOCK-DIVIDENDS> 16,549
<TOTAL-INTEREST-ON-BONDS> 10,396
<CASH-FLOW-OPERATIONS> 72,491
<EPS-PRIMARY> 2.24
<EPS-DILUTED> 2.24
<FN>
Capital-surplus-paid-in is net of $24,017 of treasury stock.
Page 20
</TABLE>
