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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 1997
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
Securities registered pursuant to Section 12(b) of the Act:
Name of each stock exchange
Title of each class on which registered
Common Stock - $1 par value New York and Chicago
Common Stock Purchase Rights New York and Chicago
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Preferred Stock - $25 par value
(5% Series B Preferred Stock and
4.56% Series C Preferred Stock)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. (X)
The aggregate market value of the Common Stock of the Company, none of
which is owned by an affiliate, at November 30, 1997 was $452,286,986.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the close of the period covered by this
report. 17,557,540
Incorporated by Reference: Form 10-K Part
Proxy Statement dated December 19, 1997* III
Index to Exhibits is found on page 49.
* The information under the captions "Compensation Committee Report
Regarding Executive Compensation" and "Performance Graph" on
pages 10-12 of the Proxy Statement is NOT incorporated by reference.
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PART I
Item 1. Business
Laclede Gas Company is a public utility engaged in the retail distribution
and transportation of natural gas. The Company, which is subject to the
jurisdiction of the Missouri Public Service Commission, serves the City of
St. Louis, St. Louis County, the City of St. Charles, and parts of St.
Charles, Franklin, Jefferson, St. Francois, Ste. Genevieve, Iron, Madison
and Butler Counties, all in Missouri. As an adjunct to its gas distribution
and transportation business, the Company operates underground natural gas
storage fields and is engaged in the transportation and storage of liquid
propane. The Company has engaged in exploration for and development of
natural gas on a utility and non-utility basis. Certain gas production
sales are subject to the regulation of the Federal Energy Regulatory
Commission. However, essentially all oil and gas properties were sold
during the 1997 calendar year. The Company has also made investments in
other non-utility businesses as part of a diversification program.
NATURAL GAS SUPPLY
Laclede's gas supply strategy continues to have the twofold objective of:
1) ensuring that the gas supplies Laclede acquires are dependable and will
be delivered when needed; and 2) insofar as is compatible with that
dependability, purchasing gas that is reasonably and economically priced.
Laclede obtains the majority of its gas from Gulf Coast and Mid-Continent
producing areas and arranges to have it transported through several
interstate pipelines into the pipeline systems of Mississippi River
Transmission Corporation (MRT) for ultimate delivery to Laclede's service
area. Laclede utilizes firm pipeline transportation capacity, which
connects the pipelines "upstream" of the MRT system to the onshore and
offshore gas-producing basins. During fiscal year 1997, Laclede continued
to release firm transportation capacity to other gas users when Laclede did
not need such capacity for itself and its own customers, a procedure that
has been a source of profit enhancement.
During fiscal 1997, Laclede purchased natural gas from a diverse group of 40
suppliers to meet its current gas sales and storage injection requirements.
Natural gas purchased by Laclede for delivery to the Company's service area
through the MRT system during fiscal 1997 totalled 85.3 billion cubic feet
(Bcf). Another 10.0 Bcf of gas was delivered through Panhandle Eastern
Pipeline Company and Missouri Pipeline Company (MPC) to Laclede take-points
in St. Charles and Franklin Counties. Also, during fiscal 1997, certain
commercial and industrial customers purchased their own gas and delivered
17.6 Bcf of gas for redelivery through Laclede's distribution system.
The fiscal 1997 peak day sendout of 1,082,000 MMBtu of gas occurred on
Friday, January 10, 1997, when the average temperature was 0 degrees
Fahrenheit. This peak day sendout was met by using 599,000 MMBtu of gas
purchased and transported using the MRT system, 248,000 MMBtu of gas
withdrawn from Laclede's storage facilities, 106,000 MMBtu of gas vaporized
through Laclede's propane facilities, 69,000 MMBtu of gas delivered by
Missouri Pipeline Company, and 60,000 MMBtu of gas not owned by the Company
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that was transported for Laclede customers. The Company sold and
transported 1,211.0 million therms of gas this year, an increase of 33.9
million therms from fiscal 1996.
UNDERGROUND NATURAL GAS STORAGE
The Company has a firm storage service agreement with MRT for approximately
23.1 billion cubic feet (Bcf) of allocated storage capacity on MRT's system
located primarily in Unionville, Louisiana. MRT's tariffs provide for
injections into the allocated storage capacity between May 16 through
November 15. The Company must withdraw all but 2.2 Bcf during the November
16 through May 15 period.
The Company supplements flowing pipeline gas with natural gas withdrawn from
its underground storage field located in St. Louis and St. Charles Counties.
The field is designed to provide 357,000 MMBtu of natural gas withdrawals on
a peak day, and annual withdrawals of approximately 5,500,000 MMBtu based on
the inventory level which the Company plans to maintain.
PROPANE SUPPLY
Laclede Pipeline Company, a wholly owned subsidiary, owns and operates a
propane pipeline which connects the parent company's 800,000-barrel
(approximately 33 million gallons) propane storage facilities in St. Louis
County, Missouri, to propane supply terminal facilities located at Wood
River and Cahokia, Illinois. Liquid propane is transported through this
pipeline for delivery to the parent company for storage, to be ultimately
vaporized and used during those periods of operation when the natural gas
supply has to be supplemented to meet the peak demands of the distribution
system. The Company's contract with Phillips Petroleum Company provides for
delivery of up to 35 million gallons of propane annually through March 31,
1999, and year to year thereafter unless terminated by either party.
EXPLORATION AND DEVELOPMENT
In May 1997, the Company completed the sale of essentially all of its
utility and a major portion of its non-utility oil and gas production
properties for $3.3 million, resulting in the recognition of a modest gain.
In November 1997, the remaining non-utility properties were sold. Most of
the properties sold were assets which had originally been acquired during
the 1970s to provide a source of gas for the Company during an era of gas
shortages and curtailments. Laclede has not been very active in oil and gas
exploration and development for a number of years.
The Company's exploration and development activities were segregated into
two distinct functions: utility and non-utility. Under the utility
program, the Company participated in drilling 96 wells over its twenty-six
year span with 52 of the wells being commercially productive. Since 1981,
this program was limited to development activities. Capital expenditures in
recent years have not been significant, amounting to $25,000 in 1997,
$104,000 in 1996, and $(8,000) in 1995, for the utility program.
Beginning in 1981, the Company continued its search for gas and oil
discoveries through Laclede Energy Resources, Inc. (LER), a wholly owned,
non-utility subsidiary, which is the general partner in LIMA Resources
Associates, a limited partnership in which LER holds a 39.6% interest. LIMA
has four limited partners, three of which are subsidiaries of gas
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transportation and/or distribution companies, each holding an interest of
19.8%. The remaining limited partner, a stock brokerage firm, has a 1.0%
interest. Laclede's non-utility exploratory drilling program involved
participation in drilling 92 wells, fifty of which were successfully
completed and forty-two wells which were plugged and abandoned. The
investment in the program changed only slightly during 1997, 1996 and 1995.
LER intends to distribute most of the assets of LIMA to the partners and
dissolve the limited partnership, and to retain a relatively small amount of
cash, as is necessary to satisfy any future liabilities or obligations of
LIMA.
REGULATORY MATTERS
At the federal level, Laclede agreed in June 1997 to a settlement of a rate
case that its principal pipeline supplier, Mississippi River Transmission
Corporation (MRT), had filed with the Federal Energy Regulatory Commission
(FERC) in April 1996. The rates originally filed by MRT would have
increased Laclede's annual gas costs by more than $13 million. However, the
settlement, rather than increasing Laclede's gas costs, actually reduced
Laclede's annual costs by $3 million, beginning in July 1997. The
settlement also resulted in nearly $8 million in refunds to Laclede, plus
interest, for the period of October 1996 through June 1997. These refunds,
as well as MRT's reduced rates, are being passed through to Laclede's
customers.
At the state level, changes in Laclede's Purchased Gas Adjustment (PGA)
Clause were approved by the Missouri Public Service Commission (MoPSC) in
July 1997. Laclede's PGA Clause provides for increases and decreases in
wholesale gas costs to be passed through to the Company's customers.
Beginning in November 1997, Laclede will make only two scheduled PGA
adjustments each year, one for the winter period and one for the summer. In
addition, Laclede may make one unscheduled adjustment during the winter if
significant, unforeseen increases or decreases in gas costs occur. The
Company also is authorized to purchase a limited amount of financial
instruments that could reduce Laclede's cost of gas in the face of any
unusually large gas price increases that may occur during the 1997-1998
winter season. The cost of purchasing these instruments is being recovered
from customers.
Fiscal 1997 also was the first year in which Laclede operated under its Gas
Supply Incentive Plan, which has provided significant benefits for Laclede's
customers and share owners. Under the Incentive Plan, which was approved by
the MoPSC in the settlement of Laclede's last rate case for a three-year
period ending September 30, 1999, Laclede and its customers share in income
from off system sales and in certain gains and losses, as measured against
benchmark levels of gas costs, related to the acquisition of the Company's
gas supply assets. During fiscal 1997, the Company achieved overall gas
cost savings of about $35.0 million, resulting in savings to Laclede's
customers of $27.6 million and contributing about $7.4 million in pretax
income to the Company.
In September 1997, the MoPSC Staff recommended that Laclede refund $3.6
million to the Company's ratepayers in connection with the sale of gas
Laclede made outside of Missouri during fiscal 1996, prior to the approval
of the Gas Supply Incentive Plan described above. Laclede intends to
vigorously oppose the Staff's recommendation.
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During 1997, the MoPSC also formed a roundtable discussion group comprised
of representatives from various segments of the natural gas industry to
discuss issues of emerging importance, including unbundling. Unbundling is
a process that some local distribution companies in certain areas have
undertaken in which small customers, including residential customers, may
purchase their gas supplies from third parties separately, or unbundled,
from the transportation service the local distribution company provides. At
this time, the MoPSC has taken no action on unbundling.
In certain proceedings, the MoPSC has examined the operation of purchased
gas adjustment clauses under which gas distribution utilities, such as the
Company, pass through to customers increases and decreases in the wholesale
cost of natural gas. In January 1996, the MoPSC issued an order in which it
rejected arguments that such clauses were unlawful and affirmed the legality
of such a clause utilized by another utility. In December 1996, the Circuit
Court of Cole County, Missouri upheld the MoPSC's order. The Circuit
Court's decision was subsequently appealed by several parties to the
Missouri Court of Appeals, Western District, where the matter is now
pending. The Company participated in the proceedings before the MoPSC and
the Circuit Court and is currently participating in the appellate
proceedings pending before the Missouri Court of Appeals. Oral argument in
such proceedings was heard on November 5, 1997.
OTHER PERTINENT MATTERS
The business of the Company is subject to a seasonal fluctuation with the
peak period occurring in the winter season.
*****
As of September 30, 1997, the Company had 2,086 employees, which includes 2
part-time employees.
*****
The Company has a labor agreement with Locals 5-6 and 5-194 of the Oil,
Chemical and Atomic Workers International Union, two unions which represent
approximately 70% of the Company's employees. On June 25, 1997, Company and
Union representatives signed a new three-year labor agreement replacing the
prior agreement which was to expire July 31, 1997. The new contract extends
through July 31, 2000. The settlement resulted in wage increases of 2.5% in
all three years, along with lump-sum payment provisions and other benefit
improvements.
*****
The Company's business has monopoly characteristics in that it is the only
distributor of natural gas within its (franchised) service area. The
principal competition is the local electric company. Other competitors in
Laclede's service area include suppliers of fuel oil, coal, liquefied
petroleum gas in outlying areas, and in a portion of downtown St. Louis, a
district steam system. Gas for househeating, certain other household uses,
and commercial and industrial space heating is now being sold by Laclede at
prices generally lower than are charged for competitive fuels and other
energy forms. Coal is competitive as a fuel source for very large boiler
plant loads, but environmental concerns have forestalled any significant
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market inroads. Oil and propane can be used to fuel boiler loads and
certain direct-fired process applications, but these fuels vary widely in
price throughout the year, thus limiting the competitiveness of these fuels.
In certain cases, district steam has been competitive with gas for downtown
area heating users. In the past five years, Laclede has made a net
conversion of 38 steam customers representing approximately 900,000 annual
therms.
Laclede's residential, commercial, and small industrial markets,
representing 90% of sales, remain committed to gas. The Company knows of no
reason why natural gas should not continue generally to have a price
advantage over electricity and other forms of energy in the foreseeable
future. The Company's exposure to price competition is not presently a
substantial factor and exists primarily in the large industrial and
commercial boiler fuel market where coal is the competing form of energy.
Laclede offers gas transportation service to its large user industrial and
commercial customers. The tariff approved for that type of service produces
a margin similar to that which Laclede would have received under its regular
sales rates. The availability of gas transportation service and favorable
spot market prices for natural gas during certain times of the year may
offer additional competitive advantages to Laclede and new opportunities for
cogeneration and large tonnage air conditioning applications.
*****
The Company is subject to various laws and regulations relating to the
environment, which thus far have not had a material effect on the Company's
financial position and results of operations.
In the past, the Company operated various manufactured gas plants which
produced certain by-products and residuals. At the request of the United
States Environmental Protection Agency (EPA), Laclede performed an
investigation of one of the Company's former manufactured gas plant sites
located in Shrewsbury, Missouri (the Shrewsbury Site). As previously
reported by the Company, the Company has had lengthy discussions with the
EPA and the Missouri Department of Natural Resources (MoDNR) on the question
of what additional actions are required for the site. On October 17, 1997,
the Company submitted to the EPA an Engineering Evaluation/Cost Analysis
(EE/CA), together with an accompanying letter (collectively the "Submitted
EE/CA Documents"), in which the Company proposed to maintain various
institutional controls at this site, to stabilize the bank of a drainageway
located at the edge of the site, and to perform a limited removal of some
contaminants located in certain small areas of the site. The EPA and the
MoDNR are currently reviewing the Submitted EE/CA Documents. At this time,
given the lack of final agreement as to what additional actions should be
taken, the ultimate costs to be incurred regarding the Shrewsbury Site
remain unclear. Assuming the Company performs the limited actions described
in the Submitted EE/CA Documents, the Company estimates that the overall
costs will be approximately $740,000. As of September 30, 1997, $541,000 of
such overall costs had been paid, and an additional $199,000 was reserved by
the Company. If the Company is required to take any additional actions with
regard to the site, the Company may have to incur additional costs, the
extent of which cannot practicably be estimated currently. The Company has
notified its insurers that it intends to seek reimbursement from them of its
investigation, remediation, clean-up and defense costs. The Company intends
to seek recovery, if practicable, from any other potentially responsible
parties.
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In a separate matter, MoDNR has accepted the Company's application to place
the site of a different former manufactured gas plant located in the City of
St. Louis, Missouri (which site was also used by subsequent owners as the
site of a coke manufacturing facility) in the Missouri Voluntary Cleanup
Program, for the purpose of characterizing the site. MoDNR's
preliminary tests conducted at the site reflect the presence of coke and gas
plant manufacturing wastes, as well as certain heavy metal wastes. The
Company and MoDNR have agreed upon the scope of the Company's initial
investigation, which consists of the drilling of monitoring wells to assess
the condition of groundwater at this site. The Company currently estimates
that the cost of such investigation, MoDNR oversight costs and associated
legal and engineering consulting costs relative to such investigation of the
site would together approximate $96,000. Currently, $36,000 has been paid
and an additional $60,000 has been reserved on the Company's books. The
City of St. Louis, the current owner of the site, received proposals from
several different groups to develop this site. Various portions of the
development proposals dealt with the issue of the environmental condition of
the site, and the impact of such condition on possible development plans.
Unless and until any development proposal is selected, the Company is unable
to determine the impact, if any, that any proposed development will have on
actions to be taken regarding the site, and the cost of any such actions.
The Company has notified its insurers that the Company intends to seek
reimbursement from them for investigation, remediation, clean-up and defense
costs. The Company has also requested that other former site owners and/or
operators participate in the cost of any site investigation, but none has
yet agreed to do so. The Company plans to seek proportionate reimbursement
of all costs incurred with respect to this site from such parties and/or any
other potentially responsible parties, to the extent practicable.
The Company is presently unable to evaluate or quantify further the scope or
cost of any environmental response activity with regard to the above two
former manufactured gas plant sites.
In the Company's most recent rate case, the Missouri Public Service
Commission approved, effective September 1, 1996, the continued use of a
cost deferral mechanism, originally approved as part of a 1994 rate case
settlement, for the Company's use in applying for appropriate rate recovery
of various environmental costs in connection with former manufactured gas
plants. This authorization will be null and void if the Company does not
file to further adjust its rates by September 1, 1998; and, in any event,
the recovery of costs thus deferred may be challenged in future rate
proceedings.
*****
The Company did not issue any shares of common stock during fiscal year
1997. The Company issued 137,913 shares of its common stock during fiscal
year 1996 under its Dividend Reinvestment and Stock Purchase Plan.
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Customers and revenues contributed by each class of customers for the last
three fiscal years are as follows:
<TABLE>
Revenues $(000)
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Residential $395,250 $376,818 $302,770
Commercial & Industrial 152,222 145,466 109,270
Interruptible 2,098 2,035 1,655
Transportation 13,042 15,375 13,211
Off System and Other Incentive 34,288 11,640 -
Exploration & Development 1,273 856 1,447
Provision for Refunds and Other 4,659 4,266 3,564
-------- -------- --------
Total $602,832 $556,456 $431,917
======== ======== ========
Customers (End of Period) 1997 1996 1995
---- ---- ----
Residential 572,794 569,818 566,421
Commercial & Industrial 37,985 37,735 37,409
Interruptible 16 16 16
Transportation 142 130 129
------- ------- -------
Total 610,937 607,699 603,975
======= ======= =======
</TABLE>
The Company has, or in one instance, will seek to renew, franchises having
initial terms varying from five years to an indefinite duration. In this
regard, it should be noted that the Company will seek to renew its franchise
in Florissant, Missouri, which franchise expired in 1992; and that, since
that time, the Company has continued to provide service in that community
without a formal franchise. All of the franchises are free from unduly
burdensome restrictions and are adequate for the conduct of the Company's
public utility business in the State of Missouri as now conducted.
*****
Laclede Investment Corporation, a wholly owned subsidiary, invests in other
enterprises and has made loans to several joint ventures engaged in real
estate development.
Laclede Energy Resources, Inc. (LER), a wholly owned subsidiary of Laclede
Investment Corporation, continues its non-utility efforts to market natural
gas, which began in fiscal 1996. LER has sold all of its interest in the
oil and gas exploration and development projects in which LER had been
engaged, either directly as a working interest owner, or indirectly as the
general partner of LIMA Resources Associates, L.P. (LIMA). LER intends to
distribute most of the assets of LIMA to the partners and dissolve the
limited partnership, and to retain a relatively small amount of cash, as is
necessary to satisfy any future liabilities or obligations of LIMA.
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Laclede Gas Family Services, Inc., a wholly owned subsidiary of Laclede
Energy Resources, Inc., is a registered insurance agency in the State of
Missouri. It is currently promoting the sale of supplemental
hospitalization, accident, supplemental medicare and life insurance by Life
Insurance Company of North America, Washington National Insurance Company,
Fidelity Security Life Insurance Company and Union Fidelity Life Insurance
Company.
Laclede Development Company (Laclede Development), a wholly owned
subsidiary, participates in real estate development, primarily through joint
ventures. In 1992, Laclede Development filed a lawsuit alleging fraud,
negligent misrepresentation, and other claims against the Resolution Trust
Corporation (RTC) and certain former senior executives of Germania Bank, a
federal savings institution, now in conservatorship (Germania). This suit
arose in connection with Laclede Development's loss on an investment in a
$5.8 million convertible debenture issued by Germania. That lawsuit has
been settled with the RTC, but remains pending against certain individual
defendants.
Laclede Venture Corp., a wholly owned subsidiary of Laclede Development
Company, has a 28.5% interest in the LBP Partnership, a general partnership
which previously engaged in research and development of light beam profiling
technology. There are presently no earnings anticipated from this
partnership investment. Laclede Venture Corp. also offers services for the
compression of natural gas to third parties who desire to use or to sell
compressed natural gas for use in vehicles.
The lines of business which constitute the non-utility activities of the
corporate family are not considered significant as defined.
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Item 2. Properties
The principal utility properties of Laclede consist of approximately 7,722
miles of gas main, related service pipes, meters and regulators. Other
physical properties include regional office buildings and holder stations.
Extensive underground gas storage facilities and equipment are located in an
area in North St. Louis County extending under the Missouri River into St.
Charles County. Substantially all of the Company's utility plant is subject
to the liens of its mortgage.
All of the utility properties of Laclede are held in fee or by easement or
under lease agreements. The principal lease agreements include underground
storage rights which are of indefinite duration and the general office
building. The current lease on the general office building extends through
February 2000 with options to renew for up to 20 additional years.
The non-utility properties of Laclede do not constitute a significant
portion of the properties of the Company.
Item 3. Legal Proceedings
On October 6, 1997, Energy Source, Inc. (Energy Source, Inc. and its
affiliates are hereinafter referred to individually and collectively as
"ESI") filed an amended petition (Amended Petition) in the district court of
Harris County, Texas, in which ESI has named the Company as a party
defendant to certain litigation previously initiated among ESI, Panhandle
Eastern Pipe Line Company (PEPL) and PanEnergy Corporation (PanEnergy) (PEPL
and PanEnergy are hereinafter referred to individually and collectively as
"Panhandle"). ESI previously supplied natural gas to the Company under an
agreement which has expired. The Company selected a different supplier to
furnish gas beyond the expiration date of such agreement. PEPL provided
pipeline transportation services under both the arrangement with ESI and the
Company's new arrangement with the Company's current supplier. In its
Amended Petition, ESI asserts, among other things, that the Company: (a)
allegedly conspired with Panhandle, in violation of the Texas Business and
Commerce Code, in Panhandle's alleged attempt to monopolize certain gas
transportation markets, through unlawful tying arrangements and other anti-
competitive means; and (b) interfered with ESI's contractual arrangements
with Panhandle by misrepresenting to ESI the status of the Company's then
pending negotiations with ESI, and other potential suppliers. Based upon
management's understanding of the relevant facts and circumstances, and its
preliminary review of this Amended Petition, the Company believes that ESI's
claims against the Company are without merit, and that the outcome of this
litigation is not likely to have a material adverse impact on the Company.
Superior Oil Company and Union Pacific Railroad Company (the "Plaintiffs")
recently joined Laclede as an additional defendant, in a lawsuit previously
filed by the Plaintiffs against Allied Signal, Inc. and Monsanto Company.
In this lawsuit the Plaintiffs are seeking contribution from the defendants
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA") for response costs which have been incurred, and
which will be incurred, by the Plaintiffs to remediate contamination at a
site located in St. Louis, Missouri which the Plaintiffs currently own
and/or lease (the "Superior Oil Site"). The Plaintiffs contend that the
three defendants should be held jointly and severally liable for past and
future response costs, in Laclede's case, because: (a) coal tar wastes
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allegedly are and have been migrating onto the Superior Oil Site from an
adjacent site, which is the former location of one of Laclede's gas
manufacturing plants; and (b) Laclede allegedly previously arranged for the
disposal of coal tar wastes at the Superior Oil Site through the operations
of Barrett Manufacturing Company (the predecessor in interest of Allied
Signal, Inc.). The Superior Oil Site is also the subject of a separate
CERCLA lawsuit filed by the U.S. Environmental Protection Agency (EPA)
against the Plaintiffs and several other potentially responsible parties.
Laclede is not a party to the lawsuit initiated by the EPA and has never
been named by the EPA as a responsible party at the Superior Oil Site. The
Superior Oil Site is contaminated with dioxin, which has been identified in
site investigation reports as the main contaminant of concern at the
Superior Oil Site. There has been no allegation that Laclede generated or
arranged for disposal of any dioxin. Based upon the information currently
available to Laclede, Laclede believes that if Laclede is found to have
contributed at all to the contamination at the Superior Oil Site, Laclede's
share of the liability for response costs applicable to the Superior Oil
Site would be relatively small. Accordingly, such liability should have no
material adverse impact on Laclede's financial condition or results of
operations. Laclede intends to defend vigorously the lawsuit in which it
has been named a party. See also the final unnumbered paragraph of the
discussion of environmental matters contained in Part I, Item 1, Business,
Other Pertinent Matters, which unnumbered paragraph deals with appropriate
rate case recovery of various environmental costs.
The entirety of the environmental discussion referred to in the immediately
preceding unnumbered paragraph also contains a discussion of various
additional environmental matters regarding primarily two other former
manufactured gas plant sites.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal year 1997.
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EXECUTIVE OFFICERS OF REGISTRANT
Name, Age, and Position with Company Appointed (1)
R. C. Jaudes, Age 63
Chairman of the Board and Chief Executive Officer December 1, 1997
Chairman, President and Chief Executive Officer January 27, 1994
President and Chief Executive Officer August 1, 1991
President and Chief Operating Officer October 1, 1990
Executive Vice President -
Operations and Marketing July 1, 1989
D. H. Yaeger, Age 48
President and Chief Operating Officer December 1, 1997
Executive Vice President - Operations and
Marketing September 1, 1995
Senior Vice President - Operations, Gas
Supply and Technical Services January 27, 1994
Vice President - Operations, Gas Supply
and Technical Services September 1, 1992
Vice President - Planning December 1, 1990
D. L. Godiner, Age 64
Senior Vice President - General Counsel
and Secretary January 24, 1991
Vice President - General Counsel and Secretary September 1, 1990
R. M. Lee, Age 56
Senior Vice President - Administrative Services September 1, 1995
Senior Vice President - Marketing January 27, 1994
Vice President - Marketing January 22, 1987
G. T. McNeive, Jr., Age 55
Senior Vice President - Finance and Chief
Financial Officer September 1, 1995
Vice President - Associate General
Counsel January 27, 1994
Assistant Vice President - Associate
General Counsel September 1, 1992
K. J. Neises, Age 56
Senior Vice President - Gas Supply and
Regulatory Affairs September 1, 1995
Senior Vice President - Federal Regulatory
Affairs January 27, 1994
Vice President - Federal Regulatory Affairs October 27, 1988
J. G. Hofer, Age 60
Vice President - Operations July 1, 1992
M. E. McMillian, Age 51
Vice President - Human Resources September 22, 1983
J. Moten, Jr., Age 56
Vice President - Community Relations January 27, 1994
(Director of Community Affairs/Conservation) November 1, 1986
P. J. Palumbo, Age 52
Vice President - Industrial Relations September 1, 1992
12<PAGE>
<PAGE>
R. L. Russell, Age 60
Vice President - Marketing February 1, 1997
(Director of Marketing) September 1, 1995
(General Sales Manager) October 1, 1994
(Director of Market Development) October 1, 1993
(Director of Operations - MoNat Division) March 1, 1985
R. L. Krutzman, Age 51
Treasurer and Assistant Secretary February 1, 1996
(Manager, Tax and Payroll) February 1, 1992
( ) Indicates a non-officer position.
(1) Officers of Laclede Gas Company are normally reappointed at the Annual
Meeting of the Board of Directors in January of each year "to serve
for the ensuing year and until their successors are elected and
qualify".
Part II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
The Company's common stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange. At September 30, 1997, there were 10,551 holders of
record of the Company's common stock.
<TABLE>
Common Stock Market and Dividend Information
<CAPTION>
Price Range Dividends
Fiscal 1997 High Low Declared
- --------------------------------------------------------
<S> <C> <C> <C>
1st Quarter 24-7/8 22-1/4 $.325
2nd Quarter 24-5/8 20-7/8 $.325
3rd Quarter 23-1/8 20-1/4 $.325
4th Quarter 24-5/8 21-5/8 $.325
</TABLE>
<TABLE>
<CAPTION>
Price Range Dividends
Fiscal 1996 High Low Declared
- --------------------------------------------------------
<S> <C> <C> <C>
1st Quarter 23-1/8 19-5/8 $.315
2nd Quarter 24-1/4 20 $.315
3rd Quarter 24-3/8 21-1/4 $.315
4th Quarter 24-3/4 20-3/4 $.315
</TABLE>
13<PAGE>
<PAGE>
<TABLE>
Item 6. Selected Financial Data
<CAPTION>
Fiscal Years Ended September 30
(Thousands Except Per Share 1997 1996 1995 1994 1993
Amounts) ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Summary of Operations
Utility Operating Revenues $602,832 $556,456 $431,917 $523,866 $503,948
------------------------------------------------
Utility Operating Expenses:
Natural and propane gas 353,810 316,476 221,423 308,515 291,057
Other operation expenses 90,712 84,844 80,573 84,906 81,027
Maintenance 18,205 18,127 17,508 18,351 16,693
Depreciation & amortization 25,884 25,009 23,676 19,332 18,704
Taxes, other than
income taxes 46,534 44,987 40,529 42,627 41,061
Income taxes 17,962 18,603 9,878 12,517 14,997
------------------------------------------------
Total utility operating
expenses 553,107 508,046 393,587 486,248 463,539
------------------------------------------------
Utility Operating Income 49,725 48,410 38,330 37,618 40,409
Allowance for Funds Used
During Construction 367 17 247 203 186
Miscellaneous Income and
Income Deductions - Net 1,462 2,344 851 790 785
------------------------------------------------
Income Before Interest
Charges 51,554 50,771 39,428 38,611 41,380
------------------------------------------------
Interest Charges:
Interest on long-term debt 14,169 13,939 12,544 12,626 14,415
Other interest charges 4,919 4,008 5,983 3,768 1,798
------------------------------------------------
Total interest charges 19,088 17,947 18,527 16,394 16,213
------------------------------------------------
Net Income 32,466 32,824 20,901 22,217 25,167
Dividends on Preferred Stk 97 97 97 97 97
------------------------------------------------
Earnings Applicable to
Common Stock $ 32,369 $32,727 $ 20,804 $ 22,120 $ 25,070
================================================
Earnings Per Share of
Common Stock $1.84 $1.87 $1.27 $1.42 $1.61
================================================
</TABLE>
14<PAGE>
<PAGE>
<TABLE>
Item 6. Selected Financial Data
<CAPTION>
Fiscal Years Ended September 30
(Thousands Except Per Share 1997 1996 1995 1994 1993
Amounts) ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Dividends Declared-
Common Stock $ 22,825 $ 22,079 $ 20,538 $ 19,054 $ 18,938
Dividends Declared Per
Share of Common Stock $1.30 $1.26 $1.24 $1.22 $1.215
Utility Plant
Gross Plant-End of Period $792,661 $780,001 $745,629 $709,563 $677,613
Net Plant-End of Period 467,573 452,165 434,336 411,677 390,826
Construction Expenditures 42,842 41,205 45,804 39,193 40,880
Property Retirements 6,241 6,486 9,199 6,757 6,135
Total Assets 720,710 689,395 636,694 608,295 515,312
Capitalization -
End of Period
Common Stock and Paid-In
Capital $ 80,628 $ 80,628 $ 77,686 $ 45,638 $ 43,702
Retained Earnings 193,776 184,232 173,584 173,318 170,252
Treasury Stock (24,017) (24,017) (24,017) (24,017) (24,017)
-----------------------------------------------
Common stock equity 250,387 240,843 227,253 194,939 189,937
Redeemable Preferred Stock 1,960 1,960 1,960 1,960 1,960
Long-Term Debt 154,413 179,346 154,279 154,211 165,745
-----------------------------------------------
Total capitalization $406,760 $422,149 $383,492 $351,110 $357,642
===============================================
Shares of Common Stock
Outstanding-End of Period 17,558 17,558 17,420 15,670 15,586
Book Value Per Share $14.26 $13.72 $13.05 $12.44 $12.19
</TABLE>
15<PAGE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Earnings applicable to common stock for the fiscal year ended September
30, 1997 were $32.4 million, compared with $32.7 million for 1996 and $20.8
million for 1995. Earnings per share of common stock based on average
shares outstanding were $1.84 in 1997, compared with $1.87 in 1996 and $1.27
in 1995. The $.03 per share decrease in fiscal 1997 (from fiscal 1996) was
primarily due to higher costs of doing business and reduced consumption by
the Company's heating customers in response to sharply higher gas prices
which were in effect for the first part of the winter during fiscal 1997.
These decreases were largely offset by the benefits of the Company's general
rate increase effective September 1, 1996 and income from the Gas Supply
Incentive Plan (which became effective October 1, 1996 for a three-year
period ending September 30, 1999). Under the Incentive Plan, Laclede and
its customers share in income from off-system sales and certain gains and
losses, as measured against benchmark levels of gas costs, related to the
acquisition of the Company's gas supply assets. As part of this Plan,
Laclede sells gas supply and pipeline capacity in markets outside of its
normal service territory. During fiscal 1997, the Company achieved overall
gas cost savings of about $35.0 million, resulting in savings to Laclede's
customers of $27.6 million and contributing about $7.4 million in pre-tax
income to the Company. The results of the Incentive Plan may not be
representative of future periods due to the volatile and seasonal nature of
such efforts. The $.60 per share increase in earnings in fiscal 1996 (from
fiscal 1995) was primarily due to higher gas sales resulting from
significantly colder weather (as compared with fiscal 1995). Earnings also
benefited from income realized due to non-traditional gas marketing efforts,
which commenced in fiscal 1996, through the Company and its wholly owned
subsidiary, Laclede Energy Resources, Inc. The impact on earnings from such
non-traditional gas marketing efforts in fiscal 1996 was $3.1 million. The
settlement in the Company's 1996 general rate case, as approved by the
Missouri Public Service Commission (MoPSC), provided that certain utility
gas marketing efforts be covered by the Gas Supply Incentive Plan, effective
October 1, 1996.
Utility operating revenues for fiscal year 1997 increased $46.4
million, or 8.3%, above fiscal 1996, and in 1996 increased $124.5 million,
or 28.8%, above fiscal 1995. The 1997 increase was principally due to
higher wholesale gas costs of $38.7 million (which are passed on to
customers in accordance with the Purchased Gas Adjustment Clause), increased
off-system and other Incentive Plan revenues of $22.6 million, and the
benefit of the general rate increase effective September 1, 1996 of
$9.2 million. These increases were partially offset by lower system sales
(primarily due to reduced consumption by heating customers) and other
variations netting to $24.1 million. The 1996 increase was principally due
to higher system therms sold and transported (mainly arising from colder
weather) and other variations netting to $63.6 million, increased wholesale
gas costs of $48.6 million, non-traditional gas marketing revenues of $11.6
million, and the one-month benefit of a general rate increase effective
September 1, 1996 of $.7 million. Total therms sold and transported for
1997 were 1,211.0 million compared with 1,177.1 million in 1996 and 978.1
million in 1995.
Utility operating expenses increased $45.1 million, or 8.9%, in
fiscal 1997, and in 1996 increased $114.5 million, or 29.1%, above fiscal
1995. Natural and propane gas expense increased $37.3 million in 1997
reflecting increased rates charged by our suppliers and higher expense
16<PAGE>
<PAGE>
related to off-system sales and the aforementioned Incentive Plan. These
increases were partially offset by reduced volumes purchased for sendout.
In 1996, natural and propane gas expense increased $95.1 million due to
higher natural gas prices, increased volumes purchased for sendout, and gas
purchases related to non-traditional gas marketing efforts. Other operation
and maintenance expenses increased $5.9 million, or 5.8%, in 1997
principally due to higher wage rates, lower gains applicable to lump-sum
pension settlements, a higher provision for uncollectible accounts, and
other increases in the costs of doing business. These increases were
partially offset by lower net pension costs. In 1996, other operation and
maintenance expenses increased $4.9 million, or 5.0%, mainly due to higher
net pension costs which resulted partly from pension credits recorded in
fiscal 1995 to establish a regulatory asset (necessary to reflect pension
costs consistent with the regulatory accounting treatment ordered by the
MoPSC in Case No. GR-94-220), and higher wage rates. 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 3.5% in 1997 primarily due to additional
depreciable property, partially offset by lower charges resulting from the
sale of oil and gas properties in May 1997. This sale is discussed further
in the following paragraph. In 1996, depreciation and amortization expense
increased 5.6% primarily as a result of increased depreciable property.
Taxes, other than income taxes, increased 3.4% in 1997 principally
attributable to higher gross receipts taxes (mainly reflecting increased
revenues) and higher property taxes. In 1996, taxes, other than income
taxes, increased 11.0% primarily due to higher gross receipts taxes
(reflecting increased revenues), partially offset by lower property taxes.
The variations in income tax expense are mainly due to changes in income.
Miscellaneous income and income deductions (net of applicable income
tax expense) decreased by $.5 million in 1997 primarily due to reduced
subsidiary income (mainly lower non-utility gas marketing income recognized
by the Company's wholly owned subsidiary, Laclede Energy Resources, Inc.).
This decrease was partially offset by a modest gain resulting from the sale
of certain oil and gas properties in 1997 for $3.3 million. Most of the
properties sold were assets which had originally been acquired during the
1970s to provide a source of gas for the Company during an era of gas
shortages and curtailments. Laclede has not been very active in oil and gas
exploration and development for a number of years. In 1996, miscellaneous
income and income deductions increased by $1.3 million mainly due to the gas
marketing efforts of the Company's wholly owned subsidiary, Laclede Energy
Resources, Inc., which commenced in fiscal 1996.
Interest expense increased 6.4% in fiscal year 1997 principally due to
higher short-term interest expense attributable to higher average borrowings
and increased interest charges on long-term debt reflecting the full-year
effect of the issuance in November 1995 of $25 million of 6-1/2% First
Mortgage Bonds. In 1996, interest expense decreased 3.1% primarily due to
lower short-term interest expense reflecting lower average borrowings and
reduced interest on refunds due customers, partially offset by an increase
in interest on long-term debt resulting from the aforementioned bond
issuance.
On June 25, 1997, the Company and Union representatives reached a new
three-year labor agreement replacing the prior agreement which was to expire
July 31, 1997. The new contract extends through July 31, 2000. The
settlement resulted in wage increases of 2.5% in all three years, along with
lump-sum payment provisions and other benefit improvements.
17<PAGE>
<PAGE>
Accounting Changes
The American Institute of Certified Public Accountants issued
Statement of Position No. 96-1, "Accounting for Environmental Remediation
Liabilities", which is effective in fiscal 1998. The Financial Accounting
Standards Board (FASB) has issued various accounting standards, including
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share" and SFAS No. 129, "Disclosure of Information about Capital
Structure". Adoption of SFAS No. 128 and SFAS No. 129 is required in fiscal
1998. The FASB has also issued SFAS No. 130, "Reporting Comprehensive
Income", and SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information". Both are effective in fiscal 1999. Based on current
circumstances, the Company does not expect the adoption of the
aforementioned standards to have a material effect on the Company's
financial position or results of operations.
Inflation
The accompanying Financial Statements reflect the historical costs of
events and transactions, regardless of the purchasing power of the dollar at
the time. Due to the capital intensive nature of the Company's business,
the most significant impact of inflation is on the Company's depreciation of
utility plant. Rate regulation to which the Company is subject allows
recovery through its rates of only the historical cost of utility plant as
depreciation. While no plans exist to undertake other than normal
replacements of plant in service, the Company believes that any higher costs
experienced upon replacement of existing facilities would be recovered
through the normal regulatory process.
Liquidity and Capital Resources
Cash flow from operations, net of dividend payments, has generally
provided the principal liquidity to meet operating requirements and to fund
a portion of the Company's construction program. Any remaining funding
requirement for construction or for other needs has been provided by long-
term and short-term financing. The issuance of long-term financing is
dependent on management's evaluation of need, financial market conditions,
and other factors. Short-term financing is used to meet seasonal cash
requirements and/or to defer long-term financing until market conditions are
favorable.
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 1997, the Company renewed its primary lines of bank credit under
which it may borrow up to an aggregate of $40 million prior to January 31,
1998, with renewal of any loans outstanding on that date permitted up to
June 30, 1998. This, along with the Company's previously obtained $90
million supplemental line of credit which ran through March 1, 1997,
provided a total line of credit of $130 million for the 1996-1997 heating
season. Short-term requirements peaked at $104.0 million in January 1997, a
level that was met through sales of commercial paper supported by lines of
credit with banks. Since seasonal cash needs typically decline at the end
of the heating season, the Company subsequently reduced the supplemental
line of credit to a low of $15 million. Under current bank loan agreements,
Laclede may borrow up to $110 million, which includes the Company's primary
lines of credit of $40 million and a $70 million supplemental line of credit
extending through August 30, 1998. Short-term borrowings outstanding at
September 30, 1997 were $74.0 million.
18<PAGE>
<PAGE>
On March 19, 1997, the MoPSC approved the Company's application seeking
a two-year extension, to April 21, 1999, of its previously granted authority
to sell up to $50 million of additional First Mortgage Bonds. The original
authorization was for $100 million of First Mortgage Bonds of which $50
million had already been issued and sold. On October 16, 1997, the Board of
Directors received competitive bids from various underwriters related to the
issuance and sale of First Mortgage Bonds, and the Board elected to sell $25
million of First Mortgage Bonds to the lowest bidder, at an overall cost to
the Company of 6.675%. The bonds were dated October 15, 1997 and mature
October 15, 2012. The proceeds were used for the payment of outstanding
short-term borrowings. The bonds were rated Aa3 by Moody's, AA- by Standard
& Poor's and A+ by Fitch. These ratings also now apply to the Company's
other outstanding bonds. The Company has $25 million of principal amount of
bonds remaining unissued under this authorization. The amounts and timing
of any future issuance will depend on management's evaluation of need,
financial market conditions, and other factors.
Construction expenditures for utility purposes were $42.8 million in
fiscal 1997 compared with $41.2 million in fiscal 1996 and $45.8 million in
fiscal 1995. The Company expects fiscal 1998 utility construction
expenditures to approximate $46.1 million.
The Company's Purchased Gas Adjustment (PGA) Clause provides for
changes in the prices of wholesale gas costs to be passed on to the
Company's customers. Under new procedures approved by the MoPSC in July
1997, the Company will make only two scheduled PGA filings each year, one
for the winter period and one for the summer. In addition, the Company may
make one unscheduled adjustment during the winter if significant, unforeseen
increases or decreases in gas costs occur. The new procedures also
authorize the Company to purchase financial instruments that could protect
the Company and its customers from any unusually large winter period gas
price increases. The cost of purchasing these instruments and any gains
derived from such activities are passed on to the Company's customers
through the operation of the PGA Clause. Accordingly, there is no earnings
impact as a result of the use of these financial instruments. These new
procedures will provide better gas price stability for the Company's
customers.
As part of its annual review of the Company's gas costs, the Staff of
the MoPSC has recommended an adjustment which, if approved by the MoPSC and
upheld by the courts, would require the Company to refund to its customers
approximately $3.6 million of gains realized by the Company from various
sales made outside of Missouri between November 1995 and March 1996. The
Company will vigorously oppose the Staff's recommended adjustment before the
MoPSC on the grounds that such adjustment violates Missouri law, is
impermissible under the Company's MoPSC-approved tariffs, and is otherwise
unlawful and unreasonable. The Company believes that the outcome of this
matter is unlikely to have a material adverse impact on the Company.
The Company is subject to various laws and regulations relating to the
environment, which thus far have not had a material effect on the Company's
financial position and results of operations. However, the Company has
reported certain environmental liabilities in connection with two
manufactured gas plants operated by the Company in the past which produced
certain by-products and residuals. The Company has either already paid or
reserved overall costs of $836,000 which are estimated to cover the
performance of certain limited actions at these locations. At this time,
the ultimate costs to be incurred remain unclear, as does the amount of any
recovery which the Company may be able to obtain from other responsible
parties and/or the Company's insurers. In the Company's most recent rate
case, the MoPSC approved, effective September 1, 1996, the continued use of
a cost deferral mechanism for the appropriate rate recovery of various
19<PAGE>
<PAGE>
environmental costs which authorization will be null and void if the Company
does not file to further adjust its rates by September 1, 1998. In any
event, the recovery of costs thus deferred may be challenged in future rate
proceedings. Refer to Note 10 of Notes to Consolidated Financial Statements
on page 40 for additional information on the Company's environmental
matters.
Capitalization at September 30, 1997, excluding current obligations of
long-term debt, consisted of 61.5% common stock equity, .5% preferred stock
and 38.0% long-term debt.
The Company's ratio of earnings before taxes to interest charges was
3.6 for 1997, 3.8 for 1996 and 2.6 for 1995.
It is management's view that the Company has adequate access to capital
markets and will have sufficient capital resources both internal and
external to meet anticipated capital requirements.
20<PAGE>
<PAGE>
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
We have audited the consolidated balance sheets and statements of
consolidated capitalization of Laclede Gas Company and its subsidiary
companies as of September 30, 1997 and 1996, and the related statements of
consolidated income, retained earnings, and cash flows for each of the three
years in the period ended September 30, 1997. Our audits also included the
financial statement schedule listed in the Index at Part IV, item 14(a)2.
These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Laclede Gas Company and its subsidiary
companies as of September 30, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 1997 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set
forth therein.
DELOITTE & TOUCHE LLP
St. Louis, Missouri
November 20, 1997
21<PAGE>
<PAGE>
Management Report
Management is responsible for the preparation, presentation and integrity of
the consolidated financial statements and other financial information in
this report. The statements were prepared in conformity with generally
accepted accounting principles and include amounts that are based on
management's best estimates and judgments. In the opinion of management,
the financial statements fairly reflect the Company's financial position,
results of operations and cash flows.
The Company maintains internal accounting systems and related administrative
controls that are designed to provide reasonable assurance, on a cost-
effective basis, that transactions are executed in accordance with
management's authorization, that consolidated financial statements are
prepared in conformity with generally accepted accounting principles, and
that the Company's assets are properly accounted for and safeguarded. The
Company's Internal Audit Department, which has unrestricted access to all
levels of Company management, monitors compliance with established controls
and procedures.
Deloitte and Touche LLP, the Company's independent auditors, whose report is
contained herein, are responsible for auditing the Company's financial
statements in accordance with generally accepted auditing standards. Such
standards include obtaining an understanding of the internal control
structure in order to design the audit of the financial statements.
The Audit Committee of the Board of Directors, which consists of five
outside directors, meets periodically with management, the internal auditor,
and the independent auditors to review the manner in which they are
performing their responsibilities. Both the internal auditor and the
independent auditors periodically meet alone with the Audit Committee and
have access to the Audit Committee at any time.
Robert C. Jaudes
Chairman of the Board
and Chief Executive Officer
Gerald T. McNeive, Jr.
Senior Vice President-Finance
and Chief Financial Officer
22<PAGE>
<PAGE>
Item 8. Financial Statements and Supplementary Data
<TABLE>
STATEMENTS OF CONSOLIDATED INCOME
(Thousands Except Per Share Amounts)
<CAPTION>
- ---------------------------------------------------------------------------
Years Ended September 30 1997 1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Utility Operating Revenues $602,832 $556,456 $431,917
------------------------------
Utility Operating Expenses
Natural and propane gas 353,810 316,476 221,423
Other operation expenses 90,712 84,844 80,573
Maintenance 18,205 18,127 17,508
Depreciation and amortization 25,884 25,009 23,676
Taxes, other than income taxes 46,534 44,987 40,529
Income taxes (Note 8) 17,962 18,603 9,878
------------------------------
Total utility operating expenses 553,107 508,046 393,587
------------------------------
Utility Operating Income 49,725 48,410 38,330
Miscellaneous Income and Income Deductions-
Net (less applicable income taxes - Note 8) 1,829 2,361 1,098
------------------------------
Income Before Interest Charges 51,554 50,771 39,428
------------------------------
Interest Charges:
Interest on long-term debt 14,169 13,939 12,544
Other interest charges 4,919 4,008 5,983
------------------------------
Total interest charges 19,088 17,947 18,527
------------------------------
Net Income 32,466 32,824 20,901
Dividends on Preferred Stock 97 97 97
------------------------------
Earnings Applicable to Common Stock $ 32,369 $32,727 $ 20,804
==============================
Average Shares of Common Stock Outstanding 17,558 17,523 16,344
==============================
Earnings Per Share of Common Stock
(after preferred dividends) $1.84 $1.87 $1.27
==============================
<FN>
See the accompanying notes to financial statements.
</TABLE>
23<PAGE>
<PAGE>
<TABLE>
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
(Thousands Except Per Share Amounts)
<CAPTION>
- ---------------------------------------------------------------------------
Years Ended September 30 1997 1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Year $184,232 $173,584 $173,318
Add - Net income, per statements 32,466 32,824 20,901
-----------------------------
Total 216,698 206,408 194,219
-----------------------------
Deduct - Cash Dividends Declared:
Preferred stock at required annual rates 97 97 97
Common stock, $1.30 per share in 1997,
$1.26 per share in 1996 and $1.24 per
share in 1995 22,825 22,079 20,538
-----------------------------
Total 22,922 22,176 20,635
-----------------------------
Balance at End of Year $193,776 $184,232 $173,584
=============================
<FN>
See the accompanying notes to financial statements.
</TABLE>
24<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------
September 30 1997 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Assets
Utility Plant $792,661 $780,001
Less - Accumulated depreciation & amortization 325,088 327,836
--------------------
Net utility plant 467,573 452,165
--------------------
Other Property and Investments, at Cost or Less
(net of accumulated depreciation and amortization,
1997, $9,493; 1996, $9,477) 29,724 24,265
--------------------
Current Assets:
Cash and cash equivalents 4,508 4,360
Accounts receivable:
Gas customers - Billed and unbilled 46,098 45,251
Other 9,885 8,311
Less - Allowances for doubtful accounts (8,051) (7,984)
Inventories:
Materials, supplies and merchandise at
average cost 5,216 5,634
Natural gas stored underground for current use
at LIFO cost 56,867 58,769
Propane gas for current use at FIFO cost 12,917 12,655
Prepayments 1,986 1,910
Deferred income taxes (Note 8) 9,881 4,477
--------------------
Total current assets 139,307 133,383
--------------------
Deferred Charges 84,106 79,582
--------------------
Total Assets $720,710 $689,395
====================
<FN>
See the accompanying notes to financial statements.
</TABLE>
25<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS (Continued)
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------
September 30 1997 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Capitalization and Liabilities
Capitalization, per statements:
Common stock equity $250,387 $240,843
Redeemable preferred stock 1,960 1,960
Long-term debt 154,413 179,346
--------------------
Total capitalization 406,760 422,149
--------------------
Current Liabilities:
Notes payable (Note 9) 74,000 59,600
Accounts payable 29,628 20,637
Refunds due customers 731 1,248
Advance customer billings 12,700 6,231
Current portion of long-term debt 25,000 -
Wages payable 3,823 3,433
Dividends payable 5,804 5,640
Customer deposits 3,189 3,224
Interest accrued 7,582 7,572
Taxes accrued 6,848 10,212
Unamortized purchased gas adjustments 13,022 26,744
Other current liabilities 2,111 1,907
--------------------
Total current liabilities 184,438 146,448
--------------------
Deferred Credits and Other Liabilities:
Deferred income taxes (Note 8) 85,013 78,149
Unamortized investment tax credits (Note 8) 7,280 7,669
Other 37,219 34,980
--------------------
Total deferred credits and other liabilities 129,512 120,798
--------------------
Commitments and Contingencies (Note 10)
Total Capitalization and Liabilities $720,710 $689,395
====================
<FN>
See the accompanying notes to financial statements.
</TABLE>
26<PAGE>
<PAGE>
<TABLE>
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------
September 30 1997 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Common Stock Equity (Note 4):
Common stock, par value $1 per share:
Authorized - 1997 and 1996, 50,000,000 shares
Issued - 1997 and 1996, 19,423,178 shares $ 19,423 $ 19,423
Paid-in capital 61,205 61,205
Retained earnings, per statements 193,776 184,232
Treasury stock, at cost - 1997 and 1996,
1,865,638 shares (24,017) (24,017)
--------------------
Total common stock equity 250,387 240,843
--------------------
Redeemable Preferred Stock,
par value $25 per share (1,480,000 shares
authorized) issued and outstanding (Note 5):
5% Series B - 1997 and 1996, 71,890 shares 1,797 1,797
4.56% Series C - 1997 and 1996, 6,510 shares 163 163
--------------------
Total redeemable preferred stock 1,960 1,960
--------------------
Long-Term Debt (Note 6):
First mortgage bonds:
6-1/4% Series, due May 1, 2003 25,000 25,000
8-1/2% Series, due November 15, 2004 25,000 25,000
8-5/8% Series, due May 15, 2006 40,000 40,000
7-1/2% Series, due November 1, 2007 40,000 40,000
6-1/2% Series, due November 15, 2010 25,000 25,000
9-5/8% Series, due May 15, 2013 (maturity
election in 1998) - 25,000
--------------------
Total 155,000 180,000
Unamortized discount, net of premium,
on long-term debt (587) (654)
--------------------
Total long-term debt 154,413 179,346
--------------------
Total $406,760 $422,149
====================
Long-term debt amounts are exclusive of current obligations.
<FN>
See the accompanying notes to financial statements.
</TABLE>
27<PAGE>
<PAGE>
<TABLE>
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars)
<CAPTION>
- --------------------------------------------------------------------------
Years Ended September 30 1997 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities:
Net Income $32,466 $32,824 $20,901
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 25,923 25,037 23,728
Deferred income taxes and investment
tax credits 8,681 (10,598) 9,459
Other - net (635) 498 679
Changes in assets and liabilities:
Accounts receivable - net (2,354) (11,180) 4,701
Unamortized purchased gas adjustments (13,722) 36,520 (7,778)
Deferred purchased gas costs 394 (712) 493
Accounts payable 8,991 (432) 945
Refunds due customers (517) (2,862) (25,672)
Taxes accrued (3,364) 1,782 (1,425)
Natural gas stored underground 1,902 (17,140) 6,704
Other assets and liabilities (3,635) (12,470) (4,529)
------------------------------
Net cash provided by operating activities 54,130 41,267 28,206
------------------------------
Investing Activities:
Construction expenditures (42,842) (41,205) (45,804)
Employee benefit trusts (3,094) (2,052) 974
Investments - non-utility (2,228) 362 (1,290)
Other 2,529 (1,363) (153)
------------------------------
Net cash used in investing activities (45,635) (44,258) (46,273)
------------------------------
Financing Activities:
Issuance of first mortgage bonds - 25,000 -
Issuance of short-term debt - net 14,400 100 6,000
Issuance of common stock - 2,970 33,380
Dividends paid (22,747) (22,046) (20,015)
Other - (228) (1,331)
------------------------------
Net cash provided by (used in)
financing activities (8,347) 5,796 18,034
------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents 148 2,805 (33)
Cash and Cash Equivalents at
Beginning of Year 4,360 1,555 1,588
------------------------------
Cash and Cash Equivalents at End of Year $ 4,508 $ 4,360 $ 1,555
==============================
Supplemental Disclosure of Cash Paid
During the Year for:
Interest $18,087 $16,541 $17,742
Income taxes 13,966 27,478 4,088
<FN>
See the accompanying notes to financial statements.
</TABLE>
28<PAGE>
<PAGE>
<TABLE>
SCHEDULE OF INCOME TAXES (Note 8)
(Thousands of Dollars)
<CAPTION>
- -------------------------------------------------------------------------
Years Ended September 30 1997 1996 1995
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Included in Statements of
Consolidated Income as:
Utility Operating Expenses:
Federal
Current $ 7,944 $24,683 $ 347
Deferred 7,595 (8,564) 8,474
Investment tax credit
adjustments - net (388) (348) (350)
State and local
Current 1,323 4,116 65
Deferred 1,488 (1,284) 1,342
-----------------------------
17,962 18,603 9,878
-----------------------------
Miscellaneous Income and Income Deductions:
Federal
Current 338 180 239
Deferred (12) (347) (5)
Investment tax credit
adjustments - net (1) (1) (1)
State and local
Current 68 17 19
Deferred (1) (54) (1)
-----------------------------
392 (205) 251
-----------------------------
Total $18,354 $18,398 $10,129
=============================
<FN>
See the accompanying notes to financial statements.
</TABLE>
29<PAGE>
<PAGE>
<TABLE>
SCHEDULE OF INTERIM FINANCIAL INFORMATION
(Unaudited) (Note 11)
(Thousands of Dollars Except Per Share Amounts)
<CAPTION>
- --------------------------------------------------------------------------
Three Months Ended Dec. 31 March 31 June 30 Sept. 30
- --------------------------------------------------------------------------
1997
<S> <C> <C> <C> <C>
Utility Operating Revenues $193,865 $264,031 $84,191 $60,745
Utility Operating Income (Loss) 20,543 26,182 4,725 (1,725)
Net Income (Loss) 16,106 21,506 812 (5,958)
Earnings (Loss) Per Share
of Common Stock
(after preferred dividends) $.92 $1.22 $ .04 $(.34)
<CAPTION>
- --------------------------------------------------------------------------
Three Months Ended Dec. 31 March 31 June 30 Sept. 30
- --------------------------------------------------------------------------
1996
<S> <C> <C> <C> <C>
Utility Operating Revenues $154,981 $258,238 $86,022 $57,215
Utility Operating Income (Loss) 19,689 27,218 3,094 (1,591)
Net Income (Loss) 15,738 24,041 (399) (6,556)
Earnings (Loss) Per Share
of Common Stock
(after preferred dividends) $.90 $1.37 $(.02) $(.37)
<FN>
See the accompanying notes to financial statements.
</TABLE>
30<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Consolidation - The consolidated financial statements include
the accounts of the Laclede Gas Company and its subsidiary companies
(Company). The net operating results of the Company's non-utility
subsidiaries, all of which are wholly owned, are included under the caption
"Miscellaneous Income and Income Deductions - Net" in the Statements of
Consolidated Income. Revenues from non-utility subsidiaries are
insignificant. All appropriate intercompany transactions have been
eliminated.
Nature of Operations - Laclede Gas Company is a public utility engaged
in the retail distribution of natural gas. The Company serves an area in
eastern Missouri, with a population of approximately 2.0 million, including
the City of St. Louis, St. Louis County, and parts of eight other counties.
As an adjunct to its gas distribution business, the Company operates
underground natural gas storage fields and is engaged in the transportation
and storage of liquid propane. The Company has also made investments in
some non-utility businesses as part of a diversification program.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
System of Accounts - The accounts of the Company are maintained in
accordance with the uniform system of accounts prescribed by the Missouri
Public Service Commission (MoPSC), which system substantially conforms to
that prescribed by the Federal Energy Regulatory Commission.
Utility Plant, Depreciation and Amortization - Utility plant is stated
at original cost. The cost of additions to utility plant includes
contracted work, direct labor and materials, allocable overheads, and an
allowance for funds used during construction. The costs of units of
property retired, replaced, or renewed are removed from utility plant and
such costs, plus removal costs, less salvage are charged to accumulated
depreciation. Maintenance and repairs of property and replacement and
renewal of items determined to be less than units of property are charged to
operating expenses.
Utility plant, excluding exploration and development, is depreciated
on the straight-line basis at rates based on estimated service lives of the
various classes of property. Annual depreciation in 1997, 1996 and 1995
averaged approximately 3.4%, 3.3% and 3.3%, respectively, of the original
cost of depreciable property.
31<PAGE>
<PAGE>
Regulated Operations - The Company accounts for its regulated
operations in accordance with Statement of Financial Accounting Standards
(SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation".
This statement sets forth the application of generally accepted accounting
principles for those companies whose rates are established by or are subject
to approval by an independent third-party regulator. The provisions of SFAS
No. 71 require, among other things, that financial statements of a regulated
enterprise reflect the actions of regulators, where appropriate. These
actions may result in the recognition of revenues and expenses in time
periods that are different than non-regulated enterprises. When this occurs,
costs are deferred as assets in the balance sheet (regulatory assets) and
recorded as expenses when those amounts are reflected in rates. Also,
regulators can impose liabilities upon a regulated company for amounts
previously collected from customers and for recovery of costs that are
expected to be incurred in the future (regulatory liabilities).
<TABLE>
The following regulatory assets and regulatory liabilities were
reflected in the Consolidated Balance Sheets as of September 30:
<CAPTION>
(Thousands of Dollars) 1997 1996
- --------------------------------------------------------------
<S> <C> <C>
Regulatory Assets:
Amounts due from customers for
future income taxes $25,450 $32,090
Pension costs 4,244 3,595
Unamortized loss on reacquired debt 986 1,209
Other 842 260
---------------------
Total Regulatory Assets $31,522 $37,154
=====================
Regulatory Liabilities:
Unamortized investment tax credits $ 7,280 $ 7,669
Amounts due to customers for
future income taxes 56 -
Purchased gas costs 838 445
Unamortized purchased gas adjustments 13,022 26,744
Other 360 311
---------------------
Total Regulatory Liabilities $21,556 $35,169
=====================
</TABLE>
Gas Stored Underground - Inventory of gas in storage is priced on a
last-in, first-out (LIFO) basis. The replacement cost of gas stored
underground for current use was $9,402,000 more than the LIFO cost at
September 30, 1997 and $9,570,000 less than the LIFO cost at September 30,
1996. The inventory carrying value has not been adjusted to market prices
because, pursuant to the Company's Purchased Gas Adjustment Clause, actual
gas costs are recovered in customer rates.
Oil & Gas Exploration and Development - The Company uses the full cost
method of accounting for utility exploration and development costs as
ordered by the MoPSC. Under the full cost method, all exploration and
development costs of productive and non-productive wells are capitalized.
Such costs are charged to expense based on oil and gas produced in relation
to total estimated recoverable reserves. Depreciation and amortization
charges amounted to $249,000 in 1997, $570,000 in 1996 and $907,000 in 1995.
32<PAGE>
<PAGE>
In May 1997, the Company completed the sale of essentially all of its oil
and gas production properties, resulting in the recognition of a modest
gain.
Operating Revenues - The Company records revenues from gas sales and
transportation service on the accrual basis which includes estimated amounts
for gas delivered, where applicable, but not yet billed.
Purchased Gas Adjustments and Deferred Account - Pursuant to the
provisions of the Company's Purchased Gas Adjustment (PGA) Clause, increases
or decreases in gas costs are passed on to its customers. Certain amounts
related to the operation of the Gas Supply Incentive Plan (see Note 3) are
also passed on to the Company's customers pursuant to the provisions of the
PGA Clause. The difference between actual costs incurred and costs
recovered through the application of the PGA, as well as amounts related to
the operation of the Incentive Plan, are reflected as a deferred charge or
credit until September 30, at which time the balance is classified as a
current asset or liability and is recovered from or credited to customers
over an annual period commencing in November. (However, for balances
related to fiscal 1996 only, such charges were credited over an annual
period commencing in December 1996). The balance in the current account is
amortized as amounts are reflected in customer billings.
In July 1997, the MoPSC authorized the Company to purchase financial
instruments that could protect the Company and its customers from any
unusually large winter period gas price increases. The costs of purchasing
these instruments and any financial gains derived from such activities are
passed on to the Company's customers through the operation of its PGA
Clause. Accordingly, there is no earnings impact as a result of the use of
these financial instruments. Such amounts are reflected as deferred charges
or credits until September 30, 1998, at which time the balance will be
classified as a current asset or liability and will be recovered from or
credited to customers over an annual period commencing in November 1998.
Income Taxes - The Company has elected, for tax purposes only, various
accelerated depreciation provisions of the Internal Revenue Code. In
addition, intangible drilling and unsuccessful exploration costs, and
certain other costs are expensed currently for tax purposes while being
deferred for book purposes. The provision for current income taxes reflects
the tax treatment of these items. The Company records deferred tax
liabilities and assets measured by enacted tax rates for the net tax effect
of all temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes, and the amounts used for
income tax purposes. Changes in enacted tax rates, if any, will be
reflected by entries to regulatory asset or liability accounts.
The benefit of investment tax credits utilized prior to 1986 has been
deferred and is being amortized in accordance with regulatory treatment over
the useful life of the related property for financial statement purposes.
Cash and Cash Equivalents - For the purpose of the statements of cash
flows, the Company considers all highly liquid debt instruments purchased,
which generally have a maturity of three months or less, to be cash
equivalents. Such instruments are carried at cost, which approximates
market value.
Reclassification - Certain prior-year amounts have been reclassified
to conform to current-year presentation.
33<PAGE>
<PAGE>
Accounting Changes - The Company adopted Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" in fiscal 1997. No
impairments were recorded. The Company also adopted SFAS No. 123,
"Accounting for Stock-Based Compensation" in fiscal 1997. There was no
material effect on the Company's financial position or results of
operations.
The American Institute of Certified Public Accountants issued
Statement of Position No. 96-1, "Accounting for Environmental Remediation
Liabilities", which is effective in fiscal 1998. The Financial Accounting
Standards Board (FASB) has issued various accounting standards, including
SFAS No. 128, "Earnings per Share" and SFAS No. 129, "Disclosure of
Information about Capital Structure". Adoption of SFAS No. 128 and SFAS No.
129 is required in fiscal 1998. The FASB has also issued SFAS No. 130,
"Reporting Comprehensive Income", and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information". Both are effective in
fiscal 1999. Based on current circumstances, the Company does not expect
the adoption of the aforementioned standards to have a material effect on
the Company's financial position or results of operations.
2. Pension Plans and Other Postemployment Benefits
The Company has non-contributory defined benefit, trusteed forms of
pension plans covering substantially all employees over the age of twenty-
one. Benefits are based on years of service and the employee's compensation
during the last three years of employment. The Company's funding policy is
to contribute an amount not less than the minimum required by government
funding standards, nor more than the maximum deductible amount for federal
income tax purposes. Plan assets consist primarily of corporate and U.S.
government obligations.
Pension costs in 1997, 1996 and 1995 amounted to $(3,091,000),
$815,000 and $(5,692,000), respectively, including amounts charged to
construction.
<TABLE>
The net pension costs (credits) include the following components:
<CAPTION>
(Thousands of Dollars) 1997 1996 1995
- ------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 7,757 $ 7,780 $ 6,412
Interest cost on projected
benefit obligation 13,510 13,456 13,966
Actual return on plan assets (37,300) (22,338) (50,765)
Net amortization and deferral 13,591 1,835 28,184
Regulatory adjustment (649) 82 (3,489)
-----------------------------
Net pension cost (credit) $ (3,091) $ 815 $ (5,692)
=============================
</TABLE>
The MoPSC ordered in the 1996 general rate case, effective September 1,
1996, certain pension costs to be recovered on a payment basis up to a
$313,000 allowance, with the difference between actual payments and the
allowance to be deferred. The allowance was previously $281,000 effective
October 1, 1994. The 1996 general rate case also provided for the full
recovery, on a payment basis, of the costs deferred at April 30, 1996.
Beginning in 1997, the amortization period for unrecognized gains and losses
was a five-year period, as ordered in the 1996 general rate case. Results
34 <PAGE>
<PAGE>
in 1996 and 1995 were based on a ten-year amortization period for
unrecognized gains and losses. Other variances in net pension cost are
primarily attributable to actuarial and investment experience.
<TABLE>
The following table sets forth the funded status of the plans and
amounts recognized in the Company's consolidated balance sheets at
September 30:
<CAPTION>
(Thousands of Dollars) 1997 1996
- ------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of
benefit obligation:
Vested benefit obligation $133,784 $120,845
===================
Accumulated benefit obligation $161,451 $142,560
===================
Projected benefit obligation $201,030 $181,799
Plan assets at fair value 272,355 251,478
-------------------
Plan assets in excess of
projected benefit obligation 71,325 69,679
Unrecognized net gain (45,975) (45,974)
Unrecognized prior service cost 19,880 13,796
Unrecognized net transition asset (4,460) (5,605)
Minimum liability adjustment (1,848) (1,794)
-------------------
Prepaid pension cost recognized in
the consolidated balance sheets $ 38,922 $ 30,102
===================
</TABLE>
The projected benefit obligation, which is based on a June 30
measurement date, was determined using a weighted-average discount rate of
7.5% for 1997 and 7.75% for 1996, and a weighted-average rate of future
compensation of 4.75% for 1997 and 1996. The expected long-term rate of
return on plan assets was 8.25% for 1997 and 1996.
Pursuant to the provisions of the Company's pension plans, pension
obligations may be settled by lump-sum cash payments. Settlements in 1997,
1996 and 1995 resulted in pre-tax gains of approximately $2,490,000,
$5,024,000, and $3,937,000, respectively.
The cost of the Company's defined contribution plans, which cover
substantially all employees, amounted to $2,103,000, $2,022,000 and
$1,803,000 for the years 1997, 1996 and 1995, respectively.
The Company also provides certain life insurance benefits at
retirement. Medical insurance is available after early retirement until age
65.
State law provides for the recovery in rates of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(OPEB), accrued costs provided that such costs are funded through an
independent, external funding mechanism. The Company established Voluntary
Employees' Beneficiary Association (VEBA) and Rabbi trusts as its external
funding mechanisms. VEBA and Rabbi trusts assets consist primarily of money
market securities. The unrecognized transition obligation is being
amortized over 20 years.
35<PAGE>
<PAGE>
Postretirement benefit costs in 1997, 1996 and 1995 amounted to
approximately $4,265,000, $4,608,000 and $6,100,000, respectively, including
amounts charged to construction.
<TABLE>
Net postretirement benefit costs consisted of the following
components:
<CAPTION>
(Thousands of Dollars) 1997 1996 1995
- -------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $1,463 $1,528 $1,568
Interest cost on accumulated
postretirement benefit
obligation 2,469 2,479 2,676
Actual return on plan assets (163) (129) -
Amortization of transition
obligation 1,267 1,267 1,267
Net amortization and deferral (819) (160) (97)
Regulatory adjustment 48 (377) 686
--------------------------
Net postretirement benefit cost $4,265 $4,608 $6,100
==========================
</TABLE>
<TABLE>
The following table sets forth the funded status of the plans and
amounts recognized in the Company's consolidated balance sheets at
September 30:
<CAPTION>
(Thousands of Dollars) 1997 1996
- -----------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit
obligation (APBO):
Retirees $(18,747) $(15,670)
Active Employees (14,483) (17,025)
-------------------
Total APBO (33,230) (32,695)
Plan assets at fair value 4,061 3,235
-------------------
APBO in excess of plan assets (29,169) (29,460)
Unrecognized transition obligation 20,247 21,514
Unrecognized prior service cost 4,300 5,079
Unrecognized net gain (3,747) (5,034)
-------------------
Accrued postretirement benefit cost $ (8,369) $ (7,901)
===================
</TABLE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation was 7% for 1997, and gradually
decreases each successive year until it reaches 5% in 1999. A one percent
increase in the assumed health care cost trend rate for each year would
increase accumulated postretirement benefit costs as of September 30, 1997
by $887,000 and the sum of the service cost and interest cost by
approximately $207,000. The accumulated postretirement benefit obligation
was determined using a weighted-average discount rate of 7.5% for 1997 and
7.75% for 1996, and a weighted-average rate of future compensation of 4.75%
for 1997 and 1996.
The 1996 rate case settlement provided for the deferral, net of any
applicable tax effects, of the difference between the costs funded by the
36<PAGE>
<PAGE>
Company and a $4,265,000 allowance of annualized OPEB costs included in
rates effective September 1, 1996. The settlement of the 1994 general rate
case had previously provided for an allowance of $6,100,000 effective
October 1, 1994. Any such deferrals will be reflected in rates established
in the next general rate case proceeding.
3. Incentive Plan
The Company's Gas Supply Incentive Plan, which became effective
October 1, 1996 for a three-year period ending September 30, 1999 as part of
a settlement reached in the Company's last rate case, has provided
significant benefits for both the Company's share owners and customers
during fiscal 1997. Under the Plan, the Company and its customers share in
income from off-system sales and certain gains and losses, as measured
against benchmark levels of gas costs, related to the acquisition of the
Company's gas supply assets. As part of this Plan, the Company sells gas
supply and pipeline capacity in markets outside of its normal service
territory. Results of the Plan during fiscal 1997 are set forth below.
Such results may not be representative of future periods due to the volatile
and seasonal nature of these efforts.
<TABLE>
<CAPTION>
(Thousands of Dollars) 1997
- -----------------------------------------------------------------
<S> <C>
Incentive Plan Revenues $34,288
Incentive Plan Gas Expense 26,886
-------
Income Before Income Taxes $ 7,402
=======
</TABLE>
4. Common Stock and Paid-in Capital
The Company did not issue any of its common stock during fiscal 1997.
(Shares of common stock required by the Company's Dividend Reinvestment and
Stock Purchase Plan were purchased on the open market). The Company issued
137,913 shares of its common stock during fiscal year 1996 under its
Dividend Reinvestment and Stock Purchase Plan.
Total shares of common stock outstanding were 17,557,540 at September
30, 1997 and at September 30, 1996.
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 gives 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 outstanding at
September 30, 1997.
There was no change in paid-in capital during fiscal year 1997. Paid-
in capital increased $2,804,000 in 1996 primarily due to the issuance of
common stock under the Dividend Reinvestment and Stock Purchase Plan,
partially offset by expenses related to the replacement of the Company's
Shareholder Rights Plan.
37<PAGE>
<PAGE>
5. Redeemable Preferred Stock
The preferred stock, which is non-voting except in certain
circumstances, may be redeemed at the option of the Board of Directors. The
redemption price is equal to par of $25.00 a share.
During 1997, 1996 and 1995 no shares of preferred stock were
reacquired.
Any default in a sinking fund payment must be cured before the Company
may pay dividends on or acquire any common stock. Sinking fund requirements
on preferred stock for the five years subsequent to September 30, 1997 are:
1998-1999, none; 2000, $37,000; 2001, $197,000; 2002, $160,000.
6. Long-Term Debt
There are no maturities or sinking fund requirements on long-term debt
for the five years subsequent to September 30, 1997. However, under the
provisions of the Company's $25 million 9 5/8% First Mortgage Bonds (due
2013), such issue is puttable at the option of the bondholders for a brief
specified period during the coming year and is redeemable at the Company's
option thereafter until maturity.
On March 19, 1997 the Company received approval from the MoPSC for a
two-year extension, to April 21, 1999, of its previously granted authority
to sell additional First Mortgage Bonds. The original authorization was for
$100 million of First Mortgage Bonds of which $50 million had already been
issued and sold. In October 1997, the Company issued $25 million of 6 1/2%
First Mortgage Bonds at a cost to the Company of 6.675%. The proceeds of
the issuance were used to reduce outstanding short-term borrowings. The
Company has $25 million of principal amount of bonds remaining unissued
under this authorization.
Substantially all of the Company's utility plant is subject to the
liens of its mortgage.
The Company's mortgage contains provisions which restrict retained
earnings from declaration or payment of cash dividends. As of September 30,
1997, all of the Company's consolidated retained earnings were free from
such restrictions.
7. Fair Value of Financial Instruments
<TABLE>
The carrying amounts and estimated fair values of the Company's
financial instruments at September 30, 1997 and 1996 are as follows:
<CAPTION>
Carrying Fair
(Thousands of Dollars) Amount Value
- ------------------------------------------------------------------
1997:
<S> <C> <C>
Cash and cash equivalents $ 4,508 $ 4,508
Short-term debt 74,000 74,000
Long-term debt 179,413 190,765
Redeemable preferred stock 1,960 1,723
<CAPTION>
1996:
<S> <C> <C>
Cash and cash equivalents $ 4,360 $ 4,360
Short-term debt 59,600 59,600
Long-term debt 179,346 185,404
Redeemable preferred stock 1,960 1,797
</TABLE>
The carrying amounts for cash and cash equivalents and short-term debt
approximate fair value due to the short maturity of these investments. Fair
value of long-term debt and preferred stock is estimated based on market
prices for similar issues.
38<PAGE>
<PAGE>
8. Income Taxes
Net provisions for income taxes were charged during the years ended
September 30, 1997, 1996 and 1995 as shown on the Schedule of Income Taxes.
The effective income tax rate varied from the federal statutory income tax
rate for each year due to the following:
<TABLE>
<CAPTION>
1997 1996 1995
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax statutory rate 35.0% 35.0% 35.0%
State and local income taxes,
net of federal income tax benefits 3.7 3.6 3.0
Certain expenses capitalized on books
and deducted on tax return (1.6) (.6) (3.3)
Taxes related to prior years - (1.4) (1.3)
Other items - net (1.0) (.7) (.8)
----------------------
Effective income tax rate 36.1% 35.9% 32.6%
======================
</TABLE>
<TABLE>
The significant items comprising the Company's net deferred tax
liability recognized in the consolidated balance sheets as of September 30
are as follows:
<CAPTION>
(Thousands of Dollars) 1997 1996
- ----------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Reserves not currently deductible $15,246 $15,869
Deferred gas cost 5,661 10,489
Unamortized investment tax credits 4,583 4,828
Other 3,521 3,165
------- -------
Total deferred tax assets 29,011 34,351
------- -------
Deferred tax liabilities:
Relating to utility property 82,836 90,185
Pension 18,385 14,782
Other 2,922 3,056
------- -------
Total deferred tax liabilities 104,143 108,023
------- -------
Net deferred tax liability 75,132 73,672
Net deferred tax asset (liability) - current 9,881 4,477
------- -------
Net deferred tax liability - non-current $85,013 $78,149
======= =======
</TABLE>
39<PAGE>
<PAGE>
9. Notes Payable and Credit Agreements
The Company has primary lines of bank credit which permit borrowing of
up to $40 million at any time before January 31, 1998. Such borrowings are
on a 90-day basis, renewable from time to time, with no note maturing beyond
June 30, 1998. The borrowings may be repaid at any time without penalty.
The Company anticipates renewal of these primary lines totaling $40 million
in January 1998. These, together with the Company's previously obtained
supplemental line of credit, which aggregated about $90 million through
March 1, 1997, provided total lines of credit of $130 million for the 1996-
1997 heating season. Since cash needs typically decline at the end of the
heating season, the Company reduced the supplemental line of credit to a low
of $15 million. Under current bank loan agreements, Laclede may borrow up
to $110 million, which includes the Company's primary lines of credit of $40
million and a $70 million supplemental line of credit extending through
August 30, 1998.
Alternatively, the Company has an agreement for the issuance of
commercial paper which is supported by the bank loan lines of credit.
During fiscal year 1997, the Company's short-term borrowing requirements
were met by the sale of commercial paper. As of September 30, 1997, the
Company had $74.0 million in commercial paper outstanding at an average
interest rate of 5.6%.
10. Commitments and Contingencies
The Company estimates fiscal year 1998 utility construction
expenditures at $46,100,000. The lease agreement covering the Company's
general office space extends through February 2000 with options to renew for
up to 20 additional years. The aggregate rental expense for fiscal years
1997, 1996 and 1995 was $794,000, $785,000 and $780,000, respectively.
Annual minimum rental payments for fiscal years 1998-1999 are $785,000 per
year. The lease agreement provides for an annual rent escalation which is
not determinable as of the balance sheet date; however, the maximum amount
of rental expense increase is $8,800 per year. The Company has other rental
arrangements which provide for minimum rental payments that are relatively
minor. The Company has entered into various contracts which in the
aggregate require it to pay approximately $76 million on an annual basis, at
present rate levels, for the reservation of gas supplies and pipeline
transmission and storage capacity. These costs are recovered from customers
in accordance with the Purchased Gas Adjustment Clause of the Company's
tariff. The contracts have various expiration dates ranging from 1998 to
2001.
A consolidated subsidiary is a general partner in an unconsolidated
partnership which invests in real estate partnerships. The subsidiary and
third parties are jointly and severally liable for the payment of mortgage
loans in the aggregate outstanding amount of approximately $3.3 million
incurred in connection with various real estate ventures. The Company has
no reason to believe that the other principal liable parties will not be
able to meet their proportionate share of these obligations. The Company
further believes that the asset values of the real estate properties are
sufficient to support these mortgage loans.
As part of its annual review of the Company's gas costs, the Staff of
the MoPSC has recommended an adjustment which, if approved by the MoPSC and
upheld by the courts, would require the Company to refund to its customers
approximately $3.6 million of gains realized by the Company from various
off-system sales made between November 1995 and March 1996. The Company
will vigorously oppose the Staff's recommended adjustment before the MoPSC
on the grounds that such adjustment violates Missouri law, is impermissible
under the Company's MoPSC-approved tariffs, and is otherwise unlawful and
40<PAGE>
<PAGE>
unreasonable. The Company believes that the outcome of this matter is
unlikely to have a material adverse impact on the Company.
The Company is subject to various laws and regulations relating to
the environment, which thus far have not had a material effect on the
Company's financial position and results of operations.
In the past, the Company operated various manufactured gas plants
which produced certain by-products and residuals. At the request of the
United States Environmental Protection Agency (EPA), Laclede performed an
investigation of one of the Company's former manufactured gas plant sites
located in Shrewsbury, Missouri (the Shrewsbury Site). As previously
reported by the Company, the Company has had lengthy discussions with the
EPA and the Missouri Department of Natural Resources (MoDNR) on the question
of what additional actions are required for the site. On October 17, 1997,
the Company submitted to the EPA an Engineering Evaluation/Cost Analysis
(EE/CA), together with an accompanying letter (collectively the "Submitted
EE/CA Documents"), in which the Company proposed to maintain various
institutional controls at this site, to stabilize the bank of a drainageway
located at the edge of the site, and to perform a limited removal of some
contaminants located in certain small areas of the site. The EPA and the
MoDNR are currently reviewing the Submitted EE/CA Documents. At this time,
given the lack of final agreement as to what additional actions should be
taken, the ultimate costs to be incurred regarding the Shrewsbury Site
remain unclear. Assuming the Company performs the limited actions described
in the Submitted EE/CA Documents, the Company estimates that the overall
costs will be approximately $740,000. As of September 30, 1997, $541,000 of
such overall costs had been paid, and an additional $199,000 was reserved by
the Company. If the Company is required to take any additional actions with
regard to the site, the Company may have to incur additional costs, the
extent of which cannot practicably be estimated currently. The Company has
notified its insurers that it intends to seek reimbursement from them of its
investigation, remediation, clean-up and defense costs. The Company intends
to seek recovery, if practicable, from any other potentially responsible
parties.
In a separate matter, MoDNR has accepted the Company's application to
place the site of a different former manufactured gas plant located in the
City of St. Louis, Missouri (which site was also used by subsequent owners
as the site of a coke manufacturing facility) in the Missouri Voluntary
Cleanup Program, for the purpose of characterizing the site. MoDNR's
preliminary tests conducted at the site reflect the presence of coke and gas
plant manufacturing wastes, as well as certain heavy metal wastes. The
Company and MoDNR have agreed upon the scope of the Company's initial
investigation, which consists of the drilling of monitoring wells to assess
the condition of groundwater at this site. The Company currently estimates
that the cost of such investigation, MoDNR oversight costs and associated
legal and engineering consulting costs relative to such investigation of the
site would together approximate $96,000. Currently, $36,000 has been paid
and an additional $60,000 has been reserved on the Company's books. The
City of St. Louis, the current owner of the site, received proposals from
several different groups to develop this site. Various portions of the
development proposals dealt with the issue of the environmental condition of
the site, and the impact of such condition on possible development plans.
Unless and until any development proposal is selected, the Company is unable
to determine the impact, if any, that any proposed development will have on
actions to be taken regarding the site, and the cost of any such actions.
The Company has notified its insurers that the Company intends to seek
reimbursement from them for investigation, remediation, clean-up and defense
costs. The Company has also requested that other former site owners and/or
41 <PAGE>
<PAGE>
operators participate in the cost of any site investigation, but none has
yet agreed to do so. The Company plans to seek proportionate reimbursement
of all costs incurred with respect to this site from such parties and/or any
other potentially responsible parties, to the extent practicable.
The Company is presently unable to evaluate or quantify further the
scope or cost of any environmental response activity with regard to the
above two former manufactured gas plant sites.
In the Company's most recent rate case, the MoPSC approved, effective
September 1, 1996, the continued use of a cost deferral mechanism,
originally approved as part of a 1994 rate case settlement, for the
Company's use in applying for appropriate rate recovery of various
environmental costs in connection with former manufactured gas plants. This
authorization will be null and void if the Company does not file to further
adjust its rates by September 1, 1998; and, in any event, the recovery of
costs thus deferred may be challenged in future rate proceedings.
The Company is involved in litigation, claims, and investigations
arising in the normal course of business. While the results of such
litigation cannot be predicted with certainty, management, after discussion
with counsel, believes the final outcome will not have a material adverse
effect on the consolidated financial position and results of operations
reflected in the financial statements presented herein.
11. Interim Financial Information (Unaudited)
In the opinion of the Company, the quarterly information presented in
the Schedule of Interim Financial Information for fiscal years 1997 and 1996
includes all adjustments, consisting of normal recurring adjustments
necessary for a fair statement of the results of operations for such
periods. Variations in operations reported on a quarterly basis reflect the
seasonal nature of the Company's business.
42<PAGE>
<PAGE>
Item 9. Changes in and Disagreements on Accounting and Financial
Disclosure
There have been no disagreements on accounting and financial disclosure with
the Company's outside auditors which are required to be disclosed.
Part III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required by this item is set forth on
pages 3 through 5 in the Company's proxy statement dated December 19, 1997
and is incorporated herein by reference.
The information concerning executive officers required by this item is
reported in Part I of this Form 10-K.
Item 11. Executive Compensation
The information required by this item is set forth on pages 7 through 13 in
the Company's proxy statement dated December 19, 1997 and is incorporated
herein by reference but the information under the captions "Compensation
Committee Report Regarding Executive Compensation" and "Performance Graph"
on pages 10 through 12 of such proxy statement is expressly NOT incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this item is set forth on page 6 in the Company's
proxy statement dated December 19, 1997 and is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions
There were no transactions required to be disclosed pursuant to this item.
43<PAGE>
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Consolidated Financial Statements: 1997 10-K Page
For Years Ended September 30, 1997, 1996, and 1995:
Statements of Income 23
Statements of Retained Earnings 24
Statements of Cash Flows 28
Schedule of Income Taxes 29
As of September 30, 1997 & 1996:
Balance Sheets 25-26
Statements of Capitalization 27
For Years Ended 1997 & 1996:
Schedule of Interim Financial Information 30
Notes to Financial Statements 31-42
Independent Auditors' Report 21
Management Report 22
2. Supplemental Schedules
II - Reserves 48
Schedules not included have been omitted because they are not
applicable or the required data has been included in the financial
statements or notes to financial statements.
3. Exhibits
Incorporated herein by reference to Index to Exhibits, page 49.
Management contracts and compensatory plans or arrangements listed in the
Index to Exhibits required to be filed as exhibits to this form pursuant to
Item 14(c) of this report:
Exhibit No. Description
10.01 - Incentive Compensation Plan of the Company, as
amended.
10.01a - Amendment adopted by the Board of Directors on
July 26, 1990 to the Incentive Compensation Plan.
10.01b - Amendments adopted by the Board of Directors on
August 23, 1990 to the Incentive Compensation Plan.
10.01c - Amendments to Laclede Gas Company Incentive
Compensation Plan, effective January 26, 1995.
10.02 - Senior Officers' Life Insurance Program of the
Company, as amended.
10.02a - Certified copy of resolutions of the Company's
Board of Directors adopted on June 27, 1991
amending the Senior Officers' Life Insurance Program.
10.02b - Certified copy of resolutions of the Company's
Board of Directors adopted on January 28, 1993
amending the Senior Officers' Life Insurance Program.
10.03 - Employees' Retirement Plan of Laclede Gas Company -
Management Employees, effective as of July 1, 1990,
as amended.
44<PAGE>
<PAGE>
10.03a - Amendment to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees adopted
by the Board of Directors on September 27, 1990.
10.03b - Amendments dated December 12, 1990 to the Employees'
Retirement Plan of Laclede Gas Company - Management
Employees.
10.03c - Amendment to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
January 10, 1994.
10.03d - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
July 29, 1994.
10.03e - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
February 21, 1995.
10.03f - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
March 7, 1995.
10.03g - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
September 11, 1995.
10.03h - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees dated
August 14, 1996.
10.03i - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees adopted
December 19, 1996.
10.03j - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees adopted
February 7, 1997.
10.04 - Laclede Gas Company Supplemental Retirement Benefit
Plan, as amended and restated effective July 25,
1991.
10.05 - Laclede Gas Company Salary Deferral Savings Plan,
as amended through February 27, 1992.
10.05a - Amendment to the Company's Salary Deferral Savings
Plan, effective January 31, 1992, adopted by the
Board of Directors on August 27, 1992.
10.05b - Amendment to the Company's Salary Deferral Savings
Plan dated January 10, 1994.
10.05c - Amendments to the Company's Salary Deferral
Savings Plan, dated July 29, 1994.
10.05d - Amendments to the Company's Salary Deferral
Savings Plan effective August 1, 1994 adopted by
the Board of Directors on August 25, 1994.
10.05e - Amendments to the Company's Salary Deferral
Savings Plan dated September 27, 1994.
10.05f - Amendments to the Company's Salary Deferral
Savings Plan dated February 21, 1995.
10.05g - Amendments to the Company's Salary Deferral
Savings Plan dated March 7, 1995.
10.05h - Amendments to the Company's Salary Deferral
Savings Plan dated June 26, 1995.
10.05i - Amendments to the Company's Salary Deferral
Savings Plan dated August 3, 1995.
10.05j - Amendments to the Company's Salary Deferral
Savings Plan adopted April 21, 1997.
10.06 - Laclede Gas Company Deferred Compensation Plan for
Non-Employee Directors dated March 26, 1981.
45<PAGE>
<PAGE>
10.06a - First Amendment to the Company's Deferred
Compensation Plan for Non-Employee Directors,
adopted by the Board of Directors on July 26,
1990.
10.06b - Amendment to the Company's Deferred Compensation
Plan for Non-Employee Directors, adopted by the
Board of Directors on August 27, 1992.
10.08 - The Retirement Plan for Non-Employee Directors of
Laclede Gas Company dated January 24, 1985.
10.08a - First Amendment to Retirement Plan for the
Company's Non-Employee Directors, adopted by the
Board of Directors on July 26, 1990.
10.08b - Amendments to the Retirement Plan for Non-Employee
Directors, adopted by the Board of Directors on
January 23, 1992.
10.09 - Salient Features of the Laclede Gas Company
Deferred Income Plan for Directors and Selected
Executives, including amendments adopted by the
Board of Directors on July 26, 1990.
10.09a - Amendment to the Company's Deferred Income Plan
for Directors and Selected Executives, adopted by
the Board of Directors on August 27, 1992.
10.10 - Form of Indemnification Agreement between the
Company and its Directors and Officers.
10.11 - Laclede Gas Company Management Continuity
Protection Plan, as amended, effective at the
close of business on January 27, 1994, by the
Board of Directors.
10.12 - Laclede Gas Company Restricted Stock Plan for
Non-Employee Directors, effective as of January 25,
1990.
10.12a - Extension and amendment of the Laclede Gas Company
Restricted Stock Plan for Non-Employee Directors
adopted by the Board of Directors on November 17,
1994.
10.14 - Salient Features of the Laclede Gas Company Deferred
Income Plan II for Directors and Selected Executives
adopted by the Board of Directors on September 23, 1993.
(b) During the last quarter of fiscal year 1997, no reports on Form 8-K
were required to be filed by the Company.
(c) Incorporated herein by reference to Index to Exhibits, page 49.
46<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
December 18, 1997 By Gerald T. McNeive, Jr.
Gerald T. McNeive, Jr.
Senior Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date Signature Title
12/18/97 Robert C. Jaudes Chairman of the Board and
Robert C. Jaudes Chief Executive Officer
(Principal Executive
Officer)
12/18/97 Douglas H. Yaeger Director, President and Chief
Douglas H. Yaeger Operating Officer
12/18/97 Gerald T. McNeive, Jr. Senior Vice President -
Gerald T. McNeive, Jr. Finance and Chief Financial
Officer (Principal Financial
and Accounting Officer)
12/18/97 Richard E. Beumer Director
Richard E. Beumer
12/18/97 Andrew B. Craig, III Director
Andrew B. Craig, III
12/18/97 Henry Givens, Jr. Director
Henry Givens, Jr.
12/18/97 C. Ray Holman Director
C. Ray Holman
12/18/97 Mary Ann Krey Director
Mary Ann Krey
12/18/97 William E. Nasser Director
William E. Nasser
12/18/97 Robert P. Stupp Director
Robert P. Stupp
12/18/97 H. Edwin Trusheim Director
H. Edwin Trusheim
47 <PAGE>
<PAGE>
<TABLE>
SCHEDULE II
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
RESERVES
FOR THE YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
<CAPTION>
- ---------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
BALANCE AT ADDITIONS CHARGED DEDUCTIONS BALANCE
BEGINNING TO TO OTHER FROM AT CLOSE
DESCRIPTION OF PERIOD INCOME ACCOUNTS RESERVES OF PERIOD
- ---------------------------------------------------------------------------
(Thousands of Dollars)
YEAR ENDED
SEPTEMBER 30, 1997:
<S> <C> <C> <C> <C> <C>
DOUBTFUL ACCOUNTS $ 7,984 $8,556 $3,583 (a) $12,072 (b) $ 8,051
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 3,655 $1,780 $ - $ 1,208 (c) $ 4,227
Deferred compensation 8,040 1,228 59 852 8,475
----------------------------------------------------
TOTAL $11,695 $3,008 $ 59 $ 2,060 $12,702
====================================================
YEAR ENDED
SEPTEMBER 30, 1996:
DOUBTFUL ACCOUNTS $ 5,189 $7,072 $2,904 (a) $7,181 (b) $ 7,984
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 3,598 $1,675 $ - $1,618 (c) $ 3,655
Deferred compensation 7,547 1,505 (196) 816 8,040
----------------------------------------------------
TOTAL $11,145 $3,180 $ (196) $2,434 $11,695
====================================================
YEAR ENDED
SEPTEMBER 30, 1995:
DOUBTFUL ACCOUNTS $ 4,943 $6,040 $3,397 (a) $9,191 (b) $ 5,189
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 4,070 $1,708 $ - $2,180 (c) $ 3,598
Deferred compensation 7,175 1,079 30 737 7,547
----------------------------------------------------
TOTAL $11,245 $2,787 $ 30 $2,917 $11,145
====================================================
<FN>
(a) Accounts reinstated, cash recoveries, etc.
(b) Accounts written off.
(c) Claims settled, less reimbursements from insurance companies.
</TABLE>
48<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
3.01(i)* Articles of Incorporation, as of February 11, 1994;
filed as Exhibit 4(a) to the Company's Form S-3
Registration Statement No. 33-52357.
3.01(ii)* By-Laws of the Company effective January 26, 1995;
filed as Exhibit 4.2 to the Company's Registration
Statement No. 33-58757.
3.01(ii)(a)* Amendment to the Company's By-Laws, effective at the
close of business on July 24, 1997, adopted by the
Company's Board of Directors on July 24, 1997; filed as
Exhibit 3.01 to the Company's 10-Q for the fiscal
quarter ended June 30, 1997 (File No. 1-1822).
4.01* - Mortgage and Deed of Trust, dated as of February 1,
1945; filed as Exhibit 7-A to Registration Statement
No. 2-5586.
4.02* - Fourteenth Supplemental Indenture, dated as of
October 26, 1976; filed on June 26, 1979 as Exhibit b-4
to Registration Statement No. 2-64857.
4.03* - Seventeenth Supplemental Indenture, dated as of May 15,
1988; filed as Exhibit 28(a) to the Registration
Statement No. 33-38413.
4.04* - Eighteenth Supplemental Indenture, dated as of
November 15, 1989; filed as Exhibit 28(b) to the
Registration Statement No. 33-38413.
4.05* - Nineteenth Supplemental Indenture, dated as of May 15,
1991; filed on May 16, 1991 as Exhibit 4.01 to the
Company's Form 8-K (File No. 1-1822).
4.06* - Twentieth Supplemental Indenture, dated as of
November 1, 1992; filed on November 4, 1992 as Exhibit
4.01 to the Company's Form 8-K (File No. 1-1822).
4.07* - Twenty-First Supplemental Indenture, dated as of May 1,
1993; filed on May 13, 1993 as Exhibit 4.01 to the
Company's Form 8-K (File No. 1-1822).
4.08* - Twenty-Second Supplemental Indenture dated as of
November 15, 1995; filed on December 8, 1995 as Exhibit
4.01 to the Company's Form 8-K (File No. 1-1822).
4.09* - Twenty-Third Supplemental Indenture dated as of
October 15, 1997; filed on November 6, 1997 as Exhibit
4.01 to the Company's Form 8-K (File No. 1-1822).
4.10* - Laclede Gas Company Board of Directors' Resolution dated
August 28, 1986 which generally provides that the Board
may delegate its authority in the adoption of certain
employee benefit plan amendments to certain designated
Executive Officers; filed as Exhibit 4.12 to the
Company's 10-K for the fiscal year ended September 30,
1991 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
49<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.10a* - Laclede Gas Company Board of Directors' Resolutions
dated August 25, 1988, which generally provide for
certain amendments to the Company's Wage Deferral
Savings Plan and Salary Deferral Savings Plan and that
certain Officers are authorized to execute such
amendments; filed as Exhibit 4.12g to the Company's 10-K
for the fiscal year ended September 30, 1988 (File No.
1-1822).
4.11* - Laclede Gas Company Wage Deferral Savings Plan,
incorporating amendments through December 12, 1990;
filed as Exhibit 4.13 to the Company's 10-K for the
fiscal year ended September 30, 1991 (File No. 1-1822).
4.11a* - Amendments to the Company's Wage Deferral and Salary
Deferral Savings Plans, effective May 1, 1992, adopted
by the Board of Directors on February 27, 1992; filed as
Exhibit 4.13 to the Company's 10-Q for the fiscal
quarter ended March 31, 1992 (File No. 1-1822).
4.11b* - Amendment to the Company's Wage Deferral Savings Plan,
effective August 1, 1992, adopted by the Board of
Directors on August 27, 1992; filed as Exhibit 4.13b to
the Company's 10-K for the fiscal year ended
September 30, 1992 (File No. 1-1822).
4.11c* - Amendments to the Company's Wage Deferral Savings Plan
dated July 29, 1994; filed as Exhibit 4.09c to the
Company's 10-K for the fiscal year ended September 30,
1994 (File No. 1-1822).
4.11d* - Amendments to the Company's Wage Deferral Savings Plan
effective August 1, 1994 and adopted by the Board of
Directors August 25, 1994; filed as Exhibit 4.09d to
the Company's 10-K for the fiscal year ended
September 30, 1994 (File No. 1-1822).
4.11e* - Amendments to the Company's Wage Deferral Savings Plan
dated February 21, 1995; filed as Exhibit 4.1 to the
Company's 10-Q for the fiscal quarter ended March 31,
1995 (File No. 1-1822).
4.11f* - Amendments to the Company's Wage Deferral Savings Plan
dated March 7, 1995; filed as Exhibit 4.2 to the
Company's 10-Q for the fiscal quarter ended March 31,
1995 (File No. 1-1822).
4.11g* - Amendments to the Company's Wage Deferral Savings Plan
dated June 26, 1995; filed as Exhibit 4.1 to the
Company's 10-Q for the fiscal quarter ended June 30,
1995 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
50<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.11h* - Amendments to the Company's Wage Deferral Savings Plan
adopted April 21, 1997; filed as Exhibit 4.2 to the
Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
4.12* - Missouri Natural Gas Division of the Laclede Gas Company
Dual Savings Plan incorporating amendments through
December 12, 1990; filed as Exhibit 4.01 to the
Company's 10-Q for the fiscal quarter ended December 31,
1990 (File No. 1-1822).
4.12a* - Amendment to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan effective
April 11, 1993, adopted by the Board of Directors on
August 26, 1993; filed as Exhibit 4.10a to the Company's
10-K for the fiscal year ended September 30, 1993 (File
No. 1-1822).
4.12b* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan dated July 29,
1994; filed as Exhibit 4.10b to the Company's 10-K for
the fiscal year ended September 30, 1994 (File No.
1-1822).
4.12c* - Amendment dated October 27, 1994 to the Missouri
Natural Gas Division of Laclede Gas Company Dual Savings
Plan; filed as Exhibit 4.1 to the Company's 10-Q for the
fiscal quarter ended December 31, 1994 (File No. 1-1822).
4.12d* - Amendment dated November 21, 1994 to the Missouri
Natural Gas Division of Laclede Gas Company Dual Savings
Plan; filed as Exhibit 4.2 to the Company's 10-Q for the
fiscal quarter ended December 31, 1994 (File No. 1-1822).
4.12e* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan dated February 21,
1995; filed as Exhibit 4.3 to the Company's 10-Q for the
fiscal quarter ended March 31, 1995 (File No. 1-1822).
4.12f* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan dated March 7,
1995; filed as Exhibit 4.4 to the Company's 10-Q for the
fiscal quarter ended March 31, 1995 (File No. 1-1822).
4.12g* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan adopted by the
Board of Directors on May 25, 1995; filed as Exhibit 4.2
to the Company's 10-Q for the fiscal quarter ended
June 30, 1995 (File No. 1-1822).
4.12h* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan dated June 26,
1995; filed as Exhibit 4.3 to the Company's 10-Q for the
fiscal quarter ended June 30, 1995 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
51<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.12i* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan dated August 3,
1995; filed as Exhibit 4.10i to the Company's 10-K for
the fiscal year ended September 30, 1995 (File No.
1-1822).
4.12j* - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan adopted April 21,
1997; filed as Exhibit 4.3 to the Company's 10-Q for the
fiscal quarter ended June 30, 1997 (File No. 1-1822).
4.13* - Rights Agreement dated as of April 3, 1996; filed on
April 3, 1996 as Exhibit 1 to the Company's Form 8-A
(File No. 1-1822).
10.01* - Incentive Compensation Plan of the Company, as amended;
filed as Exhibit 10.03 to the Company's 10-K for the
fiscal year ended September 30, 1989 (File No. 1-1822).
10.01a* - Amendment adopted by the Board of Directors on July 26,
1990 to the Incentive Compensation Plan; filed as
Exhibit 10.02a to the Company's 10-K for the fiscal
year ended September 30, 1990 (File No. 1-1822).
10.01b* - Amendments adopted by the Board of Directors on
August 23, 1990 to the Incentive Compensation Plan;
filed as Exhibit 10.02b to the Company's 10-K for the
fiscal year ended September 30, 1990 (File No. 1-1822).
10.01c* - Amendments to the Company's Incentive Compensation
Plan, effective January 26, 1995; filed as Exhibit 10.3
to the Company's 10-Q for the fiscal quarter ended
March 31, 1995 (File No. 1-1822).
10.02* - Senior Officers' Life Insurance Program of the Company,
as amended; filed as Exhibit 10.03 to the Company's 10-K
for the fiscal year ended September 30, 1990 (File
No. 1-1822).
10.02a* - Certified copy of resolutions of the Company's Board of
Directors adopted on June 27, 1991 amending the Senior
Officers' Life Insurance Program; filed as Exhibit 10.01
to the Company's 10-Q for the fiscal quarter ended
June 30, 1991 (File No. 1-1822).
10.02b* - Certified copy of resolutions of the Company's Board of
Directors adopted on January 28, 1993 amending the
Senior Officers' Life Insurance Program; filed as
Exhibit 10.03 to the Company's 10-Q for the fiscal
quarter ended March 31, 1993 (File No. 1-1822).
10.03* - Employees' Retirement Plan of Laclede Gas Company -
Management Employees, effective as of July 1, 1990, as
amended; filed as Exhibit 10.01 to the Company's 10-Q
for the fiscal quarter ended June 30, 1990 (File
No. 1-1822).
* Incorporated herein by reference and made a part hereof.
52<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.03a* - Amendment to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees adopted by the Board
of Directors on September 27, 1990; filed as
Exhibit 10.04a to the Company's 10-K for the fiscal year
ended September 30, 1990 (File No. 1-1822).
10.03b* - Amendments dated December 12, 1990 to the Employees'
Retirement Plan of Laclede Gas Company - Management
Employees; filed as Exhibit 10.04b to the Company's 10-K
for the fiscal year ended September 30, 1990 (File
No. 1-1822).
10.03c* - Amendment to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated January 10,
1994; filed as Exhibit 10.01 to the Company's 10-Q for
the fiscal quarter ended December 31, 1993 (File No.
1-1822).
10.03d* - Amendments to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated July 29, 1994;
filed as Exhibit 10.3d to the Company's 10-K for the
fiscal year ended September 30, 1994 (File No. 1-1822).
10.03e* - Amendments to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated February 21,
1995; filed as Exhibit 10.4 to the Company's 10-Q for
the fiscal quarter ended March 31, 1995 (File No.
1-1822).
10.03f* - Amendments to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated March 7, 1995;
filed as Exhibit 10.5 to the Company's 10-Q for the
fiscal quarter ended March 31, 1995 (File No. 1-1822).
10.03g* - Amendments to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated September 11,
1995; filed as Exhibit 10.03g to the Company's 10-K for
the fiscal year ended September 30, 1995 (File No.
1-1822).
10.03h* - Amendments to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees dated August 14,
1996; filed as Exhibit 10.03h to the Company's 10-K for
the fiscal year ended September 30, 1996 (File No.
1-1822).
10.03i* - Amendment to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees adopted by the Board
of Directors on December 19, 1996; filed as Exhibit
10.01 to the Company's 10-Q for the fiscal quarter
ended December 31, 1996 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
53<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.03j* - Amendment to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees adopted February 7,
1997; filed as Exhibit 10.01 to the Company's 10-Q for
the fiscal quarter ended March 31, 1997 (File No.
1-1822).
10.04* - Laclede Gas Company Supplemental Retirement Benefit
Plan, as amended and restated effective July 25, 1991;
filed as Exhibit 10.05 to the Company's 10-K for the
fiscal year ended September 30, 1991 (File No. 1-1822).
10.04a* - Trust Agreement with Boatmen's Trust Company, dated
September 4, 1990; filed as Exhibit 10.05c to the
Company's 10-K for the fiscal year ended September 30,
1990 (File No. 1-1822).
10.04b* - First Amendment to Laclede Gas Company Trust Agreement
dated as of September 4, 1990, adopted by the Board of
Directors on September 23, 1993; filed as Exhibit
10.05b to the Company's 10-K for the fiscal year ended
September 30, 1993 (File No. 1-1822).
10.05* - Laclede Gas Company Salary Deferral Savings Plan, as
amended through February 27, 1992; filed as Exhibit
10.08 to the Company's 10-Q for the fiscal quarter ended
March 31, 1992 (File No. 1-1822).
10.05a* - Amendment to the Company's Salary Deferral Savings Plan,
effective January 31, 1992, adopted by the Board of
Directors on August 27, 1992; filed as Exhibit 10.08a to
the Company's 10-K for the fiscal year ended
September 30, 1992 (File No. 1-1822).
10.05b* - Amendment to the Company's Salary Deferral Savings Plan
dated January 10, 1994; filed as Exhibit 10.02 to the
Company's 10-Q for the fiscal quarter ended December 31,
1993 (File No. 1-1822).
10.05c* - Amendments to the Company's Salary Deferral Savings
Plan, dated July 29, 1994; filed as Exhibit 10.05c to
the Company's 10-K for the fiscal year ended
September 30, 1994 (File No. 1-1822).
10.05d* - Amendments to the Company's Salary Deferral Savings Plan
effective August 1, 1994 adopted by the Board of
Directors on August 25, 1994; filed as Exhibit 10.05d
to the Company's 10-K for the fiscal year ended
September 30, 1994 (File No. 1-1822).
10.05e* - Amendments to the Company's Salary Deferral Savings Plan
dated September 27, 1994; filed as Exhibit 10.05e to the
Company's 10-K for the fiscal year ended September 30,
1994 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
54<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.05f* - Amendments to the Company's Salary Deferral Savings
Plan dated February 21, 1995; filed as Exhibit 10.1 to
the Company's 10-Q for the fiscal quarter ended
March 31, 1995 (File No. 1-1822).
10.05g* - Amendments to the Company's Salary Deferral Savings
Plan dated March 7, 1995; filed as Exhibit 10.2 to the
Company's 10-Q for the fiscal quarter ended March 31,
1995 (File No. 1-1822).
10.05h* - Amendments to the Company's Salary Deferral Savings Plan
dated June 26, 1995; filed as Exhibit 10.1 to the
Company's 10-Q for the fiscal quarter ended June 30, 1995
(File No. 1-1822).
10.05i* - Amendments to the Company's Salary Deferral Savings
Plan dated August 3, 1995; filed as Exhibit 10.05 to the
Company's 10-K for the fiscal year ended September 30,
1995 (File No. 1-1822).
10.05j* - Amendments to the Company's Salary Deferral Savings Plan
adopted April 21, 1997; filed as Exhibit 4.1 to the
Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
10.06* - Laclede Gas Company Deferred Compensation Plan for
Non-Employee Directors dated March 26, 1981; filed as
Exhibit 10.12 to the Company's 10-K for the fiscal year
ended September 30, 1989 (File No. 1-1822).
10.06a* - First Amendment to the Company's Deferred Compensation
Plan for Non-Employee Directors, adopted by the Board of
Directors on July 26, 1990; filed as Exhibit 10.09a to
the Company's 10-K for the fiscal year ended
September 30, 1990 (File No. 1-1822).
10.06b* - Amendment to the Company's Deferred Compensation Plan
for Non-Employee Directors, adopted by the Board of
Directors on August 27, 1992; filed as Exhibit 10.09b
to the Company's 10-K for the fiscal year ended
September 30, 1992 (File No. 1-1822).
10.07* - Agency Agreement Between Laclede Gas Company and
Mississippi River Transmission Corporation dated
August 26, 1993; filed as Exhibit 10.10 to the Company's
10-K for the fiscal year ended September 30, 1993 (File
No. 1-1822).
10.07a* - Agency Agreement between Laclede Gas Company and
Mississippi River Transmission Corporation dated
September 20, 1996 and effective November 1, 1996;
filed as Exhibit 10.07a to the Company's 10-K for the
fiscal year ended September 30, 1996 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
55<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.07b* - Propane sales contract between Phillips 66 Company and
Laclede Pipeline Company, dated February 2, 1989; filed
as Exhibit 10.10d to the Company's 10-K for the fiscal
year ended September 30, 1990 (File No. 1-1822).
10.07c* - Amendment, dated August 6, 1992, to Propane Sales
Contract between the Company and Phillips 66 Company;
filed as Exhibit 10.10c to the Company's 10-K for the
fiscal year ended September 30, 1992 (File No. 1-1822).
10.07d - Transportation Service Agreement dated October 13, 1993
between Mississippi River Transmission Corporation and
the Company.
10.07e - Storage Service Agreement dated October 13, 1993 between
Mississippi River Transmission Corporation and the
Company.
10.08* - The Retirement Plan for Non-Employee Directors of
Laclede Gas Company dated January 24, 1985; filed as
Exhibit 10.01 to the Company's 10-Q for the fiscal
quarter ended March 31, 1990 (File No. 1-1822).
10.08a* - First Amendment to Retirement Plan for the Company's
Non-Employee Directors, adopted by the Board of
Directors on July 26, 1990; filed as Exhibit 10.11a to
the Company's 10-K for the fiscal year ended
September 30, 1990 (File No. 1-1822).
10.08b* - Amendments to the Retirement Plan for Non-Employee
Directors, adopted by the Board of Directors on
January 23, 1992; filed as Exhibit 10.11 to the
Company's 10-Q for the fiscal quarter ended March 31,
1992 (File No. 1-1822).
10.09* - Salient Features of the Laclede Gas Company Deferred
Income Plan for Directors and Selected Executives,
including amendments adopted by the Board of Directors
on July 26, 1990; filed as Exhibit 10.12 to the
Company's 10-K for the fiscal year ended September 30,
1991 (File No. 1-1822).
10.09a* - Amendment to the Company's Deferred Income Plan for
Directors and Selected Executives, adopted by the Board
of Directors on August 27, 1992; filed as Exhibit 10.12a
to the Company's 10-K for the fiscal year ended
September 30, 1992 (File No. 1-1822).
10.10* - Form of Indemnification Agreement between the Company
and its Directors and Officers; filed as Exhibit 10.13
to the Company's 10-K for the fiscal year ended
September 30, 1990 (File No. 1-1822).
10.11* - Laclede Gas Company Management Continuity Protection
Plan, as amended, effective at the close of business on
January 27, 1994, by the Board of Directors; filed as
Exhibit 10.1 to the Company's 10-Q for the fiscal
quarter ended March 31, 1994 (File No. 1-1822).
* Incorporated herein by reference and made a part hereof.
56<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.12* - Laclede Gas Company Restricted Stock Plan for
Non-Employee Directors, effective as of January 25,
1990; filed as Exhibit 10.03 to the Company's 10-Q for
the fiscal quarter ended March 31, 1990 (File No.
1-1822).
10.12a* - Extension and amendment of the Company's Restricted
Stock Plan for Non-Employee Directors adopted by the
Board of Directors on November 17, 1994; filed as
Exhibit 10.1 to the Company's 10-Q for the quarter ended
December 31, 1994 (File No. 1-1822).
10.13* - Laclede Gas Company Trust Agreement with Boatmen's Trust
Company, dated December 7, 1989; filed as Exhibit 10.16
to the Company's 10-K for the fiscal year ended
September 30, 1990 (File No. 1-1822).
10.13a* - First Amendment to the Company's Trust Agreement,
adopted by the Board of Directors on July 26, 1990;
filed as Exhibit 10.16a to the Company's 10-K for the
fiscal year ended September 30, 1990 (File No. 1-1822).
10.13b* - Second Amendment to the Company's Trust Agreement
dated as of December 7, 1989, adopted by the Board of
Directors on September 23, 1993; filed as Exhibit 10.16b
to the Company's 10-K for the fiscal year ended
September 30, 1993 (File No. 1-1822).
10.13c - Third Amendment to Laclede Gas Company Trust Agreement
dated as of December 7, 1989 adopted by the Board of
Directors on August 28, 1997.
10.14* - Salient Features of the Laclede Gas Company Deferred
Income Plan II for Directors and Selected Executives
adopted by the Board of Directors on September 23, 1993;
filed as Exhibit 10.17 to the Company's 10-K for the
fiscal year ended September 30, 1993 (File No. 1-1822).
10.15* - January 17, 1997 line of credit agreement with
Mercantile Bank of St. Louis, National Association;
filed as Exhibit 10.03 to the Company's 10-Q for the
fiscal quarter ended March 31, 1997 (File No. 1-1822).
10.16* - January 14, 1997 line of credit agreement with The
Boatmen's National Bank of St. Louis; filed as Exhibit
10.04 to the Company's 10-Q for the fiscal quarter ended
March 31, 1997 (File No. 1-1822).
10.17* - January 15, 1997 line of credit agreement with Commerce
Bank, N.A.; filed as Exhibit 10.05 to the Company's 10-Q
for the fiscal quarter ended March 31, 1997 (File No.
1-1822).
10.18* - January 17, 1997 line of credit agreement with The Chase
Manhattan Bank; filed as Exhibit 10.02 to the Company's
10-Q for the fiscal quarter ended March 31, 1997 (File
No. 1-1822).
* Incorporated herein by reference and made a part hereof.
57<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.19* - Supplemental Line of Credit Agreement dated August 19,
1996 among Laclede Gas Company, The Chase Manhattan
Bank, The Boatmen's National Bank of St. Louis, and
Mercantile Bank of St. Louis National Association; filed
as Exhibit 10.19 to the Company's 10-K for the fiscal
year ended September 30, 1996 (File No. 1-1822).
10.19a* - Amendment dated December 23, 1996 of the Supplemental
Line of Credit Agreement dated August 19, 1996 among
the Company, The Chase Manhattan Bank, The Boatmen's
National Bank of St. Louis and Mercantile Bank of
St. Louis National Association; filed as Exhibit 10.02
to the Company's 10-Q for the fiscal quarter ended
December 31, 1996 (File No. 1-1822).
10.19b* - Extension and Further Amendment dated March 1, 1997 of
the Supplemental Line of Credit Agreement dated
August 19, 1996, as amended, among the Company,
The Chase Manhattan Bank, The Boatmen's National Bank of
St. Louis and Mercantile Bank of St. Louis National
Association; filed as Exhibit 10.07 to the Company's
10-Q for the quarter ended March 31, 1997 (File No.
1-1822).
10.20* - Three Day Additional Credit Agreement dated February 28,
1997 with The Boatmen's National Bank of St. Louis;
filed as Exhibit 10.06 to the Company's 10-Q for the
fiscal quarter ended March 31, 1997 (File No. 1-1822).
10.21* - April 1, 1997 Supplemental Line of Credit Agreement with
The Chase Manhattan Bank; filed as Exhibit 10.1 to the
Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
10.22* - April 15, 1997 Supplemental Line of Credit Agreement
with The Chase Manhattan Bank; filed as Exhibit 10.2 to
the Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
10.23* - April 30, 1997 Supplemental Line of Credit Agreement
with The Chase Manhattan Bank; filed as Exhibit 10.3 to
the Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
10.24* - July 1, 1997 Supplemental Line of Credit Agreement
with The Chase Manhattan Bank; filed as Exhibit 10.4 to
the Company's 10-Q for the fiscal quarter ended June 30,
1997 (File No. 1-1822).
10.25 - August 13, 1997 Supplemental Line of Credit Agreement
among the Company, The Chase Manhattan Bank,
NationsBank, N.A. and Mercantile Bank of St. Louis
National Association.
* Incorporated herein by reference and made a part hereof.
58<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
No.
12 - Ratio of Earnings to Fixed Charges.
21 - Subsidiaries of the Registrant.
23 - Consent of Independent Public Accountants.
27 - Financial Data Schedule UT
59
Contract #463
TRANSPORTATION SERVICE AGREEMENT
This TRANSPORTATION SERVICE AGREEMENT, hereinafter referred to as
"Agreement," made and entered into on this 13th day of October, 1993, by and
between Mississippi River Transmission Corporation, a Delaware corporation,
hereinafter called "MRT," and Laclede Gas Company, a Missouri corporation,
hereinafter called "Customer."
WHEREAS, Customer, a local distribution company, has submitted a valid
request time and date stamped 5:00 p.m. CST on October 1, 1993 that MRT
transport natural gas pursuant to Rate Schedule FTS; and
WHEREAS, MRT owns and operates an interstate natural gas pipeline and has
agreed to provide such service for Customer subject to the terms and
conditions hereof; and
WITNESSETH: That, in consideration of the mutual covenants herein
contained, the parties hereto agree that MRT shall transport for Customer,
on a firm basis, and Customer shall furnish, or cause to be furnished, to
MRT natural gas for such transportation during the term hereof, at the
prices and on the terms and conditions hereinafter provided.
ARTICLE 1
TERM
Section 1.1 - This Agreement shall become effective as of November 1,
1993, and shall continue for a primary term ending October 31, 1999;
provided, however, that this Agreement shall continue from year to year
thereafter unless and until terminated by either MRT or Customer by written
notice to the other delivered at least six (6) calendar months prior to the
next succeeding year of the Agreement.
Section 1.2 - Upon termination hereof for whatever reason, Customer
agrees to stop delivering gas to MRT for transportation hereunder. In
addition, upon termination of this Agreement, Customer agrees that it will
thereafter make no further demand for service hereunder and MRT agrees that
it will make no further demand for the continuation of services or any
payment related thereto, other than payments which are due with respect to
any services previously provided. Customer agrees to cooperate with and
assist MRT in obtaining whatever regulatory approvals and authorizations, if
any, as are necessary or appropriate in view of such termination and
abandonment of service hereunder.
Section 1.3 - Termination of this Agreement shall not relieve either
party of any obligation that might otherwise exist
60 <PAGE>
<PAGE>
to correct any volume imbalance hereunder nor relieve Customer of its
obligation to pay any monies due hereunder to MRT.
Section 1.4 - In accordance with the terms and conditions of Section 19
of the General Terms and Conditions of MRT's FERC Gas Tariff, Third Revised
Volume No. 1 (General Terms and Conditions), if Customer fails to pay within
thirty (30) days after payment is due all of the amount of any bill for
service rendered by MRT hereunder, MRT, upon ten (10) days' prior written
notice to Customer, may suspend further receipt and/or delivery of gas until
such amount is paid, or satisfactory credit arrangements have been made in
accordance with Section 5 of the General Terms and Conditions. If Customer
fails to pay or make satisfactory credit arrangements within such ten (10)
day notice period, MRT, in addition to any other remedy it may have
hereunder, may, upon thirty (30) days' written notice to Customer, terminate
this Agreement and cease further receipt and/or delivery of gas on behalf of
Customer.
ARTICLE 2
RATE SCHEDULE
Section 2.1 - Service hereunder shall be provided pursuant to Rate
Schedule FTS of MRT's FERC Gas Tariff, Third Revised Volume No. 1. Customer
will provide fuel in kind.
Section 2.2 - This Agreement shall be subject to the provisions of the
applicable rate schedule as well as the General Terms and Conditions set
forth in MRT's FERC Gas Tariff, Third Revised Volume No. 1, as on file and
in effect from time to time, and such provisions are incorporated herein by
this reference. Any curtailment of transportation service hereunder shall
be in accordance with the priorities set out in MRT's General Terms and
Conditions. To the extent not inconsistent with effective law, MRT shall
have the right to determine the priority and/or scheduling of the
transportation service under this Agreement and to revise the priority
and/or scheduling of this transportation service from time to time.
Section 2.3 - MRT shall have the right at any time and from time to
time to file and place into effect unilateral changes or modifications in
the rates and charges, and other terms and conditions of service hereunder,
as set forth in the applicable rate schedule and in the General Terms and
Conditions, in accordance with the Natural Gas Act or other applicable law.
ARTICLE 3
QUANTITIES
Section 3.1 - Customer may deliver or cause to be delivered to MRT at
the Receipt Points described in Exhibit A and A-1 to this Agreement, and MRT
agrees to accept at such points for transportation under this Agreement,
quantities of natural gas up
61<PAGE>
<PAGE>
to a Receipt Point Maximum Daily Quantity (Receipt Point MDQ) of 670,766
MMBtus per day which excludes a quantity of gas for Fuel Use and Loss. A
maximum receipt point quantity is specified in Exhibit A and Exhibit A-1 for
each receipt point. For firm service, the sum of all individual maximum
receipt point quantities listed in Exhibit A shall not exceed the maximum
receipt point quantities in the aggregate.
Section 3.2 - MRT shall redeliver thermally equivalent quantities, as
defined in the General Terms and Conditions, to Customer, and Customer
agrees to accept delivery of quantities of natural gas up to a Maximum Daily
Quantity (MDQ) of 655,160 MMBtus per day at the delivery points described in
Exhibit B and Exhibit B-1 to this Agreement. A maximum delivery point
quantity is also specified for each MRT delivery point in Exhibit B and
Exhibit B-1. For firm service, the sum of all individual maximum delivery
point quantities listed in Exhibit B shall not exceed the MDQ set forth in
this Section 3.2.
ARTICLE 4
RATE
Section 4.1 - Customer shall pay, or cause to be paid, to MRT each
month for all services provided hereunder the maximum applicable rate and
any other charges specified in MRT's FERC Gas Tariff, Third Revised Volume
No. 1, as on file and in effect from time to time, for service(s) rendered
hereunder, unless otherwise agreed in writing by MRT and Customer. The
maximum applicable rate(s) as of the effective date of this Agreement to be
charged by MRT for the service(s) to be provided hereunder are set forth on
Exhibit C.
Section 4.2 - In the event that MRT places on file with the Commission
another rate schedule which may be applicable to service rendered hereunder,
then MRT, at its option, may, from and after the effective date of such rate
schedule, utilize such rate schedule in the performance of this Agreement.
Such rate schedule or superseding rate schedule(s) and any revisions thereof
which shall be filed and become effective shall apply to and be a part of
this Agreement. MRT shall have the right to propose, file and make
effective with the Commissison, or other body having jurisdiction, changes
and revisions of any effective rate schedule(s) and/or General Terms and
Conditions, or to propose, file, and make effective superseding rate
schedules and/or General Terms and Conditions, for the purpose of changing
the rates, charges, and other provisions thereof effective as to Customer.
ARTICLE 5
ASSIGNMENT
Section 5.1 - This Agreement shall not be assigned by Customer in whole
or in part without MRT's prior written consent,
62<PAGE>
<PAGE>
which consent shall not be unreasonably withheld; provided, however, that
Customers under Rate Schedules FTS and SCT may release their capacity
consistent with the terms and conditions of the applicable rate schedule and
the General Terms and Conditions of MRT's FERC Gas Tariff, Third Revised
Volume No. 1. In addition to all other rights and remedies, MRT may
terminate the Agreement immediately if it is assigned by Customer without
MRT's consent, whether the assignment or contract be voluntary or by
operation of law or otherwise. Subject to the above, the respective rights
and obligations of the parties under the Agreement shall extend to and be
binding upon their heirs, successors, assigns and legal representatives.
ARTICLE 6
NOTICES
Section 6.1 - Any notice, statement, or bill provided for in this
Agreement shall be in writing and shall be considered as duly delivered when
hand-delivered, telecopied, or when received by the other party if mailed by
United States mail, postage prepaid, to the following addresses (unless and
until either party notifies the other, in writing of a change in its
address):
To Customer: Laclede Gas Company
Payments
Steven F. Mathews
720 Olive Street, Room 1524
St. Louis, MO 63101
(314) 342-0512
Notices
Steven F. Mathews
720 Olive Street, Room 1524
St. Louis, MO 63101
(314) 342-0512
Telecopy
(314) 421-1979
To MRT: Mississippi River Transmission Corporation
Payments
P. O. Box 955582
St. Louis, MO 63195-5582
Notices
Transportation Services
9900 Clayton Road
St. Louis, MO 63124
Nominations (other than electronic)
Transportation Services
9900 Clayton Road
St. Louis, MO 63124
Telecopy: (314) 991-7600
63<PAGE>
<PAGE>
Pipeline Operations
Gas Control Department
9900 Clayton Road
St. Louis, MO 63124
Telecopy: (314) 991-9900
Section 6.2 - Each party shall notify the other in writing of the name,
address, telephone number and telecopy number of the person or persons who
shall have authority to act for such party in connection with this
Agreement, and operating notices shall thereafter be served upon such person
or persons.
ARTICLE 7
MISCELLANEOUS
Section 7.1 - This Agreement constitutes the entire agreement between
the parties and no waiver, representation or agreement, oral or otherwise,
shall affect the subject matter hereof unless and until such waiver,
representation or agreement is reduced to writing and executed by authorized
representatives of the parties. No waiver by either Customer or MRT of any
one or more defaults by the other in performance of any of the provisions of
the Agreement shall operate or be construed as a waiver of any other
existing or future default or defaults, whether of a like or of a different
character.
Section 7.2 - At the time Customer executes this Agreement, Customer
shall complete Exhibit D if applicable.
Section 7.3 - Exhibits A, A-1, B, B-1, C, D and E attached hereto are
incorporated into this Agreement in their entirety.
Section 7.4 - This Agreement replaces all previously effective firm
sales agreements between the parties. 18 CFR Section 284.284.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date hereinabove first written.
ATTEST: MISSISSIPPI RIVER TRANSMISSION
CORPORATION
s/Loretta J. Grueninger By s/Kevin J. Blase (AVS)
Secretary Kevin J. Blase
9900 Clayton Road
St. Louis, MO 63124
ATTEST: LACLEDE GAS COMPANY
s/D. L. Godiner By s/Douglas H. Yaeger
Secretary Douglas H. Yaeger
Vice President-Operations,
Gas Supply and Technical Services
64
Contract #502
STORAGE SERVICE AGREEMENT
This STORAGE SERVICE AGREEMENT, hereinafter referred to as "Agreement,"
made and entered into on this 13th day of October, 1993, by and between
Mississippi River Transmission Corporation, a Delaware corporation,
hereinafter called "MRT," and Laclede Gas Company, a Missouri corporation,
hereinafter called "Customer."
WHEREAS, Customer, a local distribution company, has submitted a valid
request time and date stamped 5:00 p.m. CST on October 1, 1993 that MRT
provide it with natural gas storage service; and
WHEREAS, MRT owns and operates natural gas storage fields as part of its
interstate natural gas pipeline system and has agreed to provide such
storage service for Customer subject to the terms and conditions hereof; and
WITNESSETH: That, in consideration of the mutual covenants herein
contained, the parties hereto agree that MRT shall provide natural gas
storage service for Customer, on a firm basis, and Customer shall furnish,
or cause to be furnished, to MRT natural gas for such storage during the
term hereof, at the prices and on the terms and conditions hereinafter
provided.
ARTICLE 1
TERM
Section 1.1 - This Agreement shall become effective as of November 1,
1993, and shall continue for a primary term ending October 31, 1999;
provided, however, that this Agreement shall continue from year to year
thereafter unless and until terminated by either MRT or Customer by written
notice to the other delivered at least six (6) calendar months prior to the
next succeeding year of the Agreement.
Section 1.2 - Upon termination hereof for whatever reason, Customer
agrees to stop delivering gas to MRT for storage hereunder. In addition,
upon termination of this Agreement, Customer agrees that it will thereafter
make no further demand for service hereunder and MRT agrees that it will
make no further demand for the continuation of services or any payment
related thereto, other than payments which are due with respect to any
services previously provided. Customer agrees to cooperate with and assist
MRT in obtaining whatever regulatory approvals and authorizations, if any,
as are necessary or appropriate in view of such termination and abandonment
of service hereunder.
Section 1.3 - Termination of this Agreement shall not relieve either
party of any obligation that might otherwise exist
65<PAGE>
<PAGE>
to correct any volume imbalance hereunder nor relieve Customer of its
obligation to pay any monies due hereunder to MRT.
Section 1.4 - In accordance with the terms and conditions of Section 19
of the General Terms and Conditions, if Customer fails to pay within thirty
(30) days after payment is due all of the amount of any bill for service
rendered by MRT hereunder, MRT, upon ten (10) days' written notice to
Customer, may suspend further injections and/or withdrawals of gas until
such amount is paid, or satisfactory credit arrangements have been made in
accordance with Section 5 of the General Terms and Conditions of MRT's FERC
Gas Tariff, Third Revised Volume No. 1 (General Terms and Conditions). If
Customer fails to pay or make satisfactory credit arrangements within such
ten (10) day notice period, MRT, in addition to any other remedy it may have
hereunder, may, upon thirty (30) days' written notice to Customer, terminate
this Agreement and cease further injections and/or withdrawals of gas on
behalf of Customer.
ARTICLE 2
RATE SCHEDULE
Section 2.1 - Service hereunder shall be provided pursuant to Rate
Schedule FSS of MRT's FERC Gas Tariff, Third Revised Volume No. 1. Customer
will provide fuel in kind.
Section 2.2 - This Agreement shall be subject to the provisions of the
applicable rate schedule as well as the General Terms and Conditions set
forth in MRT's FERC Gas Tariff, Third Revised Volume No. 1, as on file and
in effect from time to time, and such provisions are incorporated herein by
this reference. Any curtailment of storage service hereunder shall be in
accordance with the priorities set out in MRT's General Terms and
Conditions. To the extent not inconsistent with effective law, MRT shall
have the right to determine the priority and/or scheduling of the storage
service under this Agreement and to revise the priority and/or scheduling of
this storage service from time to time.
Section 2.3 - MRT shall have the right at any time and from time to
time to file and place into effect unilateral changes or modifications in
the rates and charges, and other terms and conditions of service hereunder,
as set forth in the applicable rate schedule and in the General Terms and
Conditions, in accordance with the Natural Gas Act or other applicable law.
ARTICLE 3
QUANTITIES
Subject to the terms, conditions and limitations hereof and of MRT's
Rate Schedule FSS, MRT agrees to provide firm service for Customer and to
receive and store for Customer's account quantities of natural gas up to the
following contracted storage
66<PAGE>
<PAGE>
capacity: 23,550,243 MMBtu based on a heat content of 1,020 Btu per cubic
foot, which shall be the Maximum Stored Quantity (MSQ). Customer's Maximum
Daily Withdrawal Quantity (MDWQ) shall be 410,231 MMBtu. Daily injection
and withdrawal quantities shall be governed by Rate Schedule FSS.
ARTICLE 4
RATE
Section 4.1 - Customer shall pay, or cause to be paid, to MRT each
month for all services provided hereunder the maximum applicable rate and
any other charges specified in MRT's FERC Gas Tariff, Third Revised Volume
No. 1, as on file and in effect from time to time, for service(s) rendered
hereunder, unless otherwise agreed in writing by MRT and Customer. The
maximum applicable rate(s) as of the effective date of this Agreement to be
charged by MRT for the service(s) to be provided hereunder are set forth on
Exhibit A.
Section 4.2 - In the event that MRT places on file with the Commission
another rate schedule which may be applicable to service rendered hereunder,
then MRT, at its option, may, from and after the effective date of such rate
schedule, utilize such rate schedule in the performance of this Agreement.
Such rate schedule or superseding rate schedule(s) and any revisions thereof
which shall be filed and become effective shall apply to and be a part of
this Agreement. MRT shall have the right to propose, file and make
effective with the Commissison, or other body having jurisdiction, changes
and revisions of any effective rate schedule(s) and/or General Terms and
Conditions, or to propose, file, and make effective superseding rate
schedules and/or General Terms and Conditions, for the purpose of changing
the rates, charges, and other provisions thereof effective as to Customer.
ARTICLE 5
ASSIGNMENT
Section 5.1 - This Agreement shall not be assigned by Customer in whole
or in part without MRT's prior written consent, which consent shall not be
unreasonably withheld, provided however, that Customers under Rate Schedule
FSS may release their capacity consistent with the terms and conditions of
the applicable rate schedule and the General Terms and Conditions of MRT's
FERC Gas Tariff, Third Revised Volume No. 1. In addition to all other
rights and remedies, MRT may terminate the Agreement immediately if it is
assigned by Customer without MRT's consent, whether the assignment or
contract be voluntary or by operation of law or otherwise. Subject to the
above, the respective rights and obligations of the parties under the
Agreement shall extend to and be binding upon their heirs, successors,
assigns and legal representatives.
67<PAGE>
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ARTICLE 6
NOTICES
Section 6.1 - Any notice, statement, or bill provided for in this
Agreement shall be in writing and shall be considered as duly delivered when
hand-delivered, telecopied, or when received by the other party if mailed by
United States mail, postage prepaid, to the following addresses (unless and
until either party notifies the other, in writing of a change in its
address):
To Customer: Laclede Gas Company
Payments
Steve Mathews
720 Olive Street, Room 1524
St. Louis, MO 63101
(314) 342-0512
Notices
Steve Mathews
720 Olive Street, Room 1524
St. Louis, MO 63101
(314) 342-0512
Telecopy
(314) 342-9577
To MRT: Mississippi River Transmission Corporation
Payments
P. O. Box 955582
St. Louis, MO 63195-5582
Notices
Transportation Services
9900 Clayton Road
St. Louis, MO 63124
Nominations (other than electronic)
Transportation Services
9900 Clayton Road
St. Louis, MO 63124
Telecopy: (314) 991-7600
Pipeline Operations
Gas Control Department
9900 Clayton Road
St. Louis, MO 63124
Telephone: (314) 991-9900
Section 6.2 - Each party shall notify the other in writing of the name,
address, telephone number and telecopy number of the person or persons who
shall have authority to act for such party in connection with this
Agreement, and operating notices shall thereafter be served upon such person
or persons.
68<PAGE>
<PAGE>
ARTICLE 7
MISCELLANEOUS
Section 7.1 - This Agreement constitutes the entire agreement between
the parties and no waiver, representation or agreement, oral or otherwise,
shall affect the subject matter hereof unless and until such waiver,
representation or agreement is reduced to writing and executed by authorized
representatives of the parties. No waiver by either Customer or MRT of any
one or more defaults by the other in performance of any of the provisions of
the Agreement shall operate or be construed as a waiver of any other
existing or future default or defaults, whether of a like or of a different
character.
Section 7.2 - Exhibit A attached hereto is incorporated into this
Agreement in its entirety.
Section 7.3 - [This Agreement supersedes and cancels the Storage
Service Agreement dated not applicable between the parties hereto.]
Section 7.4 - [Complete as applicable]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date hereinabove first written.
ATTEST: MISSISSIPPI RIVER TRANSMISSION
CORPORATION
s/Loretta J. Grueninger By s/Kevin J. Blase (AVS)
Secretary Kevin J. Blase
9900 Clayton Road
St. Louis, MO 63124
ATTEST: LACLEDE GAS COMPANY
s/D. L. Godiner By s/Douglas H. Yaeger
Secretary Douglas H. Yaeger
Vice President-Operations,
Gas Supply and Technical Services
720 Olive Street
St. Louis, MO
69<PAGE>
<PAGE>
EXHIBIT A
BASE
TYPE OF SERVICE RATE*
Firm Storage Service
(Rate Schedule FSS) Deliverability Charge
(Maximum): $0.957/MMBtu
Capacity Charge
(Maximum): 21.09 cents/MMBtu
Injection Charge
(Maximum): 0.52 cents/MMBtu
Withdrawal Charge
(Maximum): 0.52 cents/MMBtu
70
Exhibit 10.13c
THIRD AMENDMENT TO LACLEDE GAS COMPANY
TRUST AGREEMENT DATED AS OF DECEMBER 7, 1989
WHEREAS, Laclede Gas Company ("Company"), and Boatmen's Trust Company
("Trustee") previously entered into a Trust Agreement made as of the 7th day
of December, 1989, known as the "Laclede Gas Company Trust Agreement," which
Trust Agreement has been previously amended by a First Amendment to said
Trust Agreement dated September 4, 1990 and a Second Amendment dated
September 29, 1993 and effective as of September 23, 1993 (said Trust
Agreement, as thus amended, being hereafter called the "Subject Trust
Agreement"); and
WHEREAS, the Company and the Trustee desire to amend the Subject Trust
Agreement further as hereinafter provided, with such further amendments to
be effective August 28, 1997;
NOW, THEREFORE, the Subject Trust Agreement is hereby amended effective
August 28, 1997, by adding the Laclede Gas Company Deferred Income Plan II
for Directors and Selected Executives (which Deferred Income Plan II was
adopted by the Company's Board of Directors on September 22, 1993) to the
incentive and deferred compensation and retirement plans listed on Exhibit A
to the Subject Trust Agreement, so that said Exhibit A shall hereafter read
in the manner set forth in Appendix No. 1 attached hereto and hereby made a
part hereof.
Except as expressly amended above, the Subject Trust Agreement is
hereby ratified, confirmed and approved.
IN WITNESS WHEREOF, the foregoing Amendment was executed this 15th day
of September, 1997, effective August 28, 1997.
LACLEDE GAS COMPANY
By: s/Gerald T. McNeive, Jr.
BOATMEN'S TRUST COMPANY, TRUSTEE
By: s/James R. Clement
71<PAGE>
<PAGE>
Appendix No. 1
To Third Amendment to Laclede Gas Company
Trust Agreement Dated as of December 7, 1989
EXHIBIT A
LACLEDE GAS COMPANY
TRUST AGREEMENT
Laclede Gas Company Incentive Compensation Plan
Laclede Gas Company Deferred Compensation Plan for Non-Employee Directors
Retirement Plan for Non-Employee Directors of Laclede Gas Company
Laclede Gas Company Deferred Income Plan for Directors and Selected
Executives
Deferred Compensation Agreement Between Laclede Gas Company and L. M.
Liberman
Laclede Gas Company Deferred Income Plan II for Directors and Selected
Executives
72
August 13, 1997
Laclede Gas Company
720 Olive Street
St. Louis, Missouri 63101
Ladies and Gentlemen:
Re: Line of credit agreement among Laclede Gas Company
(the "Company" or Laclede"), The Chase Manhattan Bank ("Chase"),
NationsBank, N.A. ("NationsBank") and Mercantile Bank of St. Louis
National Association ("Mercantile") (each a "Bank" and collectively the
"Banks". Said line of credit agreement shall hereinafter be called the
"Line of Credit Agreement").
The undersigned Banks have established for Laclede a committed line
of credit (the "Line of Credit") under which the Company may from time to
time prior to the Termination Date (such term and certain other capitalized
terms used herein being defined below) request advances ("Advances") subject
only to the terms and conditions expressly set forth below.
1. Definitions. As used herein, the following terms shall have the
meanings specified below:
a. "ABR Advance" shall mean any Advance bearing interest at a rate
determined by reference to the Alternate Base Rate as defined herein.
b. "Alternate Base Rate" shall mean for any day a rate per annum
(rounded upwards, if not already a whole multiple of 1/16 of 1%, to the next
higher 1/16 of 1%) equal to the greater of (i) the Prime Rate in effect on
such day, and (ii) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of
interest per annum announced by Chase from time to time as its prime rate in
effect at its principal office in the City of New York; each change in the
Prime Rate shall be effective on the Business Day such change is publicly
announced as being effective. "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions (calculated on a per
73<PAGE>
<PAGE>
2
annum basis) with members of the Federal Reserve Bank of New York, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such transactions
received by Chase from three Federal funds brokers of recognized standing
selected by Chase. If Chase shall have determined that it is unable to
ascertain the Federal Funds Effective Rate for any reason, the Alternate
Base Rate shall be determined without regard to clause (ii) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the Business Day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively. The Alternate Base Rate shall
be determined by Chase and such determination shall be conclusive absent
manifest error.
c. "Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which Chase
is open for business in the City of New York; PROVIDED that when the term
"Business Day" is used with respect to LIBO Rate Advances, such term shall
exclude any day on which banks in London are not open for dealings in U.S.
Dollar deposits in the London Interbank Market.
d. "Interest Period" shall mean (i) as to any LIBO Rate Advance, the
period commencing on the date of such LIBO Rate Advance and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2 or 3 months
thereafter, as the Company may elect, (ii) as to any ABR Advance, the period
commencing on the date of such ABR Advance and ending on the Termination
Date or any earlier date specified by the Company in the notice requesting
such Advance; PROVIDED, HOWEVER, that (1) if any Interest Period would end
on a day that shall not be a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, with respect to LIBO
Rate Advances only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (2) interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such
Interest Period.
74<PAGE>
<PAGE>
3
e. "LIBO Rate" shall mean, with respect to any LIBO Rate Advance for
any Interest Period, the interest rate per annum (rounded upwards, if
necessary, to the next higher 1/16 of 1%) at which U.S. Dollar deposits
approximately equal in principal amount to such LIBO Rate Advance and for a
maturity equal to the applicable Interest Period are offered by leading
banks in the London Interbank Market to the London office of Chase in
immediately available funds at or near 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period. The LIBO Rate shall
be determined by Chase and such determination shall be conclusive absent
manifest error.
f. "LIBO Rate Advance" shall mean any advance bearing interest at a
rate determined by reference to the LIBO Rate as defined herein.
g. "Termination Date" shall mean August 30, 1998.
2. Maximum Amounts Of Advances. After the Effective Date of this Line of
Credit Agreement, the combined aggregate principal amount of Advances at any
time outstanding from any Bank under this Line of Credit Agreement shall not
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 $70,000,000:
NAME OF BANK MAXIMUM AMOUNT
Chase $30,000,000
NationsBank $20,000,000
Mercantile $20,000,000
3. Effective Date. The Effective Date of this Line of Credit Agreement
shall be August 31, 1997 (the "Effective Date").
4. Requests For Advances. Laclede shall give the Bank or Banks from which
any Advances shall be requested written or telecopy notice (or telephone
notice promptly confirmed in writing or by telecopy) not later than 10:30
a.m., New York City time, three Business Days before each proposed LIBO Rate
Advance, and no later than 12:00 p.m., New York City time, the day of each
proposed ABR Advance. Such notice shall be irrevocable and shall in each
case specify (i) whether the Advance then being requested is to be a LIBO
Rate Advance or an ABR Advance; (ii) the date of such Advance (which shall
be
75<PAGE>
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4
a Business Day) and the amount thereof; and (iii) if such Advance is to be a
LIBO Rate Advance, the Interest Period with respect thereto. No LIBO Rate
Advance may be requested if the Interest Period applicable thereto would end
after the Termination Date. The proceeds of each Advance pursuant to the
Line of Credit shall be deposited by the Bank making such Advance in the
general deposit account of the Company with such Bank or disbursed in
another manner agreed upon by the Company and such Bank as promptly as
practicable, but in no event later than 4:00 p.m., New York City time, on
the date of such Advance.
5. Repayment of Advances. The principal of each Advance shall be due and
payable on the earliest of the last day of the Interest Period applicable
thereto, the Termination Date and the date of commencement of any
bankruptcy, insolvency or similar proceeding in respect of Laclede. Each
Bank shall also have the right, upon notice to Laclede, to cause the
principal of and all interest accrued but not yet paid on all Advances made
by it hereunder, together with all other amounts owed to it hereunder, to
become immediately due and payable in the event Laclede shall default in the
payment of any amount due to such Bank hereunder and such default shall
continue for three Business Days after notice thereof from such Bank.
Advances may be repaid at any time subject, in the case of any LIBO Rate
Advance repaid other than on the last day of an Interest Period, to the
indemnity obligations set forth below, but otherwise without premium or
penalty.
6. Interest On Advances. Laclede agrees to pay interest (a) in the case of
each ABR Advance at a rate per annum equal to the Alternate Base Rate and
(b) in the case of each LIBO Rate Advance at the LIBO Rate applicable to the
Interest Period in effect for such Advance plus 1/4% per annum. Interest on
each Advance shall accrue from and including the date such Advance is made
to but excluding the date such Advance is repaid, and shall be payable at
the time the principal of such Advance is repaid and, in the case of each
ABR Advance which shall not theretofore have been repaid, on the date 90
days after the date on which such Advance shall have been made. The Company
agrees to pay interest, on demand, on any overdue principal and, to the
extent permitted by applicable law, overdue interest until paid at a rate
per annum equal to the Alternate Base Rate plus 2%. Interest shall be
computed on the basis of the actual number of days elapsed in a year of
(i) 365 days in the case of ABR Advances when the Alternate Base Rate is
based on the Prime Rate and (ii) 360 days in all other cases.
76<PAGE>
<PAGE>
5
7. Facility Fee. Laclede agrees to pay to each Bank, on the last Business
Day of each calendar quarter and on the Termination Date or any earlier date
on which the availability of Advances from such Bank is terminated as
provided herein, a facility fee of .05% per annum on the Maximum Amount of
such Bank, whether used or unused. Such fee shall accrue from and including
the Effective Date to but excluding the earlier of the Termination Date and
any date on which the availability of Advances from such Bank is terminated
as provided herein.
8. Waiver, Amendment And Remedies. Laclede hereby waives diligence,
presentment, demand, protest, notice of dishonor and any other notice of any
kind whatsoever. Neither the failure nor any delay on the part of any Bank
in any particular instance to exercise any right, power or privilege
hereunder shall constitute a waiver thereof in that or any subsequent
instance. No consent, amendment, modification or waiver of the terms or
provisions hereof shall be effective unless in writing and executed by
Laclede and each Bank. All rights and remedies of each Bank are cumulative
and concurrent, and no single or partial exercise by any Bank of any right,
power or privilege shall preclude any other or further exercise of any other
right, power or privilege.
9. Conditions To Advances. The aggregate principal amount of Advances at
any time outstanding hereunder from any Bank shall in no event exceed the
Maximum Amount of such Bank. The making of Advances is also subject to the
absence of any material adverse change since September 30, 1996, in the
financial condition of the Company and to the receipt by each Bank of a copy
of this letter duly executed by Laclede and an executed Note in the form
attached as Exhibit A hereto, duly completed to set forth the name, the
address and the amount of the commitment of each Bank (the "Note"),
accompanied by such evidence of the corporate power and authority of Laclede
as the Banks may request.
10. Indemnification; Payment Of Additional Costs To Bank. Laclede shall
indemnify each Bank against any loss or reasonable expense which such Bank
may sustain or incur as a consequence of (a) any payment or prepayment of a
LIBO Rate Advance on a date other than the last day of the Interest Period
applicable thereto or (b) any failure of Laclede to borrow any LIBO Rate
Advance requested by it hereunder. Such loss or reasonable expense shall
include an amount equal to the excess, if any, as reasonably determined by
such Bank, of (i) its cost of obtaining the funds for the Advance being
77<PAGE>
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6
paid, prepaid or not borrowed for the period from the date of such payment,
prepayment or failure to borrow to the last day of the Interest Period for
such Advance (or, in the case of a failure to borrow, the Interest Period
for such Advance which would have commenced on the date of such failure)
over (ii) the amount of interest (as reasonably determined by such Bank)
that would be realized by such Bank in reemploying the funds so paid,
prepaid or not borrowed for such period or Interest Period, as the case may
be. A certificate of any Bank setting forth any amount or amounts which
such Bank is entitled to receive pursuant to this provision shall be
delivered to Laclede and shall be conclusive absent manifest error.
If after the date hereof any change in applicable law or regulation or
in the interpretation or administration thereof by any governmental
authority shall change the basis of taxation of payments to any Bank of the
principal of or interest on any LIBO Rate Advance or any other fees or
amounts payable hereunder, or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by any Bank, or shall impose
on any Bank any other condition affecting the Advances made by such Bank,
and the result of any of the foregoing shall be to increase the cost to such
Bank of making or maintaining such Advances or to reduce the amount of any
sum received or receivable by such Bank hereunder (whether of principal,
interest or otherwise) in respect thereof by an amount deemed by such Bank
to be material, then Laclede agrees to pay to such Bank such additional
amount or amounts as will compensate such Bank for such additional costs or
reduction. A certificate of any Bank setting forth the amount or amounts
which shall be necessary to compensate such Bank and, in reasonable detail,
the method by which such amounts have been determined shall be delivered to
Laclede and shall be conclusive absent manifest error.
Laclede agrees to pay the amount or amounts specified in any
certificate delivered pursuant to one of the two preceding paragraphs to the
applicable Bank within 10 days after its receipt of the same.
11. Notification Of Interest Rate. Chase hereby agrees, at the request of
Laclede or any other Bank, promptly to determine and advise Laclede or such
other Bank of the LIBO Rate or the Alternate Base Rate for any Interest
Period or day within an Interest Period.
78<PAGE>
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7
12. Termination Of Facility. The availability of Advances hereunder from
any Bank may be terminated by Laclede upon written or telecopy notice to
such Bank, and will in any event terminate on the earlier of the Termination
Date and the date of commencement of any bankruptcy, insolvency or similar
proceeding in respect of Laclede.
13. Corporate Authority. Laclede represents and warrants that it has the
corporate power and authority and all necessary regulatory approvals to
execute, deliver and perform its obligations under this Agreement and that
such execution, delivery and performance will not violate any law or
regulation applicable to Laclede or any agreement to which Laclede is party.
Each Bank is hereby authorized to rely on notices given hereunder by persons
reasonably believed by it to be acting on behalf of Laclede.
14. Amendment And Governing Law. This letter may not be amended or any
provision hereof waived or modified except by an instrument in writing
signed by each of the parties hereto. This letter shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. Headings. The headings in this Line of Credit Agreement are for
convenience and shall not limit or otherwise affect any of the provisions of
this Line of Credit Agreement.
Please indicate your acceptance of the terms hereof by signing in the
appropriate space below and returning to Chase the enclosed duplicate
originals 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.
Commitment Very truly yours,
$30,000,000 THE CHASE MANHATTAN BANK
by s/Paul V. Farrell
Name: Paul V. Farrell
Title: Vice President
Address for Notices:
One Chase Manhattan Plaza - Third Floor
New York, New York 10081
Attn. of:
Telecopy: (212) 552-7625
79<PAGE>
<PAGE>
8
$20,000,000 NATIONSBANK, N.A.
by s/Thomas C. Guyton
Name: Thomas C. Guyton
Title: Vice President
Address for Notices:
One NationsBank Plaza
800 Market Street
St. Louis, Missouri 63166-0236
Attn. of: Mr. Thomas Guyton
Telecopy: (314) 466-7783
$20,000,000 MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
by s/Timothy W. Hassler
Name: Timothy W. Hassler
Title: Vice President
Address for Notices:
#1 Mercantile Center
12th Floor
P.O. Box 524
St. Louis, Missouri 63101
Attn. of: Mr. Timothy W. Hassler
Telecopy: (314) 425-2162
Accepted and agreed to as of the date first
written above:
LACLEDE GAS COMPANY
by s/Gerald T. McNeive, Jr.
Name: Gerald T. McNeive, Jr.
Title: Senior Vice President-Finance
80
<TABLE>
Exhibit 12
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
-------------------------------------------------------------
<CAPTION>
Fiscal Year Ended September 30,
----------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Income before interest
charges and the cumulative
effect of change in
accounting $51,554 $50,771 $39,428 $38,611 $41,380
Add: Taxes based on
utility income 17,962 18,603 9,878 12,517 14,997
Taxes based on
miscellaneous income 392 (205) 252 121 1,068
One third of applicable
rentals charged to
operating expense
(which approximates the
interest factor) 294 291 288 287 284
-------------------------------------------
Total Earnings $70,202 $69,460 $49,846 $51,536 $57,729
===========================================
Interest on long-term debt $14,169 $13,939 $12,544 $12,626 $14,415
Other interest 4,919 4,008 5,983 3,768 1,798
One-third of applicable rentals
charged to operating expense
(which approximates the
interest factor) 294 291 288 287 284
-------------------------------------------
Total Fixed Charges $19,382 $18,238 $18,815 $16,681 $16,497
===========================================
Ratio of Earnings to
Fixed Charges 3.62 3.81 2.65 3.09 3.50
</TABLE>
81
Exhibit 21
LACLEDE GAS COMPANY AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
PERCENT OF
VOTING STOCK
OWNED
------------
Subsidiaries of Laclede Gas Company (Parent)
Laclede Pipeline Company 100%
Laclede Investment Corporation* 100%
Laclede Development Company** 100%
*Subsidiary Company of Laclede Investment Corporation
Laclede Energy Resources, Inc. 100%
Subsidiary Company of Laclede Energy Resources, Inc. 100%
Laclede Gas Family Services, Inc.
***Subsidiary Company of Laclede Development Company
Laclede Venture Corp. 100%
All of the above corporations have been organized under the laws of the
State of Missouri.
82
Exhibit 23
DELOITTE & TOUCHE LLP
One City Centre
St. Louis, MO 63101
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-60996 and 33-52357 of Laclede Gas Company and its subsidiary companies on
Form S-3 and in Registration Statement Nos. 33-38413, 33-57573 and 33-64933
of Laclede Gas Company and its subsidiary companies on Form S-8 of our
report dated November 20, 1997 appearing in this Annual Report on Form 10-K
of Laclede Gas Company and its subsidiary companies for the year ended
September 30, 1997.
Deloitte & Touche LLP
December 19, 1997
83
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<PERIOD-END> SEP-30-1997
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1,960
0
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97
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<FN>
Capital surplus, paid in includes $(24,017) treasury stock.
84
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