<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
FORM 10-K
ANNUAL REPORT
For the Fiscal Year Ended September 30, 2000
LACLEDE GAS COMPANY
720 Olive Street, St. Louis, MO 63101
<PAGE>
<PAGE>
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, 2000
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, 2000 was $428,804,175.
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. 18,877,987
Incorporated by Reference: Form 10-K Part
Proxy Statement dated December 15, 2000* III
Index to Exhibits is found on page 56.
* The information under the captions "Compensation Committee Report
Regarding Executive Compensation", "Performance Graph", and "Audit
Committee Report" on pages 21-25 of the Proxy Statement is NOT
incorporated by reference.
1
<PAGE>
<PAGE>
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.
NATURAL GAS SUPPLY
Laclede's fundamental gas supply strategy remains unchanged: to ensure that
the gas supplies we acquire are dependable and will be delivered when needed
and, insofar as it is compatible with that dependability, purchasing gas
that is economically priced.
In structuring our natural gas supply portfolio, we continue to focus on a
diverse group of suppliers that are strategically positioned to meet
Laclede's primary objectives. Laclede utilizes both Mid-Continent and Gulf
Coast gas sources to provide a level of supply diversity that facilitates
the optimization of pricing differentials, as well as protection against the
potential of regional supply disruptions. The gas is then transported from
these areas through several interstate pipelines to Laclede's service area.
Laclede continues to receive the majority of its natural gas through the
Mississippi River Transmission Corporation (MRT) system, but Laclede also
holds firm transportation on several interstate pipeline systems that access
gas supplies upstream of MRT. This year, Laclede entered into a new, long-
term agreement for firm transportation on the Koch Gateway pipeline system,
which used to provide a sizable portion of the gas supply to the St. Louis
region but has been utilized infrequently during the past decade. Laclede
releases firm transportation capacity to third parties when Laclede does not
need this capacity for its own customers, an opportunity that has provided
benefits to both its customers and shareholders.
During fiscal 2000, Laclede purchased natural gas from 24 different
suppliers to meet its current gas sales and storage injection requirements.
Natural gas purchased by Laclede for delivery to its service area through
the MRT system during the fiscal 2000 period totaled 58.1 billion cubic feet
(Bcf). Laclede's western takepoints received an additional 9.9 Bcf of gas
from Panhandle Eastern and the Missouri Pipeline system and 10.1 Bcf of gas
from the Williams Gas Pipeline system. Also, during fiscal 2000, some of
Laclede's commercial and industrial customers purchased their own gas
anddelivered to Laclede approximately 18.7 Bcf for transportation to them
through Laclede's distribution system.
The fiscal 2000 peak day sendout of gas to Laclede's customers occurred on
January 25, 2000, when the average temperature was 21 degrees Fahrenheit. On
that day, Laclede's customers consumed 825,809 Million British Thermal Units
(MMBtu) of gas. About 83% of the peak day demand was met with natural gas
transported to St. Louis through the MRT, Missouri Pipeline, and Williams
transportation systems, and 17% was met with gas withdrawn from Laclede's
underground storage facilities. The Company sold and transported 1,035.2
million therms of gas this year, an increase of 9.3 million therms from
fiscal 1999.
2
<PAGE>
<PAGE>
UNDERGROUND NATURAL GAS STORAGE
Laclede has a contractual right to store approximately 23.1 Bcf of gas in
MRT's storage system located in Unionville, Louisiana. MRT's tariffs allow
injections into storage from May 16 through November 15 and require the
withdrawal from storage of all but 2.2 Bcf from November 16 through May 15.
In addition 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 of gas based on the inventory level which the Company plans
to maintain.
PROPANE SUPPLY
Laclede Pipeline Company, Laclede Gas Company's wholly-owned subsidiary,
operates a propane pipeline that connects Laclede Gas Company's propane
storage facilities in St. Louis County, Missouri, to propane supply terminal
facilities located at Wood River and Cahokia, Illinois. Laclede Gas Company
vaporizes the propane to supplement its natural gas supply and meet the peak
demands on the distribution system.
REGULATORY MATTERS
At the federal level, the Federal Energy Regulatory Commission (FERC)
continues to consider changes in the regulation of interstate pipeline
transportation service that could affect the Company's future costs and,
ultimately, the rates its customers pay. The Company is monitoring these
developments closely and will intervene when necessary to promote the best
interests of both the Company and its customers.
At the state level, there have been several important developments during
the last fiscal year affecting Laclede, some of which are still pending.
After the Company litigated several key issues, the Missouri Public Service
Commission (MoPSC or Commission), on December 14, 1999, approved a general
rate increase designed to increase the Company's revenues by $11.24 million
annually. On May 11, 2000, the Company appealed to the Circuit Court of
Cole County, Missouri the MoPSC's decision on a contested issue in the 1999
rate case relating to the calculation of the Company's depreciation rates.
On December 1, 2000 the court remanded this decision to the MoPSC based on
inadequate findings of fact. For additional information on this general
rate increase, see Regulatory Matters in Management's Discussion and
Analysis of Financial Condition and Results of Operations on page 16.
In June 2000, the Commission approved an agreement Laclede had reached with
the Commission staff to modify and extend the Company's Gas Supply Incentive
Plan (GSIP) for an additional year, from October 1, 2000, through September
30, 2001. Under the GSIP, Laclede shares certain gains and losses related
to the acquisition and management of its gas supply assets. Further, since
October 1, 1999, the Company is permitted to retain all revenues resulting
from sales made outside of its traditional service area. These activities
continue to provide significant benefits to both its customers and its
shareholders. During the year ended September 30, 2000, Laclede's efforts
in this area resulted in cost savings of $19.3 million for its customers and
$9.6 million in pretax income to its shareholders. In addition to the
financial benefits of the program, the innovative structure under which the
3
<PAGE>
<PAGE>
Company operates allows its customers to retain the reliability inherent in
Laclede's long-standing supply relationships. On November 17, 2000, the
Company filed a proposal with the MoPSC to extend the GSIP, add a fixed
price component and make other modifications to the plan. For additional
information on the Gas Supply Incentive Plan, see Note 3 of Notes to
Consolidated Financial Statements on page 40.
In July 2000, the Commission approved the Company's request for a waiver of
the Purchased Gas Adjustment (PGA) provisions of the Company's tariff so
that it could make an unscheduled, out-of-cycle PGA change effective July
15, 2000. Through the PGA clause in the Company's tariff, it flows through
to customers the cost of purchased gas supplies. The clause provides for
only two scheduled PGA filings each year, one for the summer months and
another for the winter period, with one unscheduled filing during the winter
if certain conditions are met. However, this summer an additional PGA
filing was necessitated by the significant and unforeseen increase in
natural gas prices that occurred since the Company had made its scheduled
summer PGA filing in early April 2000. The run-up in prices was so steep
that, without the requested adjustment, the Company's gas supply costs would
have exceeded the gas supply portion of its rates by approximately $100,000
per day during the remainder of the summer and by even more in the early
fall.
Gas prices continued to climb throughout the summer and fall, and the
Company was forced to adjust rates even higher, effective November 15, 2000,
to cover the increased cost of natural gas supplies for the current winter.
Laclede hopes increased production of natural gas, stimulated by higher
wholesale prices, will eventually bring those prices down.
Laclede has an incentive-based Price Stabilization Program (PSP) under which
it purchases certain financial instruments designed to protect the Company
and its customers from unusually large increases in the cost of natural gas
during the heating season. However, the PSP, like the Company's gas costs,
has been adversely affected by inflated natural gas prices because of the
related increases in the cost of these financial instruments. The steady
rise in costs last spring effectively eliminated any opportunity for the
Company to share in cost reductions or gains under the PSP. Also, in an
effort to obtain more meaningful winter-time price protection for its
customers, Laclede reached an agreement with the Commission staff and the
Office of the Public Counsel in September 2000 to reduce the quantity of
natural gas purchases that would be covered under the PSP. On September 28,
2000, the MoPSC approved this agreement. For additional information on the
Price Stabilization Program, see Regulatory Matters in Management's
Discussion and Analysis of Financial Condition and Results of Operations on
page 16.
In October 1999, the staff of the MoPSC recommended that the Company credit
ratepayers with $2.5 million of pretax income the Company had realized in
fiscal 1997 and fiscal 1998 in connection with its treatment of a gas supply
contract under the operation of the Company's Gas Supply Incentive Plan. On
August 1, 2000, the MoPSC issued its report and order in which it rejected
staff's proposal and determined that no adjustment should be made to the
amounts retained by the Company under its Gas Supply Incentive Plan.
On October 30, 1998, the MoPSC issued an order opening a docket addressing
the adequacy of Laclede's copper service line replacement program. On
February 18, 2000, the staff of the MoPSC, the Office of Public Counsel in
the State of Missouri and the Company filed a joint settlement setting forth
a replacement schedule recommendation. Such settlement was approved by the
MoPSC on May 18, 2000. The Company currently has completed one phase and
continues to proceed in compliance with the approved program. Costs
associated with the program are either being deferred through a deferral
mechanism approved by the MoPSC or capitalized through the normal course of
business. One lawsuit involving a claim for wrongful death and punitive
4
<PAGE>
<PAGE>
damages has been settled, the effect of which is not significant and has
been provided for in the current year.
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, 2000, the Company had 1,985 employees, which includes 4
part-time employees.
*****
The Company has a labor agreement with Locals 5-6 and 5-194 of the Paper,
Allied-Industrial, Chemical & Energy Workers International Union (formerly
known as the Oil, Chemical and Atomic Workers International Union), two
locals which represent approximately 70% of the Company's employees. On
July 30, 2000, the Company and Union representatives reached a new four-year
labor agreement replacing the prior agreement which was to expire July 31,
2000. The new contract extends through July 31, 2004. The settlement
resulted in wage increases of 2.75% in all four 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 has historically been 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 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 eight steam customers representing approximately 1.9
million annual therm sales.
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
5
<PAGE>
<PAGE>
offer additional competitive advantages to Laclede and new opportunities for
cogeneration and large tonnage air conditioning applications.
*****
The Company is subject to various environmental laws and regulations. To
date they have not materially affected 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. With regard to the Company's
former manufactured gas plant site located in Shrewsbury, Missouri, the
Company and the state and federal environmental regulatory agencies have
agreed upon the actions needed at this site. Those actions are nearing
completion. In the course of recent site grading called for by the
agreement, some site materials that proved to be manufactured gas wastes
were released into an adjacent stream. The release was contained and
appropriate authorities notified. The Company is dealing with this
development as part of the remaining work being done at the site. The
Company currently estimates the overall costs of these actions will be
approximately $1,521,000. As of September 30, 2000, the Company has paid
$1,000,000 and reserved $521,000 for these actions. If the regulatory
agencies require any additional actions, Laclede will incur additional
costs.
The Company also applied to place the site of a different former
manufactured gas plant in the City of St. Louis, Missouri into the Missouri
Voluntary Cleanup Program (VCP). Laclede ceased its operations at and sold
this site in 1950. Subsequent owners of this site used it as a coke
manufacturing facility. The Missouri Department of Natural Resources
(MoDNR) accepted the Company's VCP application. Acceptance provides
opportunities to minimize costs of remediation while maximizing
possibilities for site development. The Company submitted a site
characterization report (SCR) to the MoDNR on June 25, 1999. The SCR was
accepted subject to the Company's development of a Remedial Action Plan
(RAP) due to MoDNR in early calendar year 2001. The RAP will include plans
to continue to monitor groundwater. Surface water sampling and the
performance of other remedial measures will likely occur during site
redevelopment. The Company will continue to inform MoDNR of site
development possibilities as well. The Company currently estimates that the
cost of the site investigations, agency oversight and related legal and
engineering consulting may be approximately $528,000. Currently, the
Company has paid $438,000 and reserved an additional $90,000. The Company
has requested that other former site owners and operators participate in the
cost of any site investigation. One former owner and operator agreed to
participate in these costs and has reimbursed the Company to date for
$150,000. The Company anticipates additional reimbursement from this party
of approximately $39,000. The Company plans to seek proportionate
reimbursement of all costs relative to this site from any other potentially
responsible parties if practicable.
While the scope of costs relative to the site in Shrewsbury will not be
significant, the scope of costs relative to the City of St. Louis site are
unknown and may be material. The Company has notified its insurers that it
intends to seek reimbursement from them of its costs at both these sites.
None of the Company's insurers have agreed that its insurance covers the
costs for which the Company intends to seek reimbursement. The majority of
the insurers have sent Laclede letters reserving their rights with respect
to the manufactured gas plant issues addressed in the Company's notices to
them. While some of the insurers have denied coverage with respect to these
issues, the Company continues to seek reimbursement from them. With regard
to the Shrewsbury site, the denial of coverage will not have any significant
6
<PAGE>
<PAGE>
impact on the Company. With regard to the City of St. Louis site, since the
scope of costs relative to this site are unknown and may be material, the
denial of coverage may have a material impact on the Company.
Previously, the MoPSC approved the Company's use of a cost deferral
mechanism for these costs. Deferral of such costs terminated July 31, 1999.
The Commission authorized previously deferred costs to be included in rates
without return on investment and amortized over a fifteen-year period,
effective with the implementation of new rates on December 27, 1999. Any
subsequent costs are being charged to expense, the effects of which are
offset, more or less, by a predetermined level of costs included in the new
rates.
*****
No additional common stock shares were issued in fiscal 2000. During 1999,
the Company issued 1,250,000 shares of common stock through a public
offering. The net proceeds of the offering, after deducting discount and
expenses, were $24.1 million.
Customers and revenues contributed by each class of customers for the last
three fiscal years are as follows:
Utility Operating Revenues $(000)
2000 1999 1998
---- ---- ----
Residential $346,159 $324,115 $365,768
Commercial & Industrial 123,578 112,890 132,504
Interruptible 1,922 1,808 2,254
Transportation 13,722 14,132 12,734
Off System and Other Incentive 40,163 16,216 29,852
Provision for Refunds and Other 5,608 4,549 5,080
-------- -------- --------
Total $531,152 $473,710 $548,192
======== ======== ========
Customers (End of Period)
2000 1999 1998
---- ---- ----
Residential 586,783 582,719 577,224
Commercial & Industrial 39,419 39,041 38,519
Interruptible 14 13 15
Transportation 154 155 149
------- ------- -------
Total 626,370 621,928 615,907
======= ======= =======
The Company has franchises having initial terms varying from five years to
an indefinite duration. Generally, a franchise allows the Company to lay
pipes and other facilities in the community. The Company's franchise in
Florissant, Missouri expired in 1992 and 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 current public utility business in
the State of Missouri.
7
<PAGE>
<PAGE>
*****
Laclede Investment Corporation, a wholly-owned subsidiary of Laclede Gas
Company, invests in other enterprises and has made loans to several joint
ventures engaged in real estate development.
Laclede Energy Resources, Inc., a wholly-owned subsidiary of Laclede
Investment Corporation, is engaged in non-utility efforts to market natural
gas and related activities.
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 promotes 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, a wholly-owned subsidiary of Laclede Gas
Company, participates in real estate development, primarily through joint
ventures.
Laclede Venture Corp., a wholly-owned subsidiary of Laclede Development
Company, 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.
Laclede Venture Corp. also 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 is presently no book value and no
effect on earnings is anticipated from this partnership investment.
The lines of business which constitute the non-utility activities of the
corporate family are not considered separately reportable operating segments
as defined by current accounting standards.
Item 2. Properties
The principal utility properties of Laclede consist of approximately 8,023
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 2005 with options to renew for up to 15 additional years.
The non-utility properties of Laclede do not constitute a significant
portion of the properties of the Company.
Item 3. Legal Proceedings
For a description of the Company's environmental matters, see Part I, Item
1, Business, Other Pertinent Matters. For a description of the Company's
pending regulatory matters, see Part I, Item I, Business, Regulatory
Matters.
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 2000.
8
<PAGE>
<PAGE>
EXECUTIVE OFFICERS OF REGISTRANT
Name, Age, and Position with Company Appointed (1)
D. H. Yaeger, Age 51
Chairman, President and Chief Executive Officer January 28, 1999
President and Chief Executive Officer January 1, 1999
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
G. T. McNeive, Jr., Age 58
Senior Vice President - Finance and General
Counsel March 1, 1998
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 59
Senior Vice President - Energy and
Administrative Services March 1, 1998
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
R. L. Russell, Age 63
Senior Vice President - Chief Operations Officer April 1, 2000
Senior Vice President - Operations and Marketing August 1, 1998
Vice President - Marketing February 1, 1997
(Director of Marketing) September 1, 1995
M. A. Huneidi, Age 42
Vice President - Information Systems February 1, 1999
Assistant Vice President - Information Systems February 1, 1997
(Director of Information Systems) July 1, 1991
M. E. McMillian, Age 54
Vice President - Human Resources September 22, 1983
J. Moten, Jr., Age 59
Vice President - Community Relations January 27, 1994
P. J. Palumbo, Age 55
Vice President - Industrial Relations September 1, 1992
J. G. Smith, Age 63
Vice President - Operations August 1, 1998
Assistant Vice President - Operations February 1, 1997
(Superintendent of Services and Facilities Management) April 1, 1988
J. A. Fallert, Age 45
Controller February 1, 1998
(Manager, Financial Services) February 1, 1992
9
<PAGE>
<PAGE>
R. L. Krutzman, Age 54
Treasurer and Assistant Secretary February 1, 1996
(Manager, Tax and Payroll) February 1, 1992
M. C. Kullman, Age 40
Secretary and Associate Counsel February 1, 1998
(Associate Counsel) August 20, 1990
P. B. Hunker, Jr., Age 61
Assistant Vice President - Associate General Counsel February 1, 1997
(Associate General Counsel) January 1, 1981
M. C. Pendergast, Age 44
Assistant Vice President - Associate General Counsel January 1, 2000
(Associate General Counsel) November 1, 1997
(Assistant General Counsel) November 1, 1993
R. L. Sherwin, Age 47
Assistant Vice President - Regulatory Administration February 17, 1999
Assistant Vice President - Human Resources January 1, 1997
Assistant Vice President - Customer Accounting September 1, 1992
M. R. Spotanski, Age 40
Assistant Vice President - Finance January 1, 2000
(Assistant to the President) March 1, 1998
(Manager, Gas Supply Planning) January 1, 1996
(Senior Rate Analyst) January 1, 1992
L. D. Rawlings, Age 47
Assistant Treasurer (2) February 15, 2000
( ) 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".
(2) Ms. Rawlings served as Vice President and Assistant Treasurer at
Mercantile Bancorporation, which became Firstar Corp. in September 1999,
from February 1996 to January 2000, and prior to that she was Vice
President of Asset/Liability Management for Mercantile from May 1991 to
February 1996.
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, 2000, there were 8,541 holders of
record of the Company's common stock.
10
<PAGE>
<PAGE>
Common Stock Market and Dividend Information
Price Range Dividends
Fiscal 2000 High Low Declared
--------------------------------------------------------
1st Quarter 23- 7/16 20 $.335
2nd Quarter 21- 7/8 17-1/2 $.335
3rd Quarter 20- 5/8 18-3/4 $.335
4th Quarter 22-11/16 19-3/16 $.335
Price Range Dividends
Fiscal 1999 High Low Declared
--------------------------------------------------------
1st Quarter 27 23 $.335
2nd Quarter 27 20-5/8 $.335
3rd Quarter 23-5/8 20 $.335
4th Quarter 23-3/4 21-1/4 $.335
11
Item 6. Selected Financial Data
Fiscal Years Ended September 30
(Thousands Except Per Share 2000 1999 1998 1997 1996
Amounts) ---- ---- ---- ---- ----
Summary of Operations
Operating Revenues:
Utility operating revenues $531,152 $473,710 $548,192 $607,236 $560,684
Non-utility operating
revenues 34,976 17,608 13,651 8,494 32,494
------------------------------------------------
Total operating revenues 566,128 491,318 561,843 615,730 593,178
------------------------------------------------
Operating Expenses:
Utility operating expenses:
Natural and propane gas 295,263 246,350 311,869 357,755 319,595
Other operation expenses 87,063 83,762 86,183 90,778 84,956
Maintenance 18,644 19,583 18,720 18,273 18,232
Depreciation & amortization 24,774 21,490 25,310 25,890 25,015
Taxes, other than
income taxes 42,799 41,669 43,782 46,543 44,995
------------------------------------------------
Total utility operating
expenses 468,543 412,854 485,864 539,239 492,793
Non-utility operating
expenses 34,269 17,245 12,659 7,547 30,587
------------------------------------------------
Total operating expenses 502,812 430,099 498,523 546,786 523,380
------------------------------------------------
Operating Income 63,316 61,219 63,320 68,944 69,798
Allowance for Funds Used
During Construction 397 739 609 367 17
Other Income and Income
Deductions - Net 365 (942) 674 597 (647)
------------------------------------------------
Income Before Interest
and Income Taxes 64,078 61,016 64,603 69,908 69,168
------------------------------------------------
Interest Charges:
Interest on long-term debt 15,164 13,966 14,797 14,169 13,939
Other interest charges 8,844 6,627 6,473 4,919 4,008
------------------------------------------------
Total interest charges 24,008 20,593 21,270 19,088 17,947
------------------------------------------------
Income Before Income Taxes 40,070 40,423 43,333 50,820 51,221
Income Taxes (Note 8) 14,105 14,361 15,441 18,354 18,397
------------------------------------------------
Net Income 25,965 26,062 27,892 32,466 32,824
Dividends on Preferred
Stock 93 97 97 97 97
------------------------------------------------
Earnings Applicable to
Common Stock $ 25,872 $ 25,965 $ 27,795 $ 32,369 $ 32,727
================================================
Earnings Per Share of
Common Stock $1.37 $1.43 $1.58 $1.84 $1.87
================================================
12
<PAGE>
<PAGE>
Item 6. Selected Financial Data
Fiscal Years Ended September 30
(Thousands Except Per Share 2000 1999 1998 1997 1996
Amounts) ---- ---- ---- ---- ----
Dividends Declared-
Common Stock $ 25,297 $ 24,459 $ 23,229 $ 22,825 $ 22,079
Dividends Declared Per
Share of Common Stock $1.34 $1.34 $1.32 $1.30 $1.26
Utility Plant
Gross Plant-End of Period $921,378 $876,431 $835,923 $794,901 $782,235
Net Plant-End of Period 548,833 519,378 490,682 467,678 452,270
Construction Expenditures 51,635 48,698 47,254 42,842 41,267
Property Retirements 6,663 8,190 6,205 6,241 6,506
Total Assets $931,740 $837,664 $777,291 $726,568 $695,204
Capitalization -
End of Period
Common Stock and Paid-In
Capital $106,579 $106,570 $ 82,460 $ 80,628 $ 80,628
Retained Earnings 200,423 199,848 198,342 193,776 184,232
Accumulated Other
Comprehensive Income - (77) - - -
Treasury Stock (24,017) (24,017) (24,017) (24,017) (24,017)
------------------------------------------------
Common stock equity 282,985 282,324 256,785 250,387 240,843
Redeemable Preferred Stock 1,763 1,923 1,960 1,960 1,960
Long-Term Debt 234,408 204,323 179,238 154,413 179,346
------------------------------------------------
Total capitalization $519,156 $488,570 $437,983 $406,760 $422,149
================================================
Shares of Common Stock
Outstanding-End of Period 18,878 18,878 17,628 17,558 17,558
Book Value Per Share $14.99 $14.96 $14.57 $14.26 $13.72
13
<PAGE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Laclede's earnings for fiscal 2000 were adversely impacted by warmer-
than-normal weather, resulting from temperatures that were the third warmest
over the last 100 years. In fact, earnings for all three fiscal years
reported were significantly impacted by the effects of warmer-than-normal
temperatures in our service area. However, the Company was successful in
mitigating the impact of weather on its financial results through, among
other factors, ongoing efforts to become more effective and efficient.
Earnings applicable to common stock for the fiscal year ended September 30,
2000 were $25.9 million, compared with $26.0 million for fiscal 1999 and
$27.8 million for fiscal 1998. Earnings per share were $1.37 in 2000 (on
average shares outstanding of 18,877,987), compared with $1.43 in 1999 (on
average shares outstanding of 18,138,261) and $1.58 in 1998 (on average
shares outstanding of 17,597,591). The slight decrease in earnings in
fiscal 2000 (from fiscal 1999) was primarily due to lower system sales
volumes arising from weather that was 5% warmer than the prior year and 16%
warmer than normal, higher pension and group insurance costs and higher
depreciation expense. Largely offsetting these factors were the benefit of
the Company's general rate increase which became effective December 27,
1999, higher income related to the Gas Supply Incentive Plan and off system
sales, and a lower provision for uncollectible accounts. The decrease in
earnings in fiscal 1999 (from fiscal 1998) was primarily due to lower system
sales volumes arising from weather that was 6% warmer than 1998 and 12%
warmer than normal, as well as a non-recurring investment loss recorded in
1999. These factors were partially offset by reduced expenses largely
attributable to effective cost-control efforts in 1999 and expense
reductions attributable to regulatory accounting changes instituted July 1,
1998 as part of the settlement of the Company's 1998 rate case. The
settlement of that rate case authorized, among other things, lower
depreciation rates and changes in the regulatory accounting treatment for
pension costs.
Utility operating revenues for fiscal year 2000 increased $57.4
million, or 12.1%, above fiscal 1999, and in 1999 decreased $74.5 million,
or 13.6%, below fiscal 1998. The 2000 increase in utility operating
revenues was primarily due to: higher wholesale gas costs of $47.4 million
(which are passed on to customers in accordance with the Purchased Gas
Adjustment Clause), higher off system sales and other incentive plan
revenues of $23.9 million, and higher revenues of $7.3 million attributable
to the partial year effect of the 1999 general rate increase. These factors
were partially offset by lower gas sales volumes arising from the warmer
weather and other variations, which combined total $21.2 million. The 1999
decrease in utility operating revenues versus the prior year was mainly
attributable to: lower wholesale gas costs of $38.5 million, reduced gas
sales volumes (due to warmer weather) and other variations, which combined
total $22.4 million, and decreased incentive plan revenues of $13.6 million.
Total therms sold and transported in 2000 were 1,035.2 million compared with
1,025.9 million in 1999 and 1,121.3 million in 1998.
Non-utility operating revenues increased $17.4 million in fiscal 2000
(from 1999) and $4.0 million in fiscal 1999 (from 1998). The increase each
year was primarily due to higher gas marketing sales in both periods by
Laclede Energy Resources, Inc., a wholly-owned non-utility subsidiary of the
Company.
Utility operating expenses in fiscal 2000 increased $55.7 million, or
13.5%, from fiscal 1999, and in 1999 decreased $73.0 million, or 15.0%, from
fiscal 1998. Natural and propane gas expense increased $48.9 million in
fiscal 2000 from fiscal 1999 primarily due to higher rates charged by our
suppliers and higher off system sales gas expense, partially offset by lower
volumes purchased for sendout. In 1999, natural and propane gas expense
decreased $65.5 million from 1998 primarily due to lower rates charged by
14
<PAGE>
<PAGE>
our suppliers, reduced volumes purchased for sendout, and lower incentive
plan gas costs. Other operation and maintenance expenses in 2000 increased
$2.4 million, or 2.3%, over 1999 principally due to increased net pension
costs, higher group insurance charges, and increased wage rates. These
increases were partially offset by lower provisions for uncollectible
accounts and injuries and damages, reduced charges for maintenance and
distribution and successful ongoing cost-control efforts. Other operation
and maintenance expenses in 1999 decreased $1.6 million, or 1.5%, from 1998
principally due to lower net pension costs resulting from the effects of the
settlement reached in the 1998 rate case and cost cutting reductions. These
factors were partially offset by higher wage rates, lower gains applicable
to lump sum pension settlements, and higher provisions for uncollectible
accounts and injuries and damages. Depreciation and amortization expense in
2000 increased $3.3 million, or 15.3%, primarily due to additional
depreciable property and an increased proportion of amortization related to
shorter-lived property. In 1999, depreciation and amortization expense
decreased $3.8 million, or 15.1%, from 1998 as a result of lower
depreciation rates effective July 1, 1998, authorized in the 1998 rate case.
The effect of lower depreciation rates was partially offset by additional
depreciable property. Taxes, other than income taxes, increased 2.7% in 2000
compared with 1999 and decreased 4.8% in 1999 compared with 1998. The
increase in 2000 was principally attributable to higher gross receipts taxes
(mainly reflecting increased gas sales revenues). The decrease in 1999
(from 1998) was principally attributable to lower gross receipts taxes
(mainly reflecting decreased gas sales revenues), the effect of which was
partially offset by higher property taxes.
Non-utility operating expenses increased $17.0 million in fiscal 2000
(compared with 1999), and increased $4.6 million in fiscal 1999 (compared
with 1998). The increase in both periods was primarily due to higher gas
expense associated with gas marketing sales by Laclede Energy Resources,
Inc.
Other income and income deductions-net increased $1.0 million from 1999
and decreased by $1.5 million in 1999 compared with 1998. The changes from
year to year mainly reflect the effect of a one-time $3.2 million pretax
charge recognized in fiscal 1999 resulting from the Company's minority
participation in Clark Enterprises. Clark Enterprises was comprised of a
group of civic-minded St. Louis firms that owned the St. Louis Blues Hockey
team and also financed and operated the Kiel Center in downtown St. Louis,
the sale of which was negotiated and completed in September, 1999. This
non-recurring charge was partially offset by a pretax gain of approximately
$1.9 million recognized in 1999 by the Company's wholly-owned subsidiary,
Laclede Development Company, on the sale of property known as Centre Park
40. Laclede Development Company owned its interest in Centre Park 40
through a real estate partnership.
Interest expense increased $3.4 million, or 16.6%, in fiscal 2000 from
1999 and decreased 3.2% in fiscal year 1999 from 1998. The 2000 increase
was mainly due to increased short-term interest expense (reflecting higher
average borrowings and increased rates) and the issuance of $25 million of
7% first mortgage bonds in June 1999. The 3.2% decrease in interest expense
in 1999 (from 1998) was due principally to lower interest charges on long-
term debt reflecting the net effect of the May 1998 redemption of a 9-5/8%
first mortgage bond issue of $25 million and the issuance of $25 million of
7% first mortgage bonds in June 1999. This decrease was partially offset by
increased short-term interest expense due to higher average borrowings.
The reductions in income tax expenses for all periods reported are
mainly due to lower pretax income.
On July 30, 2000, the Company and Union representatives reached a new
four-year labor agreement replacing the prior agreement which was to expire
July 31, 2000. The new contract extends through July 31, 2004. The
settlement resulted in wage increases of 2.75% in all four years, along with
lump-sum payment provisions and other benefit improvements.
15
<PAGE>
<PAGE>
Regulatory Matters
At the state level, there have been several important developments
during the fiscal year affecting Laclede, some of which are still pending.
On December 14, 1999 the Missouri Public Service Commission (MoPSC or
Commission) issued its report and order in the Company's 1999 rate case, in
which the MoPSC: (1) approved a partial settlement reached earlier in the
year by the parties on some issues (2) determined certain contested issues
and (3) authorized the Company to increase its rates for gas service by
$11.24 million on an annual basis. The new rates and settlement became
effective for service rendered on and after December 27, 1999. Under the
partial settlement, the Company discontinued deferring certain costs for
future recovery. As approved by the MoPSC, previously deferred costs are
being recovered, without return on investment, effective with implementation
of the new rates on December 27, 1999. The deferral of certain costs was
eliminated going forward, as expenses associated with those specific areas
are included in the newly approved rates. On May 11, 2000, the Company
appealed to the Circuit Court of Cole County, Missouri the MoPSC's decision
on one of the contested issues mentioned in item (2) above relating to the
calculation of the Company's depreciation rates. The Company believes that
any decision on this appeal would not adversely impact the $11.24 million
increase in rates or the Company's earnings; however, a favorable decision,
when recognized in the Company's rates, would be expected to benefit the
Company's cash flow.
Settlement of the Company's 1998 general rate case provided that rates
charged to the vast majority of the Company's customers, including all
residential customers, remained unchanged. Also, the settlement allowed the
Company to record, beginning July 1, 1998, substantially reduced expense
levels resulting from the authorization of lower depreciation rates and
changes in the regulatory accounting treatment for the recovery of pension
costs. The MoPSC authorized the continued use of certain cost deferral
mechanisms under which the Company subsequently applied for future rate
recovery of certain costs. In addition, the MoPSC approved a similar cost
deferral mechanism by which the Company subsequently applied for future rate
recovery of certain costs related to the Company's Year 2000 readiness
program.
On July 21, 1999, the MoPSC approved a Price Stabilization Program for
the fiscal 2000-2002 heating seasons that authorizes the Company to purchase
certain financial instruments to protect itself and its customers from
unusually large increases in the unregulated cost of natural gas. Because
of unforeseen increases in the cost of such financial instruments, the
Company notified the MoPSC on June 2, 2000, that it would not be
participating this year in one of the program's provisions to share in gains
achieved under the program. Laclede also made a filing on July 7, 2000
requesting the approval of certain temporary revisions to the program to
enhance its opportunity to obtain price protection for the Company and its
customers under current market conditions. These changes included a
proposed increase in the amount of funds authorized to purchase financial
instruments and a reduction in the amount of coverage required by the
program. The Company entered into a Stipulation and Agreement with the
staff of the MoPSC and the Office of the Public Counsel in the State of
Missouri that would allow the Company to exercise its discretion as to the
amount of coverage to obtain, but would not result in an increase in
authorized funds. All other provisions of the program currently in effect
would remain unchanged. On September 28, 2000, the MoPSC approved this
Agreement.
Under the Company's Gas Supply Incentive Plan as modified and approved
by the MoPSC effective October 1, 1999 for a one-year period, the Company
continues to share with its customers certain gains and losses related to
the acquisition of its gas supply assets. Also, effective October 1, 1999,
Laclede is also permitted to retain all income resulting from sales made
outside its traditional service area. These activities continue to provide
benefits to both the Company's customers and shareholders. Overall cost
16
<PAGE>
<PAGE>
savings for Laclede and its customers were $28.9 million in 2000, $28.4
million in 1999, and $31.0 million in 1998. Those efforts resulted in
pretax income to shareholders of $9.6 million in 2000, $5.4 million in 1999,
and $6.4 million in 1998. On February 1, 2000, the Company submitted a
filing with the MoPSC requesting that the Plan be extended beyond September
30, 2000. On June 8, 2000, the MoPSC issued an order approving a
recommendation made by the Company, staff of the MoPSC and other parties to
extend the Gas Supply Incentive Plan as modified for another year. As a
result, the term of the Plan now runs through September 30, 2001. The
parties who recommended an extension of the Gas Supply Incentive Plan also
agreed to cooperate on the development of a mutually acceptable multi-year
incentive plan that includes a fixed price mechanism for implementation once
the current plan expires. For additional information on the Gas Supply
Incentive Plan, see Note 3 of Notes to Consolidated Financial Statements on
page 40.
Accounting Changes
The Company has adopted Statement of Position (SOP) No. 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use",
issued by the American Institute of Certified Public Accountants (AICPA).
SOP No. 98-1 provides guidance on accounting for the costs of computer
software developed or obtained for internal use, including criteria for
capitalization of certain costs. Its adoption in fiscal 2000 did not have a
significant effect on the Company's financial position or results of
operations.
The Company also adopted Emerging Issues Task Force (EITF) 98-10,
"Accounting for Energy Trading and Risk Management Activities". EITF 98-10
requires energy contracts associated with trading activities to be recorded
at fair value on the balance sheet, with the changes in fair value included
in earnings. The fiscal 2000 adoption of EITF 98-10 had no effect on the
Company's financial position or results of operations.
The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting
and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedge
accounting. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. SFAS No. 133 requires that changes in the
fair value of a derivative be recognized currently in earnings, unless
specific hedge accounting criteria are met. SFAS No. 133 would have been
effective in fiscal 2000, however, its effective date was delayed until
fiscal 2001 as a result of the issuance of SFAS No. 137. In June 2000, the
FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities". This statement amends portions of SFAS No.
133. Among other things, SFAS No. 138 provides an exception for contracts
intended for the normal purchase and normal sale of something other than a
financial instrument or derivative instrument, for which physical delivery
is probable. Some of the Company's gas supply and transportation contracts
are derivative instruments as defined under SFAS No. 133; however, all of
these contracts qualify for the normal purchases and normal sales exception
provided by SFAS No. 138. The financial instruments purchased by Laclede
under its Price Stabilization Program are derivative instruments under SFAS
No. 133. These financial instruments are purchased as hedges against
significant increases in the price of natural gas, as approved by the MoPSC,
and are accounted for in accordance with the Company's Purchased Gas
Adjustment Clause. The effect of the Company's adoption of these statements
on October 1, 2000 did not have a significant impact on the Company's
financial position and results of operations as of that date.
Inflation
The accompanying Financial Statements reflect the historical costs of
events and transactions, regardless of the purchasing power of the dollar at
17
<PAGE>
<PAGE>
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 replacements of plant in
service other than normal replacements and those under existing replacement
programs, 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
the majority of the Company's construction program. Any remaining funding
requirements for construction or other needs have 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
when the Company borrows money to cover the gap between when the Company
purchases its natural gas and when the Company's customers pay for that gas.
These short-term cash requirements have traditionally been met through the
sale of commercial paper supported by lines of credit with banks.
During fiscal year 2000, the Company had lines of credit in place of up
to $190 million. The Company sold commercial paper aggregating to a maximum
of $158.2 million at any one time during the fiscal year, but did not borrow
from the banks under the aforementioned agreements. At this writing, the
Company has aggregate lines of credit totaling $210 million. Short-term
borrowings outstanding at September 30, 2000 were $127.0 million at a
weighted average interest rate of 6.6%. Based on short-term borrowings at
September 30, 2000, a change in interest rates of 100 basis points would
increase or decrease pretax earnings and cash flows by approximately
$1,270,000 on an annual basis.
On June 29, 2000, the Company filed a registration statement with the
Securities and Exchange Commission on Form S-3 relative to the sale of up to
$350 million of first mortgage bonds, debt securities and common stock. On
August 10, 2000, the MoPSC provided authorization to issue debt and equity
up to this amount. On September 21, 2000, the Company issued $30 million of
first mortgage bonds under this authorization with an interest rate of
7.90%, at an overall cost to the Company of 7.987%. The bonds were dated
September 15, 2000 and mature September 15, 2030. The proceeds were used to
repay short-term debt. The bonds were rated Aa3 by Moody's, AA- by Standard
& Poor's, and A+ by Fitch. The ratings also apply to the Company's other
outstanding bonds. The amount, timing, and type of securities under this
shelf registration in the future will depend on cash requirements and market
conditions.
On June 2, 1999, the Company issued $25 million of first mortgage
bonds with an interest rate of 7%, at an overall cost to the Company of
7.04%. The bonds were dated June 1, 1999 and mature June 1, 2029. The
proceeds were used to repay short-term debt. This issuance exhausted the
Company's shelf registration initially filed in 1993.
On October 21, 1997, the Company issued $25 million of first mortgage
bonds, 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 to
repay short-term debt.
On May 15, 1998, the Company redeemed, at its first opportunity, $25
million of 9-5/8% first mortgage bonds due May 15, 2013. The funds for this
redemption were supplied by short-term borrowing agreements.
At September 30, 2000, the Company had fixed-rate long-term debt
totaling $235 million. While these long-term debt issues are fixed-rate,
they are subject to changes in fair value as market interest rates change.
18
<PAGE>
<PAGE>
However, increases or decreases in fair value would impact earnings and cash
flows only if the Company were to reacquire any of these issues in the open
market prior to maturity.
On May 5, 1999, the Company issued and sold 1,250,000 shares of its common
stock to the public. Net proceeds of $24.1 million were used to repay
short-term debt.
Laclede Pipeline Company, Laclede Gas Company's wholly-owned subsidiary,
operates a propane pipeline that connects Laclede Gas Company's propane
storage facilities in St. Louis County, Missouri, to propane supply terminal
facilities located at Wood River and Cahokia, Illinois. In June 1999,
Laclede Pipeline Company purchased from Phillips Pipe Line Company for
approximately $1.4 million a section of existing propane pipeline, which
completed Laclede Gas Company's control of all facets of its propane peak
shaving assets allowing greater access to supply markets. Laclede Gas
Company vaporizes the propane to supplement its natural gas supply and meet
the peak demands on the distribution system. Laclede Pipeline Company's
previous contract arrangement with Phillips Petroleum Company, to provide
transportation of propane on an annual basis and that expired on March 31,
1999, is no longer needed.
Construction expenditures for utility purposes were $51.6 million in fiscal
2000 compared with $48.7 million in fiscal 1999 and $47.3 million in fiscal
1998. The Company expects fiscal 2001 utility construction expenditures to
approximate $40 million.
Capitalization at September 30, 2000, consisted of 54.5% common stock
equity, .3% preferred stock and 45.2% long-term debt.
The Company's ratio of earnings to fixed charges was 2.6 for 2000, 2.9
for 1999 and 2.9 for 1998.
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.
Environmental Matters
The Company is subject to various environmental laws and regulations.
To date they have not materially affected 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. With regard to the Company's
former manufactured gas plant site located in Shrewsbury, Missouri, the
Company and the state and federal environmental regulatory agencies have
agreed upon the actions needed at this site. Those actions are nearing
completion. In the course of recent site grading called for by the
agreement, some site materials that proved to be manufactured gas wastes
were released into an adjacent stream. The release was contained and
appropriate authorities notified. The Company is dealing with this
development as part of the remaining work being done at the site. The
Company currently estimates the overall costs of these actions will be
approximately $1,521,000. As of September 30, 2000, the Company has paid
$1,000,000 and reserved $521,000 for these actions. If the regulatory
agencies require any additional actions, Laclede will incur additional
costs.
The Company also applied to place the site of a different former
manufactured gas plant in the City of St. Louis, Missouri into the Missouri
Voluntary Cleanup Program (VCP). Laclede ceased its operations at and sold
this site in 1950. Subsequent owners of this site used it as a coke
manufacturing facility. The Missouri Department of Natural Resources
(MoDNR) accepted the Company's VCP application. Acceptance provides
opportunities to minimize costs of remediation while maximizing
possibilities for site development. The Company submitted a site
characterization report (SCR) to MoDNR on June 25, 1999. The SCR was
accepted subject to the Company's development of a Remedial Action Plan
(RAP) due MoDNR in early calendar year 2001. The RAP will include plans to
continue to monitor groundwater. Surface water sampling and the performance
19
<PAGE>
<PAGE>
of other remedial measures will likely occur during site redevelopment. The
Company will continue to inform MoDNR of site development possibilities as
well. The Company currently estimates that the cost of the site
investigations, agency oversight and related legal and engineering
consulting may be approximately $528,000. Currently, the Company has paid
$438,000 and reserved an additional $90,000. The Company has requested that
other former site owners and operators participate in the cost of any site
investigation. One former owner and operator agreed to participate in these
costs and has reimbursed the Company to date for $150,000. The Company
anticipates additional reimbursement from this party of approximately
$39,000. The Company plans to seek proportionate reimbursement of all costs
relative to this site from any other potentially responsible parties if
practicable.
While the scope of costs relative to the site in Shrewsbury will not be
significant, the scope of costs relative to the City of St. Louis site are
unknown and may be material. The Company has notified its insurers that it
intends to seek reimbursement from them of its costs at both these sites.
None of the Company's insurers have agreed that its insurance covers the
costs for which the Company intends to seek reimbursement. The majority of
the insurers have sent Laclede letters reserving their rights with respect
to the manufactured gas plant issues addressed in the Company's notices to
them. While some of the insurers have denied coverage with respect to these
issues, the Company continues to seek reimbursement from them. With regard
to the Shrewsbury site, the denial of coverage will not have any significant
impact on the Company. With regard to the City of St. Louis site, since the
scope of costs relative to this site are unknown and may be material, the
denial of coverage may have a material impact on the Company.
Previously, the MoPSC approved the Company's use of a cost deferral
mechanism for these costs. Deferral of such costs terminated July 31, 1999.
The Commission authorized previously deferred costs to be included in rates
without return on investment and amortized over a fifteen-year period,
effective with the implementation of new rates on December 27, 1999. Any
subsequent costs are being charged to expense, the effects of which are
offset, more or less, by a predetermined level of costs included in the new
rates.
Other Matters
On October 26, 2000, the Company announced its intention, subject to
receipt of the necessary approvals, to reorganize its corporate structure to
form a holding company known as The Laclede Group, Inc. As a result of the
reorganization, The Laclede Group, Inc. would become a holding company under
the Public Utility Holding Company Act of 1935 but would be exempt from all
provisions of the Act except Section 9(a)(2) thereof. Laclede Gas is taking
the necessary steps to obtain regulatory and shareholder approvals and filed
a registration statement on Form S-4 with the Securities and Exchange
Commission on October 27, 2000. Under the new structure, Laclede Gas
Company as the regulated utility, and the subsidiaries it currently holds,
would become subsidiaries of The Laclede Group, Inc. Even after forming a
holding company, the profile of Laclede Gas' regulated distribution business
is expected to remain substantially the same. At the January 25, 2001
annual meeting, shareholders of record on December 11, 2000 will vote on
this proposal.
In October 1999, the staff of the MoPSC recommended that the Company
credit ratepayers with $2.5 million of pretax income the Company had
realized in fiscal 1997 and fiscal 1998 in connection with its treatment of
a gas supply contract under the operation of the Company's Gas Supply
Incentive Plan. On August 1, 2000, the MoPSC issued its report and order in
which it rejected staff's proposal and determined that no adjustment should
be made to the amounts retained by the Company under its Gas Supply
Incentive Plan.
On October 30, 1998, the MoPSC issued an order opening a docket
addressing the adequacy of Laclede's copper service line replacement
20
<PAGE>
<PAGE>
program. On February 18, 2000, the staff of the MoPSC, the office of Public
Counsel in the State of Missouri and the Company filed a joint settlement
setting forth a replacement schedule recommendation. Such settlement was
approved by the MoPSC on May 18, 2000. The Company currently has completed
one phase and continues to proceed in compliance with the approved program.
Costs associated with the program are either being deferred through a
deferral mechanism approved by the MoPSC or capitalized through the normal
course of business. One lawsuit involving a claim for wrongful death and
punitive damages has been settled, the effect of which is not significant
and has been fully provided for in the current year.
On April 6, 1999, voters in Wentzville, Missouri, in western St.
Charles County, granted Laclede, by a 3-to-1 margin, a 20-year non-exclusive
franchise to provide natural gas service to much of the city south of
Interstate 70, west of Lake St. Louis. This will allow Laclede to continue
expansion of its service territory in areas where the Company anticipates
significant growth to occur during the next few years. The Company received
the MoPSC's approval to serve specifically this portion of Wentzville, as
well as currently unincorporated adjacent areas.
In January 2000, Laclede Energy Resources, Inc., (LER) finalized a
multi-year arrangement with UtiliCorp United, Inc. (UtiliCorp) to provide a
significant portion of the gas supply for a natural gas fired power plant
currently under construction in Pleasant Hill, Missouri. The four-year
agreement is scheduled to go into effect June 1, 2001. LER will provide
UtiliCorp with up to 5 billion cubic feet of natural gas annually - the
equivalent of about 5% of the annual sendout of Laclede Gas Company in a
normal year - and will manage fluctuations in UtiliCorp's gas-purchase
requirements on an as-needed basis to satisfy summer power needs.
After more than three years of preparing for any potential year 2000
problems that threatened non-compliant computer programs and processes, the
Company met the turn of the century without incident. Its computer-based
systems operated normally and continue to do so. The Company incurred total
costs of approximately $20.7 million through September 30, 2000 for
replacements and modifications of various computer systems. Nearly all of
this amount was capitalized. The Company used funds from internally
generated cash flows and short-term borrowings to pay these costs. In the
1998 rate case, the MoPSC authorized Laclede to capitalize the expenses
incurred in connection with making its information systems ready for year
2000 operations. The MoPSC also authorized Laclede to defer any interim
property tax, depreciation or carrying cost expenses that it incurred in
connection with these capitalized items. As a result of the 1999 rate case,
however, deferral of these costs ceased December 27, 1999. In 1999, the
Commission authorized previously deferred costs to be included in rates
(without return on investment) and amortized over a fifteen-year period
effective with the implementation of new rates on December 27, 1999.
21
<PAGE>
<PAGE>
Forward-Looking Statements
Certain statements in this 10-K are forward-looking statements made
based upon the Company's expectations and beliefs concerning future
developments and their potential effect on Laclede. These statements,
however, do not include financial statements and other statements of
historical fact. The forward-looking statements may be identified by the
use of such terms as "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "seek" and similar expressions. Future developments may
not be in accordance with the Company's expectations or beliefs and the
effect of future developments on Laclede may not be those anticipated.
Among the factors that may cause actual results to differ materially from
those contemplated in any forward-looking statements are:
- weather conditions and catastrophic events
- changes in transportation and gas supply costs or availability
- regulatory actions and initiatives of federal and state regulatory
agencies, some of which could be retroactive, including those
affecting:
-- financings
-- allowed rates of return
-- incentive regulation
-- industry and rate structure
-- purchased gas adjustment provisions
-- franchise renewal
-- environmental or safety requirements
- the effects of any industry or corporate restructuring
- the results of litigation
- conservation efforts of our customers
- economic factors such as changes in the conditions of capital
markets, interest rates and rates of inflation
- inability to retain existing customers or to attract new customers
- ability to obtain funds from operations or the sale of debt or
equity to finance necessary capital expenditures and other
investments
- employee work force issues
- statutory or tax changes
- changes in accounting standards
The Company does not, by including this statement, assume any
obligation to review or revise any particular forward-looking statement
referenced herein in light of future events.
22
<PAGE>
<PAGE>
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
To the Board of Directors or Laclede Gas Company:
We have audited the consolidated balance sheets and statements of
consolidated capitalization of Laclede Gas Company and its subsidiary
companies as of September 30, 2000 and 1999, and the related statements of
consolidated income, retained earnings, comprehensive income, and cash flows
for each of the three years in the period ended September 30, 2000. 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 these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 2000 in conformity with accounting principles generally
accepted in the United States of America. 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 16, 2000
23
<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 accounting
principles generally accepted in the United States of America 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 accounting principles generally accepted in the
United States of America 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 & Touche LLP, the Company's independent auditors, whose report is
contained herein, are responsible for auditing the Company's financial
statements in accordance with auditing standards generally accepted in the
United States of America. 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.
Douglas H. Yaeger
Chairman of the Board,
President and Chief Executive Officer
Gerald T. McNeive, Jr.
Senior Vice President
Finance and General Counsel
24
<PAGE>
<PAGE>
Item 8. Financial Statements and Supplementary Data
STATEMENTS OF CONSOLIDATED INCOME
(Thousands Except Per Share Amounts)
---------------------------------------------------------------------------
Years Ended September 30 2000 1999 1998
---------------------------------------------------------------------------
Operating Revenues:
Utility operating revenues $531,152 $473,710 $548,192
Non-utility operating revenues 34,976 17,608 13,651
------------------------------
Total operating revenues 566,128 491,318 561,843
------------------------------
Operating Expenses:
Utility operating expenses
Natural and propane gas 295,263 246,350 311,869
Other operation expenses 87,063 83,762 86,183
Maintenance 18,644 19,583 18,720
Depreciation and amortization 24,774 21,490 25,310
Taxes, other than income taxes 42,799 41,669 43,782
------------------------------
Total utility operating expenses 468,543 412,854 485,864
Non-utility operating expenses 34,269 17,245 12,659
------------------------------
Total operating expenses 502,812 430,099 498,523
------------------------------
Operating Income 63,316 61,219 63,320
Other Income and Income Deductions-
Net (Note 10) 762 (203) 1,283
------------------------------
Income Before Interest and
Income Taxes 64,078 61,016 64,603
------------------------------
Interest Charges:
Interest on long-term debt 15,164 13,966 14,797
Other interest charges 8,844 6,627 6,473
------------------------------
Total interest charges 24,008 20,593 21,270
------------------------------
Income Before Income Taxes 40,070 40,423 43,333
Income Taxes (Note 8) 14,105 14,361 15,441
------------------------------
Net Income 25,965 26,062 27,892
Dividends on Preferred Stock 93 97 97
------------------------------
Earnings Applicable to Common Stock $ 25,872 $ 25,965 $ 27,795
==============================
Average Shares of Common Stock Outstanding 18,878 18,138 17,598
==============================
Earnings Per Share of Common Stock
(after preferred dividends) $1.37 $1.43 $1.58
==============================
See the accompanying notes to financial statements.
25
<PAGE>
<PAGE>
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
(Thousands Except Per Share Amounts)
---------------------------------------------------------------------------
Years Ended September 30 2000 1999 1998
---------------------------------------------------------------------------
Balance at Beginning of Year $199,848 $198,342 $193,776
Add - Net Income, per statements 25,965 26,062 27,892
-----------------------------
Total 225,813 224,404 221,668
-----------------------------
Deduct - Cash Dividends Declared:
Preferred stock at required annual rates 93 97 97
Common stock, $1.34 per share in 2000 and
1999; $1.32 per share in 1998 25,297 24,459 23,229
-----------------------------
Total 25,390 24,556 23,326
-----------------------------
Balance at End of Year $200,423 $199,848 $198,342
=============================
See the accompanying notes to financial statements.
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(Thousands of Dollars)
---------------------------------------------------------------------------
Years Ended September 30 2000 1999 1998
---------------------------------------------------------------------------
Net Income $ 25,965 $ 26,062 $ 27,892
-----------------------------
Other Comprehensive Income (Loss):
Minimum pension liability adjustment 125 (125) -
Income tax expense (benefit) 48 (48) -
-----------------------------
Other Comprehensive Income (Loss) 77 (77) -
-----------------------------
Comprehensive Income $ 26,042 $ 25,985 $ 27,892
=============================
See the accompanying notes to financial statements.
26
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
--------------------------------------------------------------------------
September 30 2000 1999
--------------------------------------------------------------------------
Assets
Utility Plant $921,378 $876,431
Less - Accumulated depreciation & amortization 372,545 357,053
--------------------
Net utility plant 548,833 519,378
--------------------
Other Property and Investments, at Cost or Less
(net of accumulated depreciation and amortization,
2000, $2,314; 1999, $2,237) 26,546 26,122
--------------------
Current Assets:
Cash and cash equivalents 4,215 9,352
Accounts receivable:
Gas customers - Billed and unbilled 49,777 38,051
Other 11,488 10,218
Less - Allowances for doubtful accounts (6,058) (6,241)
Inventories:
Materials, supplies and merchandise at
average cost 5,491 5,680
Natural gas stored underground for current use
at LIFO cost 94,787 64,112
Propane gas for current use at FIFO cost 12,201 11,697
Prepayments and other 3,303 2,309
Unamortized purchased gas adjustments 14,907 -
Deferred income taxes (Note 8) 2,485 10,216
--------------------
Total current assets 192,596 145,394
--------------------
Deferred Charges:
Prepaid pension cost 97,229 80,994
Regulatory assets 64,336 64,069
Other 2,200 1,707
--------------------
Total deferred charges 163,765 146,770
--------------------
Total Assets $931,740 $837,664
====================
See the accompanying notes to financial statements.
27
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEETS (Continued)
(Thousands of Dollars)
--------------------------------------------------------------------------
September 30 2000 1999
--------------------------------------------------------------------------
Capitalization and Liabilities
Capitalization, per statements:
Common stock equity $282,985 $282,324
Redeemable preferred stock 1,763 1,923
Long-term debt 234,408 204,323
--------------------
Total capitalization 519,156 488,570
--------------------
Current Liabilities:
Notes payable (Note 9) 127,000 84,700
Accounts payable 45,660 31,716
Refunds due customers 176 1,425
Advance customer billings 15,290 15,665
Current portion of preferred stock 50 35
Wages and compensation accrued 9,974 10,620
Dividends payable 6,421 6,391
Customer deposits 4,302 3,961
Interest accrued 7,939 8,092
Taxes accrued 12,044 5,804
Unamortized purchased gas adjustments - 8,956
Other current liabilities 2,248 2,085
--------------------
Total current liabilities 231,104 179,450
--------------------
Deferred Credits and Other Liabilities:
Deferred income taxes (Note 8) 134,944 124,756
Unamortized investment tax credits 6,267 6,586
Pension and postretirement benefit costs 20,261 19,259
Other 20,008 19,043
--------------------
Total deferred credits and other liabilities 181,480 169,644
--------------------
Commitments and Contingencies (Note 12)
Total Capitalization and Liabilities $931,740 $837,664
====================
See the accompanying notes to financial statements.
28
<PAGE>
<PAGE>
STATEMENTS OF CONSOLIDATED CAPITALIZATION
(Thousands of Dollars)
--------------------------------------------------------------------------
September 30 2000 1999
--------------------------------------------------------------------------
Common Stock Equity (Note 4):
Common stock, par value $1 per share:
Authorized - 2000 and 1999, 50,000,000 shares
Issued - 2000 and 1999, 20,743,625 shares $ 20,744 $ 20,744
Paid-in capital 85,835 85,826
Retained earnings, per statements 200,423 199,848
Accumulated other comprehensive income
(minimum pension liability adjustment) - (77)
Treasury stock, at cost - 2000 and 1999,
1,865,638 shares (24,017) (24,017)
--------------------
Total common stock equity 282,985 282,324
--------------------
Redeemable Preferred Stock,
par value $25 per share (1,480,000 shares
authorized) issued and outstanding (Note 5):
5% Series B - 2000, 66,012 shares; 1999, 71,820
shares 1,600 1,760
4.56% Series C - 2000, 6,507 shares; 1999,
6,510 shares 163 163
--------------------
Total redeemable preferred stock 1,763 1,923
--------------------
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
6-1/2% Series, due October 15, 2012 25,000 25,000
7% Series, due June 1, 2029 25,000 25,000
7.90% Series, due September 15, 2030 30,000 -
--------------------
Total 235,000 205,000
Unamortized discount, net of premium,
on long-term debt (592) (677)
--------------------
Total long-term debt 234,408 204,323
--------------------
Total $519,156 $488,570
====================
Long-term debt and preferred stock amounts are exclusive of current
obligations.
See the accompanying notes to financial statements.
29
<PAGE>
<PAGE>
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars)
--------------------------------------------------------------------------
Years Ended September 30 2000 1999 1998
--------------------------------------------------------------------------
Operating Activities:
Net Income $25,965 $26,062 $27,892
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 24,875 21,592 25,403
Deferred income taxes and investment
tax credits 14,295 14,486 8,891
Other - net 112 911 (675)
Changes in assets and liabilities:
Accounts receivable - net (13,179) 4,027 1,877
Unamortized purchased gas adjustments (23,863) (6,859) 2,793
Deferred purchased gas costs 4,028 (67) (3,863)
Accounts payable 13,944 11,024 (8,936)
Refunds due customers (1,249) (6,164) 6,858
Taxes accrued 6,240 (2,886) 1,842
Natural gas stored underground (30,675) (9,139) 1,894
Other assets and liabilities (17,447) (9,922) (15,087)
------------------------------
Net cash provided by operating activities 3,046 43,065 48,889
------------------------------
Investing Activities:
Construction expenditures (51,635) (48,698) (47,254)
Employee benefit trusts (448) (997) (2,560)
Investments - non-utility (656) 2,215 (2,569)
Other (2,221) (1,211) (413)
------------------------------
Net cash used in investing activities (54,960) (48,691) (52,796)
------------------------------
Financing Activities:
Issuance of first mortgage bonds 30,000 25,000 25,000
Issuance of short-term debt - net 42,300 (13,800) 24,500
Issuance of common stock - 24,110 1,832
Dividends paid (25,387) (24,048) (23,215)
Redemption of first mortgage bonds - - (25,000)
Redemption of preferred stock (136) (2) -
------------------------------
Net cash provided by
financing activities 46,777 11,260 3,117
------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents (5,137) 5,634 (790)
Cash and Cash Equivalents at
Beginning of Year 9,352 3,718 4,508
------------------------------
Cash and Cash Equivalents at End of Year $ 4,215 $ 9,352 $ 3,718
==============================
Supplemental Disclosure of Cash Paid
(Refunded) During the Year for:
Interest $23,631 $19,003 $20,005
Income taxes (6,721) 4,768 4,110
See the accompanying notes to financial statements.
30
<PAGE>
<PAGE>
SCHEDULE OF INCOME TAXES (Note 8)
(Thousands of Dollars)
-------------------------------------------------------------------------
Years Ended September 30 2000 1999 1998
-------------------------------------------------------------------------
Included in Statements of
Consolidated Income:
Federal
Current $ 202 $ 310 $ 5,514
Deferred 11,987 12,291 7,777
Investment tax credit
adjustments - net (319) (347) (347)
State and local
Current (392) (435) 1,036
Deferred 2,627 2,542 1,461
-----------------------------
Total $14,105 $14,361 $15,441
=============================
See the accompanying notes to financial statements.
31
<PAGE>
<PAGE>
SCHEDULE OF INTERIM FINANCIAL INFORMATION
(Unaudited) (Note 13)
(Thousands of Dollars Except Per Share Amounts)
--------------------------------------------------------------------------
Three Months Ended Dec. 31 March 31 June 30 Sept. 30
--------------------------------------------------------------------------
2000
Total Operating Revenues $151,354 $238,311 $95,293 $81,170
Operating Income (Loss) 19,935 38,431 5,611 (661)
Net Income (Loss) 9,581 19,454 322 (3,392)
Earnings (Loss) Per Share
of Common Stock
(after preferred dividends) $ .51 $1.03 $ .02 $(.18)
--------------------------------------------------------------------------
Three Months Ended Dec. 31 March 31 June 30 Sept. 30
--------------------------------------------------------------------------
1999
Total Operating Revenues $153,477 $211,856 $70,319 $55,666
Operating Income 18,577 37,933 3,664 1,045
Net Income (Loss) 9,707 20,138 195 (3,978)
Earnings (Loss) Per Share
of Common Stock
(after preferred dividends) $ .55 $1.14 $ .01 $(.21)
See the accompanying notes to financial statements.
32
<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). All subsidiaries are wholly owned and material 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 accounting principles generally accepted in the United
States of America 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
maintenance expenses.
Utility plant is depreciated on the straight-line basis at rates based
on estimated service lives of the various classes of property. Annual
depreciation and amortization in 2000, 1999, and 1998 averaged approximately
2.8%, 2.6% and 3.1%, respectively, of the original cost of depreciable and
amortizable property. The increase in the composite rate in 2000 (over
1999) primarily reflects an increased proportion of amortization related to
shorter-lived property. The decrease in the fiscal 1999 composite rate
(from 1998) is mainly attributable to settlement of the Company's 1998 rate
case, in which the MoPSC authorized a decrease in depreciation rates for the
Company which was instituted July 1, 1998.
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 accounting principles generally
accepted in the United States of America 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
33
<PAGE>
<PAGE>
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).
The following regulatory assets and regulatory liabilities were
reflected in the Consolidated Balance Sheets as of September 30:
(Thousands of Dollars) 2000 1999
---------------------------------------------------------------------
Regulatory Assets:
Future income taxes due from customers $44,353 $42,339
Unamortized purchased gas adjustments 14,907 -
Pension and postretirement benefit costs 7,175 7,559
Purchased gas costs - 3,092
Compensated absences 6,295 6,045
Other 8,257 5,609
-------------------------
Total Regulatory Assets $80,987 $64,644
=========================
Regulatory Liabilities:
Unamortized investment tax credits $ 6,267 $ 6,586
Unamortized purchased gas adjustments - 8,956
Purchased gas costs 936 -
Other 287 260
-------------------------
Total Regulatory Liabilities $ 7,490 $15,802
=========================
On December 14, 1999 the MoPSC issued its report and order in the
Company's 1999 rate case, in which the MoPSC approved a partial settlement
reached earlier in the year by the parties on some issues. Under the
partial settlement, the Company discontinued deferring certain costs for
future recovery, as expenses associated with those specific areas are
included in the newly approved rates. Previously deferred costs, of
$10,529,000 and $2,064,000 are being recovered and amortized over fifteen-
year and ten-year periods, respectively, without return on investment,
effective with rates implemented December 27, 1999.
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 at September 30, 2000 and 1999 was more than the
LIFO cost by $31,747,000 and $15,450,000, respectively. The inventory
carrying value is not adjusted to the lower of cost or market prices
because, pursuant to the Company's Purchased Gas Adjustment Clause, actual
gas costs are recovered in customer rates.
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
and decreases in gas costs are passed on to its customers. The Company
makes 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. In order to better match customer billings
with higher than anticipated natural gas prices, the Company also requested
and received approval to implement a special unscheduled summer PGA filing
34
<PAGE>
<PAGE>
allowing the Company to change rates charged to its customers effective July
15, 2000.
The provisions of the PGA Clause also include the operation of the Gas
Supply Incentive Plan, which has been approved, as modified, to extend
through September 30, 2001. The Plan allows the Company to record income as
part of a sharing mechanism related to utilization of the Company's gas
supply assets, with certain amounts being passed on to the Company's
customers. See Note 3 for more information on the operation of the Plan.
The provisions of the PGA Clause also include the operation of the
Price Stabilization Program. Under those provisions, the MoPSC authorized
the Company to purchase financial instruments for the fiscal 1998 and fiscal
1999 heating seasons to protect the Company and its customers from unusually
large winter period gas price increases. The costs of purchasing these
instruments and financial gains derived from such activities are passed on
to the Company's customers through the operation of its PGA Clause.
Accordingly, there was no earnings impact as a result of the use of these
financial instruments in fiscal 1998 and fiscal 1999. In July 1999, the
MoPSC approved modifications to the PGA Clause with respect to the purchase
of financial instruments for the fiscal 2000-2002 heating seasons. As
modified, the Plan continues to provide significant price protection for the
Company and its customers above a predetermined level, but it also has an
additional opportunity to benefit from gains and cost reductions achieved
under the program. During fiscal 2000, the Company recorded $27,000 pretax
income under the provisions of the program. Due to market conditions, the
Company notified the MoPSC on June 2, 2000, that it would not be
participating in one of the program's provisions to share in gains achieved
under the program with respect to financial instruments purchased for the
fiscal 2001 heating season.
Pursuant to the provisions of the PGA Clause, the difference between
actual costs incurred and costs recovered through the application of the
PGA, amounts due to or from customers related to the operation of the
Incentive Plan, and amounts related to the Price Stabilization Program 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.
The balance in the current account is amortized as amounts are reflected in
customer billings.
Income Taxes - The Company has elected, for tax purposes only, various
accelerated depreciation provisions of the Internal Revenue Code. In
addition, 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.
Investment tax credits utilized prior to 1986 have been deferred and
are being amortized in accordance with regulatory treatment over the useful
life of the related property.
Cash and Cash Equivalents - For the purpose of the statements of cash
flows, the Company considers all highly liquid debt instruments purchased to
be cash equivalents. Such instruments are carried at cost, which
approximates market value.
Reclassification - Certain prior-period amounts have been reclassified
to conform to current-period presentation. These reclassifications did not
affect consolidated net income for the periods presented.
35
<PAGE>
<PAGE>
Accounting Changes - The Company has adopted Statement of Position
(SOP) No. 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use," issued by the American Institute of Certified
Public Accountants (AICPA). SOP No. 98-1 provides guidance on accounting
for the costs of computer software developed or obtained for internal use,
including criteria for capitalization of certain costs. Its adoption in
fiscal 2000 did not have a significant effect on the Company's financial
position or results of operations.
The Company also adopted Emerging Issues Task Force (EITF) 98-10,
"Accounting for Energy Trading and Risk Management Activities." EITF 98-10
requires energy contracts associated with trading activities to be recorded
at fair value on the balance sheet, with the changes in fair value included
in earnings. The fiscal 2000 adoption of EITF 98-10 had no effect on the
Company's financial position or results of operations.
The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting
and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedge
accounting. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. SFAS No. 133 requires that changes in the
fair value of a derivative be recognized currently in earnings, unless
specific hedge accounting criteria are met. SFAS No. 133 would have been
effective in fiscal 2000, however, its effective date was delayed until
fiscal 2001 as a result of the issuance of SFAS No. 137. In June 2000, the
FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." This statement amends portions of SFAS No.
133. Among other things, SFAS No. 138 provides an exception for contracts
intended for the normal purchase and normal sale of something other than a
financial instrument or derivative instrument, for which physical delivery
is probable. Some of the Company's gas supply and transportation contracts
are derivative instruments as defined under SFAS No. 133; however, all of
these contracts qualify for the normal purchases and normal sales exception
provided by SFAS No. 138. The financial instruments purchased by Laclede
under its Price Stabilization Program are derivative instruments under SFAS
No. 133. These financial instruments are purchased as hedges against
significant increases in the price of natural gas, as approved by the MoPSC,
and are accounted for in accordance with the Company's Purchased Gas
Adjustment Clause. The effect of the Company's adoption of these statements
on October 1, 2000 did not have a significant impact on the Company's
financial position and results of operations as of that date.
2. Pension Plans and Other Postretirement 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.
In February 1998, the Financial Accounting Standards Board issued SFAS
No. 132, "Employers' Disclosures about Pensions and other Postretirement
Benefits." This statement revises employers' disclosures about pension and
other postretirement benefit plans and requires additional information on
changes in the benefit obligations and fair values of plan assets.
Restatement of disclosures for earlier periods provided for comparative
purposes is required.
36
<PAGE>
<PAGE>
Pension costs in 2000, 1999 and 1998 amounted to $(7,620,000),
$(10,653,000) and $(3,345,000), respectively, including amounts recorded in
construction.
The net periodic pension costs (credits) include the following
components:
(Thousands of Dollars) 2000 1999 1998
----------------------------------------------------------------------
Service cost - benefits earned
during the period $ 9,281 $ 9,909 $ 8,866
Interest cost on projected
benefit obligation 14,714 14,355 14,327
Expected return on plan assets (25,649) (25,689) (21,100)
Amortization of transition obligation (716) (760) (826)
Amortization of prior service cost 1,024 1,082 1,143
Amortization of actuarial gain (6,606) (8,975) (4,994)
Regulatory adjustment 332 (575) (761)
-------------------------------
Net pension cost (credit) $ (7,620) $(10,653) $ (3,345)
===============================
The MoPSC ordered in the 1998 general rate case, effective October 27,
1998, certain pension costs to be recovered on a payment basis up to a
$314,000 allowance, with the difference between actual payments and the
allowance to be deferred. The allowance was previously $313,000 effective
September 1, 1996. Such deferrals terminated July 31, 1999. In the 1999
rate case, the Commission authorized amounts deferred pursuant to the
September 1, 1996 and October 27, 1998 allowances to be included in rates
without return on investment and amortized over a fifteen-year period,
effective with the implementation of new rates on December 27, 1999. The
MoPSC also ordered in the 1998 rate case that, beginning July 1, 1998, the
return on plan assets be based on the market value of plan assets.
Previously, such calculations were based on a market-related value of plan
assets, which method recognized certain gains and losses in assets over a
three-year period. Also, beginning July 1, 1998, the unrecognized net gain
or loss balances subject to amortization are based upon the most recent
five-year average of the unrecognized gain or loss balance. Such
methodology was implemented prospectively. Net gains and losses subject to
amortization are amortized over a five-year period, as ordered by the MoPSC.
Other variances in net pension costs are primarily attributable to actuarial
and investment experience.
The following table sets forth the reconciliation of the beginning and
ending balances of the pension benefit obligation at September 30:
(Thousands of Dollars) 2000 1999
-----------------------------------------------------------------------
Benefit obligation at beginning of year $205,174 $237,938
Service cost 9,281 9,909
Interest cost 14,714 14,355
Plan amendments 3,112 -
Actuarial gain (9,224) (26,932)
Settlements (13,899) (20,929)
Gross benefits paid (8,695) (9,167)
--------------------
Benefit obligation at end of year $200,463 $205,174
====================
37
<PAGE>
<PAGE>
The following table sets forth the reconciliation of the beginning and
ending balances of the fair value of plan assets recognized in the Company's
consolidated balance sheets at September 30:
(Thousands of Dollars) 2000 1999
----------------------------------------------------------------------
Fair value of plan assets at beginning of year $310,158 $309,288
Actual return on plan assets 14,895 22,428
Employer contributions 5,361 8,538
Settlements (13,899) (20,929)
Gross benefits paid (8,695) (9,167)
----------------------
Fair value of plan assets at end of year 307,820 310,158
----------------------
Funded status at end of year 107,357 104,984
Unrecognized net actuarial gain (34,629) (44,925)
Unrecognized prior service cost 15,897 13,810
Unrecognized net transition asset (1,572) (2,377)
Fourth quarter contribution adjustment 56 56
----------------------
Net amount recognized at end of year 87,109 71,548
======================
Amounts recognized in the consolidated
balance sheets consist of:
Prepaid pension cost 97,229 80,994
Accrued benefit liability (10,368) (9,895)
Intangible asset 248 324
Accumulated other comprehensive income - 125
----------------------
Net amount recognized at end of year $ 87,109 $ 71,548
======================
The projected benefit obligation, which is based on a June 30
measurement date, was determined using a weighted average discount rate of
8.00% for 2000 and 7.50% for 1999, and a weighted average rate of future
compensation increase of 4.25% for both 2000 and 1999. The effect of the
above changes in pension assumptions was to decrease the projected benefit
obligation by $10,472,000. The expected long-term rate of return on plan
assets was 8.50% for both 2000 and 1999.
The aggregate projected benefit obligation and fair value of plan
assets for plans with benefit obligations in excess of plan assets were
$55,925,000 and $37,701,000, respectively, for fiscal 2000 and $56,881,000
and $39,163,000, respectively, for fiscal 1999. The aggregate accumulated
benefit obligation and fair value of plan assets for plans with accumulated
benefit obligations in excess of plan assets were $42,044,000 and
$37,701,000, respectively, for fiscal 2000, and $3,944,000 and $0,
respectively, for fiscal 1999.
Pursuant to the provisions of the Company's pension plans, pension
obligations may be settled by lump-sum cash payments. Settlements in 2000,
1999 and 1998 resulted in pretax gains of approximately $2,248,000,
$1,641,000 and $3,771,000, respectively.
The cost of the Company's defined contribution plans, which cover
substantially all employees, amounted to $2,648,000, $2,480,000 and
$2,304,000 for the years 2000, 1999 and 1998, respectively.
The Company also provides certain life insurance benefits at
retirement. Medical insurance is available after early retirement until age
65.
Missouri state law provides for the recovery in rates of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
38
<PAGE>
<PAGE>
(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.
Postretirement benefit costs in 2000, 1999 and 1998 amounted to
approximately $5,962,000, $3,856,000 and $4,265,000, respectively, including
amounts charged to construction.
Net periodic postretirement benefit costs consisted of the following
components:
(Thousands of Dollars) 2000 1999 1998
---------------------------------------------------------------------
Service cost - benefits earned
during the period $1,973 $1,959 $1,354
Interest cost on accumulated
postretirement benefit
obligation 2,814 2,478 2,327
Expected return on plan assets (574) (431) (337)
Amortization of transition
obligation 1,267 1,267 1,267
Amortization of prior service cost 365 365 365
Amortization of actuarial (gain)/loss 64 52 (1,151)
Regulatory adjustment 53 (1,834) 440
----------------------------
Net postretirement benefit cost $5,962 $3,856 $4,265
============================
The following table sets forth the reconciliation of the beginning and
ending balances of the postretirement benefit obligation at September 30:
(Thousands of Dollars) 2000 1999
--------------------------------------------------------------------
Benefit obligation at beginning of year $35,843 $36,813
Service cost 1,973 1,959
Interest cost 2,814 2,478
Actuarial (gain)/loss 527 (1,986)
Gross benefits paid (4,034) (3,421)
--------------------
Benefit obligation at end of year $37,123 $35,843
====================
The following table sets forth the reconciliation of the beginning and
ending balances of the fair value of plan assets recognized in the Company's
consolidated balance sheets at September 30:
(Thousands of Dollars) 2000 1999
--------------------------------------------------------------------
Fair value of plan assets at beginning of year $ 6,222 $ 4,305
Actual return on plan assets 298 211
Employer contributions 5,380 5,127
Gross benefits paid (4,034) (3,421)
--------------------
Fair value of plan assets at end of year 7,866 6,222
--------------------
Funded status at end of year (29,257) (29,620)
Unrecognized net actuarial gain (286) (1,026)
Unrecognized prior service cost 3,204 3,569
Unrecognized net transition asset 16,446 17,713
--------------------
Net amount recognized at end of year
as postretirement benefit cost $(9,893) $ (9,364)
====================
39
<PAGE>
<PAGE>
Assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 5% for both 2000 and 1999, and for
future years. A one-percentage-point increase or (decrease) in the assumed
health care cost trend rate for each future year would have increased or
(decreased) the aggregate of the service and interest cost components of the
2000 net periodic postretirement benefit cost by approximately $280,000 or
$(260,000) and would have increased or (decreased) the postretirement
benefit obligation by $1,340,000 or $(1,280,000). The accumulated
postretirement benefit obligation was determined using a weighted average
discount rate of 8.00% for 2000 and 7.50% for 1999, and a weighted average
rate of future compensation increase of 4.25% for both 2000 and 1999. These
changes in assumptions decreased the postretirement benefit obligation by
$1,399,000. The weighted average rate for the expected return on medical
plan assets was 7.75% for both 2000 and 1999 and the weighted average rate
for the expected return on life insurance plan assets was 8.50% for both
2000 and 1999.
The 1998 rate case settlement provided for the deferral, net of any
applicable tax effects, of the difference between the costs funded by the
Company and a $3,825,000 allowance of annualized OPEB costs included in
rates effective October 27, 1998. The allowance was previously $4,265,000
effective September 1, 1996. In the 1999 rate case settlement, the
Commission authorized previously deferred costs to be included in rates
without return on investment and amortized over a fifteen-year period,
effective with the implementation of new rates on December 27, 1999.
Deferrals ceased September 30, 1999 and all OPEB costs are being charged to
expense.
3. Incentive Plan and Off System Sales
The MoPSC extended the Company's Gas Supply Incentive Plan with
specific modifications effective for fiscal 2000. Under the modified Plan,
the Company continued to share with its customers certain gains and losses
related to the acquisition of gas supply assets. Effective October 1, 1999,
Laclede is also permitted to retain all income resulting from sales made
outside of its traditional service area. Under the provisions of the Plan
during fiscal 2000, the Company and its customers shared as follows:
- releases of pipeline capacity, of which 70% to 90% of the revenues
are allocated to Laclede's customers and the balance is allocated
to its shareholders
- savings from discounts off of maximum pipeline transportation
rates, of which the excess over a predetermined baseline of $13
million is allocated 70% to Laclede's customers and the balance to
its shareholders
- gains and losses as measured against a benchmark level of gas cost,
of which 50% to 90%, depending on the change from a predetermined
cost, is allocated to Laclede's customers and the balance to its
shareholders, and
- increases or decreases in costs related to changes in the mix of
pipeline services, of which 70% is allocated to Laclede's customers
and the balance to its shareholders.
Under the provisions of the Plan during fiscal 1999 and fiscal 1998,
the Company and its customers shared as follows:
- sales of gas outside of the Company's traditional service area, of
which 70% of the income was allocated to Laclede's customers and
the balance was allocated to its shareholders
- releases of pipeline capacity, of which 70% to 90% of the revenues
were allocated to Laclede's customers and the balance to its
shareholders
- savings from discounts off of maximum pipeline transportation
rates, of which 80% to 90% of the savings was allocated to
Laclede's customers and the balance to its shareholders, and
- gains and losses as measured against a benchmark level of gas cost,
of which 50% was allocated to Laclede's customers and the balance
to its shareholders.
40
<PAGE>
<PAGE>
Incentive plan and off system sales revenues are included in the
utility operating revenues line in the Company's financial statements.
Expenses related to the incentive plan and off system sales are included in
the natural and propane gas expense line in the financial statements.
Results of the Plan and off system sales activities are set forth below:
(Thousands of Dollars) 2000 1999 1998
--------------------------------------------------------------------------
Net Benefits to Customers
and Shareholders $28,909 $28,362 $31,028
--------------------------------------------------------------------------
Shareholder Benefits:
Off System and
Incentive Plan Revenues $40,136 $16,217 $29,851
Off System and
Incentive Plan Gas Expense 30,493 10,806 23,482
-----------------------------------
Company Share - Pretax Income $ 9,643 $ 5,411 $ 6,369
===================================
On June 8, 2000, the MoPSC issued an order approving a recommendation
made by the Company, staff of the MoPSC and other parties to extend the Plan
as modified for another year. As a result, the term of the Plan now runs
through September 30, 2001. The parties who recommended an extension of the
Gas Supply Incentive Plan also agreed to cooperate on the development of a
mutually acceptable multi-year incentive plan that includes a fixed price
mechanism for implementation once the current plan expires. As modified,
total pretax income derived from all sharing provisions of the Plan,
excluding income generated by sales outside the Company's service area,
cannot exceed $9.0 million for fiscal 2001. Of that amount, pretax income
derived from sharing gains and losses as measured against a benchmark level
of gas costs cannot exceed $5.3 million. While previous results of the Plan
and off system sales may not be representative of fiscal 2001 results due to
modifications and the seasonal and volatile nature of such efforts, the
Company believes that both the Company and its customers will continue to
benefit.
4. Common Stock and Paid-in Capital
No additional common stock shares were issued in fiscal 2000. During
1999, the Company issued 1,250,000 shares of common stock through a public
offering. The net proceeds of the offering, after deducting discount and
expenses, were $24.1 million.
Paid-in capital increased $9,000 in 2000 due to gains recorded on
reacquired preferred stock. The $22,860,000 increase in paid-in capital in
1999 was due to the sale of common stock in the above-mentioned 1999 public
offering.
Total shares of common stock outstanding were 18,877,987 at September
30, 2000 and September 30, 1999.
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
41
<PAGE>
<PAGE>
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 18,877,987 rights were outstanding at
September 30, 2000.
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 2000, 5,808 shares of 5% Series B preferred stock and 3 shares
of 4.56% Series C preferred stock were reacquired; in 1999, 70 shares of 5%
Series B 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, 2000 are:
2001, $50,300; 2002-2005, $160,000 per year.
6. Long-Term Debt
Maturities or sinking fund requirements on long-term debt for the five
fiscal years subsequent to September 30, 2000 are as follows: 2001-2002,
none; 2003, $25 million; 2004, none; 2005, $25 million.
On June 29, 2000, the Company filed a registration statement with the
Securities and Exchange Commission on Form S-3 relative to the sale of up to
$350 million of first mortgage bonds, debt securities and common stock. On
August 10, 2000 the MoPSC provided authorization to issue debt and equity up
to this amount.
On September 21, 2000, the Company issued $30 million of first
mortgage bonds under this authorization with an interest rate of 7.90%, at
an overall cost to the Company of 7.987%. The bonds were dated September
15, 2000 and mature September 15, 2030. The proceeds were used to repay
short-term debt. The amount, timing and type of financing remaining to be
issued under this shelf registration will depend on cash requirements and
market conditions.
On April 8, 1999 the Company received approval from the MoPSC for a
two-year extension, to April 21, 2001, of its previously granted authority
to sell additional first mortgage bonds. The original authorization was for
$100 million of first mortgage bonds of which $75 million had already been
issued and sold. On June 2, 1999, the Company issued the remaining $25
million of first mortgage bonds with an interest rate of 7%, at an overall
cost to the Company of 7.04%. The proceeds were used to repay short-term
debt.
On May 15, 1998, the Company redeemed, at its first opportunity, $25
million of 9-5/8% first mortgage bonds due May 15, 2013. The funds for this
redemption were supplied by short-term borrowing agreements.
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,
2000, all of the Company's consolidated retained earnings were free from
such restrictions.
42
<PAGE>
<PAGE>
7. Fair Value of Financial Instruments
The carrying amounts and estimated fair values of the Company's
financial instruments at September 30, 2000 and 1999 are as follows:
Carrying Fair
(Thousands of Dollars) Amount Value
-----------------------------------------------------------------------
2000:
Cash and cash equivalents $ 4,215 $ 4,215
Short-term debt 127,000 127,000
Long-term debt 234,408 233,676
Redeemable preferred stock 1,813 1,640
1999:
Cash and cash equivalents $ 9,352 $ 9,352
Short-term debt 84,700 84,700
Long-term debt 204,323 201,659
Redeemable preferred stock 1,958 1,812
Non-utility financial instruments 131 86
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. The fair value of non-utility financial
instruments reflects trading prices at September 30, 1999.
8. Income Taxes
Net provisions for income taxes were charged during the years ended
September 30, 2000, 1999 and 1998 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:
2000 1999 1998
-----------------------------------------------------------------------
Federal income tax statutory rate 35.0% 35.0% 35.0%
State and local income taxes,
net of federal income tax benefits 3.6 3.4 3.7
Certain expenses capitalized on books
and deducted on tax return (2.5) (3.2) (2.0)
Taxes related to prior years .2 .5 (1.2)
Other items - net (1.1) (.2) .1
-------------------------
Effective income tax rate 35.2% 35.5% 35.6%
=========================
43
<PAGE>
<PAGE>
The significant items comprising the Company's net deferred tax
liability recognized in the consolidated balance sheets as of September 30
are as follows:
(Thousands of Dollars) 2000 1999
-----------------------------------------------------------------------
Deferred tax assets:
Reserves not currently deductible $ 18,100 $ 16,777
Deferred gas cost - 3,679
Unamortized investment tax credits 3,946 4,147
Other 2,779 2,339
--------------------------
Total deferred tax assets 24,825 26,942
--------------------------
Deferred tax liabilities:
Relating to utility property 107,604 102,870
Pension 36,384 30,196
Deferred gas costs 4,598 -
Other 8,698 8,416
--------------------------
Total deferred tax liabilities 157,284 141,482
--------------------------
Net deferred tax liability 132,459 114,540
Net deferred tax asset - current 2,485 10,216
--------------------------
Net deferred tax liability - non-current $134,944 $124,756
==========================
9. Notes Payable and Credit Agreements
In January 2000, the Company renewed three lines of bank credit under
which it may borrow up to an aggregate of $30 million prior to January 31,
2001, with repayment of any loans outstanding on that date permitted from
April 30, 2001 to June 30, 2001. The borrowings may be repaid at any time
without penalty. This, along with $160 million of supplemental lines of
credit, provided the Company total lines of credit of up to $190 million for
fiscal year 2000. At this writing, the Company has aggregate lines of
credit totaling $210 million.
Alternatively, the Company has an agreement for the issuance of
commercial paper which is supported by the bank lines of credit. During
fiscal year 2000, the Company's short-term borrowing requirements, which
peaked at $158.2 million, were met by the sale of commercial paper. The
Company had $127.0 million in commercial paper outstanding as of September
30, 2000 at a weighted average interest rate of 6.6%, and $84.7 million
outstanding as of September 30, 1999 at a weighted average interest rate of
5.4%.
10. Other Income and Income Deductions - Net
(Thousands of Dollars) 2000 1999 1998
-----------------------------------------------------------------------
Investment Losses $ - $(3,409) $ -
Gains on Sale of Property - 2,275 -
Allowance for Funds
Used During Construction 397 739 609
Other Income 1,209 1,530 1,346
Other Income Deductions (844) (1,338) (672)
----------------------------------
Other Income and
Income Deductions - Net $ 762 $ (203) $1,283
==================================
44
<PAGE>
<PAGE>
In fiscal 1999, the Company recorded a $3.2 million pretax investment
loss. This non-recurring loss resulted from the Company's minority
participation in Clark Enterprises, an entity comprised of a group of civic-
minded St. Louis firms that owned the St. Louis Blues Hockey team and also
financed and operated the Kiel Center in downtown St. Louis, the sale of
which was negotiated and completed during September 1999.
A pretax gain of $1.9 million was recognized in fiscal 1999 by the
Company's wholly-owned subsidiary, Laclede Development Company, on the
November 1998 sale of property known as Centre Park 40. Laclede Development
Company owned its interest in Centre Park 40 though a real estate
partnership.
11. Information by Operating Segment
Laclede Gas Company is a public utility engaged in the retail
distribution of natural gas. The Company serves an area of eastern
Missouri, with a population of approximately 2.0 million. As an adjunct to
its gas distribution business, Laclede operates underground natural gas
storage fields and stores liquid propane and is engaged in the
transportation of liquid propane through its wholly-owned subsidiary,
Laclede Pipeline Company.
The Company has also made investments in some non-utility businesses
as part of a diversification program, none of which are reportable segments.
These non-regulated operations are conducted through five wholly-owned
subsidiaries which are engaged in gas marketing, the sale of insurance
products through an insurance agency in the State of Missouri, real estate
development, the compression of natural gas, and financial investments in
other enterprises. These subsidiaries have the same accounting policies as
those described in the summary of significant accounting policies in Note 1.
There are no material intersegment revenues.
All Other
(Thousands of Dollars) Gas Utility (Non-Utility) Eliminations Consolidated
----------------------------------------------------------------------------
Fiscal 2000
Operating revenues $531,152 $34,976 $ - $566,128
Depreciation & amortization 24,774 - - 24,774
Interest charges 24,326 - (318) 24,008
Income tax expense 13,755 350 - 14,105
Net income 25,474 491 - 25,965
Total assets 928,298 18,324 (14,882) 931,740
Construction expenditures 51,635 - - 51,635
Fiscal 1999
Operating revenues $473,710 $17,608 $ - $491,318
Depreciation & amortization 21,490 - - 21,490
Interest charges 20,593 - - 20,593
Income tax expense 13,670 691 - 14,361
Net income 25,012 1,050 - 26,062
Total assets 831,036 13,774 (7,146) 837,664
Construction expenditures 48,698 7 - 48,705
Fiscal 1998
Operating revenues $548,192 $13,651 $ - $561,843
Depreciation & amortization 25,310 - - 25,310
Interest charges 21,270 - - 21,270
Income tax expense 15,019 422 - 15,441
Net income 27,201 691 - 27,892
Total assets 774,167 10,298 (7,174) 777,291
Construction expenditures 47,254 185 - 47,439
45
<PAGE>
<PAGE>
12. Commitments and Contingencies
The Company estimates fiscal year 2001 utility construction
expenditures at $40 million. The lease agreement covering the Company's
general office space extends through February 2005 with options to renew for
up to 15 additional years. The aggregate rental expense for fiscal years
2000, 1999 and 1998 was $821,000, $812,000 and $803,000, respectively. The
annual minimum rental payment for fiscal year 2001 is anticipated to be
approximately $830,000 with a maximum annual rental payment escalation of
$8,800 per year for each year through fiscal 2005. The Company has other
rental arrangements that 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
2001 to 2005.
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 $2.6 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.
Laclede Pipeline Company, Laclede Gas Company's wholly-owned
subsidiary, operates a propane pipeline that connects Laclede Gas Company's
propane storage facilities in St. Louis County, Missouri, to propane supply
terminal facilities located at Wood River and Cahokia, Illinois. In June
1999, Laclede Pipeline Company purchased from Phillips Pipe Line Company for
approximately $1.4 million a section of existing propane pipeline, which
completed Laclede Gas Company's control of all facets of its propane peak
shaving assets allowing greater access to supply markets. Laclede Gas
Company vaporizes the propane to supplement its natural gas supply and meet
the peak demands on the distribution system. Laclede Pipeline Company's
previous contract arrangement with Phillips Petroleum Company, to provide
transportation of propane on an annual basis and that expired on March 31,
1999, is no longer needed.
The Company is subject to various environmental laws and regulations.
To date they have not materially affected 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. With regard to the
Company's former manufactured gas plant site located in Shrewsbury,
Missouri, the Company and the state and federal environmental regulatory
agencies have agreed upon the actions needed at this site. Those actions are
nearing completion. In the course of recent site grading called for by the
agreement, some site materials that proved to be manufactured gas wastes
were released into an adjacent stream. The release was contained and
appropriate authorities notified. The Company is dealing with this
development as part of the remaining work being done at the site. The
Company currently estimates the overall costs of these actions will be
approximately $1,521,000. As of September 30, 2000, the Company has paid
$1,000,000 and reserved $521,000 for these actions. If the regulatory
agencies require any additional actions, Laclede will incur additional
costs.
The Company also applied to place the site of a different former
manufactured gas plant in the City of St. Louis, Missouri into the Missouri
Voluntary Cleanup Program (VCP). Laclede ceased its operations at and sold
this site in 1950. Subsequent owners of this site used it as a coke
46
<PAGE>
<PAGE>
manufacturing facility. The Missouri Department of Natural Resources
(MoDNR) accepted the Company's VCP application. Acceptance provides
opportunities to minimize costs of remediation while maximizing
possibilities for site development. The Company submitted a site
characterization report (SCR) to MoDNR on June 25, 1999. The SCR was
accepted subject to the Company's development of a Remedial Action Plan
(RAP) due MoDNR in early calendar year 2001. The RAP will include plans to
continue to monitor groundwater. Surface water sampling and the performance
of other remedial measures will likely occur during site redevelopment. The
Company will continue to inform MoDNR of site development possibilities as
well. The Company currently estimates that the cost of the site
investigations, agency oversight and related legal and engineering
consulting may be approximately $528,000. Currently, the Company has paid
$438,000 and reserved an additional $90,000. The Company has requested that
other former site owners and operators participate in the cost of any site
investigation. One former owner and operator agreed to participate in these
costs and has reimbursed the Company to date for $150,000. The Company
anticipates additional reimbursement from this party of approximately
$39,000. The Company plans to seek proportionate reimbursement of all costs
relative to this site from any other potentially responsible parties if
practicable.
While the scope of costs relative to the site in Shrewsbury will not
be significant, the scope of costs relative to the City of St. Louis site
are unknown and may be material. The Company has notified its insurers that
it intends to seek reimbursement from them of its costs at both these sites.
None of the Company's insurers have agreed that its insurance covers the
costs for which the Company intends to seek reimbursement. The majority of
the insurers have sent Laclede letters reserving their rights with respect
to the manufactured gas plant issues addressed in the Company's notices to
them. While some of the insurers have denied coverage with respect to these
issues, the Company continues to seek reimbursement from them. With regard
to the Shrewsbury site, the denial of coverage will not have any significant
impact on the Company. With regard to the City of St. Louis site, since the
scope of costs relative to this site are unknown and may be material, the
denial of coverage may have a material impact on the Company.
Previously, the MoPSC approved the Company's use of a cost deferral
mechanism for these costs. Deferral of such costs terminated July 31, 1999.
The Commission authorized previously deferred costs to be included in rates
without return on investment and amortized over a fifteen-year period,
effective with the implementation of new rates on December 27, 1999. Any
subsequent costs are being charged to expense, the effects of which are
offset, more or less, by a predetermined level of costs included in the new
rates.
On October 26, 2000, the Company announced its intention, subject to
receipt of the necessary approvals, to reorganize its corporate structure to
form a holding company known as The Laclede Group, Inc. As a result of the
reorganization, The Laclede Group, Inc. would become a holding company under
the Public Utility Holding Company Act of 1935 but would be exempt from all
provisions of the Act except Section 9(a)(2) thereof. Laclede Gas is taking
the necessary steps to obtain regulatory and shareholder approvals and filed
a registration statement on Form S-4 with the Securities and Exchange
Commission on October 27, 2000. Under the new structure, Laclede Gas
Company as the regulated utility, and the subsidiaries it currently holds,
would become subsidiaries of The Laclede Group, Inc. Even after forming a
holding company, the profile of Laclede Gas' regulated distribution business
is expected to remain substantially the same. At the January 25, 2001
annual meeting, shareholders of record on December 11, 2000 will vote on
this proposal.
In October 1999, the staff of the MoPSC recommended that the Company
credit ratepayers with $2.5 million of pretax income the Company had
realized in fiscal 1997 and fiscal 1998 in connection with its treatment of
a gas supply contract under the operation of the Company's Gas Supply
47
<PAGE>
<PAGE>
Incentive Plan. On August 1, 2000, the MoPSC issued its report and order in
which it rejected staff's proposal and determined that no adjustment should
be made to the amounts retained by the Company under its Gas Supply
Incentive Plan.
On October 30, 1998, the MoPSC issued an order opening a docket
addressing the adequacy of Laclede's copper service line replacement
program. On February 18, 2000, the staff of the MoPSC, the office of Public
Counsel in the State of Missouri and the Company filed a joint settlement
setting forth a replacement schedule recommendation. Such settlement was
approved by the MoPSC on May 18, 2000. The Company currently has completed
one phase and continues to proceed in compliance with the approved program.
Costs associated with the program are either being deferred through a
deferral mechanism approved by the MoPSC or capitalized through the normal
course of business. One lawsuit involving a claim for wrongful death and
punitive damages has been settled, the effect of which is not significant
and has been fully provided for in the current year.
In January 2000, Laclede Energy Resources, Inc., (LER) finalized a
multi-year arrangement with UtiliCorp United, Inc. (UtiliCorp) to provide a
significant portion of the gas supply for a natural gas fired power plant
currently under construction in Pleasant Hill, Missouri. The four-year
agreement is scheduled to go into effect June 1, 2001. LER will provide
UtiliCorp with up to 5 billion cubic feet of natural gas annually - the
equivalent of about 5% of the annual sendout of Laclede Gas Company in a
normal year - and will manage fluctuations in UtiliCorp's gas-purchase
requirements on an as-needed basis to satisfy summer power needs.
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.
13. Interim Financial Information (Unaudited)
In the opinion of the Company, the quarterly information presented in
the Schedule of Interim Financial Information for fiscal years 2000 and 1999
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.
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.
48
<PAGE>
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required by this item is set forth on
pages 14 through 16 in the Company's proxy statement dated December 15, 2000
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 17 through 26 in
the Company's proxy statement dated December 15, 2000 and is incorporated
herein by reference but the information under the captions "Compensation
Committee Report Regarding Executive Compensation", "Performance Graph", and
"Audit Committee Report" on pages 21 through 25 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 16 in the Company's
proxy statement dated December 15, 2000 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.
49
<PAGE>
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Consolidated Financial Statements: 2000 10-K Page
For Years Ended September 30, 2000, 1999, and 1998:
Statements of Consolidated Income 25
Statements of Consolidated Retained Earnings 26
Statements of Consolidated Comprehensive Income 26
Statements of Consolidated Cash Flows 30
Schedule of Income Taxes 31
As of September 30, 2000 & 1999:
Consolidated Balance Sheets 27-28
Statements of Consolidated Capitalization 29
For Years Ended 2000 & 1999:
Schedule of Interim Financial Information 32
Notes to Financial Statements 33-48
Independent Auditors' Report 23
Management Report 24
2. Supplemental Schedules
II - Reserves 55
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 56.
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.
50
<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.
10.03k - Amendments to the Employees' Retirement Plan of
Laclede Gas Company - Management Employees adopted
October 1, 2000.
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.
51
<PAGE>
<PAGE>
10.05k - Amendments to the Company's Salary Deferral
Savings Plan adopted October 5, 1998.
10.05l - Amendments to the Company's Salary Deferral
Savings Plan adopted with the following effective dates:
October 1, 2000, November 1, 2000, February 3, 1997,
August 1, 2000.
10.06 - Laclede Gas Company Deferred Compensation Plan for
Non-Employee Directors dated March 26, 1981.
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.
10.12b - Amendment to the Laclede Gas Company Restricted Stock
Plan for Non-Employee Directors adopted August 14,
1998.
10.12c - Amendment to the Laclede Gas Company Restricted Stock
Plan for Non-Employee Directors adopted December 16,
1999.
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.
10.21 - Severance Benefits Agreement dated as of July 31, 2000
between Laclede Gas Company and D.H. Yaeger.
52
<PAGE>
<PAGE>
(b) The Company filed three reports on Form 8-K during the last quarter of
fiscal year 2000.
On September 27, 2000 the Company filed an 8-K reporting the sale of $30
million principal amount of its first mortgage bonds, 7.90% Series due
September 15, 2030 to A. G. Edwards & Sons, Inc., the underwriter. The
bonds were issued under its mortgage and deed of trust, dated as of
September 15, 2000. The bonds were registered under a universal shelf
registration statement on Form S-3 (File No. 333-40362), which was filed on
June 29, 2000 and declared effective on July 24, 2000. Copies of the
underwriting agreement and the Twenty-Fifth Supplemental Indenture were
filed as exhibits to the Form 8-K.
On September 20, 2000, the Company reported on Form 8-K that some site
materials were released into an adjacent stream in the course of site
grading. The materials included concentrations of manufactured gas wastes.
On September 14, 2000, the Company reported on Form 8-K the order of
the Missouri Public Service Commission rejecting its Staff's recommendation
that the Company credit ratepayers with $2.5 million of pretax income that
it realized in fiscal 1997 and 1998 in connection with the treatment of a
gas supply contract under its Gas Supply Incentive Plan. The Form 8-K also
reported the MoPSC's approval of a joint settlement recommendation in the
docket addressing the adequacy of the Company's copper gas service line
replacement program and the Company's continued compliance with the approved
program, the costs of which are either being deferred through a MoPSC
approved deferral mechanism or capitalized. It reported that one lawsuit
involving a claim for wrongful death and punitive damages relative to a
copper gas service line remains pending. The report also indicated that the
Company entered into a Stipulation and Agreement with the staff of the MoPSC
and the Office of Public Council that would allow the Company to exercise
its discretion as to the amount of coverage to obtain under its Price
Stabilization Program, but would not result in increased funding. At that
time, the MoPSC had not yet approved that agreement.
(c) Incorporated herein by reference to Index to Exhibits, page 56.
53
<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 13, 2000 By Gerald T. McNeive, Jr.
Gerald T. McNeive, Jr.
Senior Vice President - Finance
and General Counsel
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
12/13/00 Douglas H. Yaeger Chairman of the Board,
Douglas H. Yaeger President and Chief Executive
Officer
(Principal Executive Officer)
12/13/00 Gerald T. McNeive, Jr. Senior Vice President -
Gerald T. McNeive, Jr. Finance & General Counsel
(Principal Financial and
Accounting Officer)
12/13/00 Andrew B. Craig, III Director
Andrew B. Craig, III
12/13/00 Henry Givens, Jr. Director
Henry Givens, Jr.
12/13/00 C. Ray Holman Director
C. Ray Holman
12/13/00 Robert C. Jaudes Director
Robert C. Jaudes
12/13/00 Mary Ann Van Lokeren Director
Mary Ann Van Lokeren
12/13/00 W. Stephen Maritz Director
W. Stephen Maritz
12/13/00 William E. Nasser Director
William E. Nasser
12/13/00 Robert P. Stupp Director
Robert P. Stupp
12/13/00 H. Edwin Trusheim Director
H. Edwin Trusheim
54
<PAGE>
<PAGE>
SCHEDULE II
LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES
RESERVES
FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
---------------------------------------------------------------------------
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, 2000:
DOUBTFUL ACCOUNTS $ 6,241 $4,493 $4,305 (a) $ 8,981 (b) $ 6,058
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 3,700 $1,825 $ - $ 2,211 (c) $ 3,314
Deferred compensation 9,184 1,292 - 862 9,614
----------------------------------------------------
TOTAL $12,884 $3,117 $ - $ 3,073 $12,928
====================================================
YEAR ENDED
SEPTEMBER 30, 1999:
DOUBTFUL ACCOUNTS $ 5,650 $6,062 $4,184 (a) $ 9,655 (b) $ 6,241
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 3,366 $2,125 $ - $ 1,791 (c) $ 3,700
Deferred compensation 8,924 1,242 - 982 9,184
----------------------------------------------------
TOTAL $12,290 $3,367 $ - $ 2,773 $12,884
====================================================
YEAR ENDED
SEPTEMBER 30, 1998:
DOUBTFUL ACCOUNTS $ 8,051 $5,312 $4,214 (a) $11,927 (b) $ 5,650
====================================================
MISCELLANEOUS:
Injuries and
property damage $ 4,227 $ 935 $ - $ 1,796 (c) $ 3,366
Deferred compensation 8,475 1,290 - 841 8,924
----------------------------------------------------
TOTAL $12,702 $2,225 $ - $ 2,637 $12,290
====================================================
(a) Accounts reinstated, cash recoveries, etc.
(b) Accounts written off.
(c) Claims settled, less reimbursements from insurance companies.
55
<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).
3.01(ii)(b)* Amendment to the Company's By-Laws, effective at the
close of business on November 20, 1997, adopted by the
Company's Board of Directors on November 20, 1997; filed
as Exhibit 3.01(ii) to the Company's 10-Q for the fiscal
quarter ended December 31, 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* - Twenty-Fourth Supplemental Indenture dated as of June 1,1999,
filed on June 4, 1999 as Exhibit 4.01 to the Company's Form
8-K (File No. 1-1822).
4.11* - 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.
56
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.11a* - 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).
4.12* - 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).
4.12a* - 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).
4.12b* - 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).
4.12c* - 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).
4.12d* - 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).
4.12e* - 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).
4.12f* - 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).
4.12g* - 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.
57
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.12h* - 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).
4.12i* - Amendments to the Company's Wage Deferral Savings Plan adopted
October 5, 1998; filed as Exhibit 4 to the Company's 10-Q for
the fiscal quarter ended December 31, 1998 (File No. 1-1822).
4.12j - Amendments to the Company's Wage Deferral Savings Plan with
the following effective dates: August 1, 2000, November 1,
2000, August 1, 1997.
4.13* - 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).
4.13a* - 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).
4.13b* - 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).
4.13c* - 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).
4.13d* - 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).
4.13e* - 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).
4.13f* - 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).
4.13g* - 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).
4.13h* - 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.
58
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
4.13i* - 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).
4.13j* - 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).
4.13k - Amendments to the Missouri Natural Gas Division of
Laclede Gas Company Dual Savings Plan adopted November 1,
2000.
4.14* - 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.
59
<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.
60
<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).
10.03k - Amendment to the Employees' Retirement Plan of Laclede
Gas Company - Management Employees adopted October 1, 2000.
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).
10.04c* - Amendment (effective as of January 15, 1998) to Laclede
Gas Company Trust Agreement (dated as of September 4,
1990) relating to the Laclede Gas Company Supplemental
Retirement Plan; filed as Exhibit 10.01 to the Company's
10-Q for the fiscal quarter ended June 30, 1998 (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.
61
<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).
10.05k* - Amendments to the Company's Salary Deferral Savings Plan
adopted October 5, 1998; filed as Exhibit 10 to the
Company's 10-Q for the fiscal quarter ended December 31,
1998 (File No. 1-1822).
10.05l - Amendments to the Company's Salary Deferral Savings Plan
adopted with the following effective dates: October 1, 2000,
November 1, 2000, February 3, 1997, August 1, 2000.
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).
* Incorporated herein by reference and made a part hereof.
62
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.07* - Transportation Service Agreement dated October 13, 1993
between Mississippi River Transmission Corporation and
the Company; filed as exhibit 10.07d to the Company's 10-K
for the fiscal year ended September 30, 1997 (File No.
1-1822).
10.07a* - Storage Service Agreement dated October 13, 1993 between
Mississippi River Transmission Corporation and the
Company; filed as exhibit 10.07e to the Company's 10-K
for the fiscal year ended September 30, 1997 (File No.
1-1822).
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.
63
<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).
10.12b* - Amendment to the Laclede Gas Company Restricted Stock
Plan for Non-Employee Directors adopted August 14, 1998;
filed as Exhibit 10.12b to the Company's 10-K for the year
ended September 30, 1998 (File No. 1-1822).
10.12c* - Amendment to the Laclede Gas Company Restricted Stock
Plan for Non-Employee Directors adopted December 16, 1999;
filed as Exhibit 10.01 to the Company's 10-Q for the quarter
ended June 30, 2000 (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; filed as exhibit 10.13c
to the Company's 10-K for the fiscal year ended September
30, 1997 (File No. 1-1822).
10.13d* - Amendment (effective as of January 15, 1998) to Laclede
Gas Company Trust Agreement (dated as of December 7,
1989); filed as Exhibit 10.02 to the Company's 10-Q for
the fiscal quarter ended June 30, 1998 (File No. 1-1822).
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 20, 2000 line of credit agreement with Bank of
America, N.A.; filed as Exhibit 10.3 to the Company's 10-Q for
the fiscal quarter ended March 31, 2000 (File No. 1-1822).
10.16* - January 24, 2000 line of credit agreement with Commerce
Bank, N.A.; filed as Exhibit 10.2 to the Company's 10-Q
for the fiscal quarter ended March 31, 2000 (File No.
1-1822).
* Incorporated herein by reference and made a part hereof.
64
<PAGE>
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No.
-------
10.17* - Supplemental line of credit agreement dated October 22,
1999 among Firstar Bank, Bank of America, N.A. and Credit
Suisse First Boston; filed as Exhibit No. 10.20 to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000 (File No. 1-1822).
10.18 - Lines of credit with UMB N.A. dated September 1, 2000.
10.19 - Lines of credit with Bank of America dated September 1, 2000.
10.20 - Lines of credit with Firstar Bank dated September 13, 2000.
10.21 - Severance Benefits Agreement dated as of July 31, 2000 between
Laclede Gas Company and D.H. Yaeger.
12 - Ratio of Earnings to Fixed Charges.
21 - Subsidiaries of the Registrant.
23 - Consent of Independent Public Accountants.
27 - Financial Data Schedule UT
*Incorporated herein by reference and made a part hereof.
65
