The Laclede Group Inc. (LG, Financial) filed Quarterly Report for the period ended 2009-12-31.
The Laclede Group Inc. has a market cap of $719.1 million; its shares were traded at around $32.32 with a P/E ratio of 11.1 and P/S ratio of 0.4. The dividend yield of The Laclede Group Inc. stocks is 5%. The Laclede Group Inc. had an annual average earning growth of 1.3% over the past 10 years.LG is in the portfolios of Bruce Kovner of Caxton Associates.
The Non-Regulated Gas Marketing segment reported a decrease in GAAP earnings of $12.9 million compared with the same quarter last year. Net economic earnings for the three months ended December 31, 2009 decreased $7.8 million from the three months ended December 31, 2008. These decreases were primarily due to LER s significantly reduced margins on sales of natural gas and, to a lesser extent, the effect of 7% lower sales volumes. The reduced sales margins were driven primarily by narrower regional price differentials that have recently prevailed in the marketplace, as compared to the favorable market conditions that existed a year ago. On a GAAP basis, the reduced sales margins this year also included the effect of net unrealized losses from certain of LER s energy-related derivative contracts, totaling $2.9 million, recognized in earnings during the quarter ended December 31, 2009, compared with net unrealized gains, totaling $2.2 million, recognized during the quarter ended December 31, 2008.
Both Other net income and Other net economic earnings increased $3.2 million compared with the same quarter last year primarily due to a sale of propane in the wholesale market by Laclede Gas during the quarter ended December 31, 2009. This non-regulated sale resulted from an inventory exchange that the counterparty settled in cash instead of through a return of inventory, and resulted in income, net of income taxes, totaling $3.7 million, contributing $0.16 to diluted earnings per share.
Regulated Gas Distribution Operating Expenses for the quarter ended December 31, 2009 decreased $74.0 million from the same quarter last year. Natural and propane gas expense decreased $72.9 million, or 28.6%, from last year s level, primarily attributable to lower rates charged by our suppliers, decreased system volumes purchased for sendout, and lower off-system gas expense. Other operation and maintenance expenses increased $0.8 million, or 1.9%, primarily due to increased group insurance charges and other minor variations, partially offset by lower maintenance charges. Taxes, other than income taxes, decreased $2.1 million, or 11.6%, primarily due to decreased gross receipts taxes (attributable to the decreased revenues).
During fiscal year 2006, the MoPSC approved permanent modifications to the Cold Weather Rule affecting the disconnection and reconnection practices of utilities during the winter heating season. Those modifications included provisions to allow the Utility to obtain accounting authorizations and defer for future recovery certain costs incurred with the modifications. During fiscal year 2007, the Utility deferred for future recovery $2.7 million of costs associated with the fiscal year 2007 heating season. On October 31, 2007, the Utility filed for determination and subsequent recovery of the deferred amount. On November 16, 2007, the MoPSC directed the MoPSC Staff and the Missouri Office of Public Counsel (Public Counsel) to submit their positions regarding the Utility s filing and on February 28, 2008, the Utility and the MoPSC Staff filed a Non-Unanimous Stipulation & Agreement in which these parties agreed to a recovery of $2.5 million of costs. Public Counsel opposed the Non-Unanimous Stipulation & Agreement and a hearing in this matter was held before the Commission. On April 17, 2008, the Commission issued its Report and Order approving the $2.5 million cost recovery recommended by the Utility and the MoPSC Staff. Consistent with the approved amount, the Utility recorded a reduction in its deferral totaling $0.2 million during the quarter ended March 31, 2008. On May 29, 2008, Public Counsel appealed the MoPSC s Order to the Cole County, Missouri Circuit Court and on January 6, 2009, the Court issued its judgment affirming the Commission s Order approving the Cold Weather Rule compliance cost amount that the Utility and Staff had recommended over Public Counsel s objection. On February 9, 2009, Public Counsel appealed the Circuit Court s affirmation of the MoPSC s April 17, 2008 Order to the Court of Appeals for the Western District of Missouri. On December 22, 2009, the Court of Appeals also issued a judgment affirming the Commission s Order. On January 5, 2010, Public Counsel sought rehearing of the decision or transfer to the Missouri Supreme Court. The Court has not yet acted on this request.
On December 28, 2006, the MoPSC Staff proposed a disallowance of $7.2 million related to Laclede Gas recovery of its purchased gas costs applicable to fiscal year 2005. On September 14, 2007, the Staff withdrew its pursuit of $5.5 million of the disallowance it had originally proposed. The remaining $1.7 million pertains to Laclede Gas purchase of gas from a marketing affiliate, LER. The MoPSC Staff has also proposed disallowances of gas costs relating to Laclede Gas purchases of gas supply from LER for fiscal years 2006 and 2007. On December 31, 2007, the MoPSC Staff proposed a disallowance of $2.8 million applicable to fiscal year 2006, and on December 31, 2008, the MoPSC Staff proposed a disallowance of $1.5 million applicable to fiscal year 2007. On December 31, 2009, the MoPSC Staff proposed a number of non-monetary recommendations only, based on its review of gas costs for fiscal year 2008. Laclede Gas believes that the proposed disallowances lack merit and is vigorously opposing these adjustments in proceedings before the MoPSC. As such, no amount has been recorded in the financial statements for these proposed disallowances.
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The Laclede Group Inc. has a market cap of $719.1 million; its shares were traded at around $32.32 with a P/E ratio of 11.1 and P/S ratio of 0.4. The dividend yield of The Laclede Group Inc. stocks is 5%. The Laclede Group Inc. had an annual average earning growth of 1.3% over the past 10 years.LG is in the portfolios of Bruce Kovner of Caxton Associates.
Highlight of Business Operations:
Laclede Group s net income was $22.9 million for the quarter ended December 31, 2009, compared with $31.3 million for the quarter ended December 31, 2008. Basic and diluted earnings per share for the quarter ended December 31, 2009 were $1.03 compared with basic and diluted earnings per share of $1.42 and $1.41, respectively for the quarter ended December 31, 2008. Net economic earnings were $25.8 million for the quarter ended December 31, 2009 compared with $29.1 million for the same quarter last year. Net economic earnings per share were $1.16 for the quarter ended December 31, 2009 compared with $1.31 for the quarter ended December 31, 2008. Earnings decreased compared to last year primarily due to lower income reported by Laclede Group s Non-Regulated Gas Marketing segment, partially offset by increased Other income and improved results reported by Laclede Group s Regulated Gas Distribution segment.The Non-Regulated Gas Marketing segment reported a decrease in GAAP earnings of $12.9 million compared with the same quarter last year. Net economic earnings for the three months ended December 31, 2009 decreased $7.8 million from the three months ended December 31, 2008. These decreases were primarily due to LER s significantly reduced margins on sales of natural gas and, to a lesser extent, the effect of 7% lower sales volumes. The reduced sales margins were driven primarily by narrower regional price differentials that have recently prevailed in the marketplace, as compared to the favorable market conditions that existed a year ago. On a GAAP basis, the reduced sales margins this year also included the effect of net unrealized losses from certain of LER s energy-related derivative contracts, totaling $2.9 million, recognized in earnings during the quarter ended December 31, 2009, compared with net unrealized gains, totaling $2.2 million, recognized during the quarter ended December 31, 2008.
Both Other net income and Other net economic earnings increased $3.2 million compared with the same quarter last year primarily due to a sale of propane in the wholesale market by Laclede Gas during the quarter ended December 31, 2009. This non-regulated sale resulted from an inventory exchange that the counterparty settled in cash instead of through a return of inventory, and resulted in income, net of income taxes, totaling $3.7 million, contributing $0.16 to diluted earnings per share.
Regulated Gas Distribution Operating Expenses for the quarter ended December 31, 2009 decreased $74.0 million from the same quarter last year. Natural and propane gas expense decreased $72.9 million, or 28.6%, from last year s level, primarily attributable to lower rates charged by our suppliers, decreased system volumes purchased for sendout, and lower off-system gas expense. Other operation and maintenance expenses increased $0.8 million, or 1.9%, primarily due to increased group insurance charges and other minor variations, partially offset by lower maintenance charges. Taxes, other than income taxes, decreased $2.1 million, or 11.6%, primarily due to decreased gross receipts taxes (attributable to the decreased revenues).
During fiscal year 2006, the MoPSC approved permanent modifications to the Cold Weather Rule affecting the disconnection and reconnection practices of utilities during the winter heating season. Those modifications included provisions to allow the Utility to obtain accounting authorizations and defer for future recovery certain costs incurred with the modifications. During fiscal year 2007, the Utility deferred for future recovery $2.7 million of costs associated with the fiscal year 2007 heating season. On October 31, 2007, the Utility filed for determination and subsequent recovery of the deferred amount. On November 16, 2007, the MoPSC directed the MoPSC Staff and the Missouri Office of Public Counsel (Public Counsel) to submit their positions regarding the Utility s filing and on February 28, 2008, the Utility and the MoPSC Staff filed a Non-Unanimous Stipulation & Agreement in which these parties agreed to a recovery of $2.5 million of costs. Public Counsel opposed the Non-Unanimous Stipulation & Agreement and a hearing in this matter was held before the Commission. On April 17, 2008, the Commission issued its Report and Order approving the $2.5 million cost recovery recommended by the Utility and the MoPSC Staff. Consistent with the approved amount, the Utility recorded a reduction in its deferral totaling $0.2 million during the quarter ended March 31, 2008. On May 29, 2008, Public Counsel appealed the MoPSC s Order to the Cole County, Missouri Circuit Court and on January 6, 2009, the Court issued its judgment affirming the Commission s Order approving the Cold Weather Rule compliance cost amount that the Utility and Staff had recommended over Public Counsel s objection. On February 9, 2009, Public Counsel appealed the Circuit Court s affirmation of the MoPSC s April 17, 2008 Order to the Court of Appeals for the Western District of Missouri. On December 22, 2009, the Court of Appeals also issued a judgment affirming the Commission s Order. On January 5, 2010, Public Counsel sought rehearing of the decision or transfer to the Missouri Supreme Court. The Court has not yet acted on this request.
On December 28, 2006, the MoPSC Staff proposed a disallowance of $7.2 million related to Laclede Gas recovery of its purchased gas costs applicable to fiscal year 2005. On September 14, 2007, the Staff withdrew its pursuit of $5.5 million of the disallowance it had originally proposed. The remaining $1.7 million pertains to Laclede Gas purchase of gas from a marketing affiliate, LER. The MoPSC Staff has also proposed disallowances of gas costs relating to Laclede Gas purchases of gas supply from LER for fiscal years 2006 and 2007. On December 31, 2007, the MoPSC Staff proposed a disallowance of $2.8 million applicable to fiscal year 2006, and on December 31, 2008, the MoPSC Staff proposed a disallowance of $1.5 million applicable to fiscal year 2007. On December 31, 2009, the MoPSC Staff proposed a number of non-monetary recommendations only, based on its review of gas costs for fiscal year 2008. Laclede Gas believes that the proposed disallowances lack merit and is vigorously opposing these adjustments in proceedings before the MoPSC. As such, no amount has been recorded in the financial statements for these proposed disallowances.
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