Document











UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.


FORM 10-Q

QUARTERLY REPORT

For the Quarterly Period Ended June 30, 2016










Table of Contents

 
 
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q
(Mark One)
[ X ]
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2016
 
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
 
Registrant, Address and
Telephone Number
 
State of Incorporation
 
I.R.S. Employer Identification Number
1-16681
 
Spire Inc.
700 Market Street
St. Louis, MO 63101
Telephone Number 314-342-0500
 
Missouri
 
74-2976504
1-1822
 
Laclede Gas Company
700 Market Street
St. Louis, MO 63101
Telephone Number 314-342-0500
 
Missouri
 
43-0368139
2-38960
 
Alabama Gas Corporation
2101 6th Avenue North
Birmingham, Alabama 35203
Telephone Number 205-326-8100
 
Alabama
 
63-0022000

Indicate by check mark whether each 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 report) and (2) has been subject to such filing requirements for the past 90 days.

Spire Inc.            Yes [ X ]        No [ ]
Laclede Gas Company    Yes [ X ]        No [ ]
Alabama Gas Corporation    Yes [ X ]        No [ ]

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Spire Inc.            Yes [ X ]        No [ ]
Laclede Gas Company    Yes [ X ]        No [ ]
Alabama Gas Corporation    Yes [ X ]        No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large
accelerated
filer
 
Accelerated
filer
 
Non-
accelerated
filer
 
Smaller
reporting
company
Spire Inc.
X
 
 
 
 
 
 
Laclede Gas Company
 
 
 
 
X
 
 
Alabama Gas Corporation
 
 
 
 
X
 
 

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Spire Inc.            Yes [ ]        No [ X ]
Laclede Gas Company    Yes [ ]        No [ X ]
Alabama Gas Corporation    Yes [ ]        No [ X ]
The number of shares outstanding of each registrant’s common stock as of July 29, 2016 was as follows:
Spire Inc.
 
Common Stock, par value $1.00 per share
 
45,640,580

Laclede Gas Company
 
Common Stock, par value $1.00 per share
(all owned by Spire Inc.)
 
24,577

Alabama Gas Corporation
 
Common Stock, par value $0.01 per share
(all owned by Spire Inc.)
 
1,972,052


Laclede Gas Company and Alabama Gas Corporation meet the conditions set forth in General Instructions H(1)(a) and (b) to Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instructions H(2) to Form 10-Q.

This combined Form 10-Q represents separate filings by Spire Inc., Laclede Gas Company and Alabama Gas Corporation. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants, except that information relating to Laclede Gas Company and Alabama Gas Corporation are also attributed to Spire Inc.
 
 
 
 
 


Table of Contents

TABLE OF CONTENTS
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
Spire Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Laclede Gas Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alabama Gas Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1



Table of Contents

GLOSSARY OF KEY TERMS AND ABBREVIATIONS
Alabama Utility
Alabama Gas Corporation or Alagasco; the utility serving the Alabama region
LER
Laclede Energy Resources, Inc.
Alagasco
Alabama Gas Corporation or Alabama Utility
MDNR
Missouri Department of Natural Resources
AOC
Administrative Order on Consent
MGE
Missouri Gas Energy
APSC
Alabama Public Service Commission
MGP
Manufactured Gas Plant
ASC
Accounting Standards Codification
Missouri Utilities
Laclede Gas Company, including MGE; the utilities serving the Missouri region
ASU
Accounting Standards Update
MMBtu
Million British thermal units
Bcf
Billion cubic feet
MoPSC
Missouri Public Service Commission
BVCP
Brownfields/Voluntary Cleanup Program
MSPSC
Mississippi Public Service Commission
CCM
Cost Control Mechanism
NSR
Negative Salvage Rebalancing
CERCLA
Comprehensive Environment Response, Compensation and Liability Act
NTSB
National Transportation Safety Board
EPA
US Environmental Protection Agency
NYMEX
New York Mercantile Exchange, Inc.
EPS
Earnings per share
O&M
Operations and Maintenance
FASB
Financial Accounting Standards Board
OPC
Missouri Office of the Public Counsel
FERC
Federal Energy Regulatory Commission
OTCBB
Over-the-Counter Bulletin Board
FOIA
Freedom of Information Act
PGA
Purchased Gas Adjustment
GAAP
Accounting principles generally accepted in the United States of America
PRP
Potential Responsible Party
Gas Marketing
Operating segment including LER, a subsidiary engaged in the non-regulated marketing of natural gas and related activities
RSE
Rate Stabilization and Equalization
Gas Utility
Operating segment including the regulated operations of Laclede Gas Company and Alabama Gas Corporation
SEC
US Securities and Exchange Commission
GRT
Gross receipts taxes
Staff
Missouri Public Service Commission Staff
GSA
Gas Supply Adjustment
US
United States
ICE
Intercontinental Exchange
Utilities
Collective operations of Laclede Gas Company and Alabama Gas Corporation
ISRS
Infrastructure System Replacement Surcharge
VEBA
Voluntary Employees' Beneficiary Association
Laclede Gas
Laclede Gas Company or Missouri Utilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2



Table of Contents

PART I. FINANCIAL INFORMATION
The interim financial statements included herein have been prepared by three separate registrants — Spire Inc. (Spire or the Company), Laclede Gas Company (Laclede Gas or Missouri Utilities) and Alabama Gas Corporation (Alagasco or Alabama Utility) — without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These financial statements should be read in conjunction with the financial statements and the notes thereto included in each registrant's respective Form 10-K for the fiscal year ended September 30, 2015.
The Financial Information in this Part I includes separate financial statements (i.e., balance sheets, statements of income and comprehensive income, statements of common shareholders' equity and statements of cash flows) for Spire, Laclede Gas and Alagasco. The Notes to Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations are also included and presented herein on a combined basis for Spire, Laclede Gas and Alagasco.

3



Table of Contents

Item 1. Financial Statements

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In Millions, Except Per Share Amounts)
2016
 
2015
 
2016
 
2015
Operating Revenues:
 
 
 
 
 

 
 
Gas Utility
$
253.2

 
$
260.2

 
$
1,263.5

 
$
1,688.6

Gas Marketing and other
(3.9
)
 
15.0

 
(5.5
)
 
83.6

Total Operating Revenues
249.3

 
275.2

 
1,258.0

 
1,772.2

Operating Expenses:
 
 
 
 
 
 
 
Gas Utility
 
 
 
 
 
 
 
Natural and propane gas
54.1

 
57.7

 
463.7

 
844.8

Other operation and maintenance expenses
91.8

 
90.6

 
277.7

 
291.5

Depreciation and amortization
34.2

 
32.5

 
101.5

 
96.7

Taxes, other than income taxes
27.4

 
26.2

 
99.5

 
119.9

Total Gas Utility Operating Expenses
207.5

 
207.0

 
942.4

 
1,352.9

Gas Marketing and other
6.5

 
32.2

 
25.6

 
138.3

Total Operating Expenses
214.0

 
239.2

 
968.0

 
1,491.2

Operating Income
35.3

 
36.0

 
290.0

 
281.0

Other Income
1.6

 
0.5

 
3.8

 
2.6

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
16.6

 
16.3

 
50.2

 
50.0

Other interest charges
2.8

 
1.5

 
7.5

 
6.1

Total Interest Charges
19.4

 
17.8

 
57.7

 
56.1

Income Before Income Taxes
17.5

 
18.7

 
236.1

 
227.5

Income Tax Expense
6.8

 
4.6

 
77.7

 
71.9

Net Income
$
10.7

 
$
14.1

 
$
158.4

 
$
155.6

 
 
 
 
 
 
 
 
Weighted Average Number of Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
44.4

 
43.2

 
43.6

 
43.1

Diluted
44.6

 
43.3

 
43.8

 
43.2

Basic Earnings Per Share of Common Stock
$
0.24

 
$
0.32

 
$
3.62

 
$
3.59

Diluted Earnings Per Share of Common Stock
$
0.24

 
$
0.32

 
$
3.60

 
$
3.59

Dividends Declared Per Share of Common Stock
$
0.49

 
$
0.46

 
$
1.47

 
$
1.38

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


4



Table of Contents

SPIRE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
 
2016
 
2015
Net Income
$
10.7

 
$
14.1

 
$
158.4

 
$
155.6

Other Comprehensive (Loss) Income, Before Tax:
 
 
 
 
 
 
 
Cash flow hedging derivative instruments:
 
 
 
 
 
 
 
Net hedging (losses) gains arising during the period
(4.3
)
 
0.3

 
(5.6
)
 
(6.2
)
Reclassification adjustment for (gains) losses included in net income
(1.5
)
 
1.3

 
0.2

 
3.5

Net unrealized (losses) gains on cash flow hedging derivative instruments
(5.8
)
 
1.6

 
(5.4
)
 
(2.7
)
Net defined benefit pension and other postretirement plans

 
0.1

 
0.1

 
0.3

Other Comprehensive (Loss) Income, Before Tax
(5.8
)
 
1.7

 
(5.3
)
 
(2.4
)
Income Tax (Benefit) Expense Related to Items of Other Comprehensive Income
(2.2
)
 
0.7

 
(2.0
)
 
(0.9
)
Other Comprehensive (Loss) Income, Net of Tax
(3.6
)
 
1.0

 
(3.3
)
 
(1.5
)
Comprehensive Income
$
7.1

 
$
15.1

 
$
155.1

 
$
154.1

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


5



Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in Millions, Except Per Share Amounts)
2016
 
2015
 
2015
ASSETS
Utility Plant
$
4,339.5

 
$
4,234.5

 
$
4,108.4

Less: Accumulated depreciation and amortization
1,311.5

 
1,307.0

 
1,239.1

Net Utility Plant
3,028.0

 
2,927.5

 
2,869.3

Non-utility Property (net of accumulated depreciation and amortization of $7.9, $7.5 and $7.4 at June 30, 2016, September 30, 2015, and June 30, 2015, respectively)
13.8

 
13.7

 
12.2

Goodwill
946.0

 
946.0

 
946.0

Other Investments
62.4

 
59.9

 
63.1

Total Other Property and Investments
1,022.2

 
1,019.6

 
1,021.3

Current Assets:
 
 
 
 
 
Cash and cash equivalents
4.9

 
13.8

 
5.7

Accounts receivable:
 
 
 
 
 
Utility
133.1

 
138.1

 
139.7

Other
82.7

 
86.7

 
86.7

Allowance for doubtful accounts
(20.2
)
 
(14.2
)
 
(15.7
)
Delayed customer billings
3.5

 
2.6

 
21.9

Inventories:
 
 
 
 
 
Natural gas
116.6

 
188.6

 
136.7

Propane gas
12.0

 
12.0

 
12.0

Materials and supplies
15.3

 
14.8

 
14.6

Natural gas receivable
17.5

 
17.3

 
19.8

Derivative instrument assets
9.0

 
4.6

 
3.6

Unamortized purchased gas adjustments
5.4

 
12.9

 

Other regulatory assets
37.5

 
27.6

 
27.0

Prepayments and other
36.1

 
25.3

 
31.0

Total Current Assets
453.4

 
530.1

 
483.0

Deferred Charges:
 
 
 
 
 
Regulatory assets
730.7

 
737.6

 
644.6

Other
76.6

 
75.4

 
64.7

Total Deferred Charges
807.3

 
813.0

 
709.3

Total Assets
$
5,310.9

 
$
5,290.2

 
$
5,082.9


6



Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
 
2016
 
2015
 
2015
CAPITALIZATION AND LIABILITIES
 
Capitalization:
 
 
 
 
 
Common stock (par value $1.00 per share; 70.0 million shares authorized;
45.6 million and 43.3 million shares issued and outstanding at June 30, 2016 and for both September 30, 2015 and June 30, 2015, respectively)
$
45.6

 
$
43.3

 
$
43.3

Paid-in capital
1,173.5

 
1,038.1

 
1,035.6

Retained earnings
588.6

 
494.2

 
532.9

Accumulated other comprehensive loss
(5.3
)
 
(2.0
)
 
(3.2
)
Total Common Stock Equity
1,802.4

 
1,573.6

 
1,608.6

Long-term debt (less current portion)
1,851.7

 
1,771.5

 
1,736.4

Total Capitalization
3,654.1

 
3,345.1

 
3,345.0

Current Liabilities:
 
 
 
 
 
Current portion of long-term debt

 
80.0

 
80.0

Notes payable
97.6

 
338.0

 
211.4

Accounts payable
135.8

 
146.5

 
148.1

Advance customer billings
53.0

 
44.3

 
12.9

Wages and compensation accrued
36.5

 
32.7

 
30.5

Dividends payable
22.3

 
21.1

 
20.9

Customer deposits
31.9

 
32.1

 
34.2

Interest accrued
19.7

 
14.3

 
19.4

Taxes accrued
41.4

 
51.7

 
45.0

Unamortized purchased gas adjustments

 
28.2

 
52.3

Other regulatory liabilities
22.4

 
32.4

 
29.4

Other
31.2

 
32.5

 
36.3

Total Current Liabilities
491.8

 
853.8

 
720.4

Deferred Credits and Other Liabilities:
 
 
 
 
 
Deferred income taxes
574.1

 
482.1

 
487.7

Pension and postretirement benefit costs
246.9

 
253.4

 
233.3

Asset retirement obligations
164.6

 
159.2

 
102.7

Regulatory liabilities
105.7

 
119.3

 
114.9

Other
73.7

 
77.3

 
78.9

Total Deferred Credits and Other Liabilities
1,165.0

 
1,091.3

 
1,017.5

Commitments and Contingencies (Note 9)

 

 

Total Capitalization and Liabilities
$
5,310.9

 
$
5,290.2

 
$
5,082.9

 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 


7



Table of Contents

SPIRE INC.
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(UNAUDITED)

 
Common Stock Outstanding
 
Paid-in Capital
 
Retained Earnings
 
Accumulated
Other
Comprehensive Loss
 
 
(Dollars In Millions)
Shares
 
Amount
 
 
 
 
Total
Balance at September 30, 2014
43,178,405

 
$
43.2

 
$
1,029.4

 
$
437.5

 
$
(1.7
)
 
$
1,508.4

Net income

 

 

 
155.6

 

 
155.6

Dividend reinvestment plan
6,999

 

 
1.2

 

 

 
1.2

Stock-based compensation costs

 

 
1.4

 

 

 
1.4

Equity Incentive Plan
131,409

 
0.1

 
3.0

 

 

 
3.1

Tax benefit – stock compensation

 

 
0.6

 

 

 
0.6

Dividends declared:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 

 

 
(60.2
)
 

 
(60.2
)
Other comprehensive loss, net of tax

 

 

 

 
(1.5
)
 
(1.5
)
Balance at June 30, 2015
43,316,813

 
$
43.3

 
$
1,035.6

 
$
532.9

 
$
(3.2
)
 
$
1,608.6

 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30, 2015
43,335,012

 
$
43.3

 
$
1,038.1

 
$
494.2

 
$
(2.0
)
 
$
1,573.6

Net income

 

 

 
158.4

 

 
158.4

Common stock offering
2,185,000

 
2.2

 
131.0

 

 

 
133.2

Dividend reinvestment plan
17,454

 

 
1.0

 

 

 
1.0

Stock-based compensation costs

 

 
0.4

 

 

 
0.4

Equity Incentive Plan
98,262

 
0.1

 
3.0

 

 

 
3.1

Dividends declared:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 

 

 
(64.0
)
 

 
(64.0
)
Other comprehensive loss, net of tax

 

 

 

 
(3.3
)
 
(3.3
)
Balance at June 30, 2016
45,635,728

 
$
45.6

 
$
1,173.5

 
$
588.6

 
$
(5.3
)
 
$
1,802.4

 
 
 
 
 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 
 
 
 


8



Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
Operating Activities:
 
 
 
Net Income
$
158.4

 
$
155.6

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation, amortization, and accretion
102.0

 
97.4

Deferred income taxes and investment tax credits
77.7

 
70.4

Changes in assets and liabilities:
 
 
 
Accounts receivable
6.7

 
(5.2
)
Unamortized purchased gas adjustments
(20.7
)
 
83.9

Deferred purchased gas costs
9.4

 
(16.6
)
Accounts payable
(6.4
)
 
(26.1
)
Delayed/advance customer billings – net
7.8

 
(30.4
)
Taxes accrued
(10.9
)
 
(18.6
)
Inventories
71.5

 
106.9

Other assets and liabilities
(38.5
)
 
(58.7
)
Other
(0.1
)
 
7.7

Net cash provided by operating activities
356.9

 
366.3

Investing Activities:
 
 
 
Capital expenditures
(195.3
)
 
(202.9
)
Payments for final reconciliation of acquisitions

 
(8.6
)
Other
(1.5
)
 
(0.4
)
Net cash used in investing activities
(196.8
)
 
(211.9
)
Financing Activities:
 
 
 
Issuance of long-term debt
80.0

 

Repayment of long-term debt
(80.0
)
 
(34.7
)
Repayment of short-term debt - net
(240.4
)
 
(75.8
)
Issuance of common stock
136.1

 
3.6

Dividends paid
(62.9
)
 
(59.1
)
Other
(1.8
)
 
1.2

Net cash used in financing activities
(169.0
)
 
(164.8
)
Net Decrease in Cash and Cash Equivalents
(8.9
)
 
(10.4
)
Cash and Cash Equivalents at Beginning of Period
13.8

 
16.1

Cash and Cash Equivalents at End of Period
$
4.9

 
$
5.7

 
 
 
 
Supplemental disclosure of cash (paid) refunded for:
 
 
 
Interest
$
(48.2
)
 
$
(48.3
)
Income taxes
3.9

 
0.3

 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 

9



Table of Contents


LACLEDE GAS COMPANY
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
 
2016
 
2015
Operating Revenues:
 

 
 
 
 

 
 

Utility
$
179.3

 
$
187.5

 
$
943.2

 
$
1,265.6

Total Operating Revenues
179.3

 
187.5

 
943.2

 
1,265.6

Operating Expenses:
 
 
 
 
 
 
 
Utility
 
 
 
 
 
 
 
Natural and propane gas
48.0

 
57.5

 
440.6

 
743.6

Other operation and maintenance expenses
58.4

 
54.3

 
178.7

 
188.7

Depreciation and amortization
22.3

 
20.7

 
66.0

 
61.4

Taxes, other than income taxes
21.2

 
20.5

 
76.4

 
92.0

Total Operating Expenses
149.9

 
153.0

 
761.7

 
1,085.7

Operating Income
29.4

 
34.5

 
181.5

 
179.9

Other Income (Income Deductions)
1.0

 
(0.2
)
 
2.2

 
1.1

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
8.1

 
8.2

 
24.7

 
24.8

Other interest charges
1.0

 
0.4

 
3.2

 
2.6

Total Interest Charges
9.1

 
8.6

 
27.9

 
27.4

Income Before Income Taxes
21.3

 
25.7

 
155.8

 
153.6

Income Tax Expense
7.4

 
5.7

 
48.2

 
44.7

Net Income
$
13.9

 
$
20.0

 
$
107.6

 
$
108.9

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


10



Table of Contents

LACLEDE GAS COMPANY
STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
 
2016
 
2015
Net Income
$
13.9

 
$
20.0

 
$
107.6

 
$
108.9

Other Comprehensive Income (Loss), Before Tax:
 
 
 
 
 
 
 
Cash flow hedging derivative instruments:
 
 
 
 
 
 
 
Net hedging losses (gains) arising during the period
0.1

 
0.2

 
(0.1
)
 
(1.1
)
Reclassification adjustment for losses included in net income

 
0.3

 
0.4

 
0.7

Net unrealized gains (losses) on cash flow hedging derivative instruments
0.1

 
0.5

 
0.3

 
(0.4
)
Net defined benefit pension and other postretirement plans
0.1

 
0.2

 
0.2

 
0.3

Other Comprehensive Income (Loss), Before Tax
0.2

 
0.7

 
0.5

 
(0.1
)
Income Tax Expense Related to Items of Other Comprehensive Income
0.1

 
0.3

 
0.2

 

Other Comprehensive Income (Loss), Net of Tax
0.1

 
0.4

 
0.3

 
(0.1
)
Comprehensive Income
$
14.0

 
$
20.4

 
$
107.9

 
$
108.8

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


11



Table of Contents

LACLEDE GAS COMPANY
CONDENSED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in Millions, Except Per Share Amounts)
2016
 
2015
 
2015
ASSETS
 
 
 
 
 
Utility Plant
$
2,659.7

 
$
2,579.1

 
$
2,527.4

Less: Accumulated depreciation and amortization
595.4

 
590.0

 
581.2

Net Utility Plant
2,064.3

 
1,989.1

 
1,946.2

Goodwill
210.2

 
210.2

 
210.2

Other Property and Investments
56.5

 
55.3

 
58.4

Total Other Property and Investments
266.7

 
265.5

 
268.6

Current Assets:
 
 
 
 
 
Cash and cash equivalents
1.5

 
1.7

 
3.0

Accounts receivable:
 
 
 
 
 
Utility
101.0

 
103.4

 
103.4

Other
10.5

 
25.2

 
28.2

Allowance for doubtful accounts
(16.5
)
 
(10.0
)
 
(10.6
)
Receivables from associated companies
1.3

 
2.5

 
2.9

Delayed customer billings
3.5

 
2.6

 
21.9

Inventories:
 
 
 
 
 
Natural gas
78.2

 
138.2

 
89.9

Propane gas
12.0

 
12.0

 
12.0

Materials and supplies
9.2

 
9.3

 
9.3

Derivative instrument assets
5.1

 

 

Unamortized purchased gas adjustments
0.6

 
12.9

 

Other regulatory assets
23.7

 
16.2

 
17.5

Prepayments and other
20.4

 
12.5

 
19.0

Total Current Assets
250.5

 
326.5

 
296.5

Deferred Charges:
 
 
 
 
 
Regulatory assets
562.6

 
573.6

 
558.0

Other
9.4

 
12.8

 
7.8

Total Deferred Charges
572.0

 
586.4

 
565.8

Total Assets
$
3,153.5

 
$
3,167.5

 
$
3,077.1

 
 
 


 
 

12



Table of Contents

LACLEDE GAS COMPANY
CONDENSED BALANCE SHEETS (Continued)
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
 
2016
 
2015
 
2015
CAPITALIZATION AND LIABILITIES
 
 
 
 
 
Capitalization:
 
 
 
 
 
Paid-in capital and common stock (par value $1.00 per share;
50,000 authorized; 24,577 shares issued and outstanding)
$
750.9

 
$
748.3

 
$
747.3

Retained earnings
333.9

 
291.2

 
314.8

Accumulated other comprehensive loss
(1.4
)
 
(1.7
)
 
(2.0
)
Total Common Stock Equity
1,083.4

 
1,037.8

 
1,060.1

Long-term debt 
808.3

 
808.1

 
808.1

Total Capitalization
1,891.7

 
1,845.9

 
1,868.2

Current Liabilities:
 
 
 
 
 
Notes payable
97.6

 
233.0

 
135.2

Notes payable – associated companies
38.8

 

 

Accounts payable
49.7

 
61.5

 
57.0

Accounts payable – associated companies
4.1

 
5.5

 
6.9

Advance customer billings
35.2

 
25.2

 

Wages and compensation accrued
28.7

 
26.8

 
26.4

Dividends payable
22.4

 
19.9

 
19.9

Customer deposits
13.3

 
13.0

 
14.7

Interest accrued
9.4

 
7.6

 
9.4

Taxes accrued
21.0

 
25.4

 
39.0

Unamortized purchased gas adjustments

 

 
20.8

Other regulatory liabilities
1.3

 
0.6

 

Other
9.1

 
18.5

 
20.2

Total Current Liabilities
330.6

 
437.0

 
349.5

Deferred Credits and Other Liabilities:
 
 
 
 
 
Deferred income taxes
548.8

 
485.2

 
466.7

Pension and postretirement benefit costs
191.9

 
207.8

 
200.4

Asset retirement obligations
75.0

 
72.4

 
73.8

Regulatory liabilities
65.7

 
70.6

 
70.9

Other
49.8

 
48.6

 
47.6

Total Deferred Credits and Other Liabilities
931.2

 
884.6

 
859.4

Commitments and Contingencies (Note 9)

 

 

Total Capitalization and Liabilities
$
3,153.5

 
$
3,167.5

 
$
3,077.1

 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 



13



Table of Contents

LACLEDE GAS COMPANY
STATEMENTS OF COMMON SHAREHOLDER'S EQUITY
(UNAUDITED)

 
Common Stock Outstanding
 
Paid-in Capital
 
Retained Earnings
 
Accumulated
Other
Comprehensive (Loss) Income
 
 
(Dollars in Millions)
Shares
 
Amount
 
 
 
 
Total
Balance at September 30, 2014
24,577

 
$
0.1

 
$
744.0

 
$
265.6

 
$
(1.9
)
 
$
1,007.8

Net income

 

 

 
108.9

 

 
108.9

Stock-based compensation costs

 

 
2.7

 

 

 
2.7

Tax benefit – stock compensation

 

 
0.5

 

 

 
0.5

Dividends declared:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 

 

 
(59.7
)
 

 
(59.7
)
Other comprehensive loss, net of tax

 

 

 

 
(0.1
)
 
(0.1
)
Balance at June 30, 2015
24,577

 
$
0.1

 
$
747.2

 
$
314.8

 
$
(2.0
)
 
$
1,060.1

 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30, 2015
24,577

 
$
0.1

 
$
748.2

 
$
291.2

 
$
(1.7
)
 
$
1,037.8

Net income

 

 

 
107.6

 

 
107.6

Stock-based compensation costs

 

 
2.6

 

 

 
2.6

Dividends declared:
 
 
 
 
 
 
 
 
 
 
 
Common stock

 

 

 
(64.9
)
 

 
(64.9
)
Other comprehensive income, net of tax

 

 

 

 
0.3

 
0.3

Balance at June 30, 2016
24,577

 
$
0.1

 
$
750.8

 
$
333.9

 
$
(1.4
)
 
$
1,083.4

 
 
 
 
 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 
 
 
 


14



Table of Contents

LACLEDE GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
Operating Activities:
 
 
 
Net Income
$
107.6

 
$
108.9

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
66.0

 
61.4

Deferred income taxes and investment tax credits
48.2

 
34.0

Changes in assets and liabilities:
 
 
 
Accounts receivable
24.6

 
7.0

Unamortized purchased gas adjustments
12.3

 
74.8

Deferred purchased gas costs
9.4

 
(16.6
)
Accounts payable
(7.3
)
 
(11.1
)
Delayed / advance customer billings – net
9.1

 
(26.5
)
Taxes accrued
(4.5
)
 
(4.8
)
Inventories
60.1

 
99.4

Other assets and liabilities
(29.4
)
 
(24.9
)
Other
0.7

 
1.5

Net cash provided by operating activities
296.8

 
303.1

Investing Activities:
 
 
 
Capital expenditures
(138.8
)
 
(142.4
)
Other
0.9

 
0.5

Net cash used in investing activities
(137.9
)
 
(141.9
)
Financing Activities:
 
 
 
Repayment of short-term debt - net
(135.4
)
 
(103.5
)
Borrowings from Spire
38.8

 
18.4

Repayment of borrowings from Spire

 
(18.4
)
Dividends paid to Spire
(62.5
)
 
(58.8
)
Other

 
0.4

Net cash used in financing activities
(159.1
)
 
(161.9
)
Net Decrease in Cash and Cash Equivalents
(0.2
)
 
(0.7
)
Cash and Cash Equivalents at Beginning of Period
1.7

 
3.7

Cash and Cash Equivalents at End of Period
$
1.5

 
$
3.0

 
 
 
 
Supplemental disclosure of cash (paid) refunded for:
 
 
 
Interest
$
(22.1
)
 
$
(22.0
)
Income taxes
2.1

 
(0.6
)
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 


15



Table of Contents


ALABAMA GAS CORPORATION
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In Millions)
2016
 
2015
 
2016
 
2015
Operating Revenues:
 

 
 
 
 

 
 

Utility
$
74.0

 
$
73.7

 
$
322.3

 
$
427.0

Total Operating Revenues
74.0

 
73.7

 
322.3

 
427.0

Operating Expenses:
 
 
 
 
 
 
 
Utility
 
 
 
 
 
 
 
Natural gas
13.1

 
15.7

 
55.4

 
158.5

Operation and maintenance
33.5

 
36.6

 
99.7

 
103.6

Depreciation and amortization
11.9

 
11.8

 
35.5

 
35.3

Taxes, other than income taxes
6.2

 
5.7

 
23.1

 
27.9

Total Operating Expenses
64.7

 
69.8

 
213.7

 
325.3

Operating Income
9.3

 
3.9

 
108.6

 
101.7

Other Income
0.5

 
0.5

 
1.5

 
1.5

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
2.8

 
2.8

 
8.5

 
8.8

Other interest charges
0.6

 
0.5

 
1.9

 
1.8

Total Interest Charges
3.4

 
3.3

 
10.4

 
10.6

Income Before Income Taxes
6.4

 
1.1

 
99.7

 
92.6

Income Tax Expense
2.4

 
0.4

 
37.7

 
35.0

Net Income
$
4.0

 
$
0.7

 
$
62.0

 
$
57.6

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


16



Table of Contents

ALABAMA GAS CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in Millions, Except Per Share Amounts)
2016
 
2015
 
2015
ASSETS
 
 
 
 
 
Utility Plant
$
1,679.8

 
$
1,655.4

 
$
1,581.0

Less: Accumulated depreciation and amortization
716.1

 
717.0

 
657.8

Net Utility Plant
963.7

 
938.4

 
923.2

Current Assets:
 
 
 
 
 
Cash and cash equivalents

 
7.2

 
0.2

Accounts receivable:
 
 
 
 
 
Utility
32.2

 
34.7

 
36.3

Other
5.3

 
5.2

 
5.7

Allowance for doubtful accounts
(3.7
)
 
(4.2
)
 
(5.1
)
Inventories:
 
 
 
 
 
Natural gas
28.3

 
40.4

 
35.3

Materials and supplies
6.0

 
5.4

 
5.1

Deferred income taxes
5.0

 
6.2

 
3.6

Unamortized purchased gas adjustments
4.8

 

 

Other regulatory assets
13.8

 
11.4

 
9.5

Prepayments and other
6.1

 
4.6

 
6.4

Total Current Assets
97.8

 
110.9

 
97.0

Deferred Charges:
 
 
 
 
 
Regulatory assets
167.5

 
163.6

 
86.6

Deferred income taxes
211.0

 
248.4

 
245.2

Other
60.1

 
57.7

 
51.3

Total Deferred Charges
438.6