8-K

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 6, 2013

The Laclede Group, Inc.

(Exact name of registrant as specified in its charter)

Missouri	1-16681	74-2976504
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

720 Olive Street

St. Louis, Missouri 63101

(Address of principal executive offices, including ZIP code)

(314) 342-0500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 13e-4(c))

Item 8.01 Other Events.

On December 17, 2012, The Laclede Group Inc. (“Laclede Group”), announced that it entered into definitive agreements, through two wholly owned subsidiaries, Plaza Missouri Acquisition, Inc. (“Plaza Missouri”), and Plaza Massachusetts Acquisition, Inc. (“Plaza Massachusetts”), to acquire from Southern Union Company (“SUG”) substantially all of the assets and liabilities of Missouri Gas Energy (“MGE”) and New England Gas Company (“NEG”) for $975 million and $60 million, respectively.

On January 11, 2013, Plaza Missouri assigned the rights and obligations under the MGE acquisition agreement to Laclede Gas Company (“Laclede Gas”), the principal subsidiary of Laclede Group.

On February 11, 2013, Laclede Group entered into a stock purchase agreement with Algonquin Power & Utilities Corp. (“APUC”) pursuant to which APUC, through its subsidiary Liberty Utilities Co. (“Liberty Utilities”), agreed to acquire from Laclede Group all of the outstanding shares of Plaza Massachusetts’s common stock for a purchase price of $11 million. Liberty Utilities will acquire Plaza Massachusetts immediately prior to the closing of the acquisition under the NEG acquisition agreement.

On July 17, 2013, the Missouri Public Service Commission provided the necessary regulatory approvals for Laclede Gas’ acquisition of MGE. The NEG transaction remains contingent upon regulatory approval from public utility regulators in Massachusetts. 

Laclede Group is filing the information under this Item 8.01 solely to file the required unaudited interim historical financial statements of MGE and unaudited pro forma combined condensed financial statements, which give pro forma effect to the transactions described above. Laclede Group previously filed the required annual audited historical financial statements of MGE on its Form 8-K dated May 20, 2013.

This Item 8.01 contains:

• historical financial statements of MGE, in accordance with Rule 3-05 of Regulation S-X , included as Exhibit 99.1, which is incorporated herein by reference; and

• pro forma financial information of Laclede Group and MGE in accordance with Article 11 of Regulation S-X giving effect to certain pro forma events relating to Laclede Group’s pending acquisition of MGE, included as Exhibit 99.2 hereto, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

Filed herewith are the following financial statements of MGE:

Unaudited Interim Financial Statements of Missouri Gas Energy as of June 30, 2013 and for the three and six months ended June 30, 2013 and 2012.

(b) Pro Forma Financial Information.

Filed herewith is the following pro forma financial information:

Unaudited Pro Forma Combined Condensed Statements of Income for the nine months ended June 30, 2013 and for the year ended September 30, 2012 and Unaudited Pro Forma Combined Condensed Balance Sheets as of June 30, 2013 and September 30, 2012, of The Laclede Group, Inc. and Missouri Gas Energy.

(d) Exhibits.

The following exhibits are filed as part of this report:

99.1	Unaudited Interim Financial Statements of Missouri Gas Energy as of June 30, 2013 and for the three and six months ended June 30, 2013 and 2012
99.2	Unaudited Pro Forma Combined Condensed Statements of Income for the nine months ended June 30, 2013 and for the year ended September 30, 2012 and Unaudited Pro Forma Combined Condensed Balance Sheets as of June 30, 2013 and September 30, 2012, of The Laclede Group, Inc. and Missouri Gas Energy

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE LACLEDE GROUP, INC.
Date: August 6, 2013	By:	/s/ M. D. Waltermire
		M. D. Waltermire Executive Vice President, Chief Financial Officer

Exhibit Index

Exhibit Number	Description
99.1	Unaudited Interim Financial Statements of Missouri Gas Energy as of June 30, 2013 and for the three and six months ended June 30, 2013 and 2012
99.2	Unaudited Pro Forma Combined Condensed Statements of Income for the nine months ended June 30, 2013 and for the year ended September 30, 2012 and Unaudited Pro Forma Combined Condensed Balance Sheets as of June 30, 2013 and September 30, 2012, of The Laclede Group, Inc. and Missouri Gas Energy

EX-99.1

EXHIBIT 99.1

Financial Statements

Missouri Gas Energy

Three and Six Months Ended

June 30, 2013 and 2012

Missouri Gas Energy – Stand Alone

INDEX TO FINANCIAL STATEMENTS

(unaudited)

Financial Statements (unaudited):	Page
Balance Sheets - June 30, 2013 and December 31, 2012	5
Statements of Operations - Three Months Ended June 30, 2013 and 2012, Six Months Ended June 30, 2013, Period from Acquisition (March 26, 2012) to June 30, 2012, and the Period from January 1, 2012 to March 25, 2012	7
Statements of Comprehensive Income (Loss) - Three Months Ended June 30, 2013 and 2012, Six Months Ended June 30, 2013, Period from Acquisition (March 26, 2012) to June 30, 2012, and the Period from January 1, 2012 to March 25, 2012	9
Statement of Parent's Equity in Division - Six Months Ended June 30, 2013	11
Statements of Cash Flows - Six Months Ended June 30, 2013, Period from Acquisition (March 26, 2012) to June 30, 2012, and the Period from January 1, 2012 to March 25, 2012	12
Notes to Financial Statements	13

FINANCIAL STATEMENTS

The unaudited interim financial statements presented here reflect the gas distribution operations of Missouri Gas Energy, a division of Southern Union Company (Southern Union) as a stand-alone business (MGE).

The accompanying unaudited interim financial statements and related footnotes present only the financial position, results of operations, comprehensive income (loss), parent's equity in division and cash flows of MGE and reflect allocations of the cost of certain services provided to MGE for management, human resources, accounting, tax, legal, insurance and other corporate services. The unaudited interim financial statements do not include any allocation of interest expense. Management believes the amounts allocated are reasonable; however, the allocations may not be indicative of the cost of future operations or the amount of future allocations.

On March 26, 2012, all of the then outstanding stock of Southern Union was acquired by Sigma Acquisition Corporation, a wholly owned subsidiary of Energy Transfer Equity, L.P. (ETE) (the ETE Merger). Southern Union's March 26, 2012 merger transaction with ETE was accounted for by ETE using business combination accounting.  Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on their fair value.  By the application of “push-down” accounting, Southern Union's assets, liabilities and equity, including those for MGE reported here were accordingly adjusted to fair value on March 26, 2012.  Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions.  See Note 3 to our interim financial statements for a discussion of the estimated fair values of MGE'S assets and liabilities recorded in connection with the ETE Merger.

Due to the application of “push-down” accounting, the unaudited interim financial statements and certain footnote disclosures of MGE are presented in two distinct periods to indicate the application of two different bases of accounting. Periods prior to March 26, 2012 are identified herein as “Predecessor,” while the period subsequent to the ETE Merger is identified as “Successor.”

Definitions

AOCI	accumulated other comprehensive income (loss)
ETE	Energy Transfer Equity, L.P.
ETP	Energy Transfer Partners, L.P., a subsidiary of ETE
GAAP	accounting principles generally accepted in the United States
MPSC	Missouri Public Service Commission
MGE	Missouri Gas Energy
NEG	New England Gas Company

4

Missouri Gas Energy – Stand Alone

BALANCE SHEETS

(Dollars in thousands)

(unaudited)

	Successor
	June 30, 2013			December 31, 2012
ASSETS
Utility plant	$	661,339		$	649,953
Less - Accumulated depreciation and amortization	(27,977		)	(15,793		)
Construction work in progress	4,236			4,152
Net utility plant	637,598			638,312
Goodwill	132,604			132,604
Other investments	3,334			3,334
Other property and investments	135,938			135,938
Current assets:
Cash and cash equivalents	8,065			16,641
Accounts receivable:
Utility	30,199			50,363
Utility unbilled revenues	10,883			33,595
Associated companies	8,825			14,477
Other	4,617			4,644
Allowance for doubtful accounts	(1,300		)	(500		)
Inventories:
Natural gas stored underground	37,289			49,083
Materials and supplies at average cost	4,726			3,780
Prepayments and other	483			1,437
Total current assets	103,787			173,520
Deferred charges:
Regulatory assets	59,298			62,523
Deferred purchased gas costs	5,178			39,039
Other	9,467			7,560
Total deferred charges	73,943			109,122
Total assets	$	951,266		$	1,056,892

The accompanying notes are an integral part of these financial statements.

5

Missouri Gas Energy – Stand Alone

BALANCE SHEETS

(Dollars in thousands)

(unaudited)

	Successor
	June 30, 2013		December 31, 2012
CAPITALIZATION AND LIABILITIES
Capitalization:
Parent's equity in division	$	620,391	$	700,544
Total capitalization	620,391		700,544
Current liabilities:
Accounts payable	26,138		32,154
Advanced customer billings	1,626		23,536
Wages and compensation accrued	8,332		6,320
Derivative instrument liability	2,971		8,142
Customer deposits	8,341		8,317
Taxes accrued	18,468		15,855
Deferred income taxes	10,189		10,626
Other	774		1,137
Total current liabilities	76,839		106,087
Deferred credits and other liabilities:
Deferred income taxes	172,759		167,000
Pension and postretirement benefit costs	58,880		64,389
Derivative instrument liability	1,254		—
Regulatory liabilities	2,240		2,289
Other	18,903		16,583
Total deferred credits and other liabilities	254,036		250,261
Commitments and contingencies (Note 10)
Total capitalization and liabilities	$	951,266	$	1,056,892

The accompanying notes are an integral part of these financial statements.

6

Missouri Gas Energy – Stand Alone

STATEMENTS OF OPERATIONS

(Dollars in thousands)

(unaudited)

	Successor
	Three Months			Three Months
	Ended			Ended
	June 30,			June 30,
	2013			2012
Operating revenues:
Regulated gas distribution	$	93,985		$	71,616
Other	2,054			1,787
Total operating revenues	96,039			73,403
Operating expenses:
Natural gas	40,726			20,767
Other operation expenses	26,483			24,717
Maintenance	4,624			4,298
Depreciation and amortization	7,601			7,406
Taxes, other than income taxes	8,528			6,969
Total operating expenses	87,962			64,157
Operating income	8,077			9,246
Other income - net	(10		)	(83		)
Interest income	12			6
Income before income taxes	8,079			9,169
Income tax expense	3,129			3,880
Net income	$	4,950		$	5,289

The accompanying notes are an integral part of these financial statements.

7

Missouri Gas Energy – Stand Alone

STATEMENTS OF OPERATIONS

(Dollars in thousands)

(unaudited)

	Successor					Predecessor
	Six Months		Period from			Period from
	Ended		March 26 -			January 1 -
	June 30,		June 30,			March 25,
	2013		2012			2012
Operating revenues:
Regulated gas distribution	$	306,270	$	77,903		$	158,321
Other	6,758		2,006			3,975
Total operating revenues	313,028		79,909			162,296
Operating expenses:
Natural gas	189,254		23,491			101,739
Other operation expenses	48,189		36,061			21,208
Maintenance	9,726		4,622			4,333
Depreciation and amortization	15,172		7,887			7,032
Taxes, other than income taxes	24,774		7,540			12,577
Total operating expenses	287,115		79,601			146,889
Operating income	25,913		308			15,407
Other income and (expense) - net	175		(82		)	54
Interest income	120		7			37
Income before income taxes	26,208		233			15,498
Income tax expense	10,147		1,236			6,001
Net income (loss)	$	16,061	$	(1,003	)	$	9,497

The accompanying notes are an integral part of these financial statements.

8

Missouri Gas Energy – Stand Alone

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

(unaudited)

	Successor
	Three Months			Three Months
	Ended			Ended
	June 30,			June 30,
	2013			2012
Net income	$	4,950		$	5,289
Other comprehensive income, before tax:
Defined benefit pension and other
postretirement benefit plans:
Net actuarial gain arising during the period	740			—
Other comprehensive income, before tax:	740			—
Income tax expense related to items of
other comprehensive income	(286		)	—
Other comprehensive income, net of tax	454			—
Comprehensive income	$	5,404		$	5,289

The accompanying notes are an integral part of these financial statements.

9

Missouri Gas Energy – Stand Alone

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

(unaudited)

	Successor						Predecessor
	Six Months			Period from
	Ended			Acquisition (March			Period from
	June 30,			26, 2012) to June 30,			January 1, 2012 to
	2013			2012)			March 25, 2012
Net income (loss)	$	16,061		$	(1,003	)	$	9,497
Other comprehensive income, before tax:
Defined benefit pension and other
postretirement benefit plans:
Net actuarial gain arising during the period	1,703			—			1,366
Other comprehensive income, before tax:	1,703			—			1,366
Income tax expense related to items of
other comprehensive income	(572		)	—			(528		)
Other comprehensive income, net of tax	1,131			—			838
Comprehensive income (loss)	$	17,192		$	(1,003	)	$	10,335

The accompanying notes are an integral part of these financial statements.

10

Missouri Gas Energy – Stand Alone

STATEMENT OF PARENT’S EQUITY IN DIVISION

(Dollars in thousands)

(unaudited)

	Parent’s						Total Parent’s
	Equity in						Equity in
	Division			AOCI			Division
Successor:
Balance, January 1, 2013	$	709,836		$	(9,292	)	$	700,544
Other comprehensive income, net of tax	—			1,131			1,131
Net income	16,061			—			16,061
Net transactions with parent	(97,345		)	—			(97,345		)
Balance, June 30, 2013	$	628,552		$	(8,161	)	$	620,391

The accompanying notes are an integral part of these financial statements.

11

Missouri Gas Energy – Stand Alone

STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

	Successor						Predecessor
	Six Months			Period from			Period from
	Ended			March 26 -			January 1 -
	June 30,			June 30,			March 25,
	2013			2012			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	16,061		$	(1,003	)	$	9,497
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization	15,172			7,887			7,032
Deferred income taxes	4,751			4,965			6,837
Change in assets and liabilities:
Accounts receivable	20,991			16,667			7,913
Accounts receivable - associated companies	5,652			(12,517		)	19,382
Accounts payable and advanced
customer billings	(27,128		)	11,112			(35,055		)
Taxes accrued	2,613			405			(296		)
Natural gas stored underground	11,794			(10,380		)	18,493
Other assets and liabilities	31,497			32,336			9,317
Net changes in derivatives	(3,330		)	(20,097		)	(1,957		)
Net change in pension and postretirement	1,703			—			1,366
Delayed customer billings	22,712			(3,806		)	22,683
Net cash flows provided by operating activities	102,488			25,569			65,212
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(13,719		)	(7,470		)	(6,386		)
Net cash flows used in investing activities	(13,719		)	(7,470		)	(6,386		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances to parent	(97,345		)	(12,366		)	(55,561		)
Other	—			(1,759		)	(3,090		)
Net cash flows used in
financing activities	(97,345		)	(14,125		)	(58,651		)
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS	(8,576		)	3,974			175
CASH AND CASH EQUIVALENTS,
beginning of period	16,641			1,790			1,615
CASH AND CASH EQUIVALENTS,
end of period	$	8,065		$	5,764		$	1,790

The accompanying notes are an integral part of these financial statements.

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Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS

(Tabular dollar amounts are in thousands)

(unaudited)

NOTE 1 - OPERATIONS AND ORGANIZATION

MGE is primarily engaged in the local distribution of natural gas and serves natural gas end-use customers in western Missouri.

In December 2012, Southern Union Company (Southern Union) entered into definitive purchase and sale agreements dated December 14, 2012 with Plaza Missouri Acquisition, Inc. (Plaza Missouri) and Plaza Massachusetts Acquisition, Inc. (Plaza Massachusetts), both of which are subsidiaries of The Laclede Group, Inc. (Laclede), pursuant to which Plaza Missouri has agreed to acquire the assets of Southern Union's MGE division, and Plaza Massachusetts has agreed to acquire the assets of Southern Union's NEG division for an aggregate purchase price of approximately $1.035 billion including the assumption of $19.5 million in outstanding debt, subject to customary closing adjustments.  Effective January 11, 2013, Laclede's subsidiary, Laclede Gas Company (Laclede Gas), and Plaza Missouri entered into an assignment and assumption agreement pursuant to which Laclede Gas assumed all of Plaza Missouri's duties and obligations under its purchase and sale agreement with Southern Union. Subsequently, on February 11, 2013, Laclede announced that it had entered into an agreement with Algonquin Power & Utilities Corp (APUC), pursuant to which APUC agreed to acquire, through a subsidiary, all of the outstanding shares of common stock of Plaza Massachusetts from Laclede immediately prior to Plaza Massachusetts' purchase of the assets of NEG from Southern Union, subject to certain approvals.  It is expected that the transactions contemplated by the purchase and sale agreements will close by the end of the third quarter of 2013.  

See Note 3 for information related to Southern Union's merger with ETE.

NOTE 2 - ESTIMATES, SIGNIFICANT ACCOUNTING POLICIES AND BALANCE SHEET

DETAIL

These notes are an integral part of the accompanying unaudited interim financial statements of MGE. The unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, management believes that the unaudited interim financial statements include all adjustments (consisting of only normal and recurring accruals) and disclosures necessary for the fair presentation of the financial position, results of the operations, and cash flows for the periods presented. There have been no changes in MGE's accounting policies as disclosed in the financial statements for the year ended December 31, 2012. These unaudited interim financial statements should be read in conjunction with the Notes to Financial Statements contained in MGE's financial statements for the year ended December 31, 2012. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year due to the seasonal nature of MGE's operations.

The accompanying unaudited interim financial statements and related footnotes present only the financial position, results of operations, comprehensive income (loss), parent's equity in division and cash flows of MGE and reflect allocations of the cost of certain services provided to MGE for management, human resources, accounting, tax, legal, insurance and other corporate services. The unaudited interim financial statements do not include any allocation of interest expense. Management believes the amounts allocated are reasonable; however, the allocations may not be indicative of the cost of future operations or the amount of future allocations.

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Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 2 - ESTIMATES, SIGNIFICANT ACCOUNTING POLICIES AND BALANCE SHEET

DETAIL - Continued

1. Franchise and Sales Taxes

Gross receipts taxes associated with MGE are imposed on the organization and billed to its customers. These amounts are recorded gross in the statements of operations. Amounts recorded in Regulated Gas Distribution Operating Revenues were $5.5 million and $4.1 million for the three months ended June 30, 2013 and 2012 and $18.7 million, $4.1 million and $ 10.8 million for the six months ended June 30, 2013, period from Acquisition (March 26, 2012) to June 30, 2012 and the period from January 1, 2012 to March 25, 2012. Franchise taxes are expensed by MGE and included in Taxes, other than income taxes.

Sales taxes imposed on applicable sales of MGE are billed to customers. These amounts are not recorded in the statements of operations, but are recorded as both Accounts Receivable and as tax collections payable included as Other in the Current Liabilities section of the balance sheets.

2. Subsequent Events

Management has evaluated subsequent events through August 5, 2013, the date the financial statements were available to be issued. For more information, see Note 10.

NOTE 3 - ETE MERGER AND OTHER TRANSACTIONS

1. Description of Merger

On March 26, 2012, Southern Union, ETE, and Sigma Acquisition Corporation, a wholly-owned subsidiary of ETE (Merger Sub), completed their previously announced merger transaction.  Pursuant to the Second Amended and Restated Agreement and Plan of Merger, dated as of July 19, 2011, as amended by Amendment No. 1 thereto dated as of September 14, 2011 (as amended, the Merger Agreement), among Southern Union, ETE and Merger Sub, Merger Sub was merged with and into Southern Union, with Southern Union continuing as the surviving corporation as an indirect, wholly-owned subsidiary of ETE.  The ETE Merger became effective on March 26, 2012 at 12:59 p.m., Eastern Time (the Effective Time).

2. Allocation of Consideration Transferred

The ETE Merger was accounted for using business combination accounting under applicable accounting principles.  Business combination accounting requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values as of the acquisition date.  The table below represents the allocation of the total consideration to MGE's tangible and intangible assets and liabilities as of March 26, 2012 based upon management's estimate of their respective fair values.

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Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 3 - ETE MERGER AND OTHER TRANSACTIONS - Continued

Cash and cash equivalents	$	1,790
Other current assets	143,504
Property and equipment	629,453
Goodwill	132,604
Other noncurrent assets	80,450
Deferred income taxes	(168,524		)
Other liabilities	(215,654		)
Total purchase price	$	603,623

The goodwill resulting from the ETE Merger was primarily due to expected commercial and operational synergies and is not deductible for tax purposes.

NOTE 4 - PARENT'S EQUITY IN DIVISION

Southern Union uses a centralized approach to cash management in which all cash receipts and cash disbursements are processed through Southern Union's cash accounts with corresponding credit or charges to intercompany accounts with MGE. MGE's intercompany accounts are also credited and charged for allocations of corporate costs. The intercompany accounts representing intercompany payables to the parent are classified in parent's equity in division.

Selling, general and administrative expenses in the unaudited interim statements of operations include expenses allocated by Southern Union to cover legal, accounting, treasury, tax, human resources, information technology, insurance and other corporate services provided to MGE. These allocations were based on the modified Massachusetts formula typically based on non-gas cost related expenses, utility investment, throughput volumes and other measures that management believes are reasonable and result in an allocation of Southern Union's cost of doing business amongst the divisions and subsidiaries of Southern Union Company.

The following tables summarize MGE's transactions with associated companies:

	Successor
	Three Months		Three Months
	Ended		Ended
	June 30,		June 30,
	2013		2012
Allocations included in operating expenses:
Service fee - 1.5% of net sales	$	—	$	723
Royalty fee - 1% of net sales	—		482
Joint and common cost allocation	1,399		1,176
Total	$	1,399	$	2,381
Allocations included in construction costs:
Joint and common cost allocation	$	—	$	360

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NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 4 - PARENT'S EQUITY IN DIVISION - Continued

	Successor				Predecessor
			Period from
			Acquisition		Period from
	Six Months		(March 26 -		January 1,
	Ended		2012) to		2012 to
	June 30,		June 30,		March 25,
	2013		2012)		2012
Allocations included in operating expenses:
Service fee - 1.5% of net sales	$	—	$	774	$	756
Royalty fee - 1% of net sales	—		516		504
Joint and common cost allocation	1,649		1,306		1,686
Total	$	1,649	$	2,596	$	2,946
Allocations included in construction costs:
Joint and common cost allocation	$	—	$	409	$	638

In June 2012, Southern Union discontinued billing MGE for the service fee and the royalty fee. Only the joint and common cost allocation continues.

In addition to the amounts allocated to MGE noted above, a non-recurring allocation of termination expenses associated with the ETE merger with Southern Union occurred in March 2012. Termination expenses totaling $9.6 million were allocated to MGE related to termination of contracts with the executives of Southern Union Company and are included in Other Operating Expenses.

NOTE 5 - COMPREHENSIVE INCOME (LOSS)

Other comprehensive income is net of taxes of $0.3 million and $0 for the three months ended June 30, 2013 and 2012, respectively. Other comprehensive income is net of taxes of $0.6 million, $0 and $0.5 million for the six months ended June 30, 2013, the period from Acquisition (March 26, 2012) to June 30, 2012 and the period from January 1, 2012 to March 25, 2012, respectively.

As of June 30, 2013 and December 31, 2012, accumulated other comprehensive loss, net of tax is $8.2 million and $9.3 million, respectively, and results from MGE's benefit plans.

NOTE 6 - RETIREMENT BENEFITS

Southern Union has funded non-contributory defined benefit pension plans to cover substantially all distribution operation employees. Normal retirement age is 65, but certain plan provisions allow for earlier retirement. Pension benefits are calculated under formulas principally based on average earnings and length of service for salaried and non-union employees and average earnings and length of service or negotiated non-wage based formulas for union employees.

The postretirement benefits include health care plans that generally provide for cost sharing between Southern Union and its retirees in the form of retiree contributions, deductibles, coinsurance, and a fixed cost cap on the amount Southern Union pays annually to provide future retiree health care coverage under certain of these plans.

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NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 6 - RETIREMENT BENEFITS - Continued

Components of Net Periodic Benefit Cost

The following tables set forth the components of net periodic benefit cost of MGE's pension and postretirement benefit plans for the periods presented below:

	Pension Benefits						Other Postretirement Benefits
	Successor						Successor
	Three Months Ended June 30,			Three Months Ended June 30,			Three Months Ended June 30,			Three Months Ended June 30,
	2013			2012			2013			2012
Net periodic benefit cost:
Service cost	$	838		$	730		$	87		$	74
Interest cost	1,606			1,681			232			252
Expected return on plan assets	(2,438		)	(2,239		)	(456		)	(442		)
Actuarial loss (gain) amortization	604						136
	610			172			(1		)	(116		)
Regulatory adjustment (1)	1,890			2,328			1			116
Net periodic benefit cost	$	2,500		$	2,500		$	—		$	—

	Pension Benefits									Other Postretirement Benefits
	Successor						Predecessor			Successor						Predecessor
	Six Months Ended June 30,			Period from Acquisition (March 26, 2012) to June 30,			Period from January 1, 2012 to March 25,			Six Months Ended June 30,			Period from Acquisition March 26, 2012 to June 30,			Period from January 1, 2012 to March 25,
	2013			2012)			2012			2013			2012			2012
Net periodic benefit cost:
Service cost	$	1,676		$	791		$	642		$	174		$	81		$	69
Interest cost	3,212			1,821			1,558			463			273			249
Expected return on plan assets	(4,876		)	(2,426		)	(1,846		)	(912		)	(479		)	(386		)
Prior service cost (credit) amortization				—			86						—			—
Actuarial loss (gain) amortization	1,208			—			1,789			272			—			—
	1,220			186			2,229			(3		)	(125		)	(68		)
Regulatory adjustment (1)	3,780			2,332			253			3			125			657
Net periodic benefit cost	$	5,000		$	2,518		$	2,482		$	—		$	—		$	589

(1) MGE recovers certain qualified pension benefit plan and other postretirement benefit plan costs through rates charged to utility customers.  Certain utility commissions require that the recovery of these costs be based on the Employee Retirement Income Security Act of 1974, as amended, or other utility commission specific guidelines.  The difference between these regulatory-based amounts and the periodic benefit cost calculated pursuant to GAAP is deferred as a regulatory asset or liability and amortized to expense over periods in which this difference will be recovered in rates, as promulgated by the applicable utility commission.

17

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 7 - TAXES ON INCOME

MGE's effective tax rate is generally higher than the U.S. federal income statutory rate of 35 percent due to state income taxes.

MGE's effective tax rate for the quarter ending June 30, 2012 is higher than in 2013 as a result of non-deductible executive compensation related to the 2012 ETE Merger.

MGE's effective tax rate in the successor period from Acquisition (March 26, 2012) to June 30, 2012 is significantly higher than for the six months ended June 30, 2013 and the period from January 1, 2012 to March 25, 2012 due to ETE Merger related expenses coupled with non-deductible executive compensation included in the merger related expenses.

NOTE 8 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

MGE is exposed to certain risks in its ongoing business operations.  The primary risk managed by using derivative instruments is commodity price risk.  Natural gas price swaps are the principal derivative instruments used by MGE to manage commodity price risk associated with purchases and/or sales of natural gas, although other commodity derivative contracts may also be used from time to time.  MGE recognizes all derivative instruments as assets or liabilities at fair value in the balance sheets. To a lesser extent, call options are also used for mitigating price fluctuations in gas costs.

1. Commodity Contracts

MGE enters into natural gas commodity financial instruments to manage the exposure to changes in the cost of natural gas passed through to utility customers that result from movements in market commodity prices.  The cost of the derivative instruments and settlement of the respective obligations are recovered from utility customers through the purchased natural gas adjustment clause as authorized by the applicable regulatory authority and therefore do not impact earnings.

Natural Gas Price Swaps.  As of June 30, 2013, MGE had outstanding pay-fixed natural gas price swaps with total notional amounts of 8.3 Bcf, 15.1 Bcf and 4.5 Bcf for the remainder of 2013, 2014 and 2015, respectively.  These natural gas price swaps are accounted for as economic hedges, with changes in their fair value recorded to deferred natural gas purchases.

MGE has master netting arrangements with certain counterparties, which permit applicable obligations of the parties to be settled on a net versus gross basis.  If a right of offset exists, the fair value amounts for the derivative instruments are reported in the balance sheets on a net basis and disclosed herein on a gross basis.

18

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 8 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Continued

2. Summary Financial Statement Information

The following table summarizes the fair value amounts of MGE's asset and liability derivative instruments and their location reported in the balance sheets at the dates indicated.

	Fair Value
	Derivative Assets				Derivative Liabilities
	Successor				Successor
	June 30,		December 31,		June 30,		December 31,
Balance Sheet Location	2013		2012		2013		2012
Economic hedges:
Commodity contracts:
Natural gas price swaps:
Deferred charges	$	—	$	712	$	—	$	125
Derivative instrument liability	788		822		5,013		8,964
Total	$	788	$	1,534	$	5,013	$	9,089

The following tables summarize the location and amount (excluding income tax effects) of derivative instrument gains and losses reported in MGE's financial statements for the periods presented:

	Successor
	Three Months Ended June 30,		Three Months Ended June 30,
	2013		2012
Economic hedges:
Commodity contracts:
Change in fair value - decrease in deferred natural gas purchases	$	10,444	$	(20,097	)

	Successor						Predecessor
	Six-Months Ended June 30, 2013			Period from Acquisition (March 26, 2012) to June 30, 2012)			Period from January 1, 2012 to March 25, 2012
Economic hedges:
Commodity contracts:
Change in fair value - decrease in
deferred natural gas purchases	$	(3,330	)	$	(20,097	)	$	(1,957	)

19

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 8 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Continued

3. Derivative Instrument Contingent Features

Certain of MGE's derivative instruments contain provisions that require Southern Union's debt to be maintained at an investment grade credit rating from each of the major credit rating agencies.  If Southern Union's debt were to fall below investment grade, Southern Union would be in violation of these provisions, and the counterparties to the derivative instruments could potentially require Southern Union to post collateral for certain of the derivative instruments.  The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position at June 30, 2013 was $3.0 million.

NOTE 9 - FAIR VALUE MEASUREMENT

MGE's assets and liabilities that are measured at fair value on a recurring basis consist of commodity derivative assets and liabilities, all of which are level 2 fair value measurements at June 30, 2013 and December 31, 2012.

MGE has no Level 1 or Level 3 instruments measured at fair value at June 30, 2013 or December 31, 2012 and there were no transfers between hierarchy levels. MGE's natural gas swap derivatives are valued using pricing models based on an income approach that discounts future cash flows to a present value amount.  The significant pricing model inputs for natural gas swap derivatives include published NYMEX forward index prices for delivery of natural gas at Henry Hub, Permian Basin and Waha.   The pricing models also adjust for nonperformance risk associated with the counterparty or MGE, as applicable; through the use of credit risk adjusted discount rates based on published default rates.

Due to their short-term nature, the approximate fair value of MGE's cash and cash equivalents, accounts receivable and accounts payable is equal to book value.

NOTE 10 - REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES, AND

ENVIRONMENTAL LIABILITIES

1. Environmental Matters

MGE is subject to federal, state and local laws, rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters. These laws, rules and regulations require MGE to conduct operations in a specified manner and to obtain and comply with a wide variety of environmental registrations, licenses, permits, inspections and other approvals. Failure to comply with environmental laws, rules and regulations may expose the organization to significant fines, penalties and/or interruptions in operations. MGE's environmental policies and procedures are designed to achieve compliance with such applicable laws and regulations. These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future. MGE engages in a process of updating and revising its procedures for the ongoing evaluation of its operations to identify potential environmental exposures and enhance compliance with regulatory requirements.

20

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 10 - REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES, AND

ENVIRONMENTAL LIABILITIES - Continued

2. Environmental Remediation

MGE is responsible for environmental remediation at various contaminated sites that are primarily associated with former manufactured gas plants (MGPs) and sites associated with the operation and disposal activities of former MGPs that produced a fuel known as “town gas.” Some byproducts of the historic manufactured gas process may be regulated substances under various federal and state environmental laws. To the extent these byproducts are present in soil or groundwater at concentrations in excess of applicable standards, investigation and remediation may be required. The sites include properties that are part of the organization's ongoing operations, sites formerly owned or used by MGE and sites owned by third parties. Remediation typically involves the management of contaminated soils and may involve removal of old MGP structures and remediation of groundwater. Activities vary with site conditions and locations, the extent and nature of the contamination, remedial requirements, complexity and sharing of responsibility; some contamination may be unrelated to former MGPs. The ultimate liability and total costs associated with these sites will depend upon many factors. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, MGE could potentially be held responsible for contamination caused by other parties. In some instances, MGE may share liability associated with contamination with other potentially responsible parties (PRPs) and may also benefit from insurance policies or contractual indemnities that cover some or all of the cleanup costs. These sites are generally managed in the normal course of business or operations.

3. Environmental Remediation Liabilities

The table below reflects the amount of accrued liabilities recorded in the balance sheets at the dates indicated to cover environmental remediation actions where management believes a loss is probable and reasonably estimable.  Except for matters discussed above, MGE does not have any material environmental remediation matters assessed as reasonably possible that would require disclosure in the financial statements.

	Successor
	June 30,		December 31,
	2013		2012
Current	$	285	$	715
Noncurrent	655		575
Total environmental liabilities	$	940	$	1,290

4. Litigation and Other Claims

Litigation related to incident at JJ's Restaurant: On February 19, 2013, there was a natural gas explosion at JJ's Restaurant located at 910 W. 48th Street in Kansas City, Missouri. One person died and media reports indicate that up to fifteen people were transported to area hospitals. The extent and nature of those injuries are currently unknown. The restaurant building was destroyed in the explosion and fire. Immediately surrounding buildings sustained damage, but the full extent of that damage is unknown at this time. A contractor, Heartland Midwest LLC, was in the process of installing cable for Time Warner Cable and hit a natural gas line while directionally boring. The utility locates for the work were done by USIC Locating Services, Inc., a utility infrastructure locating company

21

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 10 – REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES, AND
ENVIRONMENTAL LIABILITIES – Continued

engaged by Missouri Gas Energy to locate and mark underground gas lines (and engaged by others to mark other underground facilities). Several parties have retained counsel, and to date, nine lawsuits have been filed in the Circuit Court of Jackson County, Missouri, against numerous defendants. MGE and MGE employee, Michael Palier, are defendants in all but one of the lawsuits (Palier v. Time Warner). The lawsuits filed to date include Simmons v. MGE, Case No. 1316-CV07265 (no trial date set); Tanner v. MGE, Case No. 1316-CV09906 (no trial date set), JJ's Restaurant v. MGE, Case No. 1316-CV11288 (two trial dates set on January 12, 2015 and April 6, 2015); Meek v. MGE, Case No. 1316-CV13523 (no trial date set); Cramer v. MGE, Case No. 1316-CV13738 (no trial date set); Plazaview, LLC v. MGE, Case No. 1316-CV16817 (no trial date set); Mingos v. MGE, Case No. 1316-CV18072 (no trial date set); Palier v. Time Warner, Case No. 1316-CV18684 (no trial date set); and Couture v. MGE, Case No. 1316-CV18787 (no trial date set). Discovery in the pending lawsuits is ongoing. No demands have been made in any of the pending lawsuits. The Company anticipates that more lawsuits will be filed. The MPSC and OSHA investigations are ongoing. An estimate for losses cannot be made at this time.

Joplin, Missouri Tornado. On Sunday, May 22, 2011, what has been described as the worst tornado in the United States in the last 60 years and one of the deadliest in American history, struck Joplin, Missouri, a city served by MGE. The tornado was designated by the National Weather Service as an EF-5, the strongest category on the Enhanced Fujita Scale. Over ten miles of MGE’s mains and in excess of 3,500 service lines were damaged beyond repair and removed from service.

On June 10, 2011, MGE filed an application with the MPSC requesting authority to defer the financial impact of the tornado that struck Joplin on the grounds that the tornado constituted a material, extraordinary and non-recurring event with respect to MGE's operations. On January 25, 2012, the MPSC issued its Report and Order in which it granted MGE's request to defer as a regulatory asset for consideration of recovery in a future rate proceeding the incremental costs occasioned by the tornado but denied MGE's request to defer as a regulatory asset for consideration of recovery in a future rate proceeding the lost revenues due to the tornado.

MGE has pursued insurance recoveries related to the property damage incurred. MGE has received approximately $7.2 million in total. MGE received $0 and $2.0 million in the three months ended June 30, 2013 and 2012, respectively. MGE received $3.1 million, $2.0 million and $0 in the six months ended June 30, 2013, the period from Acquisition (March 26, 2012) to June 30, 2012 and the period from January 1, 2012 to March 25, 2012, respectively.

To date, MGE estimates that the net loss in customers is approximately 2,200 that will have an ongoing impact on net earnings estimated to be approximately $0.7 million per year until the customers have re-established service.

MGE is involved in legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding matters arising in the ordinary course of business.

MGE recognizes legal expenses and other related fees in the period in which they occurred. Reserves are established when necessary when management believes a loss is probable and reasonably estimable.

MGE records accrued liabilities for litigation and other claim costs when management believes a loss is probable and reasonably estimable. When management believes there is at least a reasonable possibility that a material loss or an additional material loss may have been incurred, MGE discloses (i) an estimate of the possible loss or range of loss in excess of the amount accrued; or (ii) a statement that such an estimate cannot be made. As of June 30, 2013 and December 31, 2012, MGE recorded litigation and other claim-related accrued liabilities of $2.0 million and $1.7 million, respectively.

22

Missouri Gas Energy – Stand Alone

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Tabular dollar amounts are in thousands)

NOTE 10 – REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES, AND
ENVIRONMENTAL LIABILITIES – Continued

Except for the matters discussed above, MGE does not have any material litigation or other claim contingency matters assessed as probable or reasonably possible that would require disclosure in the financial statements.

5. Other Commitments and Contingencies

Regulation and Rates.  See Note 11 for potential contingent matters associated with the LDC Operation's regulated operations.

Unclaimed Property Audits.   MGE is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment (the transfer of property to the state) of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements.  MGE is currently being examined by a third party auditor on behalf of nine states for compliance with unclaimed property laws.

NOTE 11 - REGULATION AND RATES

On April 2, 2009, MGE made a filing with the MPSC seeking to implement an annual base rate increase of approximately $32.4 million. On February 10, 2010, the MPSC issued its Report and Order in this case, authorizing a revenue increase of $16.2 million and approving distribution rate structures for MGE's residential and small general service customers (which comprised approximately 99% of its total customers and approximately 91% of its net operating revenues at the time the rates went into effect) that eliminate the impact of weather and conservation for residential and small general service margin revenues and related earnings in Missouri. The new rates became effective February 28, 2010. Judicial review of the MPSC's Report and Order was sought by the Office of the Public Counsel, with respect to rate structure issues, and by MGE, with respect to cost of capital issues. By opinion issued on March 20, 2012, the Southern District of the Missouri Court of Appeals affirmed the MPSC's Report and Order. That opinion is now final.

23

EX-99.2

EXHIBIT 99.2

THE LACLEDE GROUP, INC.

PRO FORMA FINANCIAL INFORMATION

(UNAUDITED)

The following Unaudited Pro Forma Combined Condensed Financial Statements (“pro forma financial statements”) give effect to the proposed acquisition by Laclede Gas Company, a wholly owned subsidiary of The Laclede Group, Inc. (“Laclede Group”) of Missouri Gas Energy (“MGE”). The pro forma financial statements have been prepared for illustrative purposes only. The pro forma information is not necessarily indicative of what the combined company’s consolidated financial position or results of operations actually would have been had the transactions been completed as of the dates indicated. In addition, the unaudited pro forma combined condensed financial information does not purport to project the future financial position or operating results of the combined company. The pro forma adjustments are based on the information available at the time of the preparation of these pro forma financial statements.

The pro forma financial statements of Laclede Group and MGE have been derived from:

• the audited financial statements of The Laclede Group, Inc. as of and for the year ended September 30, 2012 included in The Laclede Group, Inc.’s Form 10-K for the fiscal year then ended;

• the financial statements of The Laclede Group, Inc. as of and for the nine months ended June 30, 2013 (unaudited) included in The Laclede Group, Inc.’s Form 10-Q for the quarterly period ended June 30, 2013;

• the audited financial statements of MGE as of and for the period from March 26, 2012 to December 31, 2012, and the period from January 1, 2012 to March 25, 2012; and

• the financial statements of MGE as of and for the nine months ended June 30, 2013 (unaudited)

Laclede Group’s acquisition of MGE (“MGE acquisition”) will be accounted for in accordance with the acquisition method of accounting and the regulations of the Securities and Exchange Commission. The Unaudited Pro Forma Combined Condensed Statements of Income (“pro forma statements of income”) for the year ended September 30, 2012 and nine months ended June 30, 2013 give effect to the MGE acquisition as if it were completed on October 1, 2011. The Unaudited Pro Forma Combined Condensed Balance Sheets (“pro forma balance sheets”) as of September 30, 2012 and June 30, 2013 give effect to the MGE acquisition as if it were completed on those respective dates. Due to the seasonal nature of the natural gas utility businesses, earnings are typically concentrated in the November through April period, which generally corresponds with the heating season. As such, the September 30, 2012 pro forma balance sheet has been included with the most recently completed period ending June 30, 2013 to provide an appropriate view of the seasonal working capital changes. These unaudited pro forma financial statements should be read in conjunction with the accompanying notes.

1

Laclede Group’s fiscal year ends on September 30 whereas MGE’s fiscal year ends on December 31. Due to this difference in fiscal year end dates, the results of MGE for the three months ended December 31, 2012 are included in both the pro forma statements of income for the fiscal year ended September 30, 2012 and the nine months ended June 30, 2013. As such, additional financial information about MGE’s results for the three months ended December 31, 2012 is included in the accompanying notes.

The historical financial information has been adjusted in the pro forma financial statements to give effect to pro forma events that are:

• directly attributable to the MGE acquisition;

• factually supportable; and

• with respect to the pro forma statements of income, expected to have a continuing impact on the combined results of Laclede Group and MGE.

The pro forma financial statements do not reflect any cost savings (or associated costs to achieve such savings) from operating efficiencies or restructuring that could result from the MGE acquisition. Further, the pro forma financial statements do not reflect the effect of any regulatory actions that may impact the pro forma financial statements when the MGE acquisition is completed. The pro forma statements of income reflect adjustments to remove the effect of transaction costs associated with the MGE acquisition that have been incurred by Laclede Group and are included in its historical financial statements.

The pro forma financial statements have been presented for illustrative purposes only and are not necessarily indicative of results of operations and financial position that would have been achieved had the pro forma events taken place on the dates indicated, or the future consolidated results of operations or financial position of the combined company. Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in connection with the pro forma financial statements. Since the pro forma financial statements have been prepared in advance of the close of the MGE acquisition, the final amounts recorded upon closing may differ materially from the information presented. These estimates are subject to change pending further review of the assets acquired and liabilities assumed and additional information available at the time of closing.

Laclede Group’s management believes that its assumptions provide a reasonable basis for presenting all of the significant effects of the MGE acquisition and that the pro forma adjustments give appropriate effect to those assumptions that are applied in the pro forma financial statements. Certain amounts in MGE’s historical balance sheets and statements of income have been reclassified to conform to Laclede Group’s presentation in these pro forma financial statements.

2

The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Statement of Income

For the Nine Months Ended June 30, 2013

		The Laclede Group, Inc.		Missouri Gas Energy			Pro Forma Adjustments Relating to the MGE Acquisition			Pro Forma Adjustments Relating to Financing		Note 3		Pro Forma Combined
(Thousands, Except Per Share Amounts)
Operating Revenues:
Gas Utility	$	735,726	$	456,053		$	—		$	—			$	1,191,779
Gas Marketing and Other		134,179		—			—			—				134,179
Total Operating Revenues		869,905		456,053			—			—				1,325,958
Operating Expenses:
Gas Utility
Natural and propane gas		410,189		272,259			—			—				682,448
Other operation and maintenance		123,245		82,465			—			—				205,710
Depreciation and amortization		33,742		22,709			—			—				56,451
Taxes, other than income taxes		49,525		36,223			—			—				85,748
Total Gas Utility Operating Expenses		616,701		413,656			—			—				1,030,357
Gas Marketing and Other		146,988		—			(7,196	)		—		A		139,792
Total Operating Expenses		763,689		413,656			(7,196	)		—				1,170,149
Operating Income		106,216		42,397			7,196			—				155,809
Other Income and (Income Deductions) - Net		2,024		122			—			—				2,146
Interest Charges		19,590		(245	)		(1,308	)		11,813		A, B		29,850
Income Before Income Taxes		88,650		42,764			8,504			(11,813	)			128,105
Income Tax Expense		26,256		17,581			3,257			(4,524	)	C		42,570
Net Income	$	62,394	$	25,183		$	5,247		$	(7,289	)		$	85,535
Weighted Average Number of Common Shares Outstanding:
Basic		23,634								8,795		(Notes 2 & 4)		32,429
Diluted		23,708								8,796		(Notes 2 & 4)		32,504
Basic Earnings Per Share of Common Stock	$	2.62											$	2.63
Diluted Earnings Per Share of Common Stock	$	2.62											$	2.62

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

3

The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Balance Sheet

As of June 30, 2013

	The Laclede Group, Inc.				Missouri Gas Energy			Pro Forma Adjustments Relating to the MGE Acquisition		Pro Forma Adjustments Relating to Financing		Note 3	Pro Forma Combined
(Thousands)
ASSETS
Utility Plant	$	1,567,296		$	665,575		$	—		$	—		$	2,232,871
Less: Accumulated depreciation and amortization		484,380			27,977			—			—			512,357
Net Utility Plant		1,082,916			637,598			—			—			1,720,514
Goodwill		—			132,604			168,726			—	D		301,330
Other Property and Investments		59,229			3,334			—			—			62,563
Current Assets:
Cash and cash equivalents		556,489			8,065			(977,802	)		445,300	E, F		32,052
Accounts receivable		141,181			54,524			—			—			195,705
Allowance for doubtful accounts		(9,024	)		(1,300	)		—			—			(10,324	)
Delayed customer billings		11,319			—			—			—			11,319
Inventories		72,611			42,015			—			—			114,626
Natural gas receivable		24,304			—			—			—			24,304
Unamortized purchased gas adjustments		6,230			—			—			—			6,230
Deferred income taxes		2,888			—			—			—			2,888
Prepayments and other		35,391			483			—			—			35,874
Total Current Assets		841,389			103,787			(977,802	)		445,300			412,674
Regulatory assets and other deferred charges		438,505			73,943			—			4,700	F		517,148
Total Assets	$	2,422,039		$	951,266		$	(809,076	)	$	450,000		$	3,014,229

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

4

The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Balance Sheet (Continued)

As of June 30, 2013

		The Laclede Group, Inc.		Missouri Gas Energy		Pro Forma Adjustments Relating to the MGE Acquisition		Pro Forma Adjustments Relating to Financing		Note 3	Pro Forma Combined
(Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Total common stock equity	$	1,080,997	$	620,391	$	(626,128	)	$	—	G, H	$	1,075,260
Long-term debt (less current portion)		464,444		—		—			450,000	F		914,444
Total Capitalization		1,545,441		620,391		(626,128	)		450,000			1,989,704
Current Liabilities:
Accounts payable		104,862		26,138		—			—			131,000
Advance customer billings		—		1,626		—			—			1,626
Accrued liabilities and other		77,939		49,075		(10,189	)		—	I		116,825
Total Current Liabilities		182,801		76,839		(10,189	)		—			249,451
Deferred Credits and Other Liabilities:
Deferred income taxes		377,965		172,759		(172,759	)		—	I		377,965
Pension and postretirement benefit costs		181,691		58,880		—			—			240,571
Regulatory liabilities		61,335		2,240		—			—			63,575
Asset retirement obligations and other		72,806		20,157		—			—			92,963
Total Deferred Credits and Other Liabilities		693,797		254,036		(172,759	)		—			775,074
Total Capitalization and Liabilities	$	2,422,039	$	951,266	$	(809,076	)	$	450,000		$	3,014,229

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

5

The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Statement of Income

For The Year Ended September 30, 2012

		The Laclede Group, Inc.		Missouri Gas Energy (1)			Pro Forma Adjustments Relating to the MGE Acquisition			Pro Forma Adjustments Relating to Financing		Note 3		Pro Forma Combined
(Thousands, Except Per Share Amounts)
Operating Revenues:
Gas Utility	$	763,447	$	452,327		$	—		$	—			$	1,215,774
Gas Marketing and Other		362,028		—			—			—				362,028
Total Operating Revenues		1,125,475		452,327			—			—				1,577,802
Operating Expenses:
Gas Utility
Natural and propane gas		397,304		223,924			—			—				621,228
Other operation and maintenance		167,351		117,368			—			—				284,719
Depreciation and amortization		40,739		29,936			—			—				70,675
Taxes, other than income taxes		53,672		38,341			—			—				92,013
Total Utility Operating Expenses		659,066		409,569			—			—				1,068,635
Gas Marketing and Other		355,807		—			(200	)		—		J		355,607
Total Operating Expenses		1,014,873		409,569			(200	)		—				1,424,242
Operating Income		110,602		42,758			200			—				153,560
Other Income and (Income Deductions) - Net		3,272		(131	)		—			—				3,141
Interest Charges		24,945		(243	)		304			15,750		K, L		40,756
Income (Loss) Before Income Taxes		88,929		42,870			(104	)		(15,750	)			115,945
Income Tax Expense (Benefit)		26,289		19,532			(40	)		(6,032	)	M		39,749
Net Income	$	62,640	$	23,338		$	(64	)	$	(9,718	)		$	76,196
Weighted Average Number of Common Shares Outstanding:
Basic		22,262								10,005		(Notes 2 & 4)		32,267
Diluted		22,340								10,005		(Notes 2 & 4)		32,345
Basic Earnings Per Share of Common Stock	$	2.80											$	2.35
Diluted Earnings Per Share of Common Stock	$	2.79											$	2.35

(1) Missouri Gas Energy amounts are for the fiscal year ended December 31, 2012.

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

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The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Balance Sheet

As of September 30, 2012

	The Laclede Group, Inc.				Missouri Gas Energy (1)			Pro Forma Adjustments Relating to the MGE Acquisition		Pro Forma Adjustments Relating to Financing		Note 3	Pro Forma Combined
(Thousands)
ASSETS
Utility Plant	$	1,497,419		$	654,105		$	—		$	—		$	2,151,524
Less: Accumulated depreciation and amortization		478,120			15,793			—			—			493,913
Net Utility Plant		1,019,299			638,312			—			—			1,657,611
Goodwill		—			132,604			102,471			—	N		235,075
Other Property and Investments		56,814			3,334			—			—			60,148
Current Assets:
Cash and cash equivalents		27,457			16,641			(891,624	)		872,323	O, R		24,797
Accounts receivable		141,547			103,079			—			—			244,626
Allowance for doubtful accounts		(7,705	)		(500	)		—			—			(8,205	)
Inventories		106,472			52,863			—			—			159,335
Natural gas receivable		22,377			—			—			—			22,377
Unamortized purchased gas adjustments		40,674			—			—			—			40,674
Prepayments and other		12,194			1,437			—			—			13,631
Total Current Assets		343,016			173,520			(891,624	)		872,323			497,235
Regulatory assets and other deferred charges		461,133			109,122			—			4,700	Q		574,955
Total Assets	$	1,880,262		$	1,056,892		$	(789,153	)	$	877,023		$	3,025,024

(1) Missouri Gas Energy amounts are as of December 31, 2012.

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

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The Laclede Group, Inc. and Missouri Gas Energy

Unaudited Pro Forma Combined Condensed Balance Sheet (Continued)

As of September 30, 2012

		The Laclede Group, Inc.		Missouri Gas Energy (1)		Pro Forma Adjustments Relating to the MGE Acquisition		Pro Forma Adjustments Relating to Financing		Note 3	Pro Forma Combined
(Thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Total common stock equity	$	601,611	$	700,544	$	(711,527	)	$	427,023	S, T, P	$	1,017,651
Long-term debt (less current portion)		339,416		—		—			450,000	Q		789,416
Total Capitalization		941,027		700,544		(711,527	)		877,023			1,807,067
Current Liabilities:
Notes payable		40,100		—		100,000			—	O		140,100
Accounts payable		89,503		32,154		—			—			121,657
Advance customer billings		25,146		23,536		—			—			48,682
Current portion of long-term debt		25,000		—		—			—			25,000
Accrued liabilities and other		72,375		50,397		(10,626	)		—	U		112,146
Total Current Liabilities		252,124		106,087		89,374			—			447,585
Deferred Credits and Other Liabilities:
Deferred income taxes		355,509		167,000		(167,000	)		—	U		355,509
Pension and postretirement benefit costs		196,558		64,389		—			—			260,947
Regulatory liabilities		59,432		2,289		—			—			61,721
Asset retirement obligations and other		75,612		16,583		—			—			92,195
Total Deferred Credits and Other Liabilities		687,111		250,261		(167,000	)		—			770,372
Commitments and Contingencies
Total Capitalization and Liabilities	$	1,880,262	$	1,056,892	$	(789,153	)	$	877,023		$	3,025,024

(1) Missouri Gas Energy amounts are as of December 31, 2012.

See accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.

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NOTES TO THE UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

1.Description of the Transaction

On December 14, 2012, The Laclede Group, Inc. (“Laclede Group”) entered into purchase and sale agreements to acquire from Southern Union Company (“SUG”), an affiliate of Energy Transfer Equity, L.P. and Energy Transfer Partners, L.P., substantially all of the assets (exclusive of cash and cash equivalents) and liabilities of SUG’s Missouri Gas Energy (“MGE”) and New England Gas Company (“NEG”). On January 11, 2013, Laclede Group assigned its agreement to acquire MGE for $975 million to Laclede Gas Company (“Laclede Gas”). On February 11, 2013, Laclede Group entered into an agreement with Algonquin Power & Utilities Corp. (“APUC”) that will allow an APUC subsidiary to acquire the rights to purchase the assets of NEG, subject to certain approvals and conditions. Under the terms of this agreement, Laclede Group will receive $11 million from APUC at closing. With the effect of the NEG proceeds, the adjusted purchase price is $964 million. As it is not probable that Laclede Group will own the NEG assets, they have been excluded from these Unaudited Pro Forma Combined Condensed Financial Statements (“pro forma financial statements”), except for the receipt of the proceeds noted above. On July 17, 2013, the Missouri Public Service Commission provided the necessary regulatory approvals for Laclede Gas’ acquisition of MGE. The NEG transaction remains contingent upon regulatory approval from public utility regulators in Massachusetts. 

The agreements are subject to customary closing adjustments. As detailed in the MGE purchase and sale agreement, the MGE purchase price will be adjusted based upon MGE’s net assets on the date immediately prior to the closing date. This purchase price adjustment is to be determined and agreed to after closing, subject to a review period. Accordingly, no purchase price adjustment has been reflected in these pro forma financial statements.

2.Financing of the Transaction

These pro forma financial statements reflect Laclede Group’s acquisition of MGE through a combination of the issuance of 10.0 million shares of common stock, which Laclede Group completed on May 29, 2013, the issuance by Laclede Gas of $450.0 million of first mortgage bonds, short-term borrowings, and available cash. Accordingly, pro forma weighted average shares outstanding were increased by 8.8 million shares and 10.0 million shares for the nine months ended June 30, 2013 and the year ended September 30, 2012, respectively, in the unaudited pro forma combined condensed statements of income.

3.Adjustments to Pro Forma Financial Statements

The historical financial information has been adjusted in the pro forma financial statements to give effect to pro forma events that are:

• directly attributable to the MGE acquisition;

• factually supportable; and

• with respect to the statements of income, expected to have a continuing impact on the combined results of Laclede Group and MGE.

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The pro forma financial statements do not reflect any cost savings (or associated costs to achieve such savings) from operating efficiencies or restructuring that could result from the MGE acquisition. Further, the pro forma financial statements do not reflect the effect of any regulatory actions that may impact the pro forma financial statements when the MGE acquisition is completed. The pro forma statements of income reflect adjustments to remove the effect of transaction costs associated with the MGE acquisition that have been incurred by Laclede Group and are included in its historical financial statements.

The pro forma adjustments included in the pro forma financial statements are as follows:

Unaudited Pro Forma Combined Condensed Statement of Income for the Nine Months Ended June 30, 2013

(A)Reflects adjustment to remove transaction costs incurred by Laclede Group through June 30, 2013 directly attributable to the MGE acquisition. Of these transaction costs, $1.3 million were classified as interest expense as this amount was incurred related to the bridge financing facility for the planned acquisition.

(B)    Reflects an increase in interest expense related to the issuance of $450.0 million of first mortgage bonds with an effective interest rate of 3.50% and 270 days outstanding. A 1/8% change in the interest rate would result in an increase or decrease in interest expense of $0.4 million for the nine-month period. The interest expense on these new bonds excludes the impact of interest rate hedge agreements.

(Dollar amounts in thousands)		Nine Months Ended June 30, 2013
Issuance of first mortgage bonds		450,000
Interest rate		3.50	%
Pro forma interest expense (270 / 360 days)	$	11,813

(C)Reflects the income tax effect of the pro forma adjustments based on an estimated statutory tax rate of 38.3% for the period ended June 30, 2013. This estimated tax rate is different from Laclede Group’s effective tax rate for the period ended June 30, 2013, which includes other tax charges or benefits, and does not take into account any historical or possible future tax events that may impact the combined company.

Unaudited Pro Forma Combined Condensed Balance Sheet at June 30, 2013

(D) Reflects the estimated purchase price (see Note 1) in excess of the fair value of the assets acquired and liabilities assumed. The estimated purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values with the excess of the purchase price over the fair value recorded to goodwill. The historical book value of the assets and liabilities approximates the fair value given the regulatory environment that Laclede Gas operates under in Missouri. The following represents the excess of the purchase price over the fair value of the net assets acquired:

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(Thousands)
Purchase price	$	975,000
NEG Proceeds		(11,000	)
Total purchase consideration		964,000
Less: book value of MGE net assets (excluding historical goodwill)		(487,787	)
Less: MGE historical goodwill included in the MGE net assets		(132,604	)
Excess consideration transferred over net book value of assets acquired (excluding historical goodwill)		343,609
Adjustments related to:
Pro forma adjustment for cash retained by sellers (see note (E))		8,065
Pro forma adjustment to deferred income tax liabilities (see note (I))		(182,948	)
Pro forma adjustment to goodwill		168,726
MGE historical goodwill included in MGE net assets		132,604
Pro forma goodwill	$	301,330

(E) Reflects the net change to cash if the acquisition had occurred on June 30, 2013

(Thousands)
Purchase price	$	(975,000	)
NEG proceeds		11,000
Transaction expenses, net of tax benefit received (see note (H))		(5,737	)
Net cash used		(969,737	)
Less cash retained by sellers		(8,065	)
Net change to cash	$	(977,802	)

The pro forma adjustment to cash and cash equivalents at June 30, 2013 assumes that the tax benefit associated with the transaction expenses has been received as of that date.

(F) Reflects the net proceeds from the issuance of first mortgage bonds. Total debt issuance costs expected to be incurred are $4.7 million.

(Thousands)
Assumed debt proceeds		450,000
Debt issuance costs		(4,700	)
Net proceeds received	$	445,300

(G)Reflects the elimination of MGE stockholders’ equity accounts of $620.4 million and the reduction in retained earnings described in note (H).

(H) Reflects a reduction in retained earnings, which is a component of total common stock equity, for estimated remaining acquisition-related expenses of $9.3 million expected to be incurred, less the estimated tax benefit received of $3.6 million. During the nine months ended June 30, 2013, pre-tax acquisition-related expenses incurred by Laclede Group were $8.5 million (see note (A)).

(I)Reflects a purchase accounting adjustment to reflect the elimination of MGE’s deferred tax liabilities.

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Unaudited Pro Forma Combined Condensed Statement of Income for the Year Ended September 30, 2012

(J)    Reflects an adjustment to remove transaction costs incurred by Laclede Group through September 30, 2012 directly attributable to the acquisition.

(K)Reflects an increase in interest expense related to the issuance of $100.0 million of short-term borrowings in the commercial paper market with an effective interest rate of 0.30%, inclusive of all fees. Interest is based on 365 days and a 360-day annual period. A 1/8% change in the interest rate would result in an increase or decrease in interest expense of $0.1 million for the twelve-month period.

(Dollar amounts in thousands)		Year Ended September 30, 2012
Issuance of short-term borrowings	$	100,000
Interest rate		0.30	%
Pro forma interest expense (365 / 360 days)	$	304

(L)Reflects an increase in interest expense related to the issuance of $450.0 million of first mortgage bonds with an effective interest rate of 3.50%. Interest is based on a twelve 30-day monthly periods and a 360-day annual period. A 1/8% change in the interest rate would result in an increase or decrease in interest expense of $0.6 million for the twelve-month period. The interest expense on these new bonds excludes the impact of interest rate hedge agreements.

(Dollar amounts in thousands)		Year Ended September 30, 2012
Issuance of first mortgage bonds	$	450,000
Interest rate		3.50	%
Pro forma interest expense (360 / 360 days)	$	15,750

(M)Reflects the income tax effect of the pro forma adjustments based on an estimated statutory tax rate of 38.3% for the period ended September 30, 2012. This estimated tax rate is different from Laclede Group’s effective tax rate for the period ended September 30, 2012, which includes other tax charges or benefits, and does not take into account any historical or possible future tax events that may impact the combined company.

Unaudited Pro Forma Combined Condensed Balance Sheet at September 30, 2012

(N) Reflects the estimated purchase price (see Note 1) in excess of the fair value of the assets acquired and liabilities assumed. The estimated purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values with the excess of the purchase price over the fair value recorded to goodwill. The historical book value of the assets and liabilities approximates the fair value given the regulatory environment Laclede Gas operates under in Missouri. The following represents the excess of the purchase price over the fair value of the net assets acquired:

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(Thousands)
Purchase price	$	975,000
NEG Proceeds		(11,000	)
Total purchase consideration		964,000
Less: net book value of MGE net assets (excluding historical goodwill)		(567,940	)
Less: MGE historical goodwill included in the MGE net assets		(132,604	)
Excess consideration transferred over net book value of assets acquired		263,456
Adjustments related to:
Pro forma adjustment for cash retained by sellers (See note (O))		16,641
Pro forma adjustment to deferred income tax liabilities (See note (U))		(177,626	)
Pro forma adjustment to goodwill		102,471
Historical MGE goodwill included in MGE net assets		132,604
Pro forma goodwill	$	235,075

(O) Reflects the net change to cash if the acquisition had occurred on September 30, 2012:

(Thousands)
Purchase price	$	(975,000	)
NEG proceeds		11,000
Notes payable - short-term borrowings (see note (K))		100,000
Transaction expenses, net of tax benefit received (see note (T))		(10,983	)
Net cash used		(874,983	)
Less cash retained by sellers		(16,641	)
Net change to cash	$	(891,624	)

The pro forma adjustment to cash and cash equivalents at September 30, 2012 assumes that the tax benefit associated with the transaction expenses has been received as of that date.

(P)    Reflects the issuance of 10.0 million shares of common stock for $445.2 million on May 29, 2013 with an offering price of $44.50 per share, less equity issuance costs consisting of underwriting, legal, and accounting fees of $18.2 million. The proceeds will be utilized to pay for the MGE acquisition.

(Thousands)
Equity proceeds	$	445,223
Equity issuance costs		(18,200	)
Net proceeds received	$	427,023

(Q) Reflects the net proceeds from the issuance of first mortgage bonds. Total debt issuance costs expected to be incurred are $4.7 million.

(Thousands)
Assumed debt proceeds	$	450,000
Debt issuance costs		(4,700	)
Net proceeds received	$	445,300

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(R)    Reflects the net proceeds of the debt and equity offerings.

(Thousands)
Assumed equity proceeds	$	445,223
Equity issuance costs		(18,200	)
Assumed debt proceeds		450,000
Debt issuance costs		(4,700	)
Net proceeds received	$	872,323

(S)Reflects the elimination of MGE stockholders’ equity accounts of $700.5 million and the reduction in retained earnings described in note (T).

(T)    Reflects a reduction in retained earnings, which is a component of total common stock equity, for total estimated remaining acquisition-related expenses of $17.8 million expected to be incurred, less the estimated tax benefit received of $6.8 million. As of September 30, 2012, $0.2 million of pre-tax acquisition-related transaction expenses had been incurred.

(U)    Reflects a purchase accounting adjustment to reflect the elimination of MGE’s deferred tax liabilities.

4.    Earnings per Share

The pro forma earnings per share calculations for the nine months ended June 30, 2013 and the year ended September 30, 2012 include the full impact of the 10.0 million shares issued in Laclede Group’s May 2013 common stock by assuming these shares were outstanding for the entire nine-month and twelve-month periods, respectively. For the nine months ended June 30, 2013, the historical weighted average shares outstanding include the effect of the May 2013 equity offering for the portion of the period these additional shares were actually outstanding. Accordingly, the pro forma adjustment to the weighted average shares for this period represents the incremental shares necessary to reflect the additional shares being outstanding for the entire period.

5.    Missouri Gas Energy Financial Information for the Three Months Ended December 31, 2012 (Unaudited)

Laclede Group’s fiscal year ends on September 30 whereas MGE’s fiscal year ends on December 31. Due to this difference in fiscal year end dates, the results of MGE for the three months ended December 31, 2012 are included in both the Unaudited Pro Forma Combined Condensed Statements of Income for the fiscal year ended September 30, 2012 and the nine months ended June 30, 2013. Additional financial information about MGE’s results for the three months ended December 31, 2012 is presented below. There were no unusual charges or adjustments recorded by MGE during this period.

(Thousands)
Operating Revenues	$	143,025
Operating Income		16,485
Net Income		9,122

14