ACQUISITIONS

The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed at the acquisition date, and the acquisitions are described below. Measurement period adjustments were immaterial.



	MGE			Alagasco
Recognized amounts of identifiable assets acquired and liabilities assumed:
Utility plant	$	671.1		$	892.7
Cash	—			12.1
Inventories	62.7			47.7
Other current assets	36.0			51.7
Deferred tax assets	—			282.0
Other assets	99.0			143.4
Current portion of long-term debt	—			(15.0		)
Long-term debt	—			(249.8		)
Other current liabilities	(65.9		)	(173.4		)
Other liabilities	(72.9		)	(130.4		)
Total identifiable net assets	730.0			861.0
Goodwill	210.2			735.8
Deferred tax elimination (Laclede Group)	—			(271.3		)
Consideration (cash)	$	940.2		$	1,325.5

Acquisition of MGE

Effective September 1, 2013, Laclede Gas completed the purchase from Southern Union Company (SUG), and affiliate of Energy Transfer Equity, L.P. (ETE) and Energy Transfer Partners, L.P., of substantially all of the assets and liabilities of MGE for a preliminary cash purchase price of $975.0. A subsequent reconciliation of net assets transferred resulted in a payment by ETE to Laclede Gas on February 14, 2014 of approximately $23.9.

On December 14, 2012, Plaza Massachusetts Acquisition, Inc. (Plaza Mass), a subsidiary of Laclede Group, agreed to purchase New England Gas Company (NEG) from SUG in a transaction related to the acquisition of MGE. On February 11, 2013, Laclede Group agreed to sell Plaza Mass to Algonquin Power and Utilities Corp. (APUC) immediately prior to the closing of the acquisition of NEG. On December 20, 2013, Laclede Group closed the sale of Plaza Mass to APUC and received $11.0, which was transferred to Laclede Gas.

The original payment offset by the subsequent receipts of funds resulted in a final net purchase price of approximately $940.2 for MGE. The goodwill of $210.2 arising from this acquisition, $177.2 of which is expected to be deductible for tax purposes, was assigned to the Company's Gas Utility reporting unit. The goodwill is attributable to MGE's assembled workforce and the expected cost efficiencies and strategic benefits of the transaction. The acquisition allows the Company to leverage its core gas utility expertise and further expand its footprint, enabling it to support growth initiatives in new markets with new customers.

Acquisition of Alagasco

Laclede Group completed the acquisition of 100% of the common stock of Alagasco from Energen effective on August 31, 2014. Total cash consideration paid at closing, net of cash acquired and debt assumed was $1,305.2. Subsequently, the Company and Energen agreed to a final reconciliation of net assets, and $8.2 was paid by the Company to Energen on January 6, 2015, effectively increasing the total net consideration to $1,313.4.

Goodwill of $735.8 arising from this acquisition, $717.6 of which is expected to be deductible for tax purposes, was assigned to the Company's Gas Utility reporting unit. The goodwill is attributable to Alagasco's assembled workforce and the expected cost efficiencies and strategic benefits of the transaction. The acquisition was supportive of the strategic focus on growing the Company's regulated footprint and created geographic and regulatory diversity. The Company determined that the Alagasco acquisition met the scope exceptions for pushdown accounting; therefore, the goodwill was recorded on the Laclede Group parent company balance sheet rather than the Alagasco subsidiary balance sheet and included in disclosures of segment assets under Other rather than the Gas Utility segment.

The Company and Energen made an election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, to treat the Alagasco acquisition as a deemed purchase and sale of assets for tax purposes. As a result of the election, goodwill was generated for tax purposes at Alagasco. For book purposes, goodwill was recorded on the Laclede Group parent entity and not pushed down to Alagasco. Consequently, a Deferred Tax Asset (DTA) was recorded at Alagasco related to the excess of tax deductible goodwill over book goodwill for the stand-alone entity. That initial goodwill DTA is eliminated (along with the investment in subsidiary and Alagasco’s equity) in the Laclede Group consolidated balance sheet because, at that consolidated level, there is no excess of tax deductible goodwill over book goodwill. As the tax goodwill is amortized and deducted for tax purposes, the DTA at Alagasco is reduced, and for Laclede Group, a deferred tax liability (DTL) is created. For both Alagasco and consolidated Laclede Group, the changes to the goodwill DTA/DTL is reported as a component of deferred tax expense in the income statement. Because the deferred tax expense impact will be offset by an opposite current tax expense impact, there will be no significant impact on the effective tax rate of the Company.

Actual and Pro Forma Results

The results of operations of each of the acquisitions are included in the statement of income from the date of acquisition, as shown in the following table.



	2015		2014			2013
Total Operating Revenues:
MGE	$	556.8	$	554.2		$	22.0
Alagasco	479.2		19.7			—
Net Income (Loss):
MGE	$	39.9	$	39.5		$	1.8
Alagasco	48.0		(2.9		)	—
Earnings (Loss) Per Share:
MGE	$	0.92	$	1.10		$	0.07
Alagasco	1.11		(0.08		)	—

The following unaudited pro forma financial information presents the combined results of operations as though the acquisitions had occurred as of October 1, 2012. The pro forma financial information does not reflect the costs of any integration activities. The pro forma results include estimates and assumptions, which management believes are reasonable. The unaudited pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had Alagasco or MGE been part of the Company as of the beginning of fiscal 2013.



	Laclede Group				Laclede Gas
	2014		2013		2013
Total Operating Revenues	$	2,187.1	$	2,051.5	$	1,518.2
Net Income	133.5		102.0		83.6
Basic Earnings Per Share	$	3.11	$	2.50
Diluted Earnings Per Share	3.10		2.49