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: February 5, 2015
(Date
of earliest event reported)
THE
EMPIRE DISTRICT ELECTRIC COMPANY
(Exact
name of registrant as specified in charter)
KS |
1-3368 |
44-0236370 |
(State or other jurisdiction of incorporation) |
(Commission File |
(IRS Employer Identification Number) |
602 S. Joplin Avenue, Joplin, Missouri |
64801 |
(Address of Principal Executive Offices) | (Zip Code) |
(417) 625-5100
(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 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On February 5, 2015, The Empire District Electric Company (the “Company”) issued a press release announcing the Company’s earnings for the fourth quarter of 2014 and for the twelve month period ended December 31, 2014. Furnished herewith as Exhibit 99.1 is a copy of the press release, which is incorporated by reference herein.
The information in this Item 2.02, including Exhibit 99.1 hereto, shall
not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the
liabilities of that section or Sections 11 and 12(a)(2) of the
Securities Act of 1933, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of businesses acquired:
None
(b) Pro forma financial information:
None
(c) Shell company transactions:
None
(d) Exhibits:
99.1 Press Release of THE EMPIRE DISTRICT ELECTRIC COMPANY dated February 5, 2015
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 EMPIRE DISTRICT ELECTRIC COMPANY |
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By |
/s/ |
Laurie A. Delano |
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Name: |
Laurie A. Delano |
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Title: |
Vice President - Finance and Chief |
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Financial Officer |
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Dated: |
February 5, 2015 |
Exhibit Index
Exhibit No. |
Description |
|
99.1 |
Press Release of THE EMPIRE DISTRICT ELECTRIC COMPANY dated February 5, 2015 |
4
Exhibit 99.1
The Empire District Electric Company Reports 2014 Earnings; Declares Quarterly Dividend; Provides 2015 Earnings Guidance; Announces New Secretary
JOPLIN, Mo.--(BUSINESS WIRE)--February 5, 2015--At the Board of Directors meeting of The Empire District Electric Company (NYSE:EDE) held today, the Directors declared a quarterly dividend of $0.26 per share. The dividend is payable March 16, 2015, to holders of record as of March 2, 2015. The Company, an operator of regulated electric, gas and water utilities, also announced results for the quarter and year ended December 31, 2014.
Highlights
2014 Results
Electric segment gross margin (electric revenue less fuel and purchased power costs) increased approximately $16.4 million during the year ended December 31, 2014. Year over year electric segment gross margin impacts include:
Other electric revenue increases of approximately $36.4 million, primarily related to Southwest Power Pool (SPP) Integrated Market (IM) activity, fuel recovery revenues, and off-system revenues, were offset by a corresponding change in fuel expense, resulting in only a negligible impact on gross margin.
AFUDC and interest expense changes combined to increase earnings by approximately $3.4 million. The 2014 period also compares favorably to the prior year due to a one-time pre-tax regulatory write off of $2.4 million for a construction disallowance recorded in the 2013 period.
Negative impacts to year over year electric segment results included:
Gas segment gross margin (gas revenues less cost of gas sold and transported) increased approximately $0.6 million in 2014 compared to 2013, on a 3.7% increase in total sales. The sales increase was driven primarily by an increase in transportation sales compared to 2013. Operating expense decreased nearly $0.8 million year over year.
Consolidated net income improved approximately $3.7 million in 2014 compared to 2013.
Fourth Quarter 2014 Results
Electric segment gross margin decreased approximately $1.5 million during the fourth quarter 2014 compared to the 2013 quarter driven by a return to more normal winter weather.
Quarter over quarter electric segment margin impacts include:
Other electric revenue increases of approximately $5.5 million, primarily related to SPP IM activity, fuel recovery, and off-system revenues, were offset by a corresponding change in fuel expense, resulting in only a negligible impact on gross margin.
Quarterly electric segment results were also impacted favorably by changes in AFUDC, resulting in an increase to earnings of approximately $0.8 million.
Negative impacts to quarter over quarter electric segment results included:
Gas segment gross margin was relatively flat quarter over quarter.
Consolidated net income decreased $4.1 million in the fourth quarter of 2014 compared to the corresponding 2013 quarter.
Selected unaudited consolidated financial and operational data for the quarters and years ended December 31, 2014 and 2013 is presented in the following tables.
(dollars in millions, except Per Share data) |
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Three Months Ended
December 31, |
Years Ended
December 31, |
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2014 | 2013 | $ Change* | 2014 | 2013 | $ Change* | |||||||||||||||
Electric Revenues | $134.1 | $130.2 | $3.9 | $592.5 | $536.4 | $56.1 | ||||||||||||||
Electric Fuel and Purchased Power | 48.6 | 43.2 | 5.4 | 215.1 | 175.4 | 39.7 | ||||||||||||||
Electric Margin | 85.5 | 87.0 | (1.5) | 377.4 | 361.0 | 16.4 | ||||||||||||||
Gas Revenues | 15.3 | 16.8 | (1.5) | 51.8 | 50.0 | 1.8 | ||||||||||||||
Cost of Gas Sold and Transported | 8.1 | 9.6 | (1.5) | 27.0 | 25.8 | 1.2 | ||||||||||||||
Gas Margin | 7.2 | 7.2 | (0.0) | 24.8 | 24.2 | 0.6 | ||||||||||||||
Other Revenues | 2.0 | 2.0 | 0.0 | 8.0 | 7.9 | 0.1 | ||||||||||||||
Gross Margin | $94.7 | $96.2 | $(1.5) | $410.2 | $393.1 | $17.1 | ||||||||||||||
Less: | ||||||||||||||||||||
Operating and Maintenance Expenses | $41.3 | $37.2 | $4.1 | $160.4 | $149.3 | $11.1 | ||||||||||||||
Loss on Plant Disallowance | 0.0 | 0.0 | 0.0 | 0.1 | 2.4 | (2.3) | ||||||||||||||
Depreciation and Amortization | 18.5 | 17.8 | 0.7 | 73.2 | 69.3 | 3.9 | ||||||||||||||
Taxes | 15.6 | 17.4 | (1.8) | 76.5 | 72.4 | 4.1 | ||||||||||||||
Operating Income | 19.3 | 23.8 | (4.5) | 100.0 | 99.7 | 0.3 | ||||||||||||||
Interest Expense and Other, net | 8.2 | 8.6 | (0.4) | 32.9 | 36.3 | (3.4) | ||||||||||||||
Net Income | $11.1 | $15.2 | $(4.1) | $67.1 | $63.4 | $3.7 | ||||||||||||||
Earnings Per Share | $0.26 | $0.35 | $(0.09) | $1.55 | $1.48 | $0.07 | ||||||||||||||
Three Months Ended
December 31, |
Years Ended
December 31, |
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2014 | 2013 | % Change* | 2014 | 2013 | % Change* | |||||||||||||||
Electric On-System kWh Sales (in millions): | ||||||||||||||||||||
Residential | 444 | 483 | (8.1)% | 1,950 | 1,937 | 0.7% | ||||||||||||||
Commercial | 386 | 390 | (1.1)% | 1,583 | 1,541 | 2.7% | ||||||||||||||
Industrial | 257 | 241 | 6.8% | 1,032 | 1,016 | 1.6% | ||||||||||||||
Other | 111 | 112 | (1.6)% | 465 | 472 | (1.7)% | ||||||||||||||
Total On-System Electric Sales | 1,198 | 1,226 | (2.4)% | 5,030 | 4,966 | 1.3% | ||||||||||||||
Retail Gas Sales (billion cubic feet): |
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Residential | 0.87 | 0.98 | (11.2)% | 2.76 | 2.74 | 0.6% | ||||||||||||||
Commercial/Industrial | 0.40 | 0.48 | (16.6)% | 1.33 | 1.42 | (5.9)% | ||||||||||||||
Other | 0.01 | 0.01 | (3.5)% | 0.04 | 0.04 | 3.1% | ||||||||||||||
Total Retail Gas Sales | 1.28 | 1.47 | (13.0)% | 4.13 | 4.20 | (1.6)% | ||||||||||||||
Transportation Sales | 1.34 | 1.28 | 4.5% | 4.92 | 4.53 | 8.6% | ||||||||||||||
Total Gas | 2.62 | 2.75 | (4.8)% | 9.05 | 8.73 | 3.7% |
* Slight differences from actual results may result due to rounding.
Presented below is a reconciliation of basic earnings per share between the quarters and years ended December 31, 2013 and 2014.
Reconciliation of Earnings Per Share |
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Quarter |
Year Ended |
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Basic Earnings Per Share – December 31, 2013 | $ | 0.35 | $ | 1.48 | ||||||||
Gross Margins | ||||||||||||
Electric segment | (0.02 | ) | 0.24 | |||||||||
Gas segment | 0.00 | 0.01 | ||||||||||
Other segment | 0.00 | 0.00 | ||||||||||
Total Gross Margin | (0.02 | ) | 0.25 | |||||||||
Expenses | ||||||||||||
Operating | (0.03 | ) | (0.08 | ) | ||||||||
Maintenance and repairs | (0.03 | ) | (0.09 | ) | ||||||||
Loss on Plant Disallowance | 0.00 | 0.03 | ||||||||||
Depreciation and amortization | (0.01 | ) | (0.05 | ) | ||||||||
Other taxes | 0.00 | (0.03 | ) | |||||||||
Change in effective income tax rates | 0.00 | 0.01 | ||||||||||
Other income and deductions | (0.01 | ) | (0.01 | ) | ||||||||
AFUDC | 0.01 | 0.06 | ||||||||||
Dilutive effect of additional shares | 0.00 | (0.02 | ) | |||||||||
Basic Earnings Per Share – December 31, 2014 | $ | 0.26 | $ | 1.55 | ||||||||
The reconciliation of basic earnings per share (EPS) presented above compares the quarter and year ended December 31, 2014 versus December 31, 2013 and is a non-GAAP presentation. The economic substance behind this non-GAAP EPS measure is to present the after tax impact of significant items and components of the statement of income on a per share basis before the impact of additional stock issuances. The Company believes this presentation is useful to investors because the statement of income does not readily show the EPS impact of the various components. This could limit the readers’ understanding of the reasons for the EPS change from previous years. This information is useful to management, and the Company believes useful to investors, to better understand the reasons for the fluctuation in EPS between the prior and current years on a per share basis.
In addition, although a non-GAAP presentation, the Company believes the presentation of gross margin (reflected in the table above and elsewhere in this press release) is useful to investors and others in understanding and analyzing changes in operating performance from one period to the next, and has included the analysis as a complement to the financial information provided in accordance with GAAP. This reconciliation and margin information may not be comparable to other companies or more useful than the GAAP presentation included in the statements of income. The presentation does not purport to be an alternative to EPS determined in accordance with GAAP as a measure of operating performance or any other measure of financial performance presented in accordance with GAAP. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The dilutive effect of additional shares issued in this table reflects the impact of all shares issued in the respective periods presented.
Earnings Guidance
We expect full-year 2015 earnings to be within the weather normalized range of $1.30 to $1.45 per share. This 2015 guidance range assumes 30-year average weather, overall system energy growth of less than 1%, an August 1, 2015 effective date for our pending Missouri rate case at the filed amount of $24.3 million, and increased operating costs, driven by a full year of service from our Asbury AQCS upgrade. This lower range, as compared to 2014, is reflective of the regulatory lag impact of a full year of costs from the AQCS upgrade, increased expense related to a new maintenance contract for our Riverton generating facility, and continued unrecovered costs from investments made since our last rate case, offset by a partial year of new rates.
Other factors that may impact earnings include variations in customer growth and usage projections, unanticipated or unplanned events that may impact operating and maintenance costs and the impact of actual rate case results differing from our assumptions. The effects of assumptions and other factors evaluated for the purpose of providing guidance are not necessarily independent of one another, and the combination of effects can cause individual impacts smaller or larger than the indicated guidance range.
Earnings Conference Call
Brad Beecher, President and CEO, will host a conference call Friday, February 6, 2015, at 1:00 p.m. Eastern Time to discuss earnings for the fourth quarter and year ended December 31, 2014. To phone in to the conference call, parties in the United States should dial 1-888-243-4451, any time after 12:45 p.m. Eastern Time. The presentation can also be accessed from Empire’s website at www.empiredistrict.com. Forward-looking and other material information may be discussed during the conference call.
Based in Joplin, Missouri, The Empire District Electric Company (NYSE:EDE) is an investor-owned utility providing electric, natural gas (through its wholly owned subsidiary The Empire District Gas Company) and water service, with approximately 218,000 customers in Missouri, Kansas, Oklahoma, and Arkansas. A subsidiary of the Company also provides fiber optic services.
Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future plans, objectives, expectations, earnings, and events or conditions concerning various matters. Actual results in each case could differ materially from those currently anticipated in such statements, by reason of the factors noted in our filings with the SEC, including the most recent Form 10-K and 10-Q.
CONTACT:
The Empire District Electric Company
Investor
Relations:
Dale Harrington, 417-625-4222
Director of Investor
Relations
dharrington@empiredistrict.com
or
Media
Communications:
Amy Bass, 417-625-5114
Director of Corporate
Communications
abass@empiredistrict.com