-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, pU6JvSHJkVnRxPHqhb/RicKSkuSO+iU6KAtMtFVeII9n8r1bpRWFsw3liOogfbWC XwafMPC+lPzISXfYgZM8Wg== 0000057183-94-000016.txt : 19941227 0000057183-94-000016.hdr.sgml : 19941227 ACCESSION NUMBER: 0000057183-94-000016 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941223 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LACLEDE GAS CO CENTRAL INDEX KEY: 0000057183 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 430368139 STATE OF INCORPORATION: MO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01822 FILM NUMBER: 94565952 BUSINESS ADDRESS: STREET 1: 720 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143420500 10-K 1 ANNUAL REPORT ON FORM 10K, 9/30/94 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ________ to ________ Commission File Number 1-1822 LACLEDE GAS COMPANY (Exact name of registrant as specified in its charter) Missouri 43-0368139 (State of incorporation) (I.R.S. Employer Identification Number) 720 Olive Street, St. Louis, Missouri 63101 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-342-0500 Securities registered pursuant to Section 12(b) of the Act: Name of each stock exchange Title of each class on which registered Common Stock - $1 par value New York and Chicago Common Stock Purchase Rights New York and Chicago Securities registered pursuant to Section 12(g) of the Act: Title of each class Preferred Stock - $25 par value (5% Series B Preferred Stock and 4.56% Series C Preferred Stock) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) The aggregate market value of the Common Stock of the Company, none of which is owned by an affiliate, at October 31, 1994 was $326,700,576. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the close of the period covered by this report. 15,670,023 Incorporated by Reference: Form 10-K Part Proxy Statement dated December 27, 1994* III Index to Exhibits is found on page 58. * The information under the captions "Compensation Committee Report Regarding Compensation" and "Performance Graph" on pages 14-17 is NOT incorporated by reference. 1 PART I Item 1. Business Laclede Gas Company is a public utility engaged in the retail distribution and transportation of natural gas. The Company, which is subject to the jurisdiction of the Missouri Public Service Commission, serves the City of St. Louis, St. Louis County, the City of St. Charles, and parts of St. Charles County, the town of Arnold, and parts of Franklin, Jefferson, St. Francois, Ste. Genevieve, Iron, Madison and Butler Counties, all in Missouri. As an adjunct to its gas distribution and transportation business, the Company operates underground natural gas storage fields and is engaged in the transportation and storage of liquid propane. The Company has engaged in exploration for and development of natural gas on a utility and non-utility basis. The Company has also made investments in other non- utility businesses as part of a diversification program. NATURAL GAS SUPPLY Federal Energy Regulatory Commission (FERC) Order 636 requires interstate natural gas pipeline companies to offer unbundled, or separate, gas transportation and storage services and to discontinue their bundled merchant sales operation, which included gas acquisition as well as related storage and transportation service. In December 1992, the Mississippi River Transmission Corporation (MRT), Laclede's principal supplier at that time, filed its initial restructuring plan, which after careful analysis, Laclede concluded was unacceptable. The two companies were unable to develop an acceptable restructuring plan that would meet the requirements of Order 636 and provide Laclede with the long- term gas supply assurances provided by Laclede's previous contract with MRT. As as result, the long-term supply contract between Laclede and MRT was terminated on November 1, 1993. To replace the MRT contract, the two companies have entered into an agency agreement in which Laclede is responsible for acquiring its own gas supplies and making transportation and storage arrangements to get such supplies to MRT's pipeline system. MRT, as Laclede's agent, is responsible for administering, much as it historically has done, the various functions (such as scheduling day-to-day gas supply and transportation, and managing storage requirements, all in accord with Laclede's needs) for deliveries to Laclede in a manner that will achieve for Laclede maximum operational efficiency and economy. MRT has agreed to advise and assist Laclede in locating sources of gas and helping to negotiate purchases from these sources. On November 1, 1993, the new agency relationship and unbundled pipeline services went into effect. The Company's supply agreements applicable to Missouri Pipeline Company were structured in a manner that is more compatible with Order 636 and need not be terminated in order to reconcile it with that Order. Gas for producing areas is transported through interstate "upstream" pipelines into the pipeline systems of Mississippi River Transmission Corporation (MRT) and Missouri Pipeline Company (MPC) for delivery to Laclede's service area. Under FERC Order 636, Laclede was allocated a part of such upstream firm transportation pipeline capacity, which connects MRT's system to the gas production basins and off-shore platforms, as well as a share of MRT's underground gas storage capacity. Most of such storage capacity is located in northern Louisiana. Wherever possible, Laclede negotiated revisions or reformed the gas transportation agreements MRT 2 formerly had with the three primary transporters of gas into MRT's pipeline system. The new arrangements increased Laclede's operational flexibility as compared to MRT's purchasing the transportation services and also provided reduced unit costs. Laclede also has been able to release firm transportation capacity to other gas users when it was not required for use by the Company's own customers. This resulted in reducing Laclede's overall gas costs during 1994 by almost $3.1 million. In order to meet its gas supply requirements in the restructured environment of the interstate natural gas pipeline industry, Laclede put in place last year arrangements to purchase gas directly from producers and marketers. In making such arrangements Laclede has had the twofold objectives of: (1) insuring that the gas supplies it acquires are dependable and will be delivered when needed; and (2) insofar as is compatible with that dependability, that the gas purchased will be reasonably and economically priced. Consonant with those intertwined objectives Laclede acquired its purchased gas supplies from three different producing basins - Mid-Continent, Gulf Coast and offshore - and also concentrated its firm purchases of gas with major suppliers which own or have large natural gas reserves available to them. Long-term agreements were negotiated in 1994 between Laclede and subsidiaries of two of the ten largest gas producers in the United States - Amoco and Arco. The Amoco agreement involves the reformation of two existing MRT agreements with Amoco to better suit Laclede's requirements and to involve Amoco in a long-term commitment to the St. Louis market. The Arco agreement will provide significant firm long-term gas supplies to Laclede and its customers with an initial term extending to 1999. While reliablity of supply is Laclede's first gas supply imperative, the Company's arrangements also have met the second objective of being reasonably priced insofar as is consistent with obtaining long-term, firm commitments from suppliers. During fiscal 1994, Laclede Gas Company purchased natural gas from a diverse group of 32 suppliers to meet its current market and storage injection requirements. Natural gas purchased by Laclede and delivered to St. Louis through the MRT system during fiscal 1994 totalled 80.8 billion cubic feet, including 5.1 Bcf purchased directly from MRT in October 1993 before Order 636 was implemented. Purchases through the MPC system during fiscal 1994 totalled 12.5 Bcf, all of which was purchased pursuant to the Company's long-term firm supply contract with ESCO Energy, Inc. The long- term ESCO agreement provides for the delivery and purchase of up to 55,000 MMBtu of gas per day through the various MPC interconnects in St. Charles and Franklin counties. It must be pointed out that the FERC-ordered new supply system has only been effective for the past year and that the past winter was warmer than normal, not only in Laclede's service area but in most areas of the country. The new system has not been tested on severely cold days over a long and protracted cold winter, and Laclede's management has some concern about how well this FERC ordered system will perform for the gas industry under such weather conditions. This concern underlies the Company's insistence on supply reliability as being the most important requirement of its gas supply portfolio. 3 The peak day sendout of 1,113,000 MMBtu occurred on Tuesday, January 18, 1994, when the average temperature was -1 degree Fahrenheit. This peak day sendout was met by using 632,000 MMBtu of gas purchased and transported using the MRT system, 301,000 MMBtu of gas withdrawn from Laclede's storage facilities, 84,000 MMBtu of propane, 60,000 MMBtu of gas purchased under the Company's long-term gas supply contract with ESCO Energy, Inc., and 36,000 MMBtu of gas not owned by the Company that was transported for Laclede customers. Temperatures during the heating season on average were 3% warmer than fiscal 1993 and 1% warmer than normal. The Company sold and transported 1,070.1 million therms of gas this year, a decrease of 10.0 million therms from fiscal 1993. UNDERGROUND NATURAL GAS STORAGE The Company has entered into a firm storage service agreement with MRT for approximately 23.5 billion cubic feet of allocated storage capacity on MRT's system located primarily in Unionville, Louisiana. MRT's tariffs provide for injections into the allocated storage capacity between May 16 through November 15. The Company must withdraw all but 2.3 Bcf during the November 16 through May 15 period. The Company supplements flowing pipeline gas with natural gas withdrawn from its underground storage fields located in St. Louis and St. Charles Counties. The fields are designed under normal operations to provide 357,000 MMBtu of natural gas withdrawals on a peak day, and annual withdrawals of approximately 5,500,000 MMBtu based on the inventory level which the Company plans to maintain. PROPANE SUPPLY Laclede Pipeline Company, a wholly owned subsidiary, owns and operates a propane pipeline which connects the parent company's 800,000-barrel (approximately 33,000,000 gallons) propane storage facilities in St. Louis County, Missouri, to propane supply terminal facilities located at Wood River and Cahokia, Illinois. Liquid propane gas is transported through this pipeline for delivery to the parent company for storage, to be ultimately vaporized and used during those periods of operation when the natural gas supply has to be supplemented to meet the peak demands of the distribution system. The Company's contract with Phillips Petroleum Company provides for delivery of up to 35 million gallons of propane annually through March 31, 1999, and year to year thereafter unless terminated by either party. EXPLORATION AND DEVELOPMENT The Company's exploration and development activities are segregated into two distinct functions: utility and non-utility. Under the utility program, the Company has participated in drilling 96 wells over its twenty-three year span with 52 of the wells being commercially productive. Since 1981, this program has been limited to development activities. Capital expenditures in recent years have not been significant, amounting to $10,000 in 1994, $84,000 in 1993 and $50,000 in 1992, for the utility program. Beginning in 1981, the Company continued its search for gas and oil discoveries through Laclede Energy Resources, Inc. (LER), a wholly owned, non-utility subsidiary, which is the general partner in LIMA RESOURCES ASSOCIATES, a limited partnership in which Laclede Energy Resources, Inc. holds a 39.6% interest. LIMA has four limited partners, three of which are subsidiaries of gas transportation and/or distribution companies, each holding an interest of 19.8%. The remaining limited partner, a stock brokerage firm, has a 1.0% interest. 4 Laclede's non-utility exploratory drilling program to date has involved participation in drilling a total of 92 wells. Fifty of these wells were successfully completed after testing commercial quantities of hydrocarbon reserves. Forty-two wells were plugged and abandoned. The investment in the program changed only slightly during 1994, 1993 and 1992. Presently, Laclede is not actively seeking new gas and oil exploration discoveries through LIMA, or otherwise. REGULATORY MATTERS The implementation of unbundled services on MRT's system, pursuant to FERC Order 636, necessitated a change in Laclede's Purchased Gas Adjustment Clause (PGA). Accordingly, on October 1, 1993, Laclede filed a revised PGA clause with the Missouri Public Service Commission (MoPSC) to enable the Company to continue to flow through to its customers any increases or decreases in the Company's cost of purchased gas. The MoPSC approved such filing on October 29, 1993. The Company is currently involved in a proceeding before the MoPSC regarding the operation of PGA clauses. The Company expects that its operation of the PGA clause will be reviewed in the context of the changed environment in which the Company and other local distributors are required to buy their gas from unregulated producers and marketers instead of from the formerly regulated interstate pipelines. The cost of buying natural gas at the wellhead and the associated cost of transporting it to the St. Louis area account for about 60% of Laclede's total operating costs. Thus, the Commission's proceeding concerning the PGA clause is of vital importance for the future. Laclede is doing everything possible to see to it that any modifications in the PGA will not restrict the Company's ability to promptly adjust rates to reflect changes in wholesale gas costs. The new system, with its requirement that local distributors obtain their own gas supplies and arrange for all required storage and pipeline transportation services, imposes a much greater degree of risk and responsibiltiy upon the gas distributor and relieves the interstate gas pipeline company of a similar risk and responsibility. Laclede believes that regulatory commissions throughout the nation should take into account this change in risk in setting the permissible rate of return allowed to the gas distribution companies which they regulate. As previously reported, MRT asked the FERC in October 1992 to approve higher rates for its bundled gas sales service, as well as for the use of its separate gas transportation and gas storage services. In April 1993, MRT was able to put the proposed new rates into effect, subject to refund to the extent not fully approved by the FERC. Then, in July 1994, the FERC approved a settlement that eliminated virtually all of MRT's proposed rate increase and brought Laclede refunds of almost $10 million, which the Company had paid MRT while the higher rates were in effect. These refunds are being passed through to Laclede's customers. The settlement also resolved a dispute over MRT's transition costs involved in the FERC-ordered restructuring of the gas pipeline industry. With Laclede and other gas distributors now purchasing their gas supplies directly from producers and marketers, MRT has had to buy out certain long- term gas supply contracts that the pipeline company entered into when it had an obligation to provide Laclede and its other customers with their supplies 5 of gas. In order to carry out the restructuring without loss to the pipeline companies, the FERC is allowing them to recover from their customers the costs of their contract buyouts. As part of the July 1994 rate case settlement, MRT agreed not to seek recovery from Laclede and its other customers of about 11% of the amount originally proposed to cover its gas supply transition costs. In June 1994, Laclede's persistent efforts to resolve a long-standing dispute with United Gas Pipe Line Company (United), the former leading supplier of gas to MRT, resulted in a settlement, which brought Laclede and its customers refunds of $8 million. The case, which had been pending for years before FERC and the U.S. Court of Appeals in Washington, D.C., began when Laclede sought refunds arising out of a 1985 United rate case and certain questionable gas accounting practices of United. The refunds were paid to Laclede by the successor corporation of United, the Koch Gateway Pipeline Company. In January 1994, Laclede filed new rates with the MoPSC seeking a general rate increase of $27.1 million annually. The Commission suspended those rates from becoming effective and entered into a rate case investigation and hearings thereon. In July 1994, a settlement was reached among the Commission Staff, Laclede and the other parties who had intervened in the rate case. This settlement was approved by the MoPSC on August 23, 1994. Under the settlement, Laclede was permitted to file rates to become effective September 1, 1994, which are designed to increase the Company's revenues by $12.2 million annually. Laclede accepted the settlement believing the lower amount preferable to further litigation and delays in obtaining the much-needed rate relief. A major part of the increase was a $1.50 per month increase in the Company's customer charge, a flat monthly charge applicable to the bills of all customers. This will make the major portion of the increase granted the Company less subject to the impact of higher gas rates on low-income customers, many of whom live in poorly insulated houses. OTHER PERTINENT MATTERS The business of the Company is subject to a seasonal fluctuation with the peak period occurring in the winter season. ***** As of September 30, 1994, the Company had 2,151 employees, which includes 2 part-time employees. ***** The Company has a labor agreement with Locals 5-6 and 5-194 of the Oil, Chemical and Atomic Workers International, two unions which represent most of the Company's employees. On June 28, 1994, Company and Union representatives signed a new three-year labor agreement replacing the prior agreement which was to expire July 31, 1994. The new contract extends through July 31, 1997. The settlement provides for wage increases of 3.5% in the first year, 3.25% the second year, and 3.25% the third year. Other employee benefit improvements will be effected during the three-year term. 6 ***** The Company's business has monopoly characteristics in that it is the only distributor of natural gas within its (franchised) service area. The principal competition is the local electric company. Other competitors in Laclede's service area include two major suppliers of fuel oil, a major supplier of coal, numerous suppliers of liquefied petroleum gas in outlying areas, and in a portion of downtown St. Louis, a district steam system. Gas for househeating, certain other household uses, and commercial and industrial space heating is now being sold by Laclede at prices generally lower than are charged for competitive fuels and other energy forms. Coal is competitive as a fuel source for very large boiler plant loads, but environmental concerns have forestalled any significant market inroads. Oil and propane can be used to fuel boiler loads and certain direct-fired process applications, but these fuels vary widely in price throughout the year, thus limiting the competitiveness of these fuels. In certain cases, district steam has been competitive with gas for downtown area heating users. In the past five years, Laclede has converted 53 steam customers representing approximately 2.1 million annual therms. Laclede's residential, commercial, and small industrial markets, representing 90% of sales, remain committed to gas. The Company knows of no reason why natural gas should not continue generally to have a price advantage over electricity and other forms of energy in the foreseeable future. The Company's exposure to price competition is not presently a substantial factor and exists primarily in the large industrial and commercial boiler fuel market where coal is the competing form of energy. Laclede offers gas transportation service to its large user industrial and commercial customers. The tariff approved for that type of service produces a margin similar to that which Laclede would have received under its regular sales rates. The availability of gas transportation service and favorable spot market prices for natural gas during certain times of the year may offer additional competitive advantages to Laclede and new opportunities for cogeneration and large tonnage air conditioning applications. ***** The Company is subject to various laws and regulations relating to the environment, which thus far have not had a material effect on the Company's financial position and results of operations. Prior to the widespread availability of natural gas, the Company operated various manufactured gas plants, the last of which was closed in 1961. The process for manufacturing gas produced by-products and residuals, including hydrocarbons such as lamp black and coal tar. Certain remnants of these residuals are typically found at former gas manufacturing sites. The United States Environmental Protection Agency (EPA) has been engaged in a survey of a large number of former manufactured gas plant sites across the nation. In this regard, the Company and the EPA have determined that manufactured gas residuals are present at one of the former manufactured gas plant sites operated by the Company. While no conclusion has been reached as to the extent of any remedial action that will be required, the Company and the EPA have entered into an Administrative Order on Consent (AOC), effective March 31, 1994, with regard to this site. The AOC provides for the Company to conduct certain investigative activities (i.e., a removal site evaluation and an engineering evaluation cost analysis), and to reimburse the EPA for response costs under the AOC. The AOC requires only investigations and does not cover any removal action. If remedial action is necessary, then a 7 subsequent order will cover such action. Based on currently available information, management believes that the costs of the foregoing investigations, response costs of the EPA in overseeing such investigations, and other associated legal and engineering consulting costs are likely to approximate $380,000. At September 30, 1994, $135,000 has been paid and a liability of $245,000 remains to cover future payments. The Company is presently unable to evaluate and quantify further the scope or cost of any environmental response activity. However, the Company has notified its insurers that the Company intends to seek reimbursement from them of its investigation, remediation, clean-up and defense costs in regard to the foregoing. In addition to pursuing insurance proceeds to the extent feasible, the Company also plans to seek recovery, if practicable, from any other potentially responsible parties. An environmental cost deferral procedure was established by the Missouri Public Service Commission in the Company's recent rate case, effective September 1, 1994, for use by the Company in applying for appropriate rate recovery of various investigation, remediation and other costs to be incurred by the Company in connection with former manufactured gas plant sites. The authorization to begin deferring such costs shall only be triggered to the extent that the cumulative liability incurred by the Company during the deferral period is not offset by the cumulative costs of $250,000 per year reflected in the Company's current rates. In the event the cumulative liability incurred by the Company for such costs during the deferral period is less than the cumulative amount of such annualized costs reflected in the rates approved in the settlement, then the Company shall refund the difference. The above authorization will become null and void if the Company does not file for a general rate increase by September 1, 1996, and, in any event, the recovery of costs deferred thereunder is subject to challenge in future rate cases. ***** At the Annual Meeting held on January 27, 1994, the Company's share owners approved an amendment which increased the authorized common stock to 50,000,000 shares with a new par value of $1.00 per share and reclassified the par value of the outstanding common stock from $2.00 to $1.00 per share. These changes were approved in connection with a 2-for-1 stock split authorized by the Board of Directors which became effective February 11, 1994. Share owners approved an amendment to the Company's Dividend Reinvestment Plan at the January 27, 1994 meeting to permit cash purchases of common stock through the Plan, with a minimum purchase of $100 per calendar quarter up to a maximum purchase of $30,000 per calendar year. The amendement also provides for the issuance of common shares by the Company to provide shares purchased under the Plan. The Company filed a Registration Statement for the Plan with the Securities and Exchange Commission on February 22, 1994. During fiscal 1994, 83,561 shares were issued under the Company's Dividend Reinvestment and Stock Purchase Plan. 8 ***** Customers and revenues contributed by each class of customers for the last three fiscal years are as follows: Revenues $(000)
1994 1993 1992 ---- ---- ---- Residential $363,058 $348,494 $281,325 Commercial & Industrial 142,042 136,462 117,744 Interruptible 1,966 2,455 2,684 Transportation 14,898 11,437 12,431 Exploration & Development 1,600 1,488 1,392 Provision for Refunds (3,770) - - Other 4,072 3,612 2,614 -------- -------- -------- Total $523,866 $503,948 $418,190 ======== ======== ======== Customers (End of Period) 1994 1993 1992 ---- ---- ---- Residential 559,225 555,467 552,141 Commercial & Industrial 36,684 36,514 36,241 Interruptible 14 13 17 Transportation 124 115 107 ------- ------- ------- Total 596,047 592,109 588,506 ======= ======= =======
***** The Company has, or in one instance is seeking renewal of, franchises having initial terms varying from five years to indefinite duration. All of the franchises are free from unduly burdensome restrictions. The foregoing are adequate for the conduct of its public utility business in the State of Missouri as now conducted. ***** Laclede Investment Corporation, a wholly owned subsidiary, invests in other enterprises and has made loans to several joint ventures engaged in real estate development. Laclede Energy Resources, Inc., a wholly owned subsidiary of Laclede Investment, engaged in the exploration and development of oil and gas properties on a non-utility basis. Exploration and development projects were conducted through LIMA RESOURCES ASSOCIATES, a limited partnership. As general partner, Laclede Energy Resources has a 39.6% interest in LIMA. Laclede Energy is not presently actively seeking new gas and oil exploration discoveries through LIMA, or otherwise. 9 Laclede Gas Family Services, Inc., a wholly owned subsidiary of Laclede Energy Resources, Inc., is a registered insurance agency in the State of Missouri. It is currently promoting the sale of supplemental hospital- ization, accident, supplemental medicare and life insurance by Life Insurance Company of North America, Washington National Insurance Company and Fidelity Security Life Insurance Company. Laclede Development Company, a wholly owned subsidiary, is engaged in participation in real estate development, primarily through joint ventures. In December 1987, Laclede Development made an investment of $5.8 million in a 10.25%, 16-year convertible debenture issued by Germania Bank, a St. Louis-based federal savings institution. The debenture permitted conversion into 577,000 common shares of Germania stock at $10 per share. On June 22, 1990, government regulators placed Germania Bank in conservatorship, and appointed the Resolution Trust Corporation (RTC) as Conservator for the Bank. The Company recorded, in fiscal 1990, a provision for the possible write-off of this investment. In September 1992, Laclede learned that a former senior executive of Germania Bank had pleaded guilty to participating in a criminal conspiracy to defraud former bank investors, including Laclede. On September 18, 1992, Laclede filed a lawsuit in the U. S. District Court for the Eastern District of Missouri against the executive and against the RTC, as Receiver for Germania, alleging that Germania engaged in fraud, negligent misrepresentation, breach of contract, and violation of securities law by establishing inadequate loan loss reserves and withholding information in this regard from Laclede, and that the RTC had knowledge of the actionable wrong-doing but did not disclose to Laclede its existence, nature, extent or substance. On November 19, 1992, criminal indictments were issued in Missouri and Illinois charging fraud by certain additional former Germania senior executives, and, based upon such indictments, Laclede promptly amended its lawsuit to name such additional persons as defendants. On November 10, 1993, the jury in the Illinois criminal trial found the two senior executives who were indicted in Illinois guilty on all charges. Laclede Development's civil suit was transferred to the U.S. District Court for the Southern District of Illinois. The RTC and other defendants have vigorously contested Laclede's civil suit. Laclede Venture Corp., a wholly owned subsidiary of Laclede Development Company has a 28.5% interest in the LBP Partnership, a general partnership. LBP was engaged in research and development of light beam profiling technology for the production of portrait sculpture and for use in other applications. After conducting market testing, LBP decided to cease its efforts to exploit the portrait sculpture application of this technology. A third party has been licensed to look into the possibility of further development of the technology for non-portrait sculpture applications, but LBP is not presently earning or receiving any compensation from any such licensing or development. The lines of business which constitute the non-utility activities of the corporate family are not considered significant as defined. 10 Item 2. Properties The principal utility properties of Laclede consist of approximately 7,352 miles of gas main and related service pipes, meters and regulators. Other physical properties include regional office buildings and holder stations. Extensive underground gas storage facilities and equipment are located in an area in North St. Louis County extending under the Missouri River into St. Charles County. Substantially all of the Company's utility plant is subject to the liens of its mortgage. All of the utility properties of Laclede are held in fee or by easement or under lease agreements. The principal lease agreements include underground storage rights which are of indefinite duration and the general office building. The current lease on the general office building extends through February 2000 with options to renew for up to 20 additional years. Laclede Gas Company jointly owns oil and gas properties in Texas, Oklahoma and Louisiana. The non-utility properties of Laclede do not constitute a significant portion of the properties of the Company. Item 3. Legal Proceedings For a discussion of environmental matters, see Part I, Item 1, Business, Other Pertinent Matters. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the fourth quarter of fiscal year 1994. 11 EXECUTIVE OFFICERS OF REGISTRANT Name, Age, and Position with Company Appointed (1) R. C. Jaudes, Age 60 Chairman, President and Chief Executive Officer January 27, 1994 President and Chief Executive Officer August 1, 1991 President and Chief Operating Officer October 1, 1990 Executive Vice President - Operations and Marketing July 1, 1989 H. Elliott, Jr., Age 61 Senior Vice President - Administrative Services January 23, 1992 Vice President - Administration January 27, 1977 D. L. Godiner, Age 61 Senior Vice President - General Counsel and Secretary January 24, 1991 Vice President - General Counsel and Secretary September 1, 1990 Vice President and General Counsel January 22, 1981 R. J. Carroll, Age 57 Senior Vice President - Finance and Chief Financial Officer January 27, 1994 Vice President - Finance and Chief Financial Officer January 23, 1992 Vice President and Controller January 24, 1991 Assistant Vice President - Accounting January 28, 1988 J. G. Hofer, Age 57 Vice President - Operations July 1, 1992 (Superintendent of Operations) July 1, 1991 (Chief Engineer - Director of Support Services) February 1, 1991 (Superintendent - Engineering and Support Services) April 1, 1988 R. M. Lee, Age 53 Senior Vice President - Marketing January 27, 1994 Vice President - Marketing January 22, 1987 M. E. McMillian, Age 48 Vice President - Human Resources September 22, 1983 G. T. McNeive, Age 52 Vice President - Associate General Counsel January 27, 1994 Assistant Vice President - Associate General Counsel September 1, 1992 (Associate General Counsel) August 1, 1986 J. Moten, Jr., Age 53 Vice President - Community Relations January 27, 1994 (Director of Community Affairs/Conservation) November 1, 1986 12 K. J. Neises, Age 53 Senior Vice President - Federal Regulatory Affairs January 27, 1994 Vice President - Federal Regulatory Affairs October 27, 1988 P. J. Palumbo, Age 49 Vice President - Industrial Relations September 1, 1992 (Director of Industrial Relations) (2) January 7, 1991 D. H. Yaeger, Age 45 Senior Vice President - Operations, Gas Supply and Technical Services January 27, 1994 Vice President - Operations, Gas Supply and Technical Services September 1, 1992 Vice President - Planning (3) December 1, 1990 V. O. Steinberg, Age 56 Vice President - Treasurer and Assistant Secretary January 27, 1994 Treasurer and Assistant Secretary September 1, 1990 Assistant Secretary-Treasurer September 28, 1978 ( ) Indicates a non-officer position. (1) Officers of Laclede Gas Company are normally reappointed at the Annual Meeting of the Board of Directors in January of each year "to serve for the ensuing year and until their successors are elected and qualify". (2) Mr. Palumbo served as Senior Vice President - Resource Management at Peabody Development Company from 1985 through 1990. (3) Mr. Yaeger served as Executive Vice President of Arkla Energy Marketing company from April 1990 through November 1990; and prior to that he was employed at Mississippi River Transmission Corporation as its Vice President - Marketing from September 1982 to July 1986; Senior Vice President - Marketing from July 1986 to April 1988; and Executive Vice President from April 1988 through April 1990. 13 Part II Item 5. Market for the Registrant's Common Equity and Related Share Owner Matters The Company's common stock is listed on the New York Stock Exchange and the Chicago Stock Exchange. At September 30, 1994, there were 11,564 holders of record of the Company's common stock. Common Stock Market and Dividend Information
Price Range Dividends Fiscal 1994 High Low Declared - -------------------------------------------------------- 1st Quarter 25 23 $.305 2nd Quarter 25-5/8 23-1/2 $.305 3rd Quarter 24-5/8 21 $.305 4th Quarter 22-3/4 20-5/8 $.305 Fiscal 1993 - -------------------------------------------------------- 1st Quarter 20-1/2 17-7/8 $.30 2nd Quarter 22 20 $.305 3rd Quarter 23-5/8 21-1/2 $.305 4th Quarter 25 23-3/8 $.305 Note: Restated to reflect a 2-for-1 stock split effective February 11, 1994.
14 Item 6. Selected Financial Data
Fiscal Years Ended September 30 (Thousands Except Per Share 1994 1993 1992 1991 1990 Amounts) ---- ---- ---- ---- ---- Summary of Operations Utility Operating Revenues $523,866 $503,948 $418,190 $438,050 $470,824 ----------------------------------------------- Utility Operating Expenses: Natural and propane gas 308,515 291,057 235,562 254,288 292,186 Other operation expenses 84,906 81,027 73,521 73,811 71,680 Maintenance 18,351 16,693 15,358 14,309 14,890 Depreciation & amortization 19,332 18,704 18,033 17,048 16,401 Taxes, other than income taxes 42,627 41,061 35,333 35,289 36,958 Income Taxes 12,517 14,997 8,272 10,795 6,717 Total utility operating ----------------------------------------------- expenses 486,248 463,539 386,079 405,540 438,832 ----------------------------------------------- Utility Operating Income 37,618 40,409 32,111 32,510 31,992 Allowance for Funds Used During Construction 203 186 377 156 126 Miscellaneous Income and Income Deductions - Net 790 785 1,400 1,950 (1,912) ----------------------------------------------- Income Before Interest Charges 38,611 41,380 33,888 34,616 30,206 ----------------------------------------------- Interest Charges: Interest on long-term debt 12,626 14,415 13,803 13,062 12,222 Other interest charges 3,768 1,798 1,811 1,524 1,081 ----------------------------------------------- Total Interest Charges 16,394 16,213 15,614 14,586 13,303 ----------------------------------------------- Income Before Cumulative Effect of Change in Accounting 22,217 25,167 18,274 20,030 16,903 Cumulative Effect of Change in Accounting - - - - 1,650 ----------------------------------------------- Net Income 22,217 25,167 18,274 20,030 18,553 Dividends on Preferred Stk 97 97 97 97 99 ----------------------------------------------- Earnings Applicable to Common Stock $ 22,120 $ 25,070 $ 18,177 $ 19,933 $ 18,454 =============================================== Earnings Per Share of Common Stock*: Before Cumulative Effect of Change in Accounting $1.42 $1.61 $1.17 $1.28 $1.08 Cumulative Effect of Change in Accounting - - - - .10 ----------------------------------------------- Total $1.42 $1.61 $1.17 $1.28 $1.18 =============================================== *Common share and per share amounts have been restated to reflect a 2-for-1 stock split effective February 11, 1994.
15 Item 6. Selected Financial Data (Continued)
Fiscal Years Ended September 30 (Thousands Except Per Share 1994 1993 1992 1991 1990 Amounts) ---- ---- ---- ---- ---- Dividends Declared - Common Stock $ 19,054 $ 18,938 $ 18,703 $ 18,703 $ 18,396 Dividends Declared Per Share of Common Stock* $1.22 $1.215 $1.20 $1.20 $1.18 Utility Plant Gross Plant-End of Period $709,563 $677,613 $643,587 $605,298 $572,210 Net Plant-End of Period 411,677 390,826 367,287 339,317 316,278 Construction Expenditures 39,193 40,880 44,660 38,291 29,211 Property Retirements 6,757 6,135 5,693 5,196 3,170 Total Assets 608,295 515,312 470,463 501,149 436,647 Capitalization - End of Period Common Stock and Paid-In Capital $ 45,638 $ 43,702 $ 43,702 $ 43,702 $ 43,701 Retained Earnings 173,318 170,252 164,120 164,646 163,416 Treasury Stock (24,017) (24,017) (24,017) (24,017) (24,017) ----------------------------------------------- Common Stock Equity 194,939 189,937 183,805 184,331 183,100 Redeemable Preferred Stk 1,960 1,960 1,960 1,960 1,966 Long-Term Debt 154,211 165,745 146,640 164,822 129,813 ------------------------------------------------ Total Capitalization $351,110 $357,642 $332,405 $351,113 $314,879 ================================================ Shares of Common Stock Outstanding-End of Period* 15,670 15,586 15,586 15,586 15,586 Book Value Per Share* $12.44 $12.19 $11.79 $11.83 $11.75 *Common share and per share amounts have been restated to reflect a 2-for-1 stock split effective February 11, 1994.
16 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Earnings applicable to common stock for the fiscal year ended September 30, 1994 were $22.1 million, compared with $25.1 million for 1993 and $18.2 million for 1992. Earnings per share of common stock based on average shares outstanding were $1.42 in 1994, compared with $1.61 in 1993 and $1.17 in 1992, restated to reflect the 2-for-1 stock split effective February 11, 1994. The $.19 per share decrease in fiscal 1994 (from fiscal 1993) was primarily due to increases in the costs of doing business and decreased sales volumes arising from warmer weather. These decreases were partially offset by the one-month benefit of a general rate increase effective September 1, 1994, designed to increase revenues by $12.2 million on an annual basis. The $.44 per share increase in earnings in fiscal 1993 (over fiscal 1992) was principally due to higher sales arising from colder weather. Increases in the costs of doing business were essentially offset by the benefit of the Company's general rate increase, which was placed in effect September 1, 1992. Weather in the metropolitan St. Louis area was 1% warmer than normal in 1994, 2% colder than normal in 1993, and 15% warmer than normal in 1992. Utility operating revenues for fiscal year 1994 increased $20.0 million, or 4.0%, above fiscal 1993, and 1993 increased $85.7 million, or 20.5%, above fiscal 1992. The 1994 increase was due to higher wholesale gas costs of $21.3 million (which are passed on to customers in accordance with the Purchased Gas Adjustment Clause) and increased revenues arising from the general rate increase effective September 1, 1994 of $.9 million. These increases were partially offset by lower therms sold and transported (principally due to the warmer weather) and other variations netting to $2.2 million. The 1993 increase in revenues, compared with 1992, was largely due to higher therms sold (reflecting the significantly colder weather) and minor factors totalling $34.1 million, higher PGA levels of $38.4 million, and increased revenues arising from the general rate increase effective September 1, 1992 of $13.2 million. Therms sold and transported for 1994 were 1,070.1 million compared with 1,080.1 million in 1993 and 971.5 million in 1992. Utility operating expenses increased $22.7 million, or 4.9%, in fiscal 1994, and 1993 increased $77.4 million, or 20.0%, above fiscal 1992. Natural and propane gas expense increased $17.5 million in 1994 reflecting higher natural gas prices, partially offset by reduced volumes required for sendout. In 1993, natural and propane gas expense increased $55.5 million due to increased volumes purchased for sendout and higher natural gas prices. Other operation and maintenance expenses increased $5.5 million, or 5.7%, in 1994 mainly due to increased pension expense of $5.9 million, reflecting the effect of recognition in fiscal 1993 of gains arising from significant lump-sum settlements (no such gains were recognized during fiscal 1994) coupled with higher net pension costs this fiscal year. This increase was partially offset by several changes netting to a $.4 million reduction in expense. These include a lower provision for uncollectibles, reduced group insurance expenses, and other reductions in expense; the benefits of which were largely offset by increased expense resulting from the adoption of Statement of Financial Accounting Standard (SFAS) No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions", 17 increased maintenance requirements, and higher contract wage rates. In 1993, other operation and maintenance expenses increased 9.9% reflecting increased group insurance charges, higher distribution and maintenance charges, increased wage rates, and other increases in the costs of doing business. Depreciation and amortization expense increased 3.4% in 1994 and 3.7% in 1993 primarily as a result of additional depreciable property. Taxes, other than income taxes, increased 3.8% in 1994 principally due to higher gross receipts taxes (reflecting increased revenues). In 1993, taxes, other than income taxes, increased 16.2% primarily due to higher gross receipts taxes and increased property taxes. The variations in income tax expense are mainly due to changes in income, and as a result of tax adjustments recorded in 1993 related to prior years. Miscellaneous income and income deductions (net of applicable income tax expense) in 1994 were essentially the same as 1993, while 1993 was $.8 million lower than 1992 reflecting lower interest income on temporary cash investments. Interest expense increased by 1.1% in fiscal 1994 primarily due to increased short-term debt, largely offset by reduced interest on long-term debt (reflecting the benefit of redemptions of First Mortgage Bonds totalling $51.7 million in fiscal 1993 and $12.0 million in fiscal 1994, partially offset by the effect of the issuance of $40 million of 7-1/2% First Mortgage Bonds in November 1992 and $25 million of 6-1/4% First Mortgage Bonds in May 1993). The fiscal 1993 increase in interest expense was primarily due to the aforementioned First Mortgage Bond issues, partially offset by the effect of redemptions in 1992 and 1993. On June 28, 1994, Company and Union representatives signed a new three-year labor agreement replacing the prior agreement which was to expire July 31, 1994. The new contract extends through July 31, 1997. The settlement resulted in wage increases of 3.5% in the first year, 3.25% the second year, and 3.25% the third year. Other employee benefit improvements will be effected during the three-year term. On January 14, 1994, the Company filed a request with the Missouri Public Service Commission (MoPSC) seeking a general rate increase of $27.1 million annually. This filing culminated in a settlement, approved by the MoPSC on August 22, 1994, providing the Company an annual increase in revenues of $12.2 million effective September 1, 1994. The Company's last general rate increase was effective on September 1, 1992, and amounted to $13.5 million per year. Accounting Changes The Company implemented SFAS No. 109, "Accounting for Income Taxes", effective October 1, 1993, without restating previously issued financial statements. SFAS No. 109 prescribes the liability method of accounting for income taxes, which required the Company to recognize additional deferred tax assets and liabilities for certain temporary differences and to adjust deferred tax accounts for changes in income tax rates. SFAS No. 109 had no effect on the Company's cash flows or results of operations due to the effect of rate regulation. Substantially all of the adjustments required by SFAS No. 109 were recorded to deferred tax balance 18 sheet accounts, with offsetting adjustments to regulatory assets and liabilities. At October 1, 1993 the cumulative effect of adopting SFAS No. 109 was an increase in net deferred tax liabilities of $30.2 million, and recognition of a regulatory asset of $30.2 million. In the first quarter of fiscal year 1994, the Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions (OPEB)". In its 1992 rate case, the Company was authorized by the MoPSC to recover OPEB on a pay-as-you-go basis and to defer the difference as a regulatory asset. However, a regulatory asset was not recorded since it did not meet the more stringent accounting criteria subsequently established in the 1993 Emerging Issues Task Force consensus. In July 1994, a new state law was enacted which requires SFAS No. 106 accrued costs to be recognized for ratemaking purposes provided that such costs are funded through an independent, external funding mechanism. The approved settlement of the Company's 1994 rate case included recovery of such costs, effective September 1, 1994. The Company is in the process of establishing funding mechanisms which comply with the new law and the terms of the settlement. In November 1992, the FASB issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits", which will require the Company to accrue the estimated future cost of providing postemployment benefits to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 is required in fiscal year 1995. The Company does not expect the adoption of SFAS No. 112 to have a material effect on the Company's financial position or results of operations. Inflation The accompanying Financial Statements reflect the historical costs of events and transactions, regardless of the purchasing power of the dollar at the time. Due to the capital intensive nature of the Company's business, the most significant impact of inflation is on the Company's depreciation of utility plant. Rate regulation to which the Company is subject allows recovery through its rates of only the historical cost of utility plant as depreciation. While no plans exist to undertake other than normal replacements of plant in service, the Company believes that any higher costs experienced upon replacement of existing facilities would be recovered through the normal regulatory process. Liquidity and Capital Resources Cash flow from operations, net of dividend payments, has generally provided the principal liquidity to meet operating requirements and to fund a significant portion of the Company's construction program. Any remaining funding requirement for construction or for other needs has been provided by long-term and short-term financing. The issuance of long-term financing is dependent on management's evaluation of need, financial market conditions, and other factors. Short-term financing is used to meet seasonal cash requirements and/or to defer long-term financing until market conditions are favorable. Short-term borrowing requirements typically peak during colder months, principally because of required payments for natural gas made in advance of 19 the receipt of cash from our customers for the sale of that gas. Such short-term cash requirements have traditionally been met through the sale of commercial paper supported by lines of credit with banks. In January 1994, the Company renewed its primary line of bank credit under which it may borrow up to $40 million prior to January 31, 1995, with renewal of any loans outstanding on that date permitted up to June 30, 1995. This primary line of credit contained short-term step-up provisions providing an additional $15 million of credit to January 27, 1994 and an additional $5 million to February 28, 1994 which helped cover peak requirements during those two months. The Company anticipates renewal of this primary line of $40 million in January 1995. Additionally, beginning October 18, 1993, the Company obtained a supplemental line of credit varying from $20 million to $40 million through October 17, 1994 and $70 million from October 18, 1994 to March 1, 1995. Thus, at this writing, the total line of credit for the 1994-1995 heating season is $110 million, compared with a maximum of $95 million during the 1993-1994 heating season. The Company anticipates that the supplemental line will be reduced after March 1, 1995, since seasonal cash needs typically decline significantly at the end of the heating season. Short-term borrowings outstanding at September 30, 1994 were $53.5 million. On April 13, 1993, the Company filed a Registration Statement with the Securities and Exchange Commission (SEC) in connection with the sale of up to $100 million of First Mortgage Bonds. The Registration Statement was approved by the SEC and became effective for a two-year period commencing April 21, 1993. The Company issued $25 million of First Mortgage Bonds in May 1993 (the proceeds of which were used to redeem outstanding higher cost debt) and has $75 million remaining related to this Registration Statement. In a further effort to take advantage of lower interest rates, the Company also redeemed $12 million of 7-1/2% First Mortgage Bonds in November 1993. These bonds were originally scheduled to mature in 1997. The amounts, timing, and types of future financings issued by the Company will depend on cash requirements, market conditions, and other factors. At the Annual Meeting held on January 27, 1994, the Company's share owners approved an amendment which increased the authorized common stock to 50,000,000 shares with a new par value of $1.00 per share and reclassified the par value of the outstanding common stock from $2.00 to $1.00 per share. These changes were approved in connection with a 2-for-1 stock split authorized by the Board of Directors which became effective February 11, 1994. Share owners approved an amendment to the Company's Dividend Reinvestment Plan at the January 27, 1994 meeting to permit cash purchases of common stock through the Plan and the issuance by the Company of common stock under the Plan. The Company filed a Registration Statement for the Plan with the Securities and Exchange Commission on February 22, 1994. The Missouri Public Service Commission granted the necessary approvals of the stock split and Plan amendments by order dated January 4, 1994. During the last two quarters of fiscal 1994, 83,561 shares were issued under the Company's Dividend Reinvestment and Stock Purchase Plan. Total shares outstanding were 15,670,023 at September 30, 1994. Construction expenditures for utility purposes were $39.2 million in fiscal 1994 compared with $40.9 million in fiscal 1993 and $44.7 million in fiscal 1992. Fiscal 1992 expenditures were abnormally high compared to other years mainly due to completion of construction of a 26-mile transmission line from Washington, Missouri to Ellisville, Missouri. 20 The Company is subject to various laws and regulations relating to the environment, which thus far have not had a material effect on the Company's financial position and results of operations. Prior to the widespread availability of natural gas, the Company operated various manufactured gas plants, the last of which was closed in 1961. The process for manufacturing gas produced by-products and residuals, including hydrocarbons such as lamp black and coal tar. Certain remnants of these residuals are typically found at former gas manufacturing sites. The United States Environmental Protection Agency (EPA) has been engaged in a survey of a large number of former manufactured gas plant sites across the nation. In this regard, the Company and the EPA have determined that manufactured gas residuals are present at one of the former manufactured gas plant sites operated by the Company. While no conclusion has been reached as to the extent of any remedial action that will be required, the Company and the EPA have entered into an Administrative Order on Consent (AOC), effective March 31, 1994, with regard to this site. The AOC provides for the Company to conduct certain investigative activities (i.e., a removal site evaluation and an engineering evaluation cost analysis), and to reimburse the EPA for response costs under the AOC. The AOC requires only investigations and does not cover any removal action. If remedial action is necessary, then a subsequent order will cover such action. Based on currently available information, management believes that the costs of the foregoing investigations, response costs of the EPA in overseeing such investigations, and other associated legal and engineering consulting costs are likely to approximate $380,000. At September 30, 1994, $135,000 has been paid and a liability of $245,000 remains to cover future payments. The Company is presently unable to evaluate and quantify further the scope or cost of any environmental response activity. However, the Company has notified its insurers that the Company intends to seek reimbursement from them of its investigation, remediation, clean-up and defense costs in regard to the foregoing. In addition to pursuing insurance proceeds to the extent feasible, the Company also plans to seek recovery, if practicable, from any other potentially responsible parties. An environmental cost deferral procedure was established by the Missouri Public Service Commission in the Company's recent rate case, effective September 1, 1994, for use by the Company in applying for appropriate rate recovery of various investigation, remediation and other costs to be incurred by the Company in connection with former manufactured gas plant sites. The authorization to begin deferring such costs shall only be triggered to the extent that the cumulative liability incurred by the Company during the deferral period is not offset by the cumulative costs of $250,000 per year reflected in the Company's current rates. In the event the cumulative liability incurred by the Company for such costs during the deferral period is less than the cumulative amount of such annualized costs reflected in the rates approved in the settlement, then the Company shall refund the difference. The above authorization will become null and void if the Company does not file for a general rate increase by September 1, 1996, and, in any event, the recovery of costs deferred thereunder is subject to challenge in future rate cases. On April 8, 1992, the Federal Energy Regulatory Commission (FERC) issued Order No. 636 which adopted its final rule to restructure the Nation's natural gas pipelines and the services they provide. Under the final rule, 21 the FERC is requiring natural gas pipelines to offer unbundled, or separate, transportation and storage services and to eliminate their bundled merchant sales and transportation service under which gas was sold to local distribution companies at the city gate. The Company's long-term gas supply contract with Mississippi River Transmission Corporation (MRT) was terminated on November 1, 1993, and replaced with an agency agreement. Under such new agreement, the Company will acquire its own gas supplies and MRT will administer all functions necessary to deliver the gas to the Company. Pursuant to this new arrangement, the Company has entered into long-term and short-term gas supply arrangements with more than 17 suppliers, so as to provide adequate supplies for the foreseeable future. The Company's PGA Clause has been revised to continue to flow through to its customers increases and decreases in the Company's cost of purchased gas, as such costs are incurred under the new Order No. 636 supply arrangements. Capitalization at September 30, 1994, excluding current redemption requirements of long-term debt, consisted of 55.5% common stock equity, .6% preferred stock and 43.9% long-term debt. The Company's outstanding First Mortgage Bonds are rated AA- by Fitch, Aa3 by Moody's, and AA- by Standard & Poor's. The Company's ratio of earnings before taxes to interest charges was 3.1 for 1994, 3.5 for 1993 and 2.7 for 1992. It is management's view that the Company has adequate access to capital markets and will have sufficient capital resources both internal and external to meet anticipated capital requirements. 22 Item 8. Financial Statements and Supplementary Data INDEPENDENT AUDITORS' REPORT We have audited the accompanying consolidated balance sheets and statements of consolidated capitalization of Laclede Gas Company and its subsidiary companies as of September 30, 1994 and 1993, and the related statements of consolidated income, retained earnings, and cash flows for each of the three years in the period ended September 30, 1994. Our audits also included the financial statement schedules listed in the Index at Part IV, Item 14(a)2. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Laclede Gas Company and its subsidiary companies as of September 30, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 1994 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Notes 1 and 2 to the consolidated financial statements, effective October 1, 1993, Laclede Gas Company and its subsidiary companies changed their method of accounting for income taxes to conform with Statement of Financial Accounting Standards No. 109 and changed their method of accounting for postretirement benefits other than pensions to conform with Statement of Financial Accounting Standards No. 106. Deloitte & Touche LLP St. Louis, Missouri November 17, 1994 23 MANAGEMENT REPORT Management is responsible for the preparation, presentation and integrity of the consolidated financial statements and other financial information in this report. The statements were prepared in conformity with generally accepted accounting principles and include amounts that are based on management's best estimates and judgments. In the opinion of management, the financial statements fairly reflect the Company's financial position, results of operations and cash flows. The Company maintains internal accounting systems and related administrative controls that are designed to provide reasonable assurance, on a cost effective basis, that transactions are executed in accordance with management's authorization, that consolidated financial statements are prepared in conformity with generally accepted accounting principles, and that the Company's assets are properly accounted for and safeguarded. The Company's Internal Audit Department, which has unrestricted access to all levels of Company management, monitors compliance with established controls and procedures. Deloitte and Touche LLP, the Company's independent auditors, whose report is contained herein, are responsible for auditing the Corporation's financial statements in accordance with generally accepted auditing standards. Such standards include obtaining an understanding of the internal control structure in order to design the audit of the financial statements. The Audit Committee of the Board of Directors, which consists of six outside directors, meets periodically with management, the internal auditor, and the independent auditors to review the manner in which they are performing their responsibilities. Both the internal auditor and the independent auditors periodically meet alone with the Audit Committee and have access to the Audit Committee at any time. Robert C. Jaudes - ------------------------------------- Chairman of the Board, President and Chief Executive Officer Robert J. Carroll - ----------------------------------- Senior Vice President- Finance and Chief Financial Officer 24 Item 8. Financial Statements and Supplementary Data STATEMENTS OF CONSOLIDATED INCOME (Thousands Except Per Share Amounts)
Years Ended September 30 1994 1993 1992 ---- ---- ---- Utility Operating Revenues $523,866 $503,948 $418,190 ------------------------------ Utility Operating Expenses Natural and propane gas 308,515 291,057 235,562 Other operation expenses 84,906 81,027 73,521 Maintenance 18,351 16,693 15,358 Depreciation and amortization 19,332 18,704 18,033 Taxes, other than income taxes 42,627 41,061 35,333 Income taxes (Note 7) 12,517 14,997 8,272 ------------------------------ Total utility operating expenses 486,248 463,539 386,079 ------------------------------ Utility Operating Income 37,618 40,409 32,111 Miscellaneous Income and Income Deductions- Net (less applicable income taxes - Note 7) 993 971 1,777 ------------------------------ Income Before Interest Charges 38,611 41,380 33,888 ------------------------------ Interest Charges: Interest on long-term debt 12,626 14,415 13,803 Other interest charges 3,768 1,798 1,811 ------------------------------ Total interest charges 16,394 16,213 15,614 ------------------------------ Net Income 22,217 25,167 18,274 Dividends on Preferred Stock 97 97 97 ------------------------------ Earnings Applicable to Common Stock $ 22,120 $ 25,070 $ 18,177 ============================== Average Shares of Common Stock Outstanding 15,619 15,586 15,586 ============================== Earnings Per Share of Common Stock (after preferred dividends) $1.42 $1.61 $1.17 ============================== See the accompanying notes to financial statements.
25 STATEMENTS OF CONSOLIDATED RETAINED EARNINGS (Thousands Except Per Share Amounts)
Years Ended September 30 1994 1993 1992 ---- ---- ---- Balance at Beginning of Year $170,252 $164,120 $164,646 Add - Net income, per statements 22,217 25,167 18,274 ----------------------------- Total 192,469 189,287 182,920 ----------------------------- Deduct - Cash Dividends Declared: Preferred stock at required annual rates 97 97 97 Common stock, $1.22 per share in 1994, $1.215 per share in 1993 and $1.20 per share in 1992 19,054 18,938 18,703 ----------------------------- Total 19,151 19,035 18,800 ----------------------------- Balance at End of Year $173,318 $170,252 $164,120 ============================= See the accompanying notes to financial statements.
26 CONSOLIDATED BALANCE SHEETS (Thousands of Dollars)
September 30 1994 1993 ---- ---- Assets Utility Plant $709,563 $677,613 Less - Accumulated depreciation & amortization 297,886 286,787 -------------------- Net utility plant 411,677 390,826 -------------------- Other Property and Investments, at Cost or Less (net of accumulated depreciation and amortization, 1994, $9,447; 1993, $9,411) 22,956 22,668 -------------------- Current Assets: Cash and cash equivalents 1,588 1,706 Accounts receivable: Gas customers - Billed and unbilled 39,835 36,340 Other 4,207 4,255 Less - Allowances for doubtful accounts (credit) (4,943) (7,704) Inventories: Materials, supplies, and merchandise at avg cost 5,059 5,202 Natural gas stored underground for current use at LIFO cost 48,333 14,079 Propane gas for current use at FIFO cost 13,582 13,657 Prepayments 1,853 1,774 Unamortized purchased gas adjustments 1,998 6,278 Deferred income taxes (Note 7) 3,717 - -------------------- Total current assets 115,229 75,587 -------------------- Deferred Charges 58,433 26,231 -------------------- Total Assets $608,295 $515,312 ==================== See the accompanying notes to financial statements.
27 CONSOLIDATED BALANCE SHEETS (Continued) (Thousands of Dollars)
September 30 1994 1993 ---- ---- Capitalization and Liabilities Capitalization, per statements: Common stock equity $194,939 $189,937 Redeemable preferred stock 1,960 1,960 Long-term debt 154,211 165,745 -------------------- Total capitalization 351,110 357,642 -------------------- Current Liabilities: Notes payable (Note 8) 53,500 27,500 Accounts payable 20,124 16,745 Refunds due customers 29,782 214 Advance customer billings 7,062 3,901 Current sinking fund requirements - 391 Wages payable 3,072 4,061 Dividends payable 4,937 4,906 Customer deposits 3,978 4,650 Interest accrued 6,951 6,946 Taxes accrued 9,855 11,545 Deferred income taxes (Note 7) - 2,312 Other current liabilities 4,930 6,026 -------------------- Total current liabilities 144,191 89,197 -------------------- Deferred Credits and Other Liabilities: Deferred income taxes (Note 7) 76,662 36,989 Unamortized investment tax credits (Note 7) 8,329 8,682 Other 28,003 22,802 -------------------- Total deferred credits and other liabilities 112,994 68,473 -------------------- Commitments and Contingencies (Note 9) Total Capitalization and Liabilities $608,295 $515,312 ==================== See the accompanying notes to financial statements.
28 STATEMENTS OF CONSOLIDATED CAPITALIZATION (Thousands of Dollars)
September 30 1994 1993 ---- ---- Common Stock Equity (Note 3): Common stock, par value $1 per share: Authorized - 1994, 50,000,000 shares; 1993, 40,000,000 shares Issued - 1994, 17,535,661 shares; 1993, 17,452,100 shares $ 17,536 $ 17,452 Paid-in capital 28,102 26,250 Retained earnings, per statements 173,318 170,252 Treasury stock, at cost - 1994 and 1993, 1,865,638 shares (24,017) (24,017) -------------------- Total common stock equity 194,939 189,937 -------------------- Redeemable Preferred Stock, par value $25 per share (1,480,000 shares authorized) issued and outstanding (Note 4): 5% Series B - 1994 and 1993, 71,890 shares 1,797 1,797 4.56% Series C - 1994 and 1993, 6,510 shares 163 163 -------------------- Total redeemable preferred stock 1,960 1,960 -------------------- Long-Term Debt (Note 5): First mortgage bonds: 7-1/2% Series, due March 15, 1997 - 11,600 6-1/4% Series, due May 1, 2003 25,000 25,000 8-1/2% Series, due November 15, 2004 25,000 25,000 8-5/8% Series, due May 15, 2006 40,000 40,000 7-1/2% Series, due November 1, 2007 40,000 40,000 9-5/8% Series, due May 15, 2013 25,000 25,000 -------------------- Total 155,000 166,600 Unamortized discount, net of premium, on long-term debt (789) (855) -------------------- Total long-term debt 154,211 165,745 -------------------- Total Capitalization $351,110 $357,642 ==================== Preferred stock and long-term debt amounts are exclusive of current maturities and sinking fund requirements. See the accompanying notes to financial statements.
29 STATEMENTS OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars) Years Ended September 30 1994 1993 1992 ---- ---- ---- Operating Activities: Net Income $22,217 $25,167 $18,274 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,393 18,917 18,291 Deferred income taxes and investment tax credits 508 5,202 227 Other - net 567 280 151 Changes in assets and liabilities: Accounts receivable - net (6,208) (6,185) 27,189 Unamortized purchased gas adjustments 4,280 (2,552) 11,279 Deferred purchased gas costs (355) 459 (258) Accounts payable 3,379 3,950 (3,148) Refunds due customers 29,568 (4,064) (17,146) Taxes accrued (1,690) 2,050 (1,261) Natural gas stored underground (34,254) (2,843) (544) Other assets and liabilities 6,280 (10,363) (7,212) ------------------------------- Net cash provided by operating activities 43,685 30,018 45,842 ------------------------------- Investing Activities: Construction expenditures (39,193) (40,880) (44,660) Employee benefit trusts 1,006 (373) (1,035) Investments - non-utility (1,673) (1,747) (1,786) Other (655) (903) (372) ------------------------------- Net cash used in investing activities (40,515) (43,903) (47,853) ------------------------------- Financing Activities: Issuance of first mortgage bonds - 65,000 - Issuance of short-term debt 26,000 20,500 7,000 Issuance of common stock 1,973 - - Dividends paid (19,126) (18,957) (18,800) Retirement of first mortgage bonds (11,991) (51,660) (13,873) Other (144) (2,614) - ------------------------------- Net cash provided by (used in) financing activities (3,288) 12,269 (25,673) ------------------------------- Net Decrease in Cash and Cash Equivalents (118) (1,616) (27,684) Cash and Cash Equivalents at Beg of Year 1,706 3,322 31,006 ------------------------------- Cash and Cash Equivalents at End of Year $ 1,588 $ 1,706 $ 3,322 =============================== Supplemental Disclosure of Cash Paid During the Year for: Interest $15,769 $15,081 $15,537 Income taxes 11,732 9,489 8,745 See the accompanying notes to financial statements.
30 SCHEDULE OF INCOME TAXES (Note 7) (Thousands of Dollars)
Years Ended September 30 1994 1993 1992 ---- ---- ---- Included in Statements of Consolidated Income as: Utility Operating Expenses: Federal Current $ 10,286 $ 8,833 $7,017 Deferred 720 5,024 528 Investment tax credit adjustments - net (352) (332) (445) State and local Current 1,708 937 1,014 Deferred 155 535 158 ------------------------------ 12,517 14,997 8,272 ------------------------------ Miscellaneous Income and Income Deductions: Federal Current 160 1,026 206 Deferred (12) (21) (10) Investment tax credit adjustments - net (2) (2) (4) State and local Current (24) 67 (20) Deferred (1) (2) - ------------------------------ 121 1,068 172 ------------------------------ Total $12,638 $16,065 $8,444 ============================== See the accompanying notes to financial statements.
31 SCHEDULE OF INTERIM FINANCIAL INFORMATION (Unaudited) (Note 10) (Thousands of Dollars Except Per Share Amounts)
Three Months Ended 1994 Dec. 31 March 31 June 30 Sept. 30 - -------------------------------------------------------------------------- Utility Operating Revenues $167,245 $233,035 $74,644 $48,942 Utility Operating Income (Loss) 15,621 22,203 1,286 (1,492) Net Income (Loss) 11,920 18,645 (2,738) (5,610) Earnings (Loss) Per Share of Common Stock (after preferred dividends) $ .76 $1.19 $(.18) $(.36) Three Months Ended 1993 Dec. 31 March 31 June 30 Sept. 30 - -------------------------------------------------------------------------- Utility Operating Revenues $160,044 $214,078 $75,993 $53,833 Utility Operating Income (Loss) 17,346 23,741 1,956 (2,634) Net Income (Loss) 13,485 20,318 (2,142) (6,494) Earnings (Loss) Per Share of Common Stock (after preferred dividends) $ .86 $1.30 $(.14) $(.41) See the accompanying notes to financial statements.
32 NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Basis of Consolidation - The consolidated financial statements include the accounts of the Laclede Gas Company and its subsidiary companies (Company). The net operating results of the Company's non-utility subsidiaries, all of which are wholly owned, are included under the caption "Miscellaneous Income and Income Deductions - Net" in the Statements of Consolidated Income. Revenues from non-utility subsidiaries are insignificant. All appropriate intercompany transactions have been eliminated. System of Accounts - The accounts of the Company are maintained in accordance with the uniform system of accounts prescribed by the Missouri Public Service Commission (MoPSC), which system substantially conforms to that prescribed by the Federal Energy Regulatory Commission. Utility Plant, Depreciation and Amortization - Utility plant is stated at original cost. The cost of additions to utility plant includes contracted work, direct labor and materials, allocable overheads, and an allowance for funds used during construction. The costs of units of property retired, replaced, or renewed are removed from utility plant and such costs, plus removal costs, less salvage are charged to accumulated depreciation. Maintenance and repairs of property and replacement and renewal of items determined to be less than units of property are charged to operating expenses. Utility plant, excluding exploration and development, is depreciated on the straight-line basis at rates based on estimated service lives of the various classes of property. Annual depreciation in 1994, 1993 and 1992 averaged approximately 2.8% of the original cost of depreciable property. In August 1994, the MoPSC approved a settlement agreement which authorized a net increase in depreciation rates for the Company effective on September 1, 1994. Gas Stored Underground - Inventory of gas in storage is priced on a last-in, first-out (LIFO) basis. The replacement cost of gas stored underground for current use at September 30, 1994 was less than the LIFO cost by $8,437,000, and at September 30, 1993, exceeded the LIFO cost by $3,354,000. The inventory carrying value has not been reduced to market prices because, pursuant to the Company's Purchased Gas Adjustment Clause, actual gas costs are recovered in customer rates. Oil & Gas Exploration and Development - The Company uses the full cost method of accounting for utility exploration and development costs as ordered by the Missouri Public Service Commission. Under the full cost method, all exploration and development costs of productive and non- productive wells are capitalized. Such costs are charged to expense based on oil and gas produced in relation to total estimated recoverable reserves. Depreciation and amortization charges amounted to $812,000 in 1994, $1,213,000 in 1993 and $1,125,000 in 1992. Operating Revenues - The Company records revenues from gas sales and transportation service on the accrual basis which includes estimated amounts for gas delivered, where applicable, but not yet billed. 33 Purchased Gas Adjustments and Deferred Account - Pursuant to the provisions of the Company's Purchased Gas Adjustment (PGA) Clause, increases or decreases in gas costs are passed on to its customers. The difference between actual costs incurred and costs recovered through the application of the PGA is reflected as a deferred charge or credit until September 30, at which time the balance is classified as a current asset or liability and is recovered from or credited to customers over an annual period commencing in November. The balance in the current account is amortized as amounts are reflected in customer billings. Income Taxes - The Company has elected, for tax purposes only, various accelerated depreciation provisions of the Internal Revenue Code. In addition, intangible drilling and unsuccessful exploration costs, and certain other costs are expensed currently for tax purposes while being deferred for book purposes. The provision for current income taxes reflects the tax treatment of these items. The Company adopted Statement of Financial Accounting Standard (SFAS) No. 109, "Accounting for Income Taxes" effective October 1, 1993. SFAS No. 109 requires the establishment of deferred tax liabilities and assets, as measured by enacted tax rates, for the net tax effects of all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes, and the amounts used for income tax purposes. Substantially all of the adjustments required by SFAS No. 109 were recorded to deferred tax balance sheet accounts, with the corresponding adjustments to regulatory assets and liabilities. At October 1, 1993, the cumulative effect of adopting SFAS No. 109 was an increase in net deferred tax liabilities of $30,200,000, and recognition of a regulatory asset of $30,200,000. The adoption of this standard did not have an impact on the Company's cash flows or results of operations due to the effect of rate regulation. In 1993 and 1992, the Company accounted for income taxes in accordance with the provisions of Accounting Principles Board Opinion No. 11. The benefit of investment tax credits utilized prior to 1986 has been deferred and is being amortized over the useful life of the related property for financial statement purposes. Cash and Cash Equivalents - For the purpose of the statements of cash flows, the Company considers all highly liquid debt instruments purchased, which generally have a maturity of three months or less, to be cash equivalents. Such instruments are carried at cost, which approximates market value. Reclassification - Certain prior-year amounts have been reclassified to conform to current-year presentation. 34 2. Pension Plans and Other Postemployment Benefits The Company has non-contributory defined benefit, trusteed forms of pension plans covering substantially all employees over the age of twenty-one. Benefits are based on years of service and the employee's compensation during the last three years of employment. The Company's funding policy is to contribute an amount not less than the minimum required by government funding standards, nor more than the maximum deductible amount for federal income tax purposes. Plan assets consist primarily of corporate and U.S. government obligations. Pension costs in 1994, 1993 and 1992 amounted to $1,895,000, $50,000 and $812,000, respectively, including amounts charged to construction. The net pension costs (credits) include the following components:
(Thousands of Dollars) 1994 1993 1992 ---- ---- ---- Service cost - benefits earned during the period $ 6,467 $ 5,891 $ 5,715 Interest cost on projected benefit obligation 13,132 13,209 13,290 Actual return on plan assets 9,849 (50,003) (37,840) Net amortization and deferral (27,553) 30,953 19,647 ------------------------------ Net pension cost $ 1,895 $ 50 $ 812 ==============================
The variance in net pension cost is primarily attributable to actuarial and investment experience. The following table sets forth the funded status of the plans and amounts recognized in the Company's consolidated balance sheet at September 30:
(Thousands of Dollars) 1994 1993 ---- ---- Actuarial present value of benefit obligation: Vested benefit obligation $122,709 $132,593 ===================== Accumulated benefit obligation $140,603 $148,616 ===================== Projected benefit obligation $174,539 $179,844 Plan assets at fair value 225,482 249,271 --------------------- Plan assets in excess of projected benefit obligation 50,943 69,427 Unrecognized net gain (40,793) (50,062) Unrecognized prior service cost 15,483 7,700 Unrecognized net transition asset (8,717) (9,797) Minimum liability adjustment (1,926) (2,380) --------------------- Prepaid pension cost recognized in the consolidated balance sheet $ 14,990 $ 14,888 =====================
The projected benefit obligation, which is based on a June 30 measurement date, was determined using a weighted-average discount rate of 8.25% for 1994 and 7.5% for 1993, and a weighted-average rate of future compensation of 5.0% for 1994 and 4.5% for 1993. The expected long-term rate of return on plan assets was 8.25% for 1994 and 9.0% for 1993. 35 Pursuant to the provisions of the Company's pension plans, pension obligations may be settled by lump-sum cash payments. Significant settlements in 1993 and 1992 resulted in pre-tax gains of approximately $4,355,000 and $3,514,000, respectively. No such gains were recognized in 1994. The cost of the Company's defined contribution plans, which cover substantially all employees, amounted to $1,706,000, $1,595,000 and $1,122,000 for the years 1994, 1993 and 1992, respectively. The Company provides life insurance benefits to all employees after retirement and medical insurance is available after early retirement until age 65. In the first quarter of fiscal year 1994, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions (OPEB)". Under the provisions of SFAS No. 106, the future cost of providing these postretirement benefits is recognized as an expense and a liability during the employees' service periods. As permitted by SFAS No. 106, the liability for any unfunded accumulated postretirement benefit obligations existing at October 1, 1993 is being recognized as a transition obligation and amortized over 20 years. Prior to the adoption of SFAS No. 106, life insurance costs were accrued systematically in order to provide for future payments. The cost of medical insurance, net of payments by the retirant, was recognized as claims were paid. Postretirement benefit costs in 1994, 1993 and 1992 amounted to approximately $6,063,000, $4,300,000 and $4,100,000, respectively, including amounts charged to construction. The 1994 net postretirement benefit cost consisted of the following components:
(Thousands of Dollars) 1994 ---- Service cost - benefits earned during the period $ 1,597 Interest cost on accumulated postretirement benefit obligation 2,767 Amortization of transition obligation 1,699 -------- Net postretirement benefit cost $ 6,063 ========
The following table sets forth the funded status of the plans and amounts recognized in the Company's consolidated balance sheet at September 30:
(Thousands of Dollars) 1994 ---- Accumulated postretirement benefit obligation (APBO): Retirees $(16,227) Active Employees (20,827) -------- Total APBO (37,054) Unrecognized transition obligation 32,265 Unrecognized net gain (2,961) -------- Accrued postretirement benefit cost $ (7,750) ========
36 The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 10% for 1994, and gradually decreases each successive year until it reaches 5% in 1998. A one percent increase in the assumed health care cost trend rate for each year would increase accumulated postretirement benefit costs as of September 30, 1994 by $1,900,000 and the sum of the service cost and interest cost by approximately $384,000. The weighted-average discount rate and weighted- average rate of future compensation used in determining the accumulated postretirement benefit obligation was 8.25% and 5.0%, respectively. In its 1992 rate case, the Company was authorized by the MoPSC to recover OPEBs on a pay-as-you-go basis and to defer, as a regulatory asset, the difference between the accrued costs calculated under the provisions of SFAS No. 106 and the actual pay-as-you-go costs. However, in January 1993, the Emerging Issues Task Force (EITF) reached a consensus requiring more stringent accounting criteria necessary to record a regulatory asset. The 1992 MoPSC authorization was not in conformity with the 1993 EITF consensus; therefore, a regulatory asset was not recorded to reflect rate recovery of these costs on a pay-as-you-go basis. However, in July 1994, a new state law was enacted which requires SFAS No. 106 accrued costs to be recognized for ratemaking purposes provided that such costs are funded through an independent, external funding mechanism. The approved settlement of the Company's 1994 rate case included recovery of such costs, effective on September 1, 1994. The Company is in the process of establishing funding mechanisms which comply with the new law and the terms of the settlement. The 1994 rate case settlement also provided for the deferral, net of any applicable tax effects, of the difference between the costs funded by the Company to its external OPEB funding mechanisms and $6,100,000 of annualized OPEB costs included in rates. Any such deferrals will be reflected in rates established in the next general rate case proceeding. In November 1992, the FASB issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits", which will require the Company to accrue the estimated future cost of providing postemployment benefits to former or inactive employees after employment but before retirement. Adoption of SFAS No. 112 is required in fiscal year 1995. The Company does not expect the adoption of SFAS No. 112 to have a material effect on the Company's financial position or results of operations. 3. Common Stock and Paid-in Capital At the Annual Meeting held on January 27, 1994, the Company's share owners approved an amendment which increased the authorized Common Stock to 50,000,000 shares with a new par value of $1.00 per share and reclassified the par value of the outstanding Common Stock from $2.00 to $1.00 per share. These changes were approved in connection with a 2-for-1 stock split authorized by the Board of Directors effective February 11, 1994. As a result, common share and per share amounts in the consolidated financial statements have been retroactively adjusted to reflect the stock split. Share owners approved an amendment to the Company's Dividend Reinvestment Plan at the January 27, 1994 meeting to permit cash purchases of common stock through the Plan, with a minimum purchase of $100 per calendar quarter up to a maximum purchase of $30,000 per calendar year. The amendment also provides for the issuance of common shares by the Company to provide shares purchased under the Plan. The Company filed a Registration Statement for the Plan with the Securities and Exchange Commission on February 22, 1994. During fiscal 1994, 83,561 shares were issued under the Company's Dividend Reinvestment and Stock Purchase Plan. At September 30, 1994, a total of 15,670,023 shares were outstanding. 37 On March 27, 1986, the Company declared a dividend of one Common Share Purchase Right for each outstanding share of common stock as of May 1, 1986. The rights expire on May 1, 1996, and may be redeemed by the Company for five cents each at any time before they become exercisable. The rights will not be exercisable or transferable apart from the common stock, until ten days after a person or group acquires or obtains the right to acquire 20% or more of the common stock, or commences or announces its intention to commence a tender or exchange offer for 30% or more of the common stock. Each right entitles its holder to buy one share of common stock at an exercise price of $50. In certain circumstances, each right will entitle the holder to purchase one share of common stock at one-third of the market price, or to purchase, at the exercise price, common stock of an acquiring entity having a value equal to twice the exercise price. A total of 15,670,023 rights were outstanding at September 30, 1994. Paid-in capital increased $1,852,000 in 1994, reflecting the issuance of common stock under the Dividend Reinvestment Plan. There were no changes in paid-in capital in 1993 or 1992. 4. Redeemable Preferred Stock The preferred stock, which is non-voting except in certain circumstances, may be redeemed at the option of the Board of Directors. The redemption price is equal to par of $25.00 a share. During 1994, 1993 and 1992 no shares of preferred stock were reacquired. Any default in a sinking fund payment must be cured before the Company may pay dividends on or acquire any common stock. There are no sinking fund requirements on preferred stock for the five years subsequent to September 30, 1994. 5. Long-Term Debt There are no maturities or sinking fund requirements on long-term debt for the five years subsequent to September 30, 1994. Substantially all of the Company's utility plant is subject to the liens of its mortgage. The Company's mortgage contains provisions which restrict retained earnings from declaration or payment of cash dividends. As of September 30, 1994, approximately $164,300,000 of consolidated retained earnings was free from such restrictions. In November 1993, the Company redeemed approximately $12 million (a portion of which was current) of First Mortgage Bonds, 7-1/2% Series, due March 15, 1997 at a cost of $12,100,000. 6. Fair Value of Financial Instruments The carrying amounts and estimated fair values of the Company's financial instruments at September 30, 1994, are as follows:
Carrying Fair (Thousands of Dollars) Amount Value ------------------- Cash and cash equivalents $ 1,588 $ 1,588 Short-term debt 53,500 53,500 Long-term debt 154,211 157,185 Redeemable preferred stock 1,960 1,583
38 The carrying amounts for cash and cash equivalents and short-term debt approximate fair value due to the short maturity of these investments. Fair value of long-term debt and preferred stock is estimated based on market prices for similar issues. 7. Income Taxes Net provisions for income taxes were charged during the years ended September 30, 1994, 1993 and 1992 as shown on the Schedule of Income Taxes. Deferred tax expense results from timing differences in the recognition of revenue and expense for tax and book purposes in 1993 and 1992 and the change in temporary tax differences in 1994. The sources of these differences and the related tax effect of each are indicated below:
(Thousands of Dollars) 1994 1993 1992 ---- ---- ---- Excess of accelerated over straight-line depreciation $ 3,531 $ 3,477 $ 3,265 Excess of full cost accounting charges per books over depreciation, intangible drilling and unsuccessful exploration costs expensed on tax return (281) (423) (380) Gas costs deferred for book purposes and expensed on tax return (reversal) (1,419) 772 (4,029) Uncollectible accounts expense for books (in excess of) less than expense per tax return 962 (486) 77 Pension income (expense) per books in excess of amounts recognized per tax return 66 2,697 2,088 Supplier refund income not recognized per books (907) - - Postretirement insurance benefits expense per books in excess of expense per tax return (1,149) - - Other items - net 59 (501) (345) -------------------------- Total deferred income tax $ 862 $ 5,536 $ 676 ==========================
The effective income tax rate varied from the federal statutory income tax rate for each year due to the following:
1994 1993 1992 ---- ---- ---- Federal income tax statutory rate 35.0% 34.7% 34.0% State and local income taxes, net of federal income tax benefits 3.4 2.4 2.8 Certain expenses and payroll taxes capitalized on books and deducted on tax return (3.0) (2.0) (3.1) Reversal of deferred taxes related to gas costs (.1) .1 - Taxes related to prior years - 2.1 (1.6) Other items - net 1.0 1.7 (.5) ----------------------- Effective income tax rate 36.3% 39.0% 31.6% =======================
39 The significant items comprising the Company's net deferred tax liability recognized in the consolidated balance sheet as of September 30, 1994 are as follows:
(Thousands of Dollars) Deferred tax assets: Reserves not currently deductible $13,481 Unamortized investment tax credits 5,269 Other 2,395 ------- Total deferred tax assets 21,145 ------- Deferred tax liabilities: Relating to utility property 84,202 Pension 7,996 Other 1,892 ------- Total deferred tax liabilities 94,090 ------- Net deferred tax liability $72,945 =======
The net deferred tax liability is presented in the consolidated balance sheet as current assets of $3,717,000, and deferred credits and other liabilities of $76,662,000. 8. Notes Payable and Credit Agreements The Company has a primary line of bank credit which permits borrowing of up to $40 million at any time before January 31, 1995. Such borrowings are on a 90-day basis, renewable from time to time, with no note maturing beyond June 30, 1995. The borrowings may be repaid at any time without penalty. The Company anticipates renewal of this primary line of $40 million in January 1995. Additionally, beginning October 18, 1993, the Company obtained a supplemental line of credit varying from $20 million to $40 million through October 17, 1994 and $70 million from October 18, 1994 to March 1, 1995. Thus, at this writing, the total line of credit for the 1994-1995 heating season is $110 million, compared with a maximum of $95 million during the 1993-1994 heating season. The Company anticipates that the supplemental line will be reduced after March 1, 1995, since seasonal cash needs typically decline at the end of the heating season. Alternatively, the Company has an agreement for the issuance of commercial paper which is supported by the bank loan lines of credit. During fiscal year 1994, the Company's short-term borrowing requirements were met by the sale of commercial paper. As of September 30, 1994, the Company had $53.5 million in commercial paper outstanding at an average interest rate of 4.9%. 40 9. Commitments and Contingencies The Company estimates fiscal year 1995 utility construction expenditures at $39,300,000. The lease agreement covering the Company's general office space extends through February 2000. The aggregate rental expense for fiscal year 1994 was $770,000. Annual minimum rental payments for years subsequent to September 30, 1994 are $770,000 per year. The lease agreement provides for an annual rent escalation which is not determinable as of the balance sheet date but such escalations have historically been relatively minor. The Company has other rental arrangements which provide for minimum rental payments that are relatively minor. The Company has entered into various contracts which in the aggregate require it to pay approximately $92 million on an annual basis, at present rate levels, for the reservation of gas supplies and pipeline transmission and storage capacity. These costs are recovered from customers in accordance with the Purchased Gas Adjustment Clause of the Company's tariff. The contracts have various expiration dates ranging from 1995 to 2000. A consolidated subsidiary is a general partner in an unconsolidated partnership which invests in real estate partnerships. The subsidiary and third parties are jointly and severally liable for the payment of mortgage loans in the aggregate outstanding amount of approximately $11.9 million incurred in connection with various real estate ventures. The Company has no reason to believe that the other principal liable parties will not be able to meet their proportionate share of these obligations. The Company further believes that the asset values of the real estate properties are sufficient to support these mortgage loans. The Company is subject to various laws and regulations relating to the environment, which thus far have not had a material effect on the Company's financial position and results of operations. Prior to the widespread availability of natural gas, the Company operated various manufactured gas plants, the last of which was closed in 1961. The process for manufacturing gas produced by-products and residuals, including hydrocarbons such as lamp black and coal tar. Certain remnants of these residuals are typically found at former gas manufacturing sites. The United States Environmental Protection Agency (EPA) has been engaged in a survey of a large number of former manufactured gas plant sites across the nation. In this regard, the Company and the EPA have determined that manufactured gas residuals are present at one of the former manufactured gas plant sites operated by the Company. While no conclusion has been reached as to the extent of any remedial action that will be required, the Company and the EPA have entered into an Administrative Order on Consent (AOC), effective March 31, 1994, with regard to this site. The AOC provides for the Company to conduct certain investigative activities (i.e., a removal site evaluation and an engineering evaluation cost analysis), and to reimburse the EPA for response costs under the AOC. The AOC requires only investigations and does not cover any removal action. If remedial action is necessary, then a subsequent order will cover such action. Based on currently available information, management believes that the costs of the foregoing investigations, response costs of the EPA in overseeing such investigations, and other associated legal and engineering consulting costs, are likely to approximate $380,000. At September 30, 1994, $135,000 has been paid and a liability of $245,000 remains to cover future payments. The Company is presently unable to evaluate and quantify further the scope or cost of any environmental response activity. The Company has notified its insurers that the Company intends to seek reimbursement from them of its investigation, remediation, clean-up and defense costs in regard 41 to the foregoing. In addition to pursuing insurance proceeds to the extent feasible, the Company also plans to seek recovery, if practicable, from any other potentially responsible parties. An environmental cost deferral procedure was established by the Missouri Public Service Commission in the Company's recent rate case, effective September 1, 1994, for use by the Company in applying for appropriate rate recovery of various investigation, remediation and other costs to be incurred by the Company in connection with former manufactured gas plant sites. The authorization to begin deferring such costs shall only be triggered to the extent that the cumulative liability incurred by the Company during the deferral period is not offset by the cumulative costs of $250,000 per year reflected in the Company's current rates. In the event the cumulative liability incurred by the Company for such costs during the deferral period is less than the cumulative amount of such annualized costs reflected in the rates approved in the settlement, then the Company shall refund the difference. The above authorization will become null and void if the Company does not file for a general rate increase by September 1, 1996, and, in any event, the recovery of costs deferred thereunder is subject to challenge in future rate cases. The Company is involved in litigation, claims, and investigations arising in the normal course of business. While the results of such litigation cannot be predicted with certainty, management, after discussion with counsel, believes the final outcome will not have a material adverse effect on the consolidated financial position and results of operations reflected in the financial statements presented herein. 10. Interim Financial Information (Unaudited) In the opinion of the Company, the quarterly information presented in the Schedule of Interim Financial Information for fiscal years 1994 and 1993 includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of operations for such periods. Variations in operations reported on a quarterly basis reflect the seasonal nature of the Company's business. 42 Item 9. Changes in and Disagreements on Accounting and Financial Disclosure There have been no disagreements on accounting and financial disclosure with the Company's outside auditors which are required to be disclosed. Part III Item 10. Directors and Executive Officers of the Registrant The information concerning directors required by this item is set forth on pages 3 through 7 in the Company's proxy statement dated December 27, 1994 and is incorporated herein by reference. The information concerning executive officers required by this item is reported in Part I of this Form 10-K. Item 11. Executive Compensation The information required by this item is set forth on pages 9 through 18 in the Company's proxy statement dated December 27, 1994 and is incorporated herein by reference but the information under the captions "Compensation Committee Report Regarding Compensation" and "Performance Graph" on pages 14 through 17 of such proxy statement is expressly NOT incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management Information required by this item is set forth on page 8 in the Company's proxy statement dated December 27, 1994 and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions There were no transactions required to be disclosed pursuant to this item. 43 Part IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) 1. Consolidated Financial Statements: 1994 10-K Page For Years Ended September 30, 1994, 1993, and 1992: Statements of Income 25 Statements of Retained Earnings 26 Statements of Cash Flows 30 Schedule of Income Taxes 31 As of September 30, 1994 & 1993: Balance Sheets 27-28 Statements of Capitalization 29 For Years Ended 1994 & 1993: Schedules of Interim Financial Information 32 Notes to Financial Statements 33-42 Independent Auditors' Report 23 Management Report 24 2. Supplemental Schedules V - Property, Plant and Equipment 48-50 VI - Accumulated Depreciation and Amortization of Property, Plant and Equipment 51-53 VII - Gurantees of Securities of Other Issuers 54 VIII - Reserves 55 IX - Short-Term Borrowings 56 X - Supplementary Income Statement Information 57 Schedules not included have been omitted because they are not applicable or the required data has been included in the financial statements or notes to financial statements. 3. Exhibits Incorporated herein by reference to Index to Exhibits, page 58. (b) During the last quarter of fiscal year 1994, no reports on Form 8-K were required to be filed by the Company. 44 (c) Management contracts and compensatory plans or arrangements listed in the Index to Exhibits required to be filed as exhibits to this form pursuant to Item 14(c) of this report: Exhibit No. Description 10.01 - Incentive Compensation Plan of the Company. 10.01a - Amendment adopted by the Board of Directors on July 26, 1990 to the Incentive Compensation Plan. 10.01b - Amendments adopted by the Board of Directors on August 23, 1990 to the Incentive Compensation Plan. 10.02 - Senior Officers' Life Insurance Program of the Company. 10.02a - Certified copy of resolutions of the Company's Board of Directors adopted on June 27, 1991 amending the Senior Officers' Life Insurance Program. 10.02b - Certified copy of resolutions of the Company's Board of Directors adopted on January 28, 1993 amending the Senior Officers' Life Insurance Program. 10.03 - Employees' Retirement Plan of Laclede Gas Company - Management Employees, effective as of July 1, 1990, as amended. 10.03a - Amendment to the Employees' Retirement Plan of Laclede Gas Company - Management Employ- ees adopted by the Board of Directors on September 27, 1990. 10.03b - Amendments, dated December 12, 1990 to the Employees' Retirement Plan of Laclede Gas Company - Management Employees. 10.03c - Amendment to the Employees' Retirement Plan of Laclede Gas Company - Management Employees dated January 10, 1994. 10.03d - Amendments to the Employees' Retirement Plan of Laclede Gas Company - Management Employees dated July 29, 1994. 10.04 - Laclede Gas Company Supplemental Retirement Benefit Plan, as amended and restated effec- tive July 25, 1991. 10.05 - Laclede Gas Company Salary Deferral Savings Plan, as amended through February 27, 1992. 10.05a - Amendment to the Company's Salary Deferral Savings Plan, effective January 31, 1992, adopted by the Board of Directors on August 27, 1992. 10.05b - Amendment to the Company's Salary Deferral Savings Plan dated January 10, 1994. 10.05c - Amendments to the Company's Salary Deferral Savings Plan, dated July 29, 1994. 10.05d - Amendments to the Company's Salary Deferral Savings Plan effective August 1, 1994 adopted by the Board of Directors on August 25, 1994. 45 10.05e - Amendments to the Company's Salary Deferral Savings Plan dated September 27, 1994. 10.06 - Laclede Gas Company Deferred Compensation Plan for Non-Employee Directors dated March 26, 1981. 10.06a - First Amendment to the Company's Deferred Compensation Plan for Non-Employee Directors, adopted by the Board of Directors on July 26, 1990. 10.06b - Amendment to the Company's Deferred Com- pensation Plan for Non-Employee Directors, adopted by the Board of Directors on August 27, 1992. 10.08 - The Retirement Plan for Non-Employee Direc- tors of Laclede Gas Company dated January 24, 1985. 10.08a - First Amendment to Retirement Plan for the Company's Non-Employee Directors, adopted by the Board of Directors on July 26, 1990. 10.08b - Amendments to the Retirement Plan for Non- Employee Directors, adopted by the Board of Directors on January 23, 1992. 10.09 - Salient Features of the Laclede Gas Company Deferred Income Plan for Directors and Selected Executives, including amendments adopted by the Board of Directors on July 26, 1990. 10.09a - Amendment to the Company's Deferred Income Plan for Directors and Selected Executives, adopted by the Board of Directors on August 27, 1992. 10.10 - Form of Indemnification Agreement between the Company and its Directors and Officers. 10.11 - Laclede Gas Company Management Continuity Protection Plan, as amended, effective at the close of business on January 27, 1994, by the Board of Directors. 10.12 - Laclede Gas Company Restricted Stock Plan for Non-Employee Directors, effective as of January 25, 1990. 10.14 - Salient Features of the Laclede Gas Company Deferred Income Plan II for Directors and Selected Executives adopted by the Board of Directors on September 23, 1993. 46 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LACLEDE GAS COMPANY December 15, 1994 By Robert J. Carroll Robert J. Carroll Senior Vice President - Finance and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date Signature Title 12/15/94 Robert C. Jaudes Chairman of the Board, Robert C. Jaudes President and Chief Executive Officer (Principal Executive Officer) 12/15/94 Robert J. Carroll Senior Vice President - Robert J. Carroll Finance and Chief Financial Officer (Principal Financial and Accounting Officer) 12/15/94 Andrew B. Craig, III Director Andrew B. Craig, III 12/15/94 Henry Givens, Jr. Director Henry Givens, Jr. 12/15/94 James L. Hoagland Director James L. Hoagland 12/15/94 C. Ray Holman Director C. Ray Holman 12/15/94 Mary Ann Krey Director Mary Ann Krey 12/15/94 William E. Nasser Director William E. Nasser -------------- Director Boyd F. Schenk 12/15/94 Robert P. Stupp Director Robert P. Stupp 12/15/94 H. Edwin Trusheim Director H. Edwin Trusheim 47 SCHEDULE V (Page 1 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1994
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F OTHER BALANCE AT RETIRE- CHANGES- BALANCE AT BEGINNING ADDITIONS MENTS DEBIT CLOSE CLASSIFICATION OF PERIOD AT COST OR SALES (CREDIT) OF PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Transmission plant $ 1,970 $ 23 $ - $ - $ 1,993 Distribution 568,884 37,176 4,136 - 601,924 Storage 23,905 28 137 - 23,796 Gas in underground storage - noncurrent 5,884 - - - 5,884 General 39,515 2,506 1,469 - 40,552 Manufactured gas production 8,676 175 1,015 - 7,836 Natural gas production and gathering plant 2,852 - - (461)(c) 2,391 Other utility plant 22,230 10 - - 22,240 Unfinished construction 3,027 (729)(a) - - 2,298 Gas plant acquisition adjustment 499 - - (25)(b) 474 Gas plant held for future use 160 4 - - 164 Intangibles 11 - - - 11 -------------------------------------------------- Total utility plant 677,613 39,193 6,757 (486) 709,563 -------------------------------------------------- OTHER PROPERTY: Rights of way 50 - - - 50 Organization expenses 3 - - - 3 Mains 1,984 - - - 1,984 Other 7,499 - - - 7,499 -------------------------------------------------- Total other property 9,536 - - - 9,536 -------------------------------------------------- TOTAL $687,149 $39,193 $6,757 $(486) $719,099 ================================================== (a) Represents net change in unfinished construction during the year. (b) Amortization of acquisition adjustments relating to Midwest Missouri Gas Co. and St. Charles Gas Corp., in accordance with Missouri Public Service Commission order in Case No. 17,873. (c) Includes amortization of non-productive gas wells amounting to $(461).
48 SCHEDULE V (Page 2 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1993
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F OTHER BALANCE AT RETIRE- CHANGES- BALANCE AT BEGINNING ADDITIONS MENTS DEBIT CLOSE CLASSIFICATION OF PERIOD AT COST OR SALES (CREDIT) OF PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Transmission plant $ 1,970 $ - $ - $ - $ 1,970 Distribution 535,423 37,251 3,790 - 568,884 Storage 23,927 80 102 - 23,905 Gas in underground storage - noncurrent 5,884 - - - 5,884 General 38,098 3,368 1,951 - 39,515 Manufactured gas production 8,914 54 292 - 8,676 Natural gas production and gathering plant 3,547 - - (695)(c) 2,852 Other utility plant 22,146 84 - - 22,230 Unfinished construction 2,984 43 (a) - - 3,027 Gas plant acquisition adjustment 523 - - (24)(b) 499 Gas plant held for future use 160 - - - 160 Intangibles 11 - - - 11 -------------------------------------------------- Total utility plant 643,587 40,880 6,135 (719) 677,613 -------------------------------------------------- OTHER PROPERTY: Rights of way 50 - - - 50 Organization expenses 3 - - - 3 Mains 1,984 - - - 1,984 Other 7,480 19 - - 7,499 -------------------------------------------------- Total other property 9,517 19 - - 9,536 -------------------------------------------------- TOTAL $653,104 $40,899 $6,135 $(719) $687,149 ================================================== (a) Represents net change in unfinished construction during the year. (b) Amortization of acquisition adjustments relating to Midwest Missouri Gas Co. and St. Charles Gas Corp., in accordance with Missouri Public Service Commission order in Case No. 17,873. (c) Includes amortization of non-productive gas wells amounting to $(695).
49 SCHEDULE V (Page 3 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1992
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F OTHER BALANCE AT RETIRE- CHANGES- BALANCE AT BEGINNING ADDITIONS MENTS DEBIT CLOSE CLASSIFICATION OF PERIOD AT COST OR SALES (CREDIT) OF PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Transmission plant $ 1,970 $ - $ - $ - $ 1,970 Distribution 495,226 43,771 3,587 13 (d) 535,423 Storage 23,915 18 6 - 23,927 Gas in underground storage - noncurrent 5,884 - - - 5,884 General 36,504 3,683 2,089 - 38,098 Manufactured gas production 8,863 62 11 - 8,914 Natural gas production and gathering plant 4,200 - - (653) (c) 3,547 Other utility plant 22,096 50 - - 22,146 Unfinished construction 5,916 (2,932) (a) - - 2,984 Gas plant acquisition adjustment 548 - - (25) (b) 523 Gas plant held for future use 165 8 - (13) (d) 160 Intangibles 11 - - - 11 -------------------------------------------------- Total utility plant 605,298 44,660 5,693 (678) 643,587 -------------------------------------------------- OTHER PROPERTY: Rights of way 50 - - - 50 Organization expenses 3 - - - 3 Mains 1,984 - - - 1,984 Other 7,462 18 - - 7,480 -------------------------------------------------- Total other property 9,499 18 - - 9,517 -------------------------------------------------- TOTAL $614,797 $44,678 $5,693 $(678) $653,104 ================================================== (a) Represents net change in unfinished construction during the year. (b) Amortization of acquisition adjustments relating to Midwest Missouri Gas Co. and St. Charles Gas Corp., in accordance with Missouri Public Service Commission order in Case No. 17,873. (c) Includes amortization of non-productive gas wells amounting to $(653). (d) Miscellaneous reclassifications.
50 SCHEDULE VI (Page 1 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1994
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E DEDUCTIONS FROM RESERVES ADDITIONS RETIREMENTS, BALANCE BALANCE AT CHARGED CHARGED RENEWALS, AT BEGINNING TO TO OTHER AND CLOSE OF DESCRIPTION OF PERIOD INCOME ACCOUNTS REPLACEMENTS OTHER PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Gas plant in service $263,489 $18,225 $1,215(a) $6,733 $2,073(b) $274,123 Producing oil land and land rights 652 - - - - 652 Underground storage land and land rights 1,842 26 - 15 - 1,853 Other gas plant in service 749 113 - 9 - 853 Exploration and development property 20,055 350 - - - 20,405 ----------------------------------------------------------- Total utility plant 286,787 18,714(d) 1,215 6,757(c) 2,073 297,886 OTHER PROPERTY 9,411 36(e) - - - 9,447 ----------------------------------------------------------- TOTAL $296,198 $18,750 $1,215 $6,757 $2,073 $307,333 =========================================================== (a) Includes salvage and depreciation charged to utility plant amounting to $670 and $545, respectively. (b) Cost of removal. (c) Utility plant retirements amounted to $6,757 per Schedule V. (d) Reflects depreciation on utility plant charged to utility operating income. (e) Depreciation on other property is charged to miscellaneous income and income deductions - net. The reserve for depreciation is not segregated on the books as between the classes of property shown on Schedule V.
51 SCHEDULE VI (Page 2 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1993
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E DEDUCTIONS FROM RESERVES ADDITIONS RETIREMENTS, BALANCE BALANCE AT CHARGED CHARGED RENEWALS, AT BEGINNING TO TO OTHER AND CLOSE OF DESCRIPTION OF PERIOD INCOME ACCOUNTS REPLACEMENTS OTHER PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Gas plant in service $253,641 $17,062 $871(a) $6,129 $1,956(b) $263,489 Producing oil land and land rights 652 - - - - 652 Underground storage land and land rights 1,816 26 - - - 1,842 Other gas plant in service 654 104 - 6 3(b) 749 Exploration and development property 19,537 518 - - - 20,055 ------------------------------------------------------------ Total utility plant 276,300 17,710(d) 871 6,135(c) 1,959 286,787 OTHER PROPERTY 9,360 51(e) - - - 9,411 ------------------------------------------------------------ TOTAL $285,660 $17,761 $871 $6,135 $1,959 $296,198 ============================================================ (a) Includes salvage and depreciation charged to utility plant amounting to $311 and $560, respectively. (b) Cost of removal. (c) Utility plant retirements amounted to $6,135 per Schedule V. (d) Reflects depreciation on utility plant charged to utility operating income. (e) Depreciation on other property is charged to miscellaneous income and income deductions - net. The reserve for depreciation is not segregated on the books as between the classes of property shown on Schedule V.
52 SCHEDULE VI (Page 3 of 3) LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED SEPTEMBER 30, 1992
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E DEDUCTIONS FROM RESERVES ADDITIONS RETIREMENTS, BALANCE BALANCE AT CHARGED CHARGED RENEWALS, AT BEGINNING TO TO OTHER AND CLOSE OF DESCRIPTION OF PERIOD INCOME ACCOUNTS REPLACEMENTS OTHER PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) UTILITY PLANT: Gas plant in service $243,935 $16,158 $948(a) $5,693 $1,707(b) $253,641 Producing oil land and land rights 652 - - - - 652 Underground storage land and land rights 1,791 25 - - - 1,816 Other gas plant in service 538 116 - - - 654 Exploration and development property 19,065 472 - - - 19,537 ------------------------------------------------------------ Total utility plant 265,981 16,771(d) 948 5,693(c) 1,707 276,300 OTHER PROPERTY 9,292 68(e) - - - 9,360 ------------------------------------------------------------ TOTAL $275,273 $16,839 $948 $5,693 $1,707 $285,660 ============================================================ (a) Includes salvage and depreciation charged to utility plant amounting to $433 and $515, respectively. (b) Cost of removal. (c) Utility plant retirements amounted to $5,693 per Schedule V. (d) Reflects depreciation on utility plant charged to utility operating income. (e) Depreciation on other property is charged to miscellaneous income and income deductions - net. The reserve for depreciation is not segregated on the books as between the classes of property shown on Schedule V.
53 SCHEDULE VII LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES GUARANTEES (1) OF SECURITIES OF OTHER ISSUERS SEPTEMBER 30, 1994 (2) (3)
- --------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C Total Name of Issuer of Amount Securities Guaranteed by Title of Issue of Each Guaranteed Persons for Which Class of Securities and Statement is Filed Guaranteed Outstanding - ------------------------ ---------------------- ----------- (Thousands of Dollars) LACLEDE DEVELOPMENT COMPANY: Centre Park Forty Bank Loan $ 1,218 Deutsch Enterprises Bank Loan 4,703 Plumbrook Ltd. Ptnrshp. Bank Loan 1,799 St. Peters Business Bank Loan and Park Development Industrial Development Bonds 2,518 63rd Street Associates Bank Loan 471 The Villages of Cherry Hills Development Bank Loan 1,218 ------- $11,927 ======= (1) For the purpose of this schedule, the references to "guarantees" include instances where a subsidiary company is jointly and severally liable for the repayment of indebtedness, whether as a general partner of the debtor a general partner of the guarantor, or a direct guarantor. (2) Columns D, E and G have been omitted as the answers thereto would have been "None". (3) In answer to Column F, all guaranteed securities are guaranteed as to principal and interest. In most cases the applicable rate of interest floats with the prime interest rate. Currently, the annual aggregate amount of interest is approximately $.9 million and will vary depending upon changes in the prime interest rate.
54 SCHEDULE VIII LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES RESERVES FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E BALANCE AT ADDITIONS CHARGED DEDUCTIONS BALANCE AT BEGINNING TO TO OTHER FROM AT CLOSE DESCRIPTION OF PERIOD INCOME ACCOUNTS RESERVES OF PERIOD - ---------------------------------------------------------------------------- (Thousands of Dollars) YEAR ENDED SEPTEMBER 30, 1994: DOUBTFUL ACCOUNTS $ 7,704 $2,818 $2,842 (a) $8,421 (b) $ 4,943 ===================================================== MISCELLANEOUS: Injuries and property damage $ 3,684 $1,657 $ - $1,271 (c) $ 4,070 Deferred compensation 6,777 1,010 - 612 7,175 Equalization group insurance premium(d) 4,754 - - 4,754 - ----------------------------------------------------- TOTAL $15,215 $2,667 $ - $6,637 $11,245 ===================================================== YEAR ENDED SEPTEMBER 30, 1993: DOUBTFUL ACCOUNTS $ 6,384 $4,842 $2,329 (a) $5,851 (b) $ 7,704 ===================================================== MISCELLANEOUS: Injuries and property damage $ 2,866 $2,027 $ - $1,209 (c) $ 3,684 Deferred compensation 6,251 684 - 158 6,777 Equalization group insurance premium 5,139 1,076 - 1,461 4,754 ----------------------------------------------------- TOTAL $14,256 $3,787 $ - $2,828 $15,215 ===================================================== YEAR ENDED SEPTEMBER 30, 1992: DOUBTFUL ACCOUNTS $ 6,627 $4,235 $2,677 (a) $7,155 (b) $ 6,384 ====================================================== MISCELLANEOUS: Injuries and property damage $ 2,816 $1,348 $ - $1,298 (c) $ 2,866 Deferred compensation 5,729 647 - 125 6,251 Equalization group insurance premium 5,095 1,059 - 1,015 5,139 ------------------------------------------------------ TOTAL $13,640 $3,054 $ - $2,438 $14,256 ====================================================== (a) Accounts reinstated, cash recoveries, etc. (b) Accounts written off. (c) Claims settled, less reimbursements from insurance companies. (d) Adjusted as a result of the adoption of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" on October 1, 1993.
55 SCHEDULE IX LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES SHORT-TERM BORROWINGS (1) FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 and 1992
- ---------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F MAXIMUM AVERAGE WEIGHTED ----------------- AVERAGE CATEGORY OF BALANCE WEIGHTED AMOUNT INTEREST AGGREGATE AT AVERAGE OUTSTANDING RATE DURING SHORT-TERM CLOSE OF INTEREST DURING PERIOD BORROWINGS PERIOD RATE PERIOD (2) - ---------------------------------------------------------------------------- (Thousands of Dollars) YEAR ENDED SEPTEMBER 30, 1994: - ------------------ Commercial Paper $53,500 4.9% $95,000 $46,713 3.7% YEAR ENDED SEPTEMBER 30, 1993: - ------------------ Commercial Paper $27,500 3.2% $32,000 $12,467 3.2% YEAR ENDED SEPTEMBER 30, 1992: - ------------------ Commercial Paper $ 7,000 3.3% $14,000 $ 679 3.6% (1) See Note 8 of Notes to Financial Statements. (2) Actual interest expense divided by average amount of debt outstanding during this year.
56 SCHEDULE X LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992
- ---------------------------------------------------------------------------- COLUMN A COLUMN B ITEM CHARGED TO COSTS AND EXPENSES - ---------------------------------------------------------------------------- 1994 1993 1992 ---- ---- ---- (Thousands of Dollars) TAXES OTHER THAN INCOME: Real Estate and Personal Property $ 8,140 $ 8,366 $ 7,454 Gross Receipts 28,994 27,406 23,000 Payroll Taxes 5,091 4,836 4,444 Manufacturer's State and City License 51 142 118 Other 351 311 317 ------------------------------- TOTAL $42,627 $41,061 $35,333 =============================== In addition to the taxes shown above, there are sales, excise and other taxes included in operating accounts, the total of which is not significant. Maintenance and depreciation other than the amounts set out separately in the statements of income were not significant. Rents, Royalties and Advertising expenditures were less than 1% of gross revenues.
57 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 3.01(i)* - Articles of Incorporation, as of February 11, 1994; filed as Exhibit 4(a) to the Company's Form S-3 Registration Statement No. 33-52357. 3.01(ii)* - By-Laws of the Company, as amended on October 1, 1990; filed as Exhibit 3.01 to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 3.01(ii)a* - Certified copy of resolutions of the Company's Board of Directors adopted on November 21, 1991 amending Article IV, Section 1 of the Company's By-Laws, effective January 22, 1992; filed as Exhibit 3.01a to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). 4.01* - Mortgage and Deed of Trust, dated as of February 1, 1945; filed as Exhibit 7-A to Registration Statement No. 2-5586. 4.02* - Fourteenth Supplemental Indenture, dated as of October 26, 1976; filed on June 26, 1979 as Exhibit b-4 to Registration State- ment No. 2-64857. 4.03* - Seventeenth Supplemental Indenture, dated as of May 15, 1988; filed as Exhibit 28(a) to the Registration Statement No. 33-38413. 4.04* - Eighteenth Supplemental Indenture, dated as of November 15, 1989; filed as Exhibit 28(b) to the Registration Statement No. 33-38413. 4.05* - Nineteenth Supplemental Indenture, dated as of May 15, 1991; filed on May 16, 1991 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.06* - Twentieth Supplemental Indenture, dated as of November 1, 1992; filed on November 4, 1992 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). 4.07* - Twenty-First Supplemental Indenture, dated as of May 1, 1993; filed on May 13, 1993 as Exhibit 4.01 to the Company's Form 8-K (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 58 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 4.08* - Laclede Gas Company Board of Directors' Resolution dated August 28, 1986 which generally provides that the Board may delegate its authority in the adoption of certain employee benefit plan amendments to certain designated Executive Officers; filed as Exhibit 4.12 to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). 4.08a* - Laclede Gas Company Board of Directors' Resolutions dated August 25, 1988, which generally provide for certain amendments to the Company's Wage Deferral Savings Plan and Salary Deferral Savings Plan and that certain Officers are authorized to execute such amendments; filed as Exhibit 4.12g to the Company's 10-K for the fiscal year ended September 30, 1988 (File No. 1-1822). 4.09* - Laclede Gas Company Wage Deferral Savings Plan, incorporating amendments through December 12, 1990; filed as Exhibit 4.13 to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). 4.09a* - Amendments to the Company's Wage Deferral and Salary Deferral Savings Plans, effective May 1, 1992, adopted by the Board of Directors on February 27, 1992; filed as Exhibit 4.13 to the Company's 10-Q for the fiscal quarter ended March 31, 1992 (File No. 1-1822). 4.09b* - Amendment to the Company's Wage Deferral Savings Plan, effective August 1, 1992, adopted by the Board of Directors on August 27, 1992; filed as Exhibit 4.13b to the Company's 10-K for the fiscal year ended September 30, 1992 (File No. 1-1822). 4.09c - Amendments to the Company's Wage Deferral 66 Savings Plan dated July 29, 1994. 4.09d - Amendments to the Company's Wage Deferral 76 Savings Plan effective August 1, 1994 and adopted by the Board of Directors August 25, 1994. * Incorporated herein by reference and made a part hereof. 59 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 4.10* - Missouri Natural Gas Division of the Laclede Gas Company Dual Savings Plan incorporat- ing amendments through December 12, 1990; filed as Exhibit 4.01 to the Company's 10-Q for the fiscal quarter ended December 31, 1990 (File No. 1-1822). 4.10a* - Amendment to the Missouri Natural Gas Division of Laclede Gas Company Dual Savings Plan effective April 11, 1993, adopted by the Board of Directors on August 26, 1993; filed as Exhibit 4.10a to the Company's 10-K for the fiscal year ended September 30, 1993 (File No. 1-1822). 4.10b - Amendments to the Missouri Natural Gas 79 Division of Laclede Gas Company Dual Savings Plan dated July 29, 1994. 4.11* - Rights Agreement dated as of April 17, 1986; filed on April 18, 1986 as Exhibit 1 to the Company's Form 8-A (File No. 1-1822). 10.01* - Incentive Compensation Plan of the Company, as amended; filed as Exhibit 10.03 to the Company's 10-K for the fiscal year ended September 30, 1989. 10.01a* - Amendment adopted by the Board of Directors on July 26, 1990 to the Incentive Compensation Plan; filed as Exhibit 10.02a to the Com- pany's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.01b* - Amendments adopted by the Board of Directors on August 23, 1990 to the Incentive Compensation Plan; filed as Exhibit 10.02b to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.02* - Senior Officers' Life Insurance Program of the Company, as amended; filed as Exhi- bit 10.03 to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.02a* - Certified copy of resolutions of the Company's Board of Directors adopted on June 27, 1991 amending the Senior Officers' Life Insurance Program; filed as Exhibit 10.01 to the Company's 10-Q for the fiscal quarter ended June 30, 1991 (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 60 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 10.02b* - Certified copy of resolutions of the Company's Board of Directors adopted on January 28, 1993 amending the Senior Officers' Life Insurance Program; filed as Exhibit 10.03 to the Company's 10-Q for the fiscal quarter ended March 31, 1993 (File No. 1-1822). 10.03* - Employees' Retirement Plan of Laclede Gas Company - Management Employees, effective as of July 1, 1990, as amended; filed as Exhibit 10.01 to the Company's 10-Q for the fiscal quarter ended June 30, 1990 (File No. 1-1822). 10.03a* - Amendment to the Employees' Retirement Plan of Laclede Gas Company - Management Employ- ees adopted by the Board of Directors on September 27, 1990; filed as Exhibit 10.04a to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.03b* - Amendments, dated December 12, 1990 to the Employees' Retirement Plan of Laclede Gas Company - Management Employees; filed as Exhibit 10.04b to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.03c* - Amendment to the Employees' Retirement Plan of Laclede Gas Company - Management Employees dated January 10, 1994; filed as Exhibit 10.01 to the Company's 10-Q for the fiscal quarter ended December 31, 1993 (File No. 1-1822). 10.03d - Amendments to the Employees' Retirement Plan 84 of Laclede Gas Company - Management Employees dated July 29, 1994. 10.04* - Laclede Gas Company Supplemental Retirement Benefit Plan, as amended and restated effec- tive July 25, 1991; filed as Exhibit 10.05 to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). 10.04a* - Trust Agreement with Boatmen's Trust Company, dated September 4, 1990; filed as Exhibit 10.05c to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 61 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 10.04b* - First Amendment to Laclede Gas Company Trust Agreement dated as of September 4, 1990, adopted by the Board of Directors on September 23, 1993; filed as Exhibit 10.05(b) to the Company's 10-K for the fiscal year ended September 30, 1993 (File No. 1-1822). 10.05* - Laclede Gas Company Salary Deferral Savings Plan, as amended through February 27, 1992; filed as Exhibit 10.08 to the Company's 10-Q for the fiscal quarter ended March 31, 1992 (File No. 1-1822). 10.05a* - Amendment to the Company's Salary Deferral Savings Plan, effective January 31, 1992, adopted by the Board of Directors on August 27, 1992; filed as Exhibit 10.08a to the Company's Form 10-K for the fiscal year ended September 30, 1992 (File No. 1-1822). 10.05b* - Amendment to the Company's Salary Deferral Savings Plan dated January 10, 1994; filed as Exhibit 10.02 to the Company's 10-Q for the fiscal quarter ended December 31, 1993 (File No. 1-1822). 10.05c - Amendments to the Company's Salary Deferral 86 Savings Plan, dated July 29, 1994. 10.05d - Amendments to the Company's Salary Deferral 89 Savings Plan effective August 1, 1994 adopted by the Board of Directors on August 25, 1994. 10.05e - Amendments to the Company's Salary Deferral 92 Savings Plan dated September 27, 1994. 10.06* - Laclede Gas Company Deferred Compensation Plan for Non-Employee Directors dated March 26, 1981; filed as Exhibit 10.12 to the Company's 10-K for the fiscal year ended September 30, 1989 (File No. 1-1822). 10.06a* - First Amendment to the Company's Deferred Compensation Plan for Non-Employee Directors, adopted by the Board of Directors on July 26, 1990; filed as Exhibit 10.09a to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.06b* - Amendment to the Company's Deferred Com- pensation Plan for Non-Employee Directors, adopted by the Board of Directors on August 27, 1992; filed as Exhibit 10.09b to the Company's Form 10-K for the fiscal year ended September 30, 1992 (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 62 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 10.07* - Agency Agreement Between Laclede Gas Company and Mississippi River Transmission Corporation dated August 26, 1993; filed as Exhibit 10.10 to the Company's 10-K for the fiscal year ended September 30, 1993 (File No. 1-1822). 10.07a* - Propane sales contract between Phillips 66 Company and Laclede Pipeline Company, dated February 2, 1989; filed as Exhibit 10.10d to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.07b* - Amendment, dated August 6, 1992, to Propane Sales Contract between the Company and Phillips 66 Company; filed as Exhibit 10.10c to the Company's Form 10-K for the fiscal year ended September 30, 1992 (File No. 1-1822). 10.07c* - Gas Purchase and Sales Agreement effective November 1, 1990 between the Company and ESCO Energy, Inc. and its affiliated companies; filed as Exhibit 10.10d to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). 10.08* - The Retirement Plan for Non-Employee Direc- tors of Laclede Gas Company dated January 24, 1985; filed as Exhibit 10.01 to the Company's 10-Q for the fiscal quarter ended March 31, 1990 (File No. 1-1822). 10.08a* - First Amendment to Retirement Plan for the Company's Non-Employee Directors, adopted by the Board of Directors on July 26, 1990; filed as Exhibit 10.11a to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.08b* - Amendments to the Retirement Plan for Non- Employee Directors, adopted by the Board of Directors on January 23, 1992; filed as Exhibit 10.11 to the Company's 10-Q for the fiscal quarter ended March 31, 1992 (File No. 1-1822). 10.09* - Salient Features of the Laclede Gas Company Deferred Income Plan for Directors and Selected Executives, including amendments adopted by the Board of Directors on July 26, 1990; filed as Exhibit 10.12 to the Company's 10-K for the fiscal year ended September 30, 1991 (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 63 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 10.09a* - Amendment to the Company's Deferred Income Plan for Directors and Selected Executives, adopted by the Board of Directors on August 27, 1992; filed as Exhibit 10.12a to the Company's Form 10-K for the fiscal year ended September 30, 1992 (File No. 1-1822). 10.10* - Form of Indemnification Agreement between the Company and its Directors and Officers; filed as Exhibit 10.13 to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.11* - Laclede Gas Company Management Continuity Protection Plan, as amended, effective at the close of business on January 27, 1994, by the Board of Directors; filed as Exhibit 10.1 to the Company's 10-Q for the fiscal quarter ended March 31, 1994 (File No. 1-1822). 10.12* - Laclede Gas Company Restricted Stock Plan for Non-Employee Directors, effective as of January 25, 1990; filed as Exhibit 10.03 to the Company's 10-Q for the fiscal quarter ended March 31, 1990 (File No. 1-1822). 10.13* - Laclede Gas Company Trust Agreement with Boatmen's Trust Company, dated December 7, 1989; filed as Exhibit 10.16 to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.13a* - First Amendment to Laclede Gas Company Trust Agreement, adopted by the Board of Directors on July 26, 1990; filed as Exhibit 10.16a to the Company's 10-K for the fiscal year ended September 30, 1990 (File No. 1-1822). 10.13b* - Second Amendment to Laclede Gas Company Trust Agreement dated as of December 7, 1989, adopted by the Board of Directors on September 23, 1993; filed as Exhibit 10.16b to the Company's 10-K for the fiscal year ended September 30, 1993 (File No. 1-1822). 10.14* - Salient Features of the Laclede Gas Company Deferred Income Plan II for Directors and Selected Executives adopted by the Board of Directors on September 23, 1993; filed as Exhibit 10.17 to the Company's 10-K for the fiscal year ended September 30, 1993 (File No. 1-1822). * Incorporated herein by reference and made a part hereof. 64 INDEX TO EXHIBITS ----------------- Sequentially Exhibit Numbered No. Pages - ------- ------------ 10.15* - January 19, 1994 line of credit agreement with Mercantile Bank of St. Louis, N.A.; filed as Exhibit 10.2 to the Company's 10-Q for the fiscal quarter ended March 31, 1994 (File No. 1-1822). 10.16* - January 10, 1994 line of credit agreement with The Boatmen's National Bank of St. Louis; filed as Exhibit 10.3 to the Company's 10-Q for the fiscal quarter ended March 31, 1994 (File No. 1-1822). 10.17* - January 20, 1994 line of credit agreement with Commerce Bank of St. Louis, N.A.; filed as Exhibit 10.4 to the Company's 10-Q for the fiscal quarter ended March 31, 1994 (File No. 1-1822). 10.18* - January 10, 1994 line of credit agreement with Chemical Bank; filed as Exhibit 10.5 to the Company's 10-Q for the fiscal quarter ended March 31, 1994 (File No. 1-1822). 10.19* - October 18, 1993 line of credit agreement with Chemical Bank, The Boatmen's National Bank of St. Louis and Mercantile Bank, N.A.; filed as Exhibit 10.6 to the Company's 10-Q for the quarter ended March 31, 1994 (File No. 1-1822). 10.19a* - Amendment and Extension dated April 18, 1994 of Line of Credit Agreement dated October 18, 1993 among Laclede Gas Company, Chemical Bank, The Boatmen's National Bank of St. Louis and Mercantile Bank of St. Louis National Association; filed as Exhibit 10 to the Company's 10-Q for the quarter ended June 30, 1994 (File No. 1-1822). 10.19b - Amendment and Further Extension dated 97 August 18, 1994 of Line of Credit Agreement dated October 18, 1993 among Laclede Gas Company, Chemical Bank, The Boatmen's National Bank of St. Louis and Mercantile Bank of St. Louis National Association. 12 - Ratio of Earnings to Fixed Charges. 100 22 - Subsidiaries of the Registrant. 101 24 - Consent of Independent Public Accountants. 102 27 - Financial Data Schedule UT 103 * Incorporated herein by reference and made a part hereof. 65 EX-4.09C 2 Date: July 29, 1994 --------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Laclede Gas Company Wage Deferral Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 66 AMENDMENTS TO THE LACLEDE GAS COMPANY WAGE DEFERRAL SAVINGS PLAN The following amendments are effective August 1, 1992, except where specified otherwise. 1. Section 2.8 "Compensation" is amended in its entirety as follows: "The wages, salary or commission actually received by an Employee during the period in which he is eligible to participate in the Plan for normal working time, during a weekly payroll period for services as an Employee of the Company, or deferred pursuant to Article IV hereof. "Compensation" shall also include overtime pay, premium pay, and compensation for sick leave, vacation, holiday allowances, or civic duty allowance, in each case paid to Employees. "Compensation" will be the amount which (but for the subtraction of amounts deferred pursuant to Article IV hereof) would be reported for Employees for Federal income tax purposes on U.S. Treasury Department Form W-2. Beginning August 1, 1989, Compensation is limited to $200,000 per Plan Year, which amount is subject to annual adjustment by the U.S. Treasury Department." 2. The last paragraph of subsection (b) of Section 4.4 is amended as follows: "The higher amount of (b)(i) and (b)(ii) above is hereinafter in this Section 4.4 called the "Base Percentage". If the actual deferral percentage for the Highly Compensated Employee group exceeds the Base Percentage (any such excess being hereinafter in this Section 4.4 called the "Excess"), then prior to the end of the Plan Year, the actual deferral percentage of each of those Participants in the Highly Compensated Employee group whose actual deferral percentage shall be greater than the Base Percentage shall be reduced as necessary (to eliminate the Excess), in a manner whereby the actual deferral percentage of such Participants shall be equal to the Base Percentage, by refunding to such Participants." 3. The last paragraph of clause (ii) of subsection (b) of Section 5.1 is amended as follows: "The higher amount of (b)(ii)(aa) and (b)(ii)(bb) above is hereinafter in this Section 5.1 called the "Base Percentage". If the actual matching percentage for the Highly Compensated Employee group exceeds the Base Percentage (any such excess being hereinafter in this Section 5.1 called the "Excess"), then prior to the end of the Plan Year, the Company Matching Contribution of each of those Participants in the Highly Compensated Employee group whose actual matching percentage shall be greater than the Base Percentage shall be reduced as necessary (to eliminate the Excess), in a manner whereby the actual matching percentage of such Participants shall be equal to the Base Percentage, by refunding to the Company." 67 4. The second paragraph of Section 7.7 is amended as follows: "Notwithstanding Section 16.1(b) of this Plan, such adjustment for any additions which, for any Participant in any Limitation Year, exceed the limitations of Section 7.3 of this Plan shall consist of the return of the sums withheld from the Participant because of his wage deferral elections to the extent that such return will reduce excess amounts already added to the Participant's Account." 5. Subsection (a) of Section 9.3 is amended in its entirety as follows: "(a) Any Participant who has suffered a financial hardship may withdraw all or any portion of amounts attributable to the Participant's Wage Deferral Contributions, plus related earnings credited as of December 31, 1988, but exclusive of later earnings and amounts previously distributed due to hardship. Application for hardship and a demonstration of the existence of such financial hardship must be made to the satisfaction of the Administrator. Except as otherwise expressly provided in Section 9.1(a) or upon a showing of a financial hardship as defined in Section 9.3(b), no withdrawals may be made while a Participant continues to be employed by the Company." 6. Clauses (i) and (ii) of subsection (b) of Section 9.3 are amended as follows: "(i) Incurred medical expenses or expenses to obtain medical care for the Participant, the Participant's spouse or any dependents of the Participant. (ii) Payment of tuition and related educational fees for the next twelve (12) months of post-secondary education for the Participant, or the Participant's spouse, children or dependents." 7. Clause (v) of subsection (c) of Section 9.3 is amended as follows: "(v) If a Participant who has an outstanding loan applies for a hardship withdrawal and if the amount of the Participant's financial hardship exceeds the maximum loan amount allowable under Section 9.4, then a hardship withdrawal may be permitted up to the amount of hardship and subject to the limitations of Section 9.3(a)." 68 8. The last sentence of subsection (a) of Section 16.1 is amended as follows: "If, however, the Internal Revenue Service rules, upon application to it for a favorable determination, that the Plan and its related Trust are qualified and exempt under the Code, all Wage Deferral and Matching Contributions theretofore made by the Company shall be subject to the provisions of this Plan in all respects and may not be diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries and estates and the payment of the administrative expenses of this Plan, and may not be returned to the Company, except as provided by Section 7.7." 9. Subsection (b) of Section 16.1 is amended in its entirety as follows: "(b) Notwithstanding the foregoing or any other contrary provision herein contained, any erroneous Company Contribution which is made by a mistake of fact will be returned to the Company if the mistake of fact is discovered, and the return of such Contribution completed, within one year after the payment of such Contribution to the Plan. If any deduction for any Company Contribution is not allowable under Section 404 of the Code, then such Contribution, to the extent of such disallowed deduction, will be returned to the Company within one year after the disallowance of such deduction." 10. Effective August 1, 1989, a new subparagraph (d) is added to Section 9.2 as follows: "(d) Payment to an alternate payee pursuant to a Qualified Domestic Relations Order shall be made in one lump-sum payment, at the alternate payee's election, by requesting such distribution on a form provided by the Company, at least thirty (30) days but no more than ninety (90) days before distribution is to be made. Distribution to the alternate payee may be made on or after the earlier of: (i) the date on which the Participant could take a distribution, or (ii) the later of: (aa) the date the Participant attains age fifty (50), or (bb) the earliest date on which the Participant could receive a distribution if he separated from service." 69 11. Effective August 1, 1989, the following sentence is added at the end of the second paragraph of Section 14.1 as follows: "Qualified Domestic Relations Orders shall be handled pursuant to procedures established by the Plan Administrator." 12. Effective October 19, 1989, the following sentences should be added at the end of subparagraph (c) of Section 9.4: "If a default occurs, the Participant will be responsible for payment of all costs and expenses of collection (including, without limitation, attorney's fees and court costs) irregardless of whether legal action is initiated. Interest will continue to accrue on the unpaid principal amount until the earlier of the maturity date or when repayment on the loan begins. A defaulted loan will be reported as a distribution, subject to income taxes and the excise tax on premature distributions, if applicable." 13. Effective October 19, 1989, a new subsection (i) is added to section 9.4 as follows: "(i) For purposes of this Section 9.4 and in conformity with the requirements contained herein, loan availability is restricted to Participants who are parties in interest as defined by section 3(14) of ERISA." 14. Effective January 1, 1993, clause (i) of subsection (c) of Section 9.3 is amended as follows: "(i) A withdrawal based upon a financial hardship cannot exceed the amount required to meet such hardship and not reasonably available from other resources available to the Participant, including loans from this Plan. Federal tax will be withheld on hardship withdrawals at a rate of twenty percent (20%); state or local income taxes will be withheld at the Participant's request. The amount required for hardship may be increased to include the necessary taxes but cannot exceed the amount available for hardship as provided in subparagraph (a) of this Section. A hardship withdrawal will not be granted if such financial hardship may be relieved in full by borrowing that amount as allowed under Section 9.4, as supplemented by subclause (iv) of this Section 9.3(c)." Robert C. Jaudes ------------------------------ Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 70 Date: July 29, 1994 ------------------ Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Laclede Gas Company Wage Deferral Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 71 AMENDMENTS TO THE LACLEDE GAS COMPANY WAGE DEFERRAL SAVINGS PLAN The following amendments are effective August 1, 1989: 1. A new subsection (d) is added to Section 9.2 as follows: "(d) If the Participant is married, request for a distribution must be in writing and signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for distribution; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Plan Administrator with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse. Participant and/or spousal consent shall not be required if distribution is being made because the Participant's account balance is less than $3,500." 2. Subclause (iii) of subsection (c) of Section 9.3 is amended in its entirety as follows: "(iii) For the purpose of determining whether the hardship withdrawal is necessary to satisfy a financial need of a Participant, the Administrator may reasonably rely on the Participant's representation that the need cannot be fully relieved by: (A) insurance or other reimbursement; (B) reasonable liquidation of assets if this does not itself create a hardship; (C) cessation of Wage Deferral Contributions; or (D) other distributions or nontaxable loans from Company plans or from commercial sources on reasonable commercial terms." 3. A new subclause (vii) is added to subsection (c) of Section 9.3 as follows: "(vii) If the Participant is married, request for a hardship withdrawal must be in writing and signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for a hardship withdrawal; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Plan Administrator with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 72 Date: July 29, 1994 -------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Laclede Gas Company Wage Deferral Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 73 AMENDMENTS TO THE LACLEDE GAS COMPANY WAGE DEFERRAL SAVINGS PLAN The following amendments are all effective January 1, 1985: 1. A new subsection (c) is added to Section 9.1 reading as follows: "(c) Notwithstanding anything to the contrary in this Plan, a Participant who is required under Code Section 401(a)(9) to take a mandatory distribution due to attainment of age seventy and one- half (70-1/2) shall receive such distribution in accordance with Section 9.2(c)(ii)." 2. The first sentence of Section 9.2(b) is replaced by the following sentence: (b) "All distributions shall be made in a single, lump sum distribution except as provided in subsection (a) of this Section 9.2 with respect to subsequent contributions or as provided in subclause (ii) of subsection (c) of this Section 9.2 with respect to Participants who have attained age seventy and one-half (70-1/2)." 3. Section 9.2(c)(ii) is amended by replacing said subclause (ii) with the following subclause (ii): "(ii) as required by and in accordance with Code Section 401(a)(9) and regulations thereunder, not later than April 1 following the end of the calendar year in which the Participant attained age seventy and one-half (70-1/2), if the Participant is then an Employee. For purposes of the required distributions, the Participant may elect to receive a total distribution of the Participant's Account, or the minimum distribution which is required. The first such distribution will be for the distribution year which is the calendar year in which the Participant attained age seventy and one-half (70-1/2). If the Participant elects the minimum required distribution, it will be based upon the value of the Participant's Account at December 31 of the calendar year preceding the distribution year, divided by remaining life expectancy. Life expectancy will be calculated using the Participant's age at December 31 of the distribution year; life expectancies for a Participant with a designated Beneficiary will be based on the Participant's and Beneficiary's ages at December 31 of the distribution year. (If there is more than one designated Beneficiary, the remaining life expectancy of the designated Beneficiary with the shortest life expectancy will be used.) Each year thereafter, the Participant's (or the Participant's and designated Beneficiary's) life expectancy (or life expectancies) shall be reduced by one year. The Participant 74 must specify the Investment Fund or Funds from which the minimum distributions shall be withdrawn. Subsequent distributions will be made at least annually thereafter, by December 31 and will be for the calendar year which ended on the prior December 31. If the Participant dies after the Participant has attained age seventy and one-half (70-1/2) but before all of the Participant's Account has been distributed, then the remainder of the Participant's Account shall be distributed to the Participant's designated Beneficiary not later than sixty (60) days after the date of the Participant's death. Mandatory distributions under this subclause (ii) will comply with the distribution requirements, including the minimum distribution incidental benefit requirements, as provided under Code Section 401(a)(9). If any provision of this Plan conflicts with such distribution requirements, then the Code Section 401(a)(9) distribution requirements will govern." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 75 EX-4.09D 3 I, D. L. Godiner, Secretary of Laclede Gas Company, a Missouri corporation, do hereby certify that the attached is a true and correct copy of resolutions adopted by the Board of Directors of said Company at the duly called and held regular meeting of said Board on August 25, 1994, at which meeting a quorum was present and acted throughout, and that said resolutions are in full force and effect. IN WITNESS WHEREOF, I have set my hand and the seal of Laclede Gas Company this 30th day of August, 1994. Donald L. Godiner ------------------------------- Title: Senior Vice President - General Counsel and Secretary 76 RESOLUTIONS REGARDING AMENDMENTS TO THE LACLEDE GAS COMPANY WAGE DEFERRAL SAVINGS PLAN RESOLVED THAT, 1. Subsection (a) of Section 4.2 of the Laclede Gas Company Wage Deferral Savings Plan ("Wage Deferral Plan") is replaced in its entirety, effective August 1, 1994, by the following: "(a) A Participant may elect to have a wage deferral by delivering to the Administrator a properly completed and signed wage deferral agreement in a form acceptable to the Administrator. Such agreement shall be a direction by the Participant to the Company to defer a portion of the Compensation that such Participant would otherwise receive by the percentage or dollar amount stated in such agreement, on the condition that the Company make a Wage Deferral Contribution in that amount on behalf of such Participant. Such agreement shall be delivered at least thirty (30) days in advance of its intended effective date (or such shorter period as the Administrator shall determine to be administratively feasible), which shall always be the first payroll date on or after the next succeeding Enrollment Date, and shall be effective beginning with the first payment of Compensation made on or after such Enrollment Date. All such wage deferrals shall be expressed as a percentage of Compensation (which must be at least nine-tenths percent (0.9%) of Compensation and which must be in one-tenth percent (0.1%) increments) or in dollar or half-dollar amounts (which at a minimum must be five dollars ($5.00) for each weekly payroll period), up to, but not exceeding, fifteen percent (15%) of the Participant's rate of Compensation determined prior to such deferral." 2. Sections 6.1 through 6.3 of the Wage Deferral Plan are replaced in their entirety, effective August 1, 1994, by the following: "6.1 Investment of Contributions Each Participant shall be permitted to direct the investment of his Account into any one (1) or more of the Investment Funds, provided, however, that (i) in the case of an investment direction under Section 6.2 of this Plan, at least twenty-five percent (25%) of the total amount of Wage Deferral Contribution and Matching Contribution with respect to such Participant shall be designated for investment in each Investment Fund selected by the Participant, and (ii) in the case of an investment direction for all or a portion of the accumulated balance of such Participant's Account under Section 6.3 of this Plan, at least ten percent (10%) of the total amount over which such investment direction is made shall be designated for each Investment Fund selected by the Participant. 77 6.2 A Participant's Investment Direction for Current Contributions Subject to the provisions of Section 6.1 of this Plan, upon a Participant's election of a wage deferral received by the Administrator at least ten (10) days in advance of the first day of any calendar month and effective on the first payroll date of the calendar month after receipt of such election (the intended effective date), a Participant shall specify in writing the particular Investment Fund or Investment Funds into which the Wage Deferral and Matching Contributions thereafter allocable to him are to be invested, and the percentages to be invested in each such Investment Fund. 6.3 A Participant's Investment Direction for Accumulated Account Balances Either with or without changing his investment direction with respect to Contributions to be made thereafter, subject to the provisions of Section 6.1 of this Plan, a Participant may, by written notice given to the Administrator at least ten (10) days in advance of the first day of any calendar month (the intended effective date), direct that the accumulated balance in his Account be invested in one or more of the Investment Funds as soon as practicable on or after the intended effective date. The valuation of the Participant's Account as of the end of the month immediately preceding the intended effective date of such investment direction shall be controlling for purposes of implementing the investment direction. A change in investment direction under this Section 6.3 can be made only four times during any Plan Year." 3. Subsection (a) of Section 5.1 of the Wage Deferral Plan is replaced in its entirety, effective August 1, 1995, by the following: "(a) Subject to subsection (b) of this Section 5.1, for each weekly payroll period, the Company shall contribute to the Trust under this Plan an amount (not to exceed three percent (3%) of the Compensation of such Participant for such payroll period) equal to one-half (1/2) of the wage deferral of each Participant for such payroll period, provided that the amount of such Matching Contribution shall not exceed the current and accumulated profits of the Company." FURTHER RESOLVED, that any action taken by this Company, any of its officers or plan administrators or any person delegated such authority by any of the foregoing, to effectuate the foregoing amendments is hereby ratified, confirmed, authorized and approved. The authority granted herein includes, but is not limited to: (A) making any necessary filings with any governmental agency (including, without limitation, the Internal Revenue Service, the Department of Labor, and the Securities and Exchange Commission); (B) preparing amendments to the Wage Deferral Plan; (C) notifying The Boatmen's Trust Company, Trustee of the Wage Deferral Plan, of such amendments; and (D) doing all acts and things and executing on behalf of this Company all amendments, instruments, notices, letters, contracts, documents and certificates of any and every kind that may be necessary or appropriate to carry out the terms and/or intention of these resolutions. 78 EX-4.10B 4 Date: July 29, 1994 ---------------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Missouri Natural Gas Division of Laclede Gas Company Dual Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 79 AMENDMENTS TO THE MISSOURI NATURAL GAS DIVISION OF LACLEDE GAS COMPANY DUAL SAVINGS PLAN The following amendments are effective November 1, 1989: 1. The fourth unnumbered paragraph of subsection (a) of Section VII is amended in its entirety as follows: "The hardship withdrawal application shall include a signed statement of the facts demonstrating financial hardship and any other facts or documents required by the Committee and shall specify which investment fund or funds are to be charged with the withdrawal. If the Participant is married, the application must be signed by both the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for hardship withdrawal; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Plan Administrator with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse. For the purpose of determining whether the hardship withdrawal is necessary to satisfy a financial need of a Participant, the Committee may reasonably rely on the Participant's representation that the need cannot be fully relieved by:" 2. The first paragraph of subsection (b) of Section VII is amended in its entirety as follows: "(b) Withdrawal from Post-Tax Deposit Account. A Participant may withdraw any portion of his Post-Tax Deposit Account at any time by giving written notice to the Committee. Within thirty (30) days after receipt of such notice, the Committee shall direct the Trustee to make the appropriate distribution. A request for withdrawal must be signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for withdrawal; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Committee with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." 80 3. The last paragraph of subsection (d) of Section VII is amended in its entirety as follows: "In the case of withdrawals under subparagraphs (1) and (3) of this paragraph (d), the Committee shall direct the Trustee to make appropriate distribution within thirty (30) days of the receipt of such notice. In the case of withdrawals under subparagraph (2)of this paragraph (d), the Committee shall direct the Trustee to make the appropriate distribution within thirty (30) days after receipt of such notice, or, if the Committee shall request proof of financial need, within thirty (30) days after a determination that financial need exists. The written notice requesting the withdrawal must be signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for withdrawal; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Committee with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." 4. Subsection (e) of Section VIII is amended in its entirety as follows: "(e) Time of Distribution. A Participant must give written notice to the Committee requesting distribution. Within thirty (30) days after the event which shall require distribution under this Section VIII, the Committee shall direct the Trustee to make the appropriate distribution. A request for distribution must be signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for distribution; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Committee with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 81 Date: July 29, 1994 -------------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Missouri Natural Gas Division of Laclede Gas Company Dual Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 82 AMENDMENT TO THE MISSOURI NATURAL GAS DIVISION OF LACLEDE GAS COMPANY SAVINGS PLAN Effective January 1, 1985, paragraph (g) of Section VIII is replaced in its entirety, as follows: "(g) Required Distribution. Distribution to a Participant, as required by and in accordance with Code Section 401(a)(9) and regulations thereunder, will be made not later than April 1 following the end of the calendar year in which the Participant attained age seventy and one-half (70-1/2), if the Participant is then an Employee. For purposes of the required distributions, the Participant may elect to receive a total distribution of the Participant's Account, or the minimum distribution which is required. The first such distribution will be for the distribution year which is the calendar year in which the Participant attained age seventy and one-half (70-1/2). If the Participant elects the minimum required distribution, it will be based upon the value of the Participant's Account at December 31 of the calendar year preceding the distribution year, divided by remaining life expectancy. Life expectancy will be calculated using the Participant's age at December 31 of the distribution year; life expectancies for a Participant with a designated beneficiary will be based on the Participant's and beneficiary's ages at December 31 of the distribution year. (If there is more than one designated beneficiary, the remaining life expectancy of the designated beneficiary with the shortest life expectancy will be used.) Each year thereafter, the Participant's (or the Participant's and designated beneficiary's) life expectancy (or life expectancies) shall be reduced by one year. The Participant must specify the investment fund or funds from which the minimum distributions shall be withdrawn. Subsequent distributions will be made at least annually thereafter, by December 31 and will be for the calendar year which ended on the prior December 31. If the Participant dies after the Participant has attained age seventy and one-half (70-1/2), but before all of the Participant's Account has been distributed, then the remainder of the Participant's Account shall be distributed to the Participant's designated beneficiary not later than sixty (60) days after the date of the Participant's death. Mandatory distributions under this paragraph (g) will comply with the distribution requirements, including the minimum distribution incidental benefit requirements, as provided under Code Section 401(a)(9). If any provision of this Plan conflicts with such distribution requirements, then the Code Section 401(a)(9) distribution requirements will govern." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 83 EX-10.03D 5 Date: July 29, 1994 ---------------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Employees' Retirement Plan of Laclede Gas Company - Management Employees as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 84 AMENDMENTS TO THE EMPLOYEES' RETIREMENT PLAN OF LACLEDE GAS COMPANY - MANAGEMENT EMPLOYEES The following amendments are effective October 1, 1989: 1. The last paragraph of Section 4.3 is amended in its entirety as follows: "Each such election made after December 31, 1984 must be in writing and signed by the Employee and his/her spouse; the spouse's consent must acknowledge the effect of the election; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall be completed within the ninety (90) day period as prescribed by Section 4.5. The spousal consent shall not be required if the Employee provides the Retirement Board with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." 2. Paragraph D. of Section 5.5 is amended in its entirety as follows: "D. Spousal Consent. Each such election made after December 31, 1984 must be in writing and signed by the Employee and his/her spouse; the spouse's consent must acknowledge the effect of the election; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall be completed within the ninety (90) day period as prescribed in B. herein. The spousal consent shall not be required if the Employee provides the Retirement Board with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 85 EX-10.05C 6 Date: July 29, 1994 --------------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Laclede Gas Company Salary Deferral Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 86 AMENDMENTS TO THE LACLEDE GAS COMPANY SALARY DEFERRAL SAVINGS PLAN The following amendments are effective October 1, 1989: 1. A new subsection (d) is added to Section 10.2 as follows: "(d) If the Participant is married, request for a distribution must be in writing and signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for distribution; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall not be required if the Participant provides the Plan Administrator with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse. Participant and/or spousal consent shall not be required if distribution is being made because the Participant's account balance is less than $3,500." 2. Subclause (iii) of subsection (c) of Section 10.3 is amended in its entirety as follows: "(iii) For the purpose of determining whether the hardship withdrawal is necessary to satisfy a financial need of a Participant, the Administrator may reasonably rely on the Participant's representation that the need cannot be fully relieved by: (A) insurance or other reimbursement; (B) reasonable liquidation of assets if this does not itself create a hardship; (C) cessation of Salary Deferral Contributions; or (D) other distributions or nontaxable loans from Company plans or from commercial sources on reasonable commercial terms." 3. A new subclause (vii) is added to subsection (c) of Section 10.3 as follows: "(vii) If the Participant is married, request for a hardship withdrawal must be in writing and signed by the Participant and his/her spouse; the spouse's consent must acknowledge the effect of the request for a hardship withdrawal; and the spouse's consent must be witnessed by a Plan representative or a notary public. The spousal consent shall 87 not be required if the Participant provides the Plan Administrator with satisfactory evidence that such consent cannot be obtained because he/she does not have a spouse; the spouse cannot be located; or such other circumstances as are prescribed by Treasury Regulations. Any consent by a spouse shall be effective only with respect to such spouse." Robert C. Jaudes ------------------------------- Title: President and Chief Executive Officer Robert J. Carroll ------------------------------- Title: Senior Vice President - Finance 88 EX-10.05D 7 I, D. L. Godiner, Secretary of Laclede Gas Company, a Missouri corporation, do hereby certify that the attached is a true and correct copy of resolutions adopted by the Board of Directors of said Company at the duly called and held regular meeting of said Board on August 25, 1994, at which meeting a quorum was present and acted throughout, and that said resolutions are in full force and effect. IN WITNESS WHEREOF, I have set my hand and the seal of Laclede Gas Company this 30th day of August, 1994. Donald L. Godiner ------------------------------- Title: Senior Vice President - General Counsel and Secretary 89 RESOLUTIONS REGARDING AMENDMENTS TO THE LACLEDE GAS COMPANY SALARY DEFERRAL SAVINGS PLAN RESOLVED THAT, 1. Subsection (a) of Section 4.2 of the Laclede Gas Company Salary Deferral Savings Plan ("Salary Deferral Plan") is replaced in its entirety, effective August 1, 1994, by the following: "(a) A Participant may elect to have a salary deferral by delivering to the Administrator a properly completed and signed salary deferral agreement in a form acceptable to the Administrator. Such agreement shall be a direction by the Participant to the Company to defer a portion of the salary or wages that such Participant would otherwise receive by the percentage or dollar amount stated in such agreement, on the condition that the Company make a Salary Deferral Contribution in that amount on behalf of such Participant. Such agreement shall be delivered at least thirty (30) days in advance of its intended effective date (or such shorter period as the Administrator shall determine to be administratively feasible), which shall always be an Enrollment Date, and shall be effective beginning with the first payment of Compensation made on or after such Enrollment Date. All such salary deferrals shall be expressed as a percentage of Compensation or in even dollar or half-dollar amounts or any multiple thereof or any combination of percentage or dollar or half-dollar amounts, up to, but not exceeding: (i) fifteen percent (15%) of the Participant's rate of Compensation determined prior to such deferral; plus (ii) an additional $12.50 per month; provided, however, that the aggregate amount of all such salary deferrals for each individual Participant (during the Participant's taxable year) shall not exceed the limitation on deferrals under Section 402 of the Internal Revenue Code (as such limitation is, or may be, adjusted or increased by Section 415(d) or any other provision of the Code) for an individual's taxable year. For purposes of a Participant's one-time election (effective upon the receipt of Compensation for services performed during the month of January, 1986) to increase such Participant's salary deferral amount by the amount of $12.50 per month, such election may be made without regard to any of the provisions of subsection (b) of this Section 4.2." 2. Sections 6.1 through 6.3 of the Salary Deferral Plan are replaced in their entirety, effective August 1, 1994, by the following: "6.1 Investment of Contributions Each Participant shall be permitted to direct the investment of his Account into any one (1) or more of the Investment Funds, provided, however, that (i) in the case of an investment direction under Section 6.2 of this Plan, at least twenty-five percent (25%) of the total 90 amount of Salary Deferral Contribution and Matching Contribution with respect to such Participant shall be designated for investment in each Investment Fund selected by the Participant, (ii) in the case of an investment direction for all or a portion of the accumulated balance of such Participant's Account under Section 6.3 of this Plan, at least ten percent (10%) of the total amount over which such investment direction is made shall be designated for each Investment Fund selected by the Participant, and (iii) the total number of Shares which this Plan may hold at any time for the Accounts of all officers of the Company must be less than twenty percent (20%) of the total number of Shares then held by this Plan for the Accounts of all Participants. 6.2 A Participant's Investment Direction for Current Contributions Subject to the provisions of Section 6.1 of this Plan, upon a Participant's election of a salary deferral received by the Administrator at least ten (10) days in advance of the first day of any calendar month (the intended effective date), a Participant shall specify in writing the particular Investment Fund or Investment Funds into which the Salary Deferral and Matching Contributions thereafter allocable to him are to be invested, and the percentages to be invested in each such Investment Fund. 6.3 A Participant's Investment Direction for Accumulated Account Balances Either with or without changing his investment direction with respect to Contributions to be made thereafter, subject to the provisions of Section 6.1 of this Plan, a Participant may, by written notice given to the Administrator at least ten (10) days in advance of the first day of any calendar month (the intended effective date), direct that the accumulated balance in his Account be invested in one or more of the Investment Funds as soon as practicable on or after the intended effective date. The valuation of the Participant's Account as of the end of the month immediately preceding the intended effective date of such investment direction shall be controlling for purposes of implementing the investment direction. A change in investment direction under this Section 6.3 can be made only four times during any Plan Year." 3. Subclause (ii) of subsection (a) of Section 5.1 of the Salary Deferral Plan is replaced in its entirety, effective August 1, 1995, by the following: "(ii) three percent (3%) of the Compensation of such Participant for such month." FURTHER RESOLVED, that any action taken by this Company, any of its officers or plan administrators or any person delegated such authority by any of the foregoing, to effectuate the foregoing amendments is hereby ratified, confirmed, authorized and approved. The authority granted herein includes, but is not limited to: (A) making any necessary filings with any governmental agency (including, without limitation, the Internal Revenue Service, the Department of Labor, and the Securities and Exchange Commission); (B) preparing amendments to the Salary Deferral Plan; (C) notifying The Boatmen's Trust Company, Trustee of the Salary Deferral Plan, of such amendments; and (D) doing all acts and things and executing on behalf of this Company all amendments, instruments, notices, letters, contracts, documents and certificates of any and every kind that may be necessary or appropriate to carry out the terms and/or intention of these resolutions. 91 EX-10.05E 8 Date: September 27, 1994 --------------------------- Robert C. Jaudes (as President of Laclede Gas Company), and Robert J. Carroll (as Senior Vice President - Finance of Laclede Gas Company), pursuant to resolutions adopted by the Board of Directors on August 28, 1986, which resolutions, among other things, granted to any two executive officers who hold one of the following offices: Chairman of the Board; President; Executive Vice President; or Senior Vice President; the authority to amend any or all of the benefit plans and/or related trust agreements of the Company (collectively the "Plans") to the extent such amendments deal with changes necessary or appropriate: (1) to comply with, or obtain the benefit of, applicable laws and/or regulations, as amended from time to time; (2) to reflect minor or routine administrative factors; (3) to clarify the meaning of any of the provisions of the Plans; and/or (4) to evidence changes in then existing Plans to reflect the interrelationship thereof with newly adopted Plans or amendments to Plans, which newly adopted Plans or amendments affect the terms of such other then existing Plans; do hereby amend the Laclede Gas Company Salary Deferral Savings Plan as set forth in the attached exhibit, such amendment to be effectuated and evidenced by our signatures on said exhibit. 92 AMENDMENTS TO THE LACLEDE GAS COMPANY SALARY DEFERRAL SAVINGS PLAN The following amendments are effective October 1, 1992, except where specified otherwise. 1. Section 2.8 "Compensation" is amended in its entirety as follows: "The amounts paid a Participant for the period in which he is eligible to participate during a Company Year (before any deferred salary amounts pursuant to Article IV have been subtracted) by the Company for services rendered as an Employee, as would (but for the subtraction of such deferred salary amounts) be reported for Federal income tax purposes on U.S. Treasury Department Form W-2, except that pension payments and other deferred compensation, income attributable to the award or exercise of qualified stock options or the premature disposition of stock option stock, and any other amount which does not constitute "compensation" within the meaning of Section 415 of the Code shall not constitute Compensation. Compensation is limited to $200,000 per Plan Year, which amount is subject to annual adjustment by the U.S. Treasury Department." 2. The last paragraph of subsection (b) of Section 4.4 is amended as follows: "The higher amount of (b)(i) and (b)(ii) above is hereinafter in this Section .4 called the "Base Percentage". If the actual deferral percentage for the Highly Compensated Employee group exceeds the Base Percentage (any such excess being hereinafter in this Section 4.4 called the "Excess"), then prior to the end of the Plan Year, the actual deferral percentage of each of those Participants in the Highly Compensated Employee group whose actual deferral percentage shall be greater than the Base Percentage shall be reduced as necessary (to eliminate the Excess), in a manner whereby the actual deferral percentage of such Participants shall be equal to the Base Percentage, by refunding to such Participants." 3. The last paragraph of clause (ii) of subsection (b) of Section 5.1 is amended as follows: "The higher amount of (b)(ii)(aa) and (b)(ii)(bb) above is hereinafter in this Section 5.1 called the "Base Percentage". If the actual matching percentage for the Highly Compensated Employee group exceeds the Base Percentage (any such excess being hereinafter in this Section 5.1 called the "Excess"), then prior to the end of the Plan Year, the Company Matching Contribution of each of those Participants in the Highly Compensated Employee group whose actual matching percentage shall be greater than the Base Percentage shall be reduced as necessary (to eliminate the Excess), in a manner whereby the actual matching percentage of such Participants shall be equal to the Base Percentage, by refunding to the Company." 93 4. Subsection (a) of Section 10.3 is amended in its entirety as follows: "(a) Any Participant who has suffered a financial hardship may withdraw all or any portion of amounts attributable to the Participant's Salary Deferral Contributions, plus related earnings credited as of December 31, 1988, but exclusive of later earnings and amounts previously distributed due to hardship. Application for hardship and a demonstration of the existence of such financial hardship must be made to the satisfaction of the Administrator. Except as otherwise expressly provided in Section 10.1(a) or upon a showing of a financial hardship as defined in Section 10.3(b), no withdrawals may be made while a Participant continues to be employed by the Company." 5. Clauses (i) and (ii) of subsection (b) of Section 10.3 are amended as follows: "(i) Incurred medical expenses or expenses to obtain medical care for the Participant, the Participant's spouse or any dependents of the Participant. (ii) Payment of tuition and related educational fees for the next twelve (12) months of post-secondary education for the Participant, or the Participant's spouse, children or dependents." 6. Clause (v) of subsection (c) of Section 10.3 is amended as follows: "(v) If a Participant who has an outstanding loan applies for a hardship withdrawal and if the amount of the Participant's financial hardship exceeds the maximum loan amount allowable under Section 10.4, then a hardship withdrawal may be permitted up to the amount of hardship and subject to the limitations of Section 10.3(a)." 7. The last sentence of subsection (a) of Section 17.1 is amended as follows: "If, however, the Internal Revenue Service rules, upon application to it for a favorable determination, that the Plan and its related Trust are qualified and exempt under the Code, all Salary Deferral and Matching Contributions theretofore made by the Company shall be subject to the provisions of this Plan in all respects and may not be diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries and estates and the payment of the administrative expenses of this Plan, and may not be returned to the Company, except as provided by Section 7.7." 94 8. Subsection (b) of Section 17.1 is amended in its entirety as follows: "(b) Notwithstanding the foregoing or any other contrary provision herein contained, any erroneous Company Contribution which is made by a mistake of fact will be returned to the Company if the mistake of fact is discovered, and the return of such Contribution completed, within one year after the payment of such Contribution to the Plan. If any deduction for any Company Contribution is not allowable under Section 404 of the Code, then such Contribution, to the extent of such disallowed deduction, will be returned to the Company within one year after the disallowance of such deduction." 9. Effective October 1, 1989, a new subparagraph (e) is added to Section 10.2 as follows: "(e) Payment to an alternate payee pursuant to a Qualified Domestic Relations Order shall be made in one lump-sum payment, at the alternate payee's election, by requesting such distribution on a form provided by the Company, at least thirty (30) days but no more than ninety (90) days before distribution is to be made. Distribution to the alternate payee may be made on or after the earlier of: (i) the date on which the Participant could take a distribution, or (ii) the later of: (aa) the date the Participant attains age fifty (50), or (bb) the earliest date on which the Participant could receive a distribution if he separated from service." 10. Effective October 1, 1989, the following sentence is added at the end of the second paragraph of Section 15.1 as follows: "Qualified Domestic Relations Orders shall be handled pursuant to procedures established by the Plan Administrator." 11. Effective October 19, 1989, the following sentences should be added at the end of subparagraph (c) of Section 10.4: "If a default occurs, the Participant will be responsible for payment of all costs and expenses of collection (including, without limitation, attorney's fees and court costs) regardless of whether legal action is initiated. Interest will continue to accrue on the unpaid principal amount until the earlier of the maturity date or when repayment on the loan begins. A defaulted loan will be reported as a distribution, subject to income taxes and the excise tax on premature distributions, if applicable." 95 12. Effective October 19, 1989, a new subsection (i) is added to Section 10.4 as follows: "(i)For purposes of this Section 10.4 and in conformity with the requirements contained herein, loan availability is restricted to Participants who are parties in interest as defined by section 3(14) of ERISA." 13. Effective January 1, 1993, clause (i) of subsection (c) of Section 10.3 is amended as follows: "(i)A withdrawal based upon a financial hardship cannot exceed the amount required to meet such hardship and not reasonably available from other resources available to the Participant, including loans from this Plan. Federal tax will be withheld on hardship withdrawals at a rate of twenty percent (20%); state or local income taxes will be withheld at the Participant's request. The amount required for hardship may be increased to include the necessary taxes but cannot exceed the amount available for hardship as provided in subparagraph (a) of this Section. A hardship withdrawal will not be granted if such financial hardship may be relieved in full by borrowing that amount as allowed under Section 10.4, as supplemented by subclause (iv) of this Section 10.3(c)." Robert C. Jaudes -------------------------------- Title: President and Chief Executive Officer Robert J. Carroll -------------------------------- Title: Senior Vice President - Finance 96 EX-10.19B 9 August 18, 1994 Chemical Bank 270 Park Avenue New York, New York 10017 Attention: Mr. Robert Gillham The Boatmen's National Bank of St. Louis One Boatmen's Plaza 800 Market Street St. Louis, MO 63166-0236 Attention: Mr. Thomas Guyton Mercantile Bank of St. Louis National Association Eighth & Locust, 12th Floor P.O. Box 524 St. Louis, MO 63101 Attention: Mr. Edward Cheney Ladies and Gentlemen: Re: Amendment and Further Extension of line of credit agreement Dated October 18, 1993, as amended and extended by letter of Amendment and Extension dated April 18, 1994, among Laclede Gas Company ("Laclede"), Chemical Bank ("Chemical"), The Boatmen's National Bank of St. Louis ("Boatmen's") and Mercantile Bank of St. Louis National Association ("Mercantile") (said banks being hereinafter collectively called the "Banks" and said line of credit agreement, as thus amended and extended, being hereinafter called the "Line of Credit Agreement"). This amendatory agreement will confirm our agreement to further amend and extend the above-referenced Line of Credit Agreement from August 18, 1994 to October 18, 1994 on the same terms and conditions set forth in the original Line of Credit Agreement, subject only to the modifications expressly set forth in numbered Paragraphs 1 through 6 below, each of which Paragraphs shall be effective on August 18, 1994. 1. New Maximum Amounts of Advances. The combined aggregate principal amount of Advances at any time out- standing from any Bank under the Line of Credit Agreement shall not, on or after August 18, 1994, exceed the amount set forth opposite the name of such Bank below (such Bank's "Maximum Amount"), and shall be in a combined aggregate principal amount at any time outstanding which shall not exceed $40 million: 97 Chemical Bank The Boatmen's National Bank of St. Louis Mercantile Bank of St. Louis National Association August 18, 1994 2 Name of Bank Maximum Amount Chemical $20 million Boatmen's 10 million Mercantile 10 million 2. New Termination Date. The phrase "Termination Date" as defined in the Line of Credit Agreement is hereby amended from August 18, 1994 to October 18, 1994. According- ly, all references in the Line of Credit Agreement to the Termination Date shall hereafter refer to October 18, 1994. 3. Interest on LIBO Rate Advances. The interest rate, in the case of each LIBO Rate Advance made on or after August 18, 1994 shall be determined by the LIBO Rate applicable to the Interest Period in effect for such advance plus 1/4% per annum. 4. Facility Fee. The Facility Fee for the period August 18, 1994 to October 18, 1994 shall be .08% per annum on the Maximum Amount of such Bank, whether used or unused. 5. New Form of Note. Each executed Note in the form of Exhibit A to the Line of Credit Agreement, as previously amended, as to which no sums are then due and payable thereunder shall be returned to Laclede immediately for cancellation, upon the holder Bank's receipt of an executed Note to that Bank in the form attached as Exhibit A to this amendatory agreement. 6. Absence of Material Adverse Change. The making of Advances under the Line of Credit Agreement as amended by this letter agreement is also subject to the absence of any material adverse change since March 31,1994, in the financial condition of Laclede. 7. Ratification of Remainder of Line of Credit Agreement. Subject only to the amendments expressly set forth in numbered Paragraphs 1 through 6 above, the Line of Credit Agreement is hereby ratified, confirmed and approved in all respects. 98 Chemical Bank The Boatmen's National Bank of St. Louis Mercantile Bank of St. Louis National Association August 18, 1994 3 Please indicate your acceptance of the terms of this amendatory agreement by signing in the appropriate space below and returning to Laclede Gas Company the enclosed duplicate of the original of this letter. This letter may be executed in counterparts, each of which shall be an original, and all of which when taken together, shall constitute one agreement which shall extend and amend the Line of Credit Agreement as hereinbefore provided. Very truly yours, LACLEDE GAS COMPANY By: Vernon O. Steinberg Name: Vernon O. Steinberg Title: Vice President-Treasurer and Assistant Secretary Accepted and Agreed to as of the date first written above. CHEMICAL BANK By: Beth Herman Name: Beth Herman Title: Vice President THE BOATMEN'S NATIONAL BANK OF ST. LOUIS By: Thomas C. Guyton Name: Thomas C. Guyton Title: Vice President MERCANTILE BANK OF ST. LOUIS NATIONAL ASSOCIATION By: Edward A. Cheney Name: Edward A. Cheney Title: Vice President 99 EX-12 10 Exhibit 12 LACLEDE GAS COMPANY AND SUBSIDIARY COMPANIES SCHEDULE OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES -------------------------------------------------------------
Fiscal Year Ended September 30, ---------------------------------------- 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- (Thousands of Dollars) Income before interest charges and the cumulative effect of change in accounting $38,611 $41,380 $33,888 $34,616 $30,206 Add: Taxes based on utility income 12,517 14,997 8,272 10,795 6,717 Taxes based on miscellaneous income 121 1,068 172 281 (1,883) One third of applicable rentals charged to operating expense (which approximates the interest factor) 287 284 279 269 262 ------------------------------------------- Total Earnings $51,536 $57,729 $42,611 $45,961 $35,302 =========================================== Interest on long-term debt $12,626 $14,415 $13,803 $13,062 $12,222 Other interest 3,768 1,798 1,811 1,524 1,081 One-third of applicable rentals charged to operating expense (which approximates the interest factor) 287 284 279 269 262 ------------------------------------------- Total Fixed Charges $16,681 $16,497 $15,893 $14,855 $13,565 =========================================== Ratio of Earnings to Fixed Charges 3.09 3.50 2.68 3.09 2.60 100
EX-22 11 Exhibit 22 LACLEDE GAS COMPANY AND SUBSIDIARIES SUBSIDIARIES OF THE REGISTRANT PERCENT OF VOTING STOCK OWNED ------------ Subsidiaries of Laclede Gas Company (Parent) Laclede Pipeline Company 100% Laclede Investment Corporation* 100% Laclede Development Company** 100% *Subsidiary Company of Laclede Investment Corporation Laclede Energy Resources, Inc. 100% Subsidiary Company of Laclede Energy Resources, Inc. 100% Laclede Gas Family Services, Inc. ***Subsidiary Company of Laclede Development Company Laclede Venture Corp. 100% All of the above corporations have been organized under the laws of the State of Missouri. 101 EX-24 12 DELOITTE & TOUCHE LLP One City Centre St. Louis, MO 63101 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement Nos. 33-60996 and 33-52357 of Laclede Gas Company and its subsidiary companies on Form S-3 and in Registration Statement Nos. 33-30182, 33-38413 and 33-38414 of Laclede Gas Company and its subsidiary companies on Form S-8 of our report (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the changes in methods of accounting for income taxes and postretirement benefits other than pensions effective October 1, 1993) dated November 17, 1994, appearing in this Annual Report on Form 10-K of Laclede Gas Company and its subsidiary companies for the year ended September 30, 1994. December 21, 1994 102 EX-27 13
UT 1,000 YEAR SEP-30-1994 SEP-30-1994 PER-BOOK 411,677 22,956 115,229 58,433 0 608,295 17,536 4,085 173,318 194,939 1,960 0 154,211 0 0 53,500 0 0 0 0 203,685 608,295 523,866 12,517 473,731 486,248 37,618 993 38,611 16,394 22,217 97 22,120 19,054 12,626 43,685 1.42 1.42 Capital-surplus-paid-in is net of $24,017 of treasury stock. 103
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