STOCKHOLDER'S EQUITY

Laclede Group

Total shares of common stock outstanding were 43.2 million and 32.7 million at September 30, 2014 and 2013, respectively.

Equity Units

In June 2014, Laclede Group issued 2.875 million Equity Units, initially consisting of Corporate Units, for an aggregate stated amount of approximately $143.8. Each Corporate Unit has a stated amount of fifty dollars and consists of (i) a stock purchase contract obligating the holder to purchase shares of Laclede Group's common stock, par value $1.00 per share (Common Stock) and (ii) a 1/20, or 5%, undivided beneficial ownership interest in one thousand dollars principal amount of Laclede Group's 2014 Series A 2.00% Remarketable Junior Subordinated Notes due 2022 (RSNs). The stock purchase contracts obligate the holders to purchase shares of Common Stock at a future settlement date prior to the relevant RSN maturity date. The purchase price to be paid under the stock purchase contracts is fifty dollars per Corporate Unit and the number of shares to be purchased will be determined under a formula based upon the average closing price of the Common Stock near the settlement date. The RSNs are pledged as collateral to secure the purchase of Common Stock under the related stock purchase contracts.

The Company makes quarterly interest payments on the RSNs and quarterly contract adjustment payments on the stock purchase contracts, at the rates described below. The Company may defer payments on the stock purchase contracts and the RSNs for one or more consecutive periods but generally not beyond the purchase contract settlement date. If payments are deferred, interest on the RSNs and contract adjustment payments will compound on each respective payment date in which the payment was deferred. Also, during the deferral period, the Company may not make any cash distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments. Additionally, the Company may not make any payments on or redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the RSNs during the deferral period.

The Company has recorded the present value of the stock purchase contract payments as a liability offset by a charge to additional paid-in capital in equity. Interest payments on the RSNs are recorded as interest expense and stock purchase contract payments are charged against the liability. Accretion of the stock purchase contract liability is recorded as imputed interest expense. In calculating diluted EPS, the Company applies the treasury stock method to the Corporate Units. These securities did not have an effect on diluted EPS for the twelve months ended September 30, 2014.

Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, Laclede Group will issue between approximately 2.5 million and 3.1 million shares of its common stock in April 2017. A total of approximately 4.2 million shares of Common Stock have been reserved for issuance in connection with the stock purchase contracts.

Selected information about the Company’s Equity Units is presented below:



Issuance Date	Units Issued (Millions)	Total Net Proceeds	Total Long-term Debt	RSN Annual Interest Rate	Stock Purchase Contract Annual Rate	Stock Purchase Contract Liability
6/11/2014	2.875	$139.4	$143.8	2.00%	4.75%	$19.7

Common Stock and Paid-In Capital

Common stock and paid-in capital increased $445.6 in fiscal year 2014. $456.8 of the increase was due to the June 2014 issuance of 10,350,000 common shares to fund the Alagasco acquisition. The issuance of 33,667 common shares under the Dividend Reinvestment and stock Purchase Plan increased common stock and paid-in capital by $1.5. Stock-based compensation and the issuance of 97,902 shares of common stock under the Equity Incentive plan increased common stock and paid-in capital by $7.0. The issuance of the 2.875 million Equity Units reduced paid-in capital by $19.7 which represents the stock purchase contract liability. Common stock and paid-in capital increased $435.8 in fiscal year 2013. The issuance of 44,074 common shares under the Dividend Reinvestment and Stock Purchase Plan increased common stock and paid-in capital by $1.8. The remaining $434.0 increase was due to the issuance of 10,005,000 shares in May 2013, stock-based compensation costs and the issuance of 108,331 shares of common stock under the Equity Incentive Plan.

Laclede Group has a registration statement on file on Form S-3 for the issuance and sale of up to 168,698 shares of its common stock under its Dividend Reinvestment and Stock Purchase Program. There were 160,579 and 152,810 shares at September 30, 2014 and November 21, 2014, respectively, remaining available for issuance under this Form S-3.

On August 6, 2013, Laclede Group and Laclede Gas filed with the SEC a joint shelf registration statement on Form S-3 for issuance of various types of debt and equity securities, which registration statement will expire August 5, 2016. Bonds totaling $450.0 were issued by Laclede Gas from this shelf registration statement on August 13, 2013. The amount, timing, and type of additional financing to be issued under this shelf registration statement will depend on cash requirements and market conditions.

At September 30, 2014 and 2013, Laclede Group and Laclede Gas had authorized 5,000,000 and 1,480,000 shares of preferred stock, respectively, but none were issued and outstanding.

Comprehensive Income

The components of accumulated other comprehensive income (loss), net of income taxes, recognized in the Consolidated Balance Sheets at September 30 were as follows:



$ Millions	Net Unrealized Gains (Losses) on Cash Flow Hedges			Defined Benefit Pension and Other Postretirement Benefit Plans			Total
Balance at September 30, 2012	$	(1.9	)	$	(2.2	)	$	(4.1	)
Current-period change	3.3			—			3.3
Balance at September 30, 2013	1.4			(2.2		)	(0.8		)
Current-period change	(1.2		)	0.3			(0.9		)
Balance at September 30, 2014	$	0.2		$	(1.9	)	$	(1.7	)

Income tax expense (benefit) recorded for items of other comprehensive income reported in the Statements of Comprehensive Income is calculated by applying statutory federal, state, and local income tax rates applicable to ordinary income. The tax rates applied to individual items of other comprehensive income are similar within each reporting period.

Laclede Gas

Common Stock and Paid-In Capital

Total shares of common stock outstanding were 24,577 and 24,549 at September 30, 2014 and 2013, respectively. Common stock and paid-in capital increased $5.9 and $480.8 in 2014 and 2013, respectively. These increases were primarily due to the issuance of common stock to Laclede Group and stock-based compensation costs allocated to the utility from Laclede Group in both periods.

Laclede Gas periodically sells shares of its stock to Laclede Group at prices per share equal to book value on the last day of the quarter preceding each sale. The utility sold 28 shares to Laclede Group for $1.1 during fiscal 2014 and 11,745 shares to Laclede Group for $476.5 during fiscal 2013. During fiscal 2013, $475.0 of the stock sale proceeds were used to fund a portion of the MGE acquisition. The proceeds from other sales were used to reduce short-term borrowings. Exemption from registration for all of the sales was claimed under Section 4(2) of the Securities Act of 1933.

Substantially all of Laclede Gas plant is subject to the liens of its first mortgage bonds. The mortgage contains several restrictions on Laclede Gas' ability to pay cash dividends on its common stock. These provisions are applicable regardless of whether the stock is publicly held or, as has been the case since the formation of Laclede Group, held solely by Laclede Gas' parent company. Under the most restrictive of these provisions, no cash dividend may be declared or paid if, after the dividend, the aggregate net amount spent for all dividends after September 30, 1953, would exceed a maximum amount determined by a formula set out in the mortgage. Under that formula, the maximum amount is the sum of $8.0 plus earnings applicable to common stock (adjusted for stock repurchases and issuances) for the period from September 30, 1953, to the last day of the quarter before the declaration or payment date for the dividends. As of September 30, 2014 and 2013, the amount under the mortgage’s formula that was available to pay dividends was $936.2 and $833.0, respectively. Thus, all of Laclede Gas retained earnings were free from such restrictions as of those dates.

Laclede Gas has authority from the MoPSC to issue up to $518.0 in debt securities and preferred stock, including on a private placement basis, as well as to enter into capital leases, issue common stock and receive paid-in capital. This authorization was originally effective through June 30, 2013. In August 2012, Laclede Gas filed a request with the MoPSC to extend this authority for an additional two years, to June 30, 2015. This extension was approved October 24, 2012, to be effective on November 23, 2012. At September 30, 2014, $369.7 remained under this authorization. The amount, timing, and type of additional financing to be issued will depend on cash requirements and market conditions.

Comprehensive Income

The components of accumulated other comprehensive income (loss), net of income taxes, recognized in the Balance Sheets at September 30 were as follows:



$ Millions	Net Unrealized Gains (Losses) on Cash Flow Hedges			Defined Benefit Pension and Other Postretirement Benefit Plans			Total
Balance at September 30, 2012	$	0.1		$	(2.2	)	$	(2.1	)
Current-period change	—			—			—
Balance at September 30, 2013	0.1			(2.2		)	(2.1		)
Current-period change	(0.1		)	0.3			0.2
Balance at September 30, 2014	$	—		$	(1.9	)	$	(1.9	)