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Home My Public Portal AboutExhibit MIEC 105E - The Laclede Group Investor PresentationFORWARD -LOOKING STATEMENTS AND USE OF NON-GAAP MEASURES This presentation contains forward -looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward -looking statements in this presentation speak only as of today, and we assume no duty to update them. Forward -looking statements are typically identified by words such as, but not limited to: "estimates," "expects," "anticipates," "intends," and similar expressions. Although our forward -looking statements are based on reasonable assumptions, various uncertainties and risk factors may cause future performance or results to be different than those anticipated. A description of the uncertainties and risk factors can be found in our Annual Reports on Form 10-K for fiscal 2014 and in our Form 10-Q filings made with the Securities and Exchange Commission (SEC) in the "Risk Factors" section as well as under the "Forward -Looking Statements" heading. This presentation also includes "net economic earnings," "net economic earnings per share," and "pro forma adjusted EBIT," non- GAAP measures used by management when evaluating the Company's performance and results of operations. Net economic earnings exclude from net income the after-tax impacts of fair -value accounting and timing adjustments associated with energy - related transactions, as well as the after-tax impacts related to acquisition, divestiture, and restructuring activities, including costs related to the acquisition and integration of Missouri Gas Energy (MGE) and the acquisition of Alabama Gas Corporation (Alagasco). A full explanation of the adjustments and a reconciliation of net income to net economic earnings is contained in the Company's SEC filings. Earnings Before Interest and Taxes (EBIT) is calculated from the Statements of Income (Operations) by adding Interest Expense to Income Before Income Taxes. An explanation of pro forma adjusted EBIT can be found in the footnote on the related slide. Note: Years shown in this presentation are fiscal years ended September 30, unless otherwise indicated. Investor Relations Contacts Scott W. Dudley Jr. Managing Director, Investor Relations 314-342-0878 Scott.Dudley@TheLacledeGroup.com Steven P. Rasche Chief Financial Officer 314-342-3348 Steve.Rasche@TheLacledeGroup.com THE LACLEDE GROUP 3 iW Recent Accom ■ lishments p • a a Achieved record earnings per share in FY 2014 Increased 2015 dividend 4.5%, the 12th consecutive increase and 70th year of continuous payment Acquired Alagasco effective August 31, 2014 Exceeded goals for MGE integration Increased pipeline replacement to 139 miles Announced second Spire CNG fueling station •a aw. .aaa• ■■ ■• •r r• ▪ ■ x• !.m. r:: :grr ■PNt■rrlrY f■ The Laclede Group Today • Financially strong natural gas services provider with 150+ years of industry experience Largest LDC in Missouri and Alabama 5th largest publicly traded gas utility with 1.56 million customers • 8th longest continuously listed stock on NYSE • $4.5 billion enterprise value, a more than three- fold increase over two years A leading gas company that's successfully executing on its growth strategy LACLEDE'S GROWTH STRATEGY Investing in distribution infrastructure r Organically growing existing businesses Acquiring gas utilities and assets Developing CNG fueling/other technologies LACLEDE IS A GAS COMPANY AT ITS CORE • Three gas utilities with comparable service areas, customers and distribution systems • Shared focus on safe and reliable service, community development and growth • Financially strong and well -run with long operating histories • Constructive working relationships with regulators • Serves regions with solid market and economic profiles =MCTS_ MISSOURI GAS ENERGY ' Kansas City 250 miles MO Laclede Ias St. Louis r, 500 miles Birmingham ONI * ' Alagasco Monteomnry Gas Distribution Customers 1.56 Million THE LACLEDE GROUP 6 ECONOMIC AND MARKET PROFILES Alabama • Significant industrial and manufacturing base - Automotive: Alabama's #1 export, "$6.5 billion in 2013 - Chemicals: $2 billion industry, #2 largest export -- Aerospace: 400 companies employing 83,000 • Opportunity for additional market penetration and propane conversion Missouri • Headquarters to 10 Fortune 500 companies • Diverse employment mix - Trade/Transportation (18%) Professional/Business Services (15%) - Healthcare (14%), Manufacturing (9%) • Laclede serves —98% of new single-family homes Residential Heating Fuel United States Alabama ▪ Utility Natural Gas ▪ Electricity ▪ Tank Gas ❑r Propane Missouri ■ Fuel Oil / Kerosene ■ Coal, Wood or No Fuel New housing starts are growing in both Missouri and Alabama Source: EIA, Global Insight Reports and U.S. Census Bureau. THE LACLEDE GROUP 7 REGULATORY DIVERSITY • Traditional rate -making approach in Missouri — General rate case filings tied to rate base — Constructive relationship with regulators enables reasonable outcomes Progressive approach in Alabama — Strong regulatory framework in place for 30+ years; top -rated by RRA1 — Rate -making process provides stable rates and ability to earn authorized ROE Missouri Alabama Regulatory Rating Average/2 Above Average/2 Frequency/Term Rate case every 3 years Annual with quarterly reviews Process Length Up to 11 months Continuous Approach Litigation/Settlement Formulaic Cost of Service Historic test year Forward test year Other Recovery Mechanisms Gas cost, pension, certain pipeline investments (ISRS) Gas cost, pension, environmental, customer loss, extraordinary events Authorized ROE2 9.75% / 9.70% 10.8% 'Regulatory Research Associates 'Authorized returns for ISRS filing purposes in Missouri and Rate Stabilization & Equalization (RSE) mechanism in Alabama. 9. 75% pre-tax WACC for MGE effective May 1, 2014 and 9.70% ROE for Laclede Gas effective September 1, 2013. Authorized Alagasco ROE effective fiscal year 2015. THE LACLEDE GROUP 8 INVESTING IN DISTRIBUTION INFRASTRUCTURE • Capital investment focused on pipeline replacement • Replaced 139 miles of pipeline in 2014, double the amount in 2013 • 2015 anticipated at —$300 million with ^'52% for pipeline replacement • Recovery mechanisms in place in MO (ISRS) and AL (RSE) • Total planned capital spend of ^'$1.5 billion through 2019 $300 $200 $100 $109 $131 36 27 68 2012 20131 II Pipeline Replacement Capital Spending $171 99 $232 130 $300 155 20141 20142 (pro forma) 2015 (forecast) Distribution, Equipment and Other Information Technology ' Actual capital spend including one month of MGE in fiscal 2013 and twelve months in fiscal 2014, and one month of Alagasco in fiscal 2014. 2Pro forma includes Alagasco spend for the full fiscal year ended September 30, 2014. THE LACLEDE GROUP 9 ORGANIC GROWTH • Utility growth — Rate base growth in Alabama and Missouri driven by pipeline replacement — Vice President of Organic Growth focused on customer growth and new business • Asset optimization — In depth analysis of upstream and midstream — transportation, storage, and supply — Evaluating how best to invest and use our expertise — Goal is to create value for customers and shareholders, improve reliability, diversify supply — Evaluating first mile/last mile pipeline investments • Consolidating municipal gas companies in existing jurisdictions • Growing our complementary non -regulated businesses THE LACLEDE GROUP 10 GAS UTILITY ACQUISITIONS DRIVE REGULATED GROWTH ($ Millions) 300 200 100 0 $115 2013 Pro Forma Adjusted EBIT1 $181 20142 $270 2014 - Pro Forma 3 ($ Billions) Enterprise Value — Peer Gas Utilities 12 11.0 (As of February 6, 2015) 10 r 8 6 4 2 0 8.4 4.8 GAS ATO PNY LG 4.2 4.1 3.8 Alagasco • Laclede Gas/MGE Non -Regulated 3.1 2.4 2.2 1.6 SWX WGL NJR OGS SJR Legacy LG NWN Legacy Alagasco 'Earnings Before Interest and Taxes (EBIT) is calculated from the Statements of Income (Operations) by adding Interest Expense to Income Before Taxes. Adjustments include those made for Net Economic Earnings purposes. See Reconciliation from Operating Income to Adjusted EBIT (Non-GAAP) in Appendix. 22014 excludes Alagasco EBIT for month of September. 32014 — Pro Forma includes EBIT for Alagasco for the full fiscal year ended September 30. THE LACLEDE GROUP 11 GAS MARKETING ▪ Provides complementary non -regulated natural gas sales and services to diverse customer base • Leverages transportation contracts and supply in central U.S. — Currently operates on 7 pipeline systems — 2 Bcf of leased storage • Conservatively operated with diligent risk management protocols • Consistent contributor to profits — 2014 NEE of $10 million — Includes $5.6 million benefit of severe weather • Expect non -regulated businesses (including LER) to contribute ^' 2% of 2015 NEE L*ilede ENERGY RESOURCES® — Panhandle Eastern — EnAh!e Energy — Natural Gat Pipeline Co. — ANR — Southern Star — MoGas — Ozark — Sonat — Transco THE LACLEDE GROUP 12 NATURAL GAS FUELING SOLUTIONS • Laclede offering end -to -end NGV fueling solutions — Services: plan, design, build, own and operate, maintain — Station economics supported by anchor customers — Targets: heavy-duty trucking, transit, waste • Long-term national growth opportunity; expect critical mass to build over time • Lambert -St. Louis International Airport — Flagship station opened December 2013 — Supports airport services, commercial customers — 2014 volumes and revenues ahead of plan • Greer, South Carolina — Expect commercial operation mid-2015 — Located next to Quik Trip (QT) travel center — At 1-85 and Highway 101, a high -traffic corridor for tractor trailers spire NATURAL GAS FUELING SOLUTIONS THE LACLEDE GROUP 13 DELIVERING SHAREHOLDER VALUE • Growing Gas Utility earnings via investment, cost control and acquisitions • Record 2014 NEE per share — up 6.3% — Utility results driven by the addition of MGE -- Gas Marketing contribution driven by 2014 severe winter weather ($0.17 per share) (Net Economic Earnings Per Share1) $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 $2.52 I $2.74 2009 2010 II Gas Utility 'See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix. 'Negative amounts not shown ($0.03) in 2013 and ($0.09) in 2014. 0.40 2011 $2.79 2012 Gas Marketing $2.87 2013 Other2 $3.05 2014 THE LACLEDE GROUP 14 GROWING CASH FLOW • 2014 cash flow from operating activities impacted by interest rate hedging and changes in regulatory accounts • Excluding those variances, cash flow would have improved by $69 million • MGE and Alagasco expected to drive higher operating cash flows • Further enhanced by the tax basis step-up at Alagasco ($ Millions) 300 -- Net Cash Provided by Operating Activities $126 $ 7.19 Laclede ex. Alagasco Alagasco 2013 2014 2014 - Pro Format 'Adjusted for impacts of interest rate hedging for acquisition -related debt and for working capital changes associated with regulatory accounts (principally purchased gas adjustment and delayed customer billings). 22014 - pro forma includes Alagasco for the full fiscal year ended September 30. THE LACLEDE GROUP 15 SUPPORTING DIVIDEND GROWTH • Dividend raised 4.5% for calendar 2015 • Continuous dividends since 1946; 12 consecutive years of increases • Payout ratio targeted at 55% - 65% • Alagasco and MGE acquisitions support dividend growth (Annualized Dividend per Share) $1.90 $1.80 $1.70 $1.60 $1.50 $1.40 $1.58 2010 $1.62 2011 $1.66 2012 $1.70 2013 1Based on 2015 annualized dividend and LG closing stock price of $51.59 on February 13, 2015. 2Annualized dividend based on quarterly dividend of $0.46 per share effective January 5, 2015. $1.76 2014 Dividend Yield 3.6%1 $1.842 2015 THE LACLEDE GROUP 16 STRONG BALANCE SHEET AND SIGNIFICANT LIQUIDITY • Long-term Group capital structure of 50.3% LT debt at 12/31/141 — Includes new equity and debt raised/assumed for the Alagasco acquisition — Plans to take advantage of current favorable debt capital markets • Ample liquidity provided by 5-year facilities: - Laclede Gas: $450 million — Alagasco: $150 million - Laclede Group: $150 million • Strong, investment grade credit ratings Laclede Group Unsecured Debt Debt Ratings Laclede Gas First Mortgage Bonds Laclede Gas Commercial Paper Alagasco Unsecured Debt S&P BBB+ A A-2 A- Moody's Baa2 Al P-2 A2 Fitch BBB+ A F2 not rated 'For purposes of this calculation, long-term capitalization gives 100% equity treatment to notes issued as part of equity unit offering due to mandatory conversion feature. The current portion of long-term debt is considered a part of long-term capitalization since the Company plans to refinance this debt. THE LACLEDE GROUP 17 OUTLOOK FOR GROWTH Long -Term NEE1 per Share Growth Target $2.87 1 2013 565 944 Organic Growth ($ millions) 282 Latest 20143 Filings' • Growth in FY 2015 and FY 2016 to be above target • Driven by organic growth, accretive acquisitions • Annual results will vary due to weather, synergies, investments, rate cases, etc. • Non -regulated earnings expected to be ^'2% of total • Organic growth reflects MO and AL rate structures I Laclede Gas Rate Base MGE Rate Base ■ Alabama Equity • Alabama Debt Laclede Gas and MGE (rate base growth) Continued pipeline replacement Modest customer growth • Alagasco (capitalization growth) Structural increase in retained shareholders' equity Modest customer growth - Ramp up in pipeline investments 'NEE is Net Economic Earnings; excludes Alagasco transaction costs. See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix. 2As filed, Laclede Gas (Case No. GR-2013-0171) and MGE (Case No. GR-2014-0007). 3Average common equity for 12 months ended 9/30/14 and debt (long-term and short-term) at 9/30/14, both per RSE filing with Alabama Public Service Commission dated 10/24/14. THE LACLEDE GROUP 18 OUTLOOK SUMMARY • NEE' per share long-term growth target: 4% - 6% On track to achieve above target growth2 in 2015 and 2016 Anticipated shift in earnings distribution in 2015 reflects concentration of Alagasco's earnings during fiscal second quarter Fiscal Quarter Actual 20142 Anticipated 2015 First 38% 33% - 34% Second 50% 67% - 69% Third 15% 5%-8% Fourth (3%) (7%) - (10%) • CAPEX: $300 million in fiscal 2015; $1.5 billion for 2015-2019 — More than 50% allocated to infrastructure (pipeline replacement) in 2015 Continued accelerated pipeline replacement in Missouri, ramp -up in Alabama • 2015 effective tax rate: low 30% range ' See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix. 2Fiscal 2014 actual excludes earnings benefit of $0.17 per share from abnormally cold weather in the second quarter; growth expectations assume normal weather in all periods. THE LACLEDE GROUP 19 XIN3ddV THE LACLEDE GROUP LEADERSHIP TEAM re:1:4)0 Steven L. Lindsey Executive Vice President and Chief Operating Officer, Distribution Operations President, Laclede Gas Mark C. Darrell Senior Vice President, General Counsel and Chief Compliance Officer Suzanne Sitherwood President and Chief Executive Officer L. Craig Dowdy Senior Vice President, External Affairs, Corporate Communications and Marketing Steven P. Rasche Executive Vice President, Chief Financial Officer Michael C. Geiseihart Senior Vice President, Strategic Planning and Corporate Development Mary Caola Kullman Senior Vice President, Chief Administrative Officer and Corporate Secretary THE LACLEDE GROUP 21 FIRST QUARTER FISCAL 2015 OPERATING RESULTS NEE' up $9.4 million (+26%) to $45.7 million - Gas Utility: Up $14.0 million driven by addition of Alagasco, a change in MGE's rate structure to reflect a larger usage -based component, and higher ISRS revenues Gas Marketing: Down $0.4 million due to lower price volatility and basis differentials, and the expiration of a favorable long-term supply contract in late 2013 • NEE per share $1.06 compared to $1.11 last year - Earnings decrease reflects anticipated shift in concentration of earnings to later quarters - Lower per share results also reflect the issuance of 10.4 million shares in May 2014 to finance the Alagasco acquisition Net Cash Used By Operating Activities: $34.1 million vs. $15.7 million Driven by seasonal increases in customer billings and timing of gas purchases and billings under the PGA clause in Missouri - Partially offset by a reduction in other working capital, higher net income and D&A • Solid financial position, capitalization and liquidity at quarter end ' See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix. THE LACLEDE GROUP 22 FIRST QUARTER FISCAL 2015 FINANCIAL SUMMARY Millions (except EPS) Earnings by Segment Gas Utility Gas Marketing Other Net Economic Earnings (non-GAAP)1 Acquisition -related costs Fair value adjustments Net Income (GAAP) Earnings Per Share Net Economic Earnings Net Income Shares Outstanding - End of Period Key Balance Sheet / Cash Flow Metrics Cash Flow from Operating Activities Capital Expenditures Long-term Debt Short-term Debt % Equity to LT Capitalization2 'See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix. 2Long-Term Capitalization gives 100% equity treatment to notes issued in 2014 as port of equity unit offering due to mandatory conversion feature, and includes current maturities of $114.8 million since the Company plans to refinance these debt securities. Quarter Ended December 31 2014 49.8 $ 0.4 (4.5) 2013 35.8 0.8 (0.3) $ 45.7 $ 36.3 (0.4) (0.4 ; 1.8 (0.3, $ 47.1 $ 35.6 1.06 $ 1.09 $ 43.2 1.11 1.09 32.6 $ (34.7) $ $ 60.0 $ 34.6 $ 1,851.0 $ 832.8 $ 397.5 $ 287.1 49.7% 56.2% THE LACLEDE GROUP 23 INTEGRATION OF MGE AND ALAGASCO • MGE integration continues on track after successful first year — On schedule and exceeded 2014 synergy targets — Significant milestones achieved: • Completed MGE rate case • Ratified labor contracts at both MGE and Laclede Gas • Completed IT systems integration for finance, HR and supply chain n On track for Summer 2015 systems integration for work and asset management, customer care & billing e. Alagasco integration planning underway; internally managed process — Approach is similar to that used for MGE — Detailed integration planning in the first half of calendar 2015 — Process allows integration to occur at a measured pace over time THE LACLEDE GROUP 24 INCREASING PIPELINE REPLACEMENT Pipeline replacement investment supported by regulatory recovery mechanisms in Missouri (ISRS) and Alabama (RSE) • 139 miles of pipeline replaced in 2014 (Laclede Gas and MGE) More miles replaced at MGE in 2014 than three prior years combined Plan to accelerate pipeline investment at Alagasco (Miles) 150 100 50 0 18 18 2011 41 2012 68 1. Laclede Gas 2013 MGE 83 2014 THE LACLEDE GROUP 25 ALABAMA GAS CORPORATION rn Alabama's largest gas utility • Founded 1852 • Serves Birmingham (largest metro area) and Montgomery (state capital) - Access to Southern Natural and Transcontinental Gas pipelines — 13 Bcf of storage; 2 Bcf of LNG storage e —23,200 miles of main and service lines A Alagasco 044.4 Birmingham risk Montgomery AL Key Statistics' Average Common Equity (millions) Allowed ROE2 $391 10.80% Customers 415,800 Employees 943 2014 Customer Mix ■ RESIDENTIAL COMMERCIAL & INDUSTRIAL 'Average common equity for 12 months ended September 30, 2014. Average customers for the month of September2014, the period of Laclede's ownership of Alagasco; Employees as of September 30, 2014, 2Allowed ROE effective fiscal year 2015. THE LACLEDE GROUP 26 ALARAMA REGULATORY SUMMARY • Alabama Public Service Commission — commissioners elected to 4-year terms — Twinkle Andress Cavanaugh, President (R) - 2016 — Jeremy H. Oden (R) - 2018 — Chris "Chip" Beeker (R) - 2018 • Rate Stabilization & Equalization (RSE) mechanism — Ratemaking process in place for more than 30 years — Forward -looking, streamlined method designed to ensure • Stable rates for customers • Achievement of authorized ROE for utilities with no regulatory lag In January 2014, APSC extended RSE to September 2018 • ROE adjusting point reduced to 10.8% for fiscal 2015 • Increased Alagasco adjusted book equity cap to 56.5% (from 55%) • Retained 5 basis point incentive if customer satisfaction ratings in top -third of U.S. • ROE applied to annual budgeted average retained earnings for the forward year APSC approved fiscal 2015 RSE filing establishing rates effective December 1, 2014 — First Point of Test Adjustment in early March THE LACLEDE GROUP 27 ALABAMA RATE --SETTING PROCESS Annual Rate Stabilization and Equalization (RSE) Equity • Approved equity and retained earnings • Up to 56.5% of total capitalization Debt • Includes short and long-term debt o&M • Recurring operating costs (excludes certain one-time costs) Cost Control Measurement (CCM) Creates incentives to manage discretionary costs • O&M cost target set at 2007 level, adjusted for CPI-U • 1.75% high/low band around target • Sharing above and below band • Rates based on approved budgeted balances; reviewed quarterly vs. actuals • 10.8% ROE for 2015-2018 • Interest recovered in rates as a pass through of actual costs incurred • Budgeted costs recovered in rates • Rate review quarterly, adjusted for actual cost levels (only rate reductions allowed) 2 06 0 75% Company 25%o Customer Cost Target 5fl%o Company 50% Customer 2007 THE LACLEDE GROUP 28 OTHER ALABAMA RATE MECHANISMS Enhance Stability Reserve (ESR) • Allows deferral and recovery of certain non -recurring or non -controllable costs — Force majeure events — Self-insurance losses — Environmental costs — Loss of a major industrial customer • Provides for additional rate stability and risk mitigation Cast Iron Main Replacement Factor (CIMRF) • Promotes system integrity and safety, controlling long-term O&M costs • Provides return for replacement above a "base" level • Currently available to Mobile Gas Other mechanisms also available to Alagasco for gas supply, weather normalization, statutory tax changes and other factors THE LACLEDE GROUP 29 LACLEDE GAS • Missouri's largest gas utility • Founded 1857 Key Statistics Rate Base (millions)' $944 • Serves St. Louis and Eastern Missouri Allowed ROE (for 1SRS) 9.70% — Access to seven pipelines (from Mid -Continent and Gulf Coast supply basins) — 27 Bcf of upstream contracted and in -market gas storage capacity — 3 Bcfe non -regulated propane storage • —16,000 miles of main and service lines Laclede Gas Jefferson City MO St. Louis 'Rate base as filed in 2013 general rate case. 2 Average customers for 12 months ended September 30, 2014. 3Emnlovees su ortin Laclede Gas and MGE combined, at fiscal year ended September 30. 2014. 1 I Customers2 642,200 Employees3 1,929 2014 Customer Mix ■ RESIDENTIAL • COMMERCIAL & INDUSTRIAL THE LACLEDE GROUP 30 MISSOURI GAS ENERGY • Founded 1867 Key Statistics • Serves Kansas Cityand Western Missouri z Rate Base (millions) $565 — Access to five interstate pipelines (from Rockies Pre-tax WACC (for ISRS) 9.75% and Mid -Continent supply basins) Cust❑mers2 505,200 — 18 Bcf of contracted gas storage capacity • -14,000 miles of main and service lines MGM MISSOURI GAS ENERGY Kansas City Jefferson City MO 'Rate base as filed in general rate case concluded in 2014. 2Average customers for 12 months ended September 30, 2014. 2014 Customer Mix ■ RESIDENTIAL _' COMMERCIAL & INDUSTRIAL THE LACLEDE GROUP 31 MISSOURI REGULATORY SUMMARY • General rate case required every three years to retain ISRS eligibility -- Cost -of -service, rate base and capital structure determined using historical test year — Mechanisms to address pensions, energy efficiency and conservation • ISRS enables accelerated cost recovery of infrastructure investment — Investments in pipeline replacement to improve safety and reliability - ISRS filings allowed every six months — Minimizes regulatory lag, accelerates return on/of investment • Purchased Gas Adjustment Clause allows recovery of gas cost • Missouri Public Service Commission — five Governor -appointed members — Robert S. Kenney, Chairman (D) — assumed leadership role in 2013 Stephen M. Stoll (D) — William P. Kenney (R) — Daniel Y. Hall (D) — Scott T. Rupp (R) THE LACLEDE GROUP 32 MOST RECENT MISSOURI REGULATORY FILINGS Laclede Gas • ISRS filings — January 30, 2015 filed for $5.3 million increase — Requested increase would add to existing annual run rate of $9.8 million • 2013 general rate case - $14.8 million of ISRS revenues into base rates, effective September 1, 2013 — Maintained rate structure, cost recovery and ability to earn solid return Missouri Gas Energy • ISRS filing — January 30, 2015 filed for $2.6 million increase — Requested increase would add to existing annual run rate of $2.0 million • 2014 general rate case - $7.8 million base rate increase effective May 1, 2014 — Revenues replace a like amount collected under ISRS THE LACLEDE GROUP 33 EQUITY UNITS - SUMMARY • 2,875,000 equity units issued; net proceeds of $139 million — $50 face value per unit consisting of: • 3-year equity forward contract • A 1/20 interest in $1,000, 8-year junior subordinated note — 6.75% cash coupon: 2.00% interest on notes, 4.75% contract payment • Equity forward converts into common shares 3 years from issuance — Conversion based on stock price, with a 25% conversion premium retained by Laclede Present value of forward contract payments recorded as liability, offset to shareholder equity • Quarterly contract payments offset liability, not tax deductible • Liability accretes to full nominal amount payable over three year life • Notes are recorded on balance sheet as liability at par — Interest expense receives normal financial statement and tax treatment — Remarketed at year 3 for the remainder of original term THE LACLEDE GROUP 34 NET ECONOMIC EARNINGS (NON-GAAP) RECONCILIATION FY Ended FY Ended FY Ended FY Ended FY Ended FY Ended QTR Ended QTR Ended Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Dec. 31 Dec. 31 (Millions, except per share amounts) 2009 2010 2011 2012 2013 2014 2013 2014 Net economic earnings (Non-GAAP) $ 60.8 $ 56.1 $ 62.4 $ 62.6 $ 65.0 $ 100.1 $ 36.3 $ 45.7 Add: Unrealized gain (loss) on energy -related derivatives 3.4 (2.1) 1.4 0.3 (0.5) 0.9 (0.4) 3.0 Add: Lower of cost or market inventory adjustments - (0.9) 0.7 0.1 (1.2) Add: Realized (gain) loss on economic hedges prior to sale of commodity - (0.2) - 0.2 Add: Acquisition, divestiture and restructuring activities - (0.1) (10.8) (17.3) (0.4) (0.4) Net Income (GAAP) $ 64.2 $ 54.0 $ 63.8 $ 62.6 $ 52.8 $ 84.6 $ 35.6 $ 47.1 Net economic earnings per share excluding propane sale (Non-GAAP) $ 2.74 $ 2.36 $ 2.52 $ 2.79 $ 2.87 $ 3.05 $ 1.11 $ 1.06 Add: Sale of excess propane inventories (1) 0.16 0.27 - - Net economic earnings per share (Non -GAP 2.74 2.52 2.79 2.79 2.87 3.05 1.11 1.06 Add: Unrealized gain (loss) on energy -related derivatives 0.15 (0.09) 0.07 0.02 (0.02) 0.02 (0.01) 0.07 Add: Lower of cost or market inventory adjustments - - (0.03) 0.02 (0.03) Add: Realized (gain) loss on economic hedges prior to sale of commodity (0.01) 0.01 Add: Acquisition, divestiture and restructuring activities (0.01) (0.42) (0.48) (0.01) (0.01) Weighted Average Shares Adjustment Diluted Earnings per Share (GAAP) $ 2.89 $ 2.43 $ 2.86 $ 2.79 $ 2.02 $ 2.35 $ 1.09 $ 1.09 (0.38) (0.27) Amounts presented net of income taxes, which are calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of pre-tax reconciling items. Net economic earnings per share and net economic earnings per share excluding propane sale are calculated by replacing net income with net economic earnings and net economic earnings excluding propane sale in the GAAP diluted earnings per share calculation. Also, net economic earnings per share exclude the impact of the May 2013 and June 2014 equity offerings to fund the acquisitions of MGE and Alagasco, respectively. For the fiscal year ended September 30, 2013, the weighted average diluted shares used in the net economic earnings per share calculation was 22.5 million compared to 26.0 million in the GAAP EPS calculation. For the twelve months ended September 30 2014, the weighted -average diluted shares used in the net economic earnings per share calculation were 32.7 million compared to 35.9 million in the GAAP EPS calculation. (1) Income tax expense associated with the sale of excess propane inventories was $3.9 million and $2.3 million for fiscal years 2011 and 2010, respectively. THE LACLEDE GROUP 35 RECONCILIATION FROM OPERATING INCOME TO ADJUSTED EBIT (NON-GAAP) $ millions Twelve Months Ended September 30 Operating Income Income Taxes Other Income Interest Income Before Income Taxes (GAAP) Interest Laclede Gas/MGE Non -Regulated 2013 Earnings Before Interest and Income Taxes - EBIT (Non-GAAP) $ One-time Impacts/(Benefits)** $ 87.5 $ 2.0 63,4 $ 26.1 $ 89.5 $ 13.8 $ Laclede Gas/MGE Non -Regulated Alagasco 2014 9.0 $ 0.5 7.0 $ 2.5 $ 9.5 $ 2.4 $ 166.4 $ (3.4) (37. 11 125.6 $ 37.4 $ 163.0 $ 6.2 $ 3.3 $ 0.2 (7.5) (4.0) $ 7.5 $ 3.5 $ 8.8 $ Alagasco 2014- Pro Forma* (3.3) $ 1.3 $ 85.2 11.8 3.0 (15.4) 84.5 15.4 (3.4) $ 100.0 3.4 $ (10.9) Adjusted EBIT (Non-GAAP) RIMS 103.3 $ 11.9 $ 169.2 $ 12.3 $ 89.1 *Alagasco Pro Forma: Statement of Income Nine Months Ending 9/30/2014 filed in form 10KT/A on 11/26/14+ Income for the period 10/1/2013 - statements 10K filed 3/2/2014 and 10Q 11/8/2013). Alagasco one time benefit removed non -recurring gain on sale of assets. **Laclede Gas and LG Non -regulated: net economic earnings adjustments including fair value accounting adjustments and costs associated with acquisitions, excluding costs that would have been classified as interest expense. 12/31/2013 (by combining MGE and Alagasco THE LACLEDE GROUP 36