Slide 1: The Laclede Group First Quarter Fiscal 2016 Earnings Call
February 3, 2016 THE LACLEDE GROUP, INC. @ Te Laclede Group
Slide 2: Participants on Today's Call
PARTICIPANTS ON TODAY'S CALL Suzanne Sitherwood Steven P. Rasche Steven L. Lindsey President and Executive Vice President, Executive Vice President and Chief Executive Officer Chief Financial Officer Chief Operating Officer, Distribution Operations CEO & President, Laclede Gas CEO, Alagasco THE LACL
Slide 3: Forward-Looking Statements and Use of Non-GAAP Measures
FORWARD-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.
Slide 4: Transforming Our Company
TRANSFORMING OUR COMPANY Industry sector has reinvented itself in response to unprecedented change in global energy markets We have responded with transformation of our own Over last several years we have: Tripled our enterprise value Expanded our geographic footprint Added nearly one million custom
Slide 5: Executing Our Growth Strategy
EXECUTING OUR GROWTH STRATEGY Growing our gas utility business — Organic growth initiatives — Investment in infrastructure upgrades Acquiring and integrating gas utilities Modernizing our gas assets Investing in innovation and emerging markets - CNG fueling solutions THE LACLEDE GROUP | FIRST QUARTE
Slide 6: Modernizing Our Gas Assets
MODERNIZING OUR GAS ASSETS Providing a better, more diverse portfolio of gas supply assets Improving reliability, resiliency and access to lower cost shale gas Striving to optimize our supply and transportation portfolios Initial focus has been on opportunities in eastern Missouri, focusing on a pip
Slide 7: REX/PEPL New Lateral
Niobrara REX/PEPL Marcellus/Utica Missouri New Lateral Rockies Express Panhandle • MoGas • Southern Star • Enable MRT • • •
Slide 8: First quarter highlights
• • – – • • • – – 1See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix.
Slide 9: Net Economic Earnings by segment
First Quarter Ended December 31 $ Millions Per Diluted Share Net Economic Earnings 1 FY16 FY15 FY16 FY15 Gas Utility $ 50.0 $ 49.8 $ 1.15 $ 1.15 Gas Marketing (0.3) $ 0.4 - $ 0.01 Other (4.6) $ (4.5) (0.11) $ (0.10) $ 45.1 $ 45.7 $ 1.04 $ 1.06 • • • 1See Net Economic Earnings (Non-GAAP) Reconciliati
Slide 10: Operating revenues and operating margin
First Quarter Ended December 31 Change ($ millions) FY16 FY15 $ % Operating Revenues Gas Utility $ 398.8 $ 581.4 $ (182.6) -31% Gas Marketing & Other 0.6 38.2 (37.6) -98% $ 399.4 $ 619.6 $ (220.2) -36% 1 Operating Margin Gas Utility 220.1 225.8 (5.7) -3% Gas Marketing 5.4 5.1 0.3 6% Other 0.8 0.7 0.
Slide 11: Operating expenses and income
First Quarter Ended December 31 Change ($ millions) FY16 FY15 $ % Operating Revenues $ 399.4 $ 619.6 $ (220.2) -36% Operating Expenses Gas Utility Natural & propane gas 148.5 304.3 (155.8) -51% Other operation & maintenance 91.6 97.1 (5.5) -6% Depreciation & amortization 33.5 32.0 1.5 5% Taxes, othe
Slide 12: EBITDA and capital expenditures
($ millions) ($ millions) $40 $120 $20 $100 $33.5 $80 $0 $60 $121.0 $122.1 -$34.1 $40 -$20 $20 -$40 $0 Q1 FY15 Q1 FY16 Q1 FY15 Q1 FY16 • – – • 1EBITDA is Earnings Before Interest, Taxes, and Depreciation and Amortization. See EBITDA (Non-GAAP) Reconciliation in Appendix.
Slide 13: 5-Year Capital Forecast: $1.6 Billion+
($ millions) ($ millions) 5-Year Forecast: $1.6 Billion+ $75 $350 $325 $330 $335 $335 $315 $300 $290 110 110 110 110 $50 $250 103 96 $200 $171 $60.0 $62.4 $150 $25 72 $100 212 215 220 225 225 194 $50 99 $0 $0 Q1 FY15 Q1 FY16 2014 2015 2016E 2017E 2018E 2019E 2020E Utility, with Minimal Lag Other Uti
Slide 14: Dividend Yield
Dividend Yield 3.3%2 $2.00 $1.961 $1.84 $1.80 $1.76 $1.70 $1.66 $1.62 $1.60 $1.40 2011 2012 2013 2014 2015 2016 • • – – • 1Quarterly dividend of $0.49 per share, annualized. 2Based on $1.96 per share dividend and LG average closing stock price of $59.30 for the month January 2016.
Slide 15: Capitalization and liquidity
(at December 31, 2015) ($ millions) Total Facilities $750 $600 Equity Debt $450 50.5% 49.5% $300 $150 $398 $377 $0 12/31/14 12/31/15 ($ millions) Equity Debt Total Capitalization per balance sheet $1,600.3 $1,851.5 $3,451.8 Notes Payable Unused Capacity Under Reclassify equity units 143.8 (143.8) -
Slide 16: Outlook for Growth
OUTLOOK FOR GROWTH Fiscal 2016 * NEE target remains $3.34 - $3.44 per share ¢ Represents growth of 5% - 8% over 2015 * Quarterly distribution of earnings — Unseasonably warm weather did impact Q1 — Expected to push ~5% of total annual NEE per share to the second half of FY16, with the fourth fiscal
Slide 17: We continue to execute on our strategy
We continue to execute on our strategy Realizing results from organic growth initiatives and infrastructure upgrades Modernizing our gas supply and investing for the future We are on track to achieve 2016 earnings per share target We continue to transform our company and we look forward to sharing m
Slide 18: Appendix
APPENDIX
Slide 19: Net Economic Earnings Reconciliation
Gas Gas Per Share ($ millions, except per share amounts) Utility Marketing Other Total Amounts (2) Three Months Ended December 31, 2015 Net Income (Loss) (GAAP) $ 49.3 $ 2.3 $ (4.7) $ 46.9 $ 1.08 Unrealized gain on energy-related derivatives (1) (0.1) (2.9) - (3.0) (0.07) Lower of cost or market inv
Slide 20: Operating Margin Reconciliation
Gas Gas ($ millions) Utility Marketing Other Eliminations Consolidated Three Months Ended December 31, 2015 Operating revenues $ 399.5 $ 12.8 $ 0.8 $ (13.7) $ 399.4 Natural and propane gas expense 161.9 7.4 - (13.4) 155.9 Gross receipts tax expense 17.5 - - - 17.5 Operating margin (non-GAAP) 220.1 5
Slide 21: EBITDA Reconciliation
($ millions) Q1 FY16 Q1 FY15 Net Income $ 46.9 $ 47.1 Add back: Interest Charges 19.0 19.2 Income Tax Expense 22.5 22.4 Depreciation & Amortization 33.7 32.3 EBITDA $ 122.1 $ 121.0 1EBITDA is Earnings Before Interest, Income Taxes, and Depreciation and Amortization.
Slide 22: The Laclede Group
Z ® Te Laclede Group