Empire District Electric Company (The) (EDE)

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The Empire District Electric Company (EDE)

Q3 2012 Earnings Call

October 26, 2012, 01:00 pm ET


Jan Watson - Secretary-Treasurer

Brad Beecher - President & CEO

Laurie Delano - Vice President, Finance & CFO




Good afternoon ladies and gentlemen and thank you for standing by. Welcome to The Empire District Electric Third Quarter 2012 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time. (Operator Instructions) I would like to remind everyone that this conference call is being recorded today the 26 October, 2012.

I will now turn the conference over to Ms. Jan Watson. Please go ahead.

Jan Watson

Good afternoon and thank you for joining us for The Empire District Electric Company’s teleconference to discuss the company’s operations and to review the financial results for the third quarter and 12 months ended September 30, 2012. A live webcast of this call is available on the Empire website at www.empiredistrict.com. Giving our presentation this afternoon will be Brad Beecher, President and CEO, and Laurie Delano, Vice President of Finance and CFO. A Q&A session will follow the presentation.

Our press release announcing third quarter earnings was issued yesterday afternoon. The press release maybe accessed on our website. Presentation slides for this call and webcast are available on our website at empiredistrict.com. There are links to the webcast located on the lower right side of the home page and in the Investors Section under presentation.

To participate in the Q&A portion of the webcast however you will need to submit your questions through the call in number for the conference. To change slides as we go along please press the arrows located on the lower right side of the slide. The replay of the call will be available for two weeks by dialing 800-406-7325 and entering pass code 4569694# and the webcast will be available on our website also.

Before we begin, I must remind you of the inherent uncertainties in any forward-looking statements in our discussion this afternoon. Slide two and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.

Also for further clarification, the earnings per share impact of revenue expense are discussed on an after-tax basis comparing the period referred to with the same period of the prior year. The estimated earnings per share impact of the individual items and the presentation of gross margins are non GAAP presentations which we believe to be useful to investors showing the earnings per share impact of the various components and analyzing changes in our operating performance from one period to the next.

This may not be comparable to other companies or more useful than the GAAP presentation included in the statements of income and does not support to be an alternative to earnings per share determined in accordance with GAAP as a measure of operating performance or any other measure of financial performance presented in accordance with GAAP.

I would now like to introduce Brad Beecher, President and CEO.

Brad Beecher

Thank you, Jan. Good afternoon everyone and welcome. Today, we will discuss matters from the Board of Directors Meeting conducted yesterday as well as our financial results for the third quarter and 12 months ended September 30th. We will also update you on company activities and progress in the Joplin area.

During the meeting yesterday, the Board declared a quarterly dividend of $0.25 per share payable December 17, 2012 for shareholders of record as of December 3rd. This represents a 4.6% annual yield at yesterday closing price of $21.79.

Yesterday, we reported consolidated third quarter 2012 earnings of $25.5 million or $0.60 per share driven in part by Cooling Degree Days 17% greater than the 30 year normal. This compares to the same period in 2011 when earnings driven by Cooling Degree Days 27% higher than normal were $25.2 million or $0.60 per share. For the 12 month period ending September 30, 2012, earnings were $54.7 million or $1.30 per share compared to September 30, 2011, 12 month earnings of $54.7 million for a $1.31 per share.

I will now turn the call over to Laurie for details of our financials.

Laurie Delano

Thank you, Brad and good afternoon to everyone. As Brad stated, our third quarter earnings of $25.5 million or $0.60 per share were relatively unchanged when compared to 2011 third quarter earnings. If you are following our webcast presentation, I will be referring to our slides to talk about the various impacts to the quarter.

As usual, I would like to begin by providing a non-GAAP basic earnings per share reconciliation for the quarter on a consolidated basis. For those of you that are following with our press release that will be the earnings per share reconciliation I’ll follow. For those of you looking at our slides, our analysis begins on slide four and as Jan indicated earlier, these earnings per share figures throughout the call are provided on an after-tax estimated basis.

Slide four illustrates the reconciliation and differences between the results of the two quarters. Total gross margins which we define as revenues less fuel and purchase power costs increased an estimated $0.02 per share during the quarter. Consolidating operating and maintenance expense reduced earnings per share by about $0.03. Depreciation and amortization decreased earnings per share another penny. Taxes, interest and other income and deductions added about $0.03 to earnings per share while the dilutive effect of common stock issuances through our dividend reinvestment plan reduced earnings about $0.01 per share. These increases and decreases net to a zero impact quarter-over-quarter.

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