UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the fiscal year ended
December 31, 2002
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] for the transition period from
____________ to ___________
Commission file number: 1-16681
EMPLOYEES' PROFIT SHARING AND SALARY
DEFERRAL PLAN OF SM&P UTILITY RESOURCES, INC.
(Full title of the plan)
THE LACLEDE GROUP, INC.
(Missouri corporation)
720 Olive Street
Saint Louis, Missouri 63101
314-342-0500
(Name of issuer of the securities held pursuant to the plan
and address of its principal executive offices)
EMPLOYEE'S PROFIT SHARING AND SALARY
DEFERRAL PLAN OF SM&P UTILITY RESOURCES, INC.
Form 11-K
Table of Contents
Page No.
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Independent Auditors' Report 2
Financial Statements as of and for the years ended
December 31, 2002 and 2001
Statements of Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2002:
Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets Held
for Investment Purposes at the End of Year 9
Certain supplemental schedules required by the rules and regulations
of the Department of Labor are omitted because of the absence of
conditions under which they are required.
Signatures 10
Exhibits 11
Consent of Deloitte Touche LLP, Independent
Public Accountants
1
Deloitte & Touche LLP
One City Centre
St. Louis, Missouri 63101-1819
Tel: (314) 342-4900
www.deloitte.com
INDEPENDENT AUDITORS' REPORT
Employee Benefits Committee of the
Employees' Profit Sharing and Salary Deferral Plan of
SM&P Utility Resources, Inc.
We have audited the accompanying statement of net assets available for
benefits of the Employees' Profit Sharing and Salary Deferral Plan of SM&P
Utility Resources, Inc. (the "Plan") as of December 31, 2002 and 2001, and
the related statement of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December
31, 2002 and 2001, and the changes in its net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at the end of the year is presented for the
purpose of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. This schedule is
the responsibility of the Plan's management. Such schedule has been
subjected to the auditing procedures applied in our audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken
as a whole.
/s/ DELOITTE & TOUCHE LLP
June 20, 2003
2
EMPLOYEES' PROFIT SHARING AND SALARY DEFERRAL PLAN OF
SM&P UTILITY RESOURCES, INC.
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
---------------------------------------------------------------------------------------------
2002 2001
ASSETS:
Investments:
Mutual funds $10,129,566 $ 9,789,560
Common stock 442,679 408,758
Participant loans 508,607 466,052
----------- -----------
Total investments 11,080,852 10,664,370
----------- -----------
Contributions receivable:
Participant contributions 50,783 44,407
Employer contributions 817,608 691,551
Interest on participant loans 1,348 870
----------- -----------
Total contributions receivable 869,739 736,828
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $11,950,591 $11,401,198
=========== ===========
See notes to financial statements.
3
EMPLOYEES' PROFIT SHARING AND SALARY DEFERRAL PLAN OF
SM&P UTILITY RESOURCES, INC.
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
----------------------------------------------------------------------------------------------------------
2002 2001
ADDITIONS:
Investment income (loss):
Interest $ 179,914 $ 169,935
Net depreciation in investments (1,563,894) (1,161,757)
----------- -----------
Total investment loss (1,383,980) (991,822)
----------- -----------
Contributions:
Participant 2,221,870 1,831,884
Employer 820,881 692,207
Other 73,154 72,174
----------- -----------
Total contributions 3,115,905 2,596,265
----------- -----------
Total additions 1,731,925 1,604,443
DEDUCTIONS--Benefits paid 1,182,532 1,023,367
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 549,393 581,076
NET ASSETS AVAILABLE FOR BENEFITS--Beginning of year 11,401,198 10,820,122
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS--End of year $11,950,591 $11,401,198
=========== ===========
See notes to financial statements.
4
EMPLOYEES' PROFIT SHARING AND SALARY DEFERRAL PLAN OF
SM&P UTILITY RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
----------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
GENERAL--The following description of the Employees' Profit Sharing
and Salary Deferral Plan of SM&P Utility Resources, Inc. (the "Plan"),
provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's
provisions. The Plan was established effective July 1, 1987. The Plan
is a defined contribution plan which covers employees of SM&P Utility
Resources, Inc. (the "Company") who are not represented by a collective
bargaining agreement, provided they meet the prescribed eligibility
requirements. Certain employees of the Company, act as trustees (the
"Trustees") of the Plan and control and manage the operation of the
Plan. American United Life Insurance Company ("AUL" or "Custodian")
serves as the custodian of the Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended.
PARTICIPATION OR ELIGIBILITY--All full time, employees of the Company
who are not represented by a collective bargaining agreement and
have attained age 20-1/2 years and completed six months of service,
as defined by the Plan document, are eligible to participate.
CONTRIBUTIONS--Under the Plan, eligible participants may elect a
salary deferral of 1% to 15% of compensation, as defined in the Plan
document, subject to certain Internal Revenue Code ("IRC")
limitations.
The Company may make discretionary matching contributions from its net
profits which are allocated to each eligible participant's account
based upon the participant's salary deferral amount. For the years
ended December 31, 2002 and 2001, the Company elected to make a
matching contribution equal to 50% of each participant's salary
deferral amount, up to a maximum of 6% of the participant's
compensation. The Company may make additional discretionary
contributions which are allocated to each eligible participant in
proportion to compensation and are unrelated to any participant salary
deferral amounts. No additional discretionary contributions were made
during the 2002 and 2001 Plan years.
ROLLOVERS FROM OTHER QUALIFIED EMPLOYER PLANS--The Plan allows for
employees to transfer certain of their other qualified employer
retirement plan assets to the Plan.
PARTICIPANT ACCOUNTS--In addition to the employee and Company matching
contributions, each participant's account is credited with an
allocation of Plan earnings, based on participant account balances, as
defined in the Plan document.
INVESTMENT OPTIONS--There are thirteen investment alternatives
available for the investment of contributions to the Plan.
Participants may invest their contributions to the Plan in any one or
more of the investment funds and may request the transfer of their
contributions among the funds. The investment funds consist of mutual,
bond, and equity funds offered by the Custodian. During January 2002
the Company was acquired by The Laclede Group, Inc.
5
("Group"). As a result of the acquisition of the Company by the
Group, an option to acquire the stock of the Group was offered in
place of the previous investment option of NiSource Inc. ("NiSource")
common stock. Effective August 1, 2003 investments of NiSource stock
will be liquidated and reinvested at the discretion of the
participants in any of the remaining investment options. If no option
is selected the proceeds from the sale of NiSource stock will default
to the AUL American Money Market Fund.
VESTING--Participants are immediately vested in their contributions
and actual earnings thereon. Participants vest ratably over a
five-year period in Company contributions and earnings thereon.
FORFEITURES--Forfeitures of Company matching contributions are used to
reduce future Company matching contributions. There were no
forfeitures available to offset future Company contributions at
December 31, 2002 and 2001. Forfeitures of $20,925 and $20,695 were
utilized during the years ended December 31, 2002 and 2001,
respectively, to reduce Company contributions.
PAYMENT OF BENEFITS--Upon retirement or termination of service,
participants may elect one of several benefit distribution options
including, but not limited to, monthly payments or a lump-sum
distribution. There were no amounts payable to such terminated
participants at December 31, 2002 or 2001. Benefits are recorded when
paid.
HARDSHIP WITHDRAWALS--A participant may request withdrawals of their
vested account balance if they satisfy hardship requirements
established by the plan administrator in accordance with Internal
Revenue Service ("IRS") guidelines.
LOANS--Participants may borrow against their account balance a minimum
of $1,000 up to the lesser of $50,000 or 50% of the participant's
vested account balance. The repayment period may not exceed five years
unless the loan is used to purchase the participant's primary
residence, subject to certain restrictions. Loans are secured by the
balance in the participant's account and bear interest at a rate
comparable to the rate charged by a commercial lender, subject to
review periodically by the Employee Benefits Committee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING--The accompanying financial statements are
prepared on the accrual basis of accounting.
USE OF ESTIMATES--The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires the Plan sponsor to make estimates and
assumptions that affect the reported amounts of assets, liabilities
and disclosure of contingent assets, and liabilities at the date of
the financial statements and the reported amount of additions and
deductions during the reporting period. Actual results could differ
from those estimates.
The Plan invests in corporate stocks and funds that invest in various
securities including U.S. Government securities, corporate debt
instruments, and corporate stocks. Investment securities, in general,
are exposed to various risks, such as interest rate, credit, and
overall market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes
in the values of investment securities will occur in the near
6
term and that such changes could materially affect the amounts
reported in the statements of net assets available for plan benefits.
INVESTMENT VALUATION--All investments in investment funds and common
stock are stated at fair value as reported by the Custodian and based
upon quoted market prices. Participant loans are stated at cost which
approximates fair value.
ADMINISTRATIVE EXPENSES--Administrative expenses of the Plan are paid
by the Company. Certain other expenses of the Plan such as investment
manager fees and broker fees are paid out of the net assets of the
Plan.
3. INVESTMENTS
The following presents investments that represent 5% or more of the
Plan's net assets at December 31:
2002 2001
AUL Fixed Interest Investment Fund $3,076,538 $2,642,990
Fidelity (VIP) Growth Fund 1,342,866 1,791,576
Fidelity (VIP II) Asset Manager Fund 988,391 1,035,994
SSGA S&P 500 Flagship Fund 968,265 1,088,707
American Century Ultra Fund 975,638 1,038,966
PBHG Growth Fund 569,213 691,823
AUL American Bond Fund 959,244 678,178
AUL American Money Market Fund 773,515 557,738
During 2002 and 2001, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the
year) (depreciated) appreciated in value as follows:
2002 2001
Mutual funds $(1,518,795) $(1,053,551)
Common stock (45,099) (108,206)
----------- -----------
$(1,563,894) $(1,161,757)
=========== ===========
4. PARTY-IN-INTEREST
Certain of the Plan's investments are invested in shares of funds
offered by the Custodian and common stock of Group. Therefore,
these transactions qualify as party-in-interest transactions. Such
investments as of December 31, 2002 are disclosed on the schedule
of assets held for investment purposes.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan at any time, subject to the
provisions set forth in ERISA.
7
6. TAX STATUS
The Internal Revenue Service has issued a determination letter dated
December 11, 1996, stating the Plan is qualified under applicable
sections of the IRC. The Plan has been amended since receiving the
determination letter. The plan administrator believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500.
DECEMBER 31,
--------------------------------------
2002 2001
Net assets available for plan benefits per the financial
statements $11,950,591 $11,401,198
Amounts allocated to withdrawing participants (7,656) (8,934)
----------- -----------
Net assets available for benefits per the Form 5500 $11,942,935 $11,392,264
=========== ===========
Benefit payments and withdrawals per the financial
statements $ 1,182,532 $ 1,023,367
Add: Amounts allocated to withdrawing participants at
December 31, 2002 and 2001, respectively 7,656 8,934
Less: Amounts allocated to withdrawing participants at
December 31, 2001 and 2000, respectively (8,934) (5,415)
----------- -----------
Benefit payments and withdrawals per the Form 5500 $ 1,181,254 $ 1,026,886
=========== ===========
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for
payment prior to December 31 but not yet paid as of that date.
* * * * * *
8
EMPLOYEES' PROFIT SHARING AND SALARY DEFERRAL PLAN OF
SM&P UTILITY RESOURCES, INC.
FORM 5500, SCHEDULE H, PART IV, LINE 4I--SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES AT THE END OF THE YEAR
DECEMBER 31, 2002
------------------------------------------------------------------------------------------------------------------------
IDENTITY OF ISSUE, BORROWER, MARKET
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
Mutual Funds * AUL Fixed Interest Investment Fund $ 3,076,538
Fidelity (VIP) Growth Fund 1,342,866
SSGA S&P 500 Flagship Fund 968,265
Fidelity (VIP II) Asset Manager Fund 988,391
American Century Ultra Fund 975,638
PBHG Growth Fund 569,213
* AUL American Bond Fund 959,244
* AUL American Money Market Fund 773,515
Alger American Leveraged Allcap Fund 145,298
Fidelity (VIP) High Income Fund 122,392
American Century Income & Growth Fund 121,915
American Century International Growth Fund 86,291
-----------
Total Mutual Funds 10,129,566
-----------
Common Stock NiSource Inc. Common Stock 345,165
* Laclede Group Common Stock 97,514
-----------
Total Common Stock 442,679
-----------
Participant Loans * Various participants, rates from 5.25% to
10.5%, maturities through May 2009 508,607
-----------
$11,080,852
===========
* Represents a party-in-interest to the Plan.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMPLOYEES' PROFIT SHARING
AND SALARY DEFERRAL PLAN
OF SM&P UTILITY RESOURCES, INC.
-------------------------------
(Registrant)
Date: June 27, 2003 BY /s/ James A. Muhl
-------------- -------------------------------
James A. Muhl
Trustee
Date: June 27, 2003 BY /s/ Penelope S. Conway
-------------- -------------------------------
Penelope S. Conway
Trustee
10
Exhibits
No. Description
23 Consent of Independent Auditors
11