Joplin tornado costs Empire District $20 to $30 million; quarterly dividends suspended

(From Empire District Electric)

Empire District Electric Company reported consolidated earnings for the third quarter of 2011 of $25.2 million, or $0.60 per share, compared with 2010 same quarter earnings of $23.0 million, or $0.56 per share (or $0.55 per share on a diluted basis). Earnings for the twelve months ended September 30, 2011 were $54.7 million, or $1.31 per share. This compares to earnings of $46.9 million, or $1.19 per share, for the 2010 twelve month period.

-- Approximately 3,900 residential, commercial and industrial customers remain unable to return to service due to damaged or destroyed structures resulting from the EF-5 tornado that struck the Joplin, Missouri area on May 22, 2011. Approximately 600 temporary housing units have been added to our system during the third quarter to shelter local residents displaced by the tornado. Estimated storm restoration costs remain at $20 million to $30 million, of which approximately $19.1 million has been incurred to date. The majority of these costs have been capitalized. The ongoing loss of revenue associated with the tornado was mitigated by increased customer usage due to storm recovery efforts, rate increases that became effective during 2010 and early 2011, and record hot weather during the quarter. Based on monthly Cooling Degree Days, the third quarter was the warmest in the past 30 years due primarily to extreme temperatures in July and early August. The loss of electric load and corresponding revenues from the tornado is expected to continue as customers rebuild. An Accounting Authority Order filed with the Missouri Public Service Commission shortly after the May 22 tornado remains pending. It requested authorization to defer expenses associated with the storm and to allow for the recovery of the loss of the fixed cost component included in our rates resulting from lost sales.

-- In response to this expected loss of revenues, our level of retained earnings and other relevant factors, our Board of Directors suspended our quarterly dividend for the third and fourth quarters of 2011. Based on current conditions and knowledge, at today's meeting the Board of Directors reaffirmed their expectation to re-establish the quarterly dividend at an approximate level of $0.25 per share for the first quarter of 2012.