SPIRE INC
For the period ended Dec 31, 2024. Filed Feb 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 5, 2025
SR$88.81-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001437749-24-024001
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-05.
0000950170-25-014213
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 141 previous paragraphs and 132 current paragraphs.
48 unchanged; 37 reworded; 47 added; 45 removed; 11 previous and 0 current paragraphs rearranged.
Tables are not compared: 49 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (47)
Current report
Weather conditions and catastrophic events, particularly severe weather in U.S. natural gas producing areas;
Current report
Volatility in gas prices, particularly sudden and sustained changes in natural gas prices, including the related impact on margin deposits associated with the use of natural gas derivative instruments, and the impact on our competitive position in relation to suppliers of alternative heating sources, such as electricity;
Current report
Changes in gas supply and pipeline availability, including as a result of decisions by natural gas producers to reduce production or shut in producing natural gas wells and expiration or termination of existing supply and transportation arrangements that are not replaced with contracts with similar terms and pricing, as well as other changes that impact supply for and access to the markets in which our subsidiaries transact business;
Current report
Acquisitions may not achieve their intended results;
Current report
Legislative, regulatory and judicial mandates and decisions, some of which may be retroactive, including those affecting:
Current report
allowed rates of return and recovery of prudent costs,
Current report
incentive regulation,
Current report
industry structure,
Current report
purchased gas adjustment provisions,
Current report
rate design structure and implementation,
Current report
capital structures established for rate-setting purposes,
Current report
regulatory assets,
Current report
non-regulated and affiliate transactions,
Current report
franchise renewals,
Current report
authorization to operate facilities,
Current report
environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change and pipeline safety and security,
Current report
taxes,
Current report
pension and other postretirement benefit liabilities and funding obligations, or
Current report
accounting standards;
Current report
The results of litigation;
Current report
The availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets;
Current report
Retention of, ability to attract, ability to collect from, and conservation efforts of, customers;
Current report
Our ability to comply with all covenants in our indentures and credit facilities, any violations of which, if not cured in a timely manner, could trigger a default of our obligation;
Current report
Energy commodity market conditions;
Current report
Discovery of material weakness in internal controls;
Current report
The disruption, failure or malfunction of our operational and information technology systems, including due to cyberattacks; and
Current report
Employee workforce issues, including but not limited to labor disputes, the inability to attract and retain key talent, and future wage and employee benefit costs, including costs resulting from changes in discount rates and returns on benefit plan assets.
Current report
Gas Marketing
Current report
Midstream
Current report
Adjusted Earnings and Adjusted Earnings Per Share
Current report
Net unrealized gains and losses on energy-related derivatives that are required by GAAP fair value accounting associated with current changes in the fair value of financial and physical transactions prior to their completion and settlement. These unrealized gains and losses result primarily from two sources:
Current report
changes in the fair values of physical and/or financial derivatives prior to the period of settlement; and
Current report
ineffective portions of accounting hedges, required to be recorded in earnings prior to settlement, due to differences in commodity price changes between the locations of the forecasted physical purchase or sale transactions and the locations of the underlying hedge instruments;
Current report
Lower of cost or market adjustments to the carrying value of commodity inventories resulting when the net realizable value of the commodity falls below its original cost, to the extent that those commodities are economically hedged; and
Current report
Realized gains and losses resulting from the settlement of economic hedges prior to the sale of the physical commodity.
Current report
Net Income and Adjusted Earnings
Current report
Other income decreased $16.9 versus the prior-year quarter. The principal drivers of the decline was a one-time $8.2 pre-tax hedging gain recognized in the prior year quarter, a decline of gas carrying cost credits at Spire Missouri, and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts. Of the reported variance, $1.3 was attributable to the Postretirement Non-Service Costs Transfer (“NSC Transfer”), which has no impact on net income.
Current report
For the quarter ended December 31, 2024, Gas Utility net income and adjusted earnings were higher than the corresponding prior-year period by $2.3 and $2.0, respectively. The quarterly change in net income was driven by the combined improved performance of Spire Alabama and Spire EnergySouth totaling $5.9, partially offset by a $3.6 decrease at Spire Missouri.
Current report
Contribution margin increased $8.4 versus the prior-year quarter. Contribution margin benefited from the $7.0 Spire Missouri ISRS growth and $6.5 of growth from Spire Alabama’s annual rate update and volumetric usage net of weather mitigation. These favorable impacts more than offset the $3.4 negative volumetric impact net of weather mitigation at Spire Missouri.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Removed paragraphs (45)
Previous report
Net Economic Earnings and Net Economic Earnings Per Share
Previous report
Net Income and Net Economic Earnings
Previous report
During the quarter ended June 30, 2024, the Company launched an initiative to improve long-term customer affordability targeted at lowering our overall cost structure and improving operational efficiency. The initiative included cost reductions across its shared services and management organizations, including targeted reductions in workforce and a retirement incentive program. The results for the quarter include costs associated with this initiative, totaling $4.6 (or $3.4 after tax), and this amount is excluded from net economic earnings.
Previous report
For the quarter ended June 30, 2024, Gas Utility net income was $2.0 lower than the corresponding prior-year period. Net economic earnings in the current year was $1.3 higher than the prior year, reflecting the exclusion of the $3.3 (after-tax) charge related to the customer affordability initiative. The quarterly change in net economic earnings was driven by improved performance of the Southeast Utilities of $1.7, partially offset by a slight decrease at Spire Missouri.
Previous report
Contribution margin increased $11.6 versus the prior-year quarter. Contribution margin benefited from the $6.2 Spire Missouri ISRS growth, the $2.0 favorable RSE adjustment at Spire Alabama, and higher volumetric usage (including the Spire Alabama customer charge reset).
Previous report
The $3.5 quarter-over-quarter increase in net economic earnings primarily reflects asset optimization principally as a result of improved transportation margins due to favorable market conditions so far this year. Net income’s increase versus prior year was $1.3, reflecting $2.2 (after-tax) unfavorable mark-to-market activity excluded from net economic earnings.
Previous report
The Company’s other activities generated a $8.4 loss in the three months ended June 30, 2024, $1.0 larger than prior-year quarter results, as higher interest expense in the current year was not completely offset by lower corporate costs.
Previous report
Spire Missouri
Previous report
Resulting net income for the quarter ended June 30, 2024 decreased $3.0 versus the prior-year quarter. Net economic earnings, which excludes the charge for the customer affordability initiative, decreased $0.4 compared to last year.
Previous report
Spire Alabama
Previous report
Contribution margin was $2.1 higher versus the prior-year quarter, driven primarily by $2.0 favorable net rate adjustments under the RSE mechanism.
Previous report
O&M expenses for the three months ended June 30, 2024 increased $0.3 versus the prior-year quarter as lower employee benefit costs and reductions of outside service costs were offset by $0.6 of expenses relating to the customer affordability initiative.
Previous report
EARNINGS–** nine months ended June 30, 2024**
Previous report
Spire
Previous report
Net Income and Net Economic Earnings
Previous report
The increase in interest expense reflects higher average interest rates and higher average balances on short-term debt versus the prior year. Further, weighted-average short-term interest rates were 5.74% in the current-year period versus 4.83% in the prior-year period.
Previous report
Other income increased $7.9. Of this increase, $8.2 was the result of a gain realized on an interest rate swap contract after management determined the anticipated issuance of certain debt was no longer probable of occurring, resulting in the discontinuation of hedge accounting. This gain, combined with favorable mark-to-market valuations on unqualified retirement and investment trusts was only partly offset by lower gas carrying cost credits at Spire Missouri.
Previous report
The change in income taxes is materially consistent with the change in pre-tax book income combined with a slight increase in the effective tax rate, as certain benefits in the prior year did not recur.
Previous report
Gas Utility
Previous report
For the nine months ended June 30, 2024, Gas Utility net economic earnings in the current year was $18.3 higher than the prior-year period with higher earnings across both Missouri and Alabama. Net income in the current year was $15.4 higher than the prior year, reflecting the current-year quarter’s $3.3 (after-tax) expense relating to the Company’s customer affordability initiative that is excluded from net economic earnings. These results are described in further detail below.
Previous report
Warmer weather across our utility footprint in the current year negatively impacted both gas cost recoveries and customer usage, particularly for Spire Missouri. Spire Missouri realized $63.6 lower gas cost recoveries in the current year, as the current-year lower volumes more than offset the higher PGA rates being charged to customers. Spire Missouri also experienced lower volumetric usage totaling $11.9 in the current year. These warmer weather impacts more than offset the $22.9 increase from Spire Missouri reflecting the final quarterly impact of implementing the 2022 rate order, $24.5 incremental revenues resulting from the reset of the Spire Alabama per customer usage charge (net of weather adjustment), favorable Spire Alabama RSE adjustments totaling $12.3, and increases in ISRS and off-system sales of $11.8 and $7.9, respectively, at Spire Missouri.
Previous report
Contribution margin increased $52.8 versus the prior year. The $22.9 increase attributable to the implementation of the 2022 Missouri rate case order, $12.3 favorable RSE adjustment at Spire Alabama, $11.8 increase in ISRS and $9.7 growth resulting from the reset of the Spire Alabama per customer usage charge (net of weather adjustment) combined to more than offset the $11.9 negative volume usage impact (net of weather mitigation) experienced by Spire Missouri in the current year.
Previous report
O&M expenses for the nine months ended June 30, 2024 were $1.8 higher than the prior year, driven by the $4.4 expenses in the third quarter of the current year relating to the Company’s customer affordability initiative. Excluding these charges, the Gas Utility segment O&M decreased $2.6, reflecting lower operations expense, lower employee-related costs and reductions in outside service costs, partially offset by increased bad debt expense.
Previous report
Taxes, other than income taxes, decreased $0.8, as lower gross receipts taxes totaling $3.1 offset increases in property and real estate taxes. Depreciation and amortization expenses for the nine months ended June 30, 2024 were $14.7 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities. Interest expense increased $9.0 to $112.2 reflecting higher average net debt levels and higher short-term interest rates. Other income decreased $1.1 in the current year, primarily the result of lower gas carrying credits at Spire Missouri that were only partly offset by favorable mark-to-market valuations on unqualified retirement trusts.
Previous report
The $21.3 year-over-year decline in net economic earnings primarily reflects very favorable market conditions in the prior year that did not recur this year. Net income’s inclusion of $23.1 (after-tax) favorable mark-to-market activity offset the decline in business conditions.
Previous report
Revenues in the current year decreased $54.3 and contribution margin decreased $29.2 (after removing the $30.8 pre-tax favorable mark-to-market activity) versus the prior-year period, reflecting the lower current-year asset optimization opportunities outlined above. Operating expenses decreased by $1.3 year-over-year, due primarily lower employee-related costs.
Previous report
Net economic earnings and net income for the Company’s Midstream segment for the nine months ended June 30, 2024 versus the prior-year period increased $8.5 and $7.4, respectively. The increase was driven by higher storage earnings, reflecting additional capacity and contract renewals at higher rates at Spire Storage West and higher contracted rates at Salt Plains effective during the third quarter. NEE results also reflect the Spire Storage Salt Plains and MoGas acquisitions. Net income was impacted by $1.1 (after-tax) in acquisition transaction expenses incurred in the current year relating to the acquisition of MoGas.
Previous report
Revenues in the current year increased $19.8 versus the prior-year period, due primarily to the acquisitions of Spire Storage Salt Plains and MoGas and increased Spire Storage West revenues attributable primarily to the previously mentioned new capacity and rates in the third quarter of the current year. O&M expenses increased by $5.9 year-over-year, due primarily to operating expenses associated with the before-mentioned acquisitions, combined with transaction costs related to MoGas.
Previous report
Other
Previous report
The Company’s other activities generated a $21.6 net economic loss in the nine months ended June 30, 2024, $3.8 lower than the prior-year period. The improved results were driven by the current-year $8.2 gain realized on an interest rate swap contract after management determined the anticipated issuance of certain debt was no longer probable of occurring considering changes in debt issuance strategy due to the interest rate environment, resulting in the discontinuation of hedge accounting. This gain more than offset higher interest expense and slightly lower corporate costs in the current year.
Previous report
Spire Missouri
Previous report
Revenues for the nine months ended June 30, 2024 were $35.3 lower than the comparable prior-year period. A key driver was a decrease in gas recovery (PGA) totaling $63.6. Higher rates in the current year were more than offset by lower volumetric usage. This lower volume usage decreased revenues versus the prior year by $11.9. These negative impacts were only partly offset by an increase of $22.9 attributable to the impact of the 2022 rate order (new rates became effective the last week of December 2022) and higher ISRS and off-system sales of $11.8 and $7.9, respectively.
Previous report
Contribution margin for the nine months ended June 30, 2024 increased $25.6 from the same period in the prior year. The previously mentioned timing of the 2022 rate case implementation generated $22.9 incremental contribution combined with $11.8 higher ISRS more than offset the $11.9 impact of lower volumes.
Previous report
Degree days in Spire Missouri’s service areas during thenine months ended June 30, 2024, were 18.6% warmer than normal, and 10.2% warmer than the same period last year. Spire Missouri’s total system volume sold and transported were 1,299.6 million CCF for the current-year period, compared with 1,435.3 million CCF for the prior-year period. Total off-system volume sold and transported were 37.0 million CCF for the current-year, compared with 14.2 million CCF a year ago.
Previous report
Reported O&M expenses for the current-year quarter increased $0.7 versus the prior year. Excluding the $3.5 of charges in the current-year third quarter relating to the Company’s customer affordability initiative, run rate O&M expenses are $2.8 lower than the comparable prior-year period. This reduction of current year O&M was driven by non-payroll operations expense and lower outside services costs, partially offset by higher insurance and bad debt expenses.
Previous report
Depreciation and amortization expenses increased $11.4 versus the prior-year period due to ongoing capital investments. Taxes, other than income taxes, decreased $1.0, as lower pass-through gross receipts taxes more than offset higher property taxes in the current year.
Previous report
Other income decreased $0.9, as lower gas carrying cost credits were not totally offset by favorable mark-to-market valuations on unqualified retirement trusts. Interest expense increased $9.4, reflecting higher short-term interest rates in the current year and the $400 in long-term debt that was issued in the prior-year second quarter.
Previous report
Resulting net income for the nine months ended June 30, 2024 was flat versus the prior-year comparable period. Net economic earnings increased $2.0 after removing expenses primarily related to the current year customer affordability initiative.
Previous report
Spire Alabama
Previous report
Operating revenues for the nine months ended June 30, 2024 increased $21.3 from the same period in the prior year. The increase in operating revenue was principally due to the $24.5 impact of the current year customer usage charge reset net of weather adjustments, combined with favorable RSE adjustments of $12.3. These favorable impacts were only partly offset by a $15.6 decrease in gas cost recovery.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (37)
Previous wording
Item 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations
Current wording
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous wording
Spire Alabama is the largest natural gas distribution utility in the state of Alabama and is regulated by the APSC. Spire Alabama’s service territory is located in central and northern Alabama. Among the cities served by Spire Alabama are Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential, commercial, and industrial customers, and other end users of natural gas. Spire Alabama also transports gas through its distribution system for certain large commercial and industrial customers for a transportation fee. Effective December 1, 2020, for most of these transportation service customers, Spire Alabama also purchases gas on the wholesale market for sale to the customer upon delivery to the Spire Alabama distribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.
Current wording
Spire Alabama is the largest natural gas distribution utility in the state of Alabama and is regulated by the APSC. Spire Alabama’s service territory is located in central and northern Alabama. Among the cities served by Spire Alabama are Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential, commercial, and industrial customers, and other end users of natural gas. Spire Alabama also transports gas through its distribution system for certain large commercial and industrial customers for a transportation fee. For most of these transportation service customers, Spire Alabama also purchases gas on the wholesale market for sale to the customer upon delivery to the Spire Alabama distribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.
Previous wording
Spire’s midstream operations consist of Spire Storage West LLC, Spire Storage Salt Plains LLC (jointly, “Spire Storage”), Spire STL Pipeline LLC (“Spire STL Pipeline”), and Spire MoGas Pipeline. Spire STL Pipeline owns and operates a FERC-regulated 65-mile pipeline connecting the Rockies Express Pipeline in Scott County, Illinois, to delivery points in St. Louis County, Missouri, including Spire Missouri’s storage facility, and its operating revenue is derived primarily from Spire Missouri as its foundation shipper. Spire MoGas Pipeline (or simply “MoGas”), a 263-mile FERC-regulated natural gas pipeline and a connected 75-mile gas distribution system in Missouri, was acquired by Spire Midstream LLC, a subsidiary of Spire, on January 19, 2024. Spire Storage is engaged in the storage of natural gas in both the western and midcontinent regions of the United States. Spire Storage West, located in Wyoming, consists of two storage fields operating under one FERC market-based rate tariff, while Spire Storage Salt Plains, acquired on April 1, 2023 and located in Oklahoma, operates under intrastate jurisdiction with authorizations from FERC under Section 311 of the Natural Gas Policy Act to provide certain interstate storage, transportation, and hub services.
Current wording
Spire’s midstream operations consist of Spire Storage West LLC, Spire Storage Salt Plains LLC (jointly, “Spire Storage”), Spire STL Pipeline LLC (“Spire STL Pipeline”), and Spire MoGas Pipeline. Spire MoGas Pipeline (or simply “MoGas”), a 263-mile FERC-regulated natural gas pipeline and a connected 75-mile gas distribution system in Missouri, was acquired by Spire Midstream LLC, a subsidiary of Spire, on January 19, 2024. Spire STL Pipeline owns and operates a FERC-regulated 65-mile pipeline connecting the Rockies Express Pipeline in Scott County, Illinois, to delivery points in St. Charles County and St. Louis County, Missouri, including MoGas and Spire Missouri’s storage facility, and its operating revenue is derived primarily from Spire Missouri as its foundation shipper. Spire Storage is engaged in the storage of natural gas in both the western and midcontinent regions of the United States. Spire Storage West, located in Wyoming, consists of two storage fields operating under one FERC market-based rate tariff, while Spire Storage Salt Plains, located in Oklahoma, operates under intrastate jurisdiction with authorizations from FERC under Section 311 of the Natural Gas Policy Act to provide certain interstate storage, transportation, and hub services.
Previous wording
Other components of the Company’s consolidated information include Spire’s subsidiaries engaged in the operation of a propane pipeline and risk management, among other activities, and unallocated corporate items, including certain debt and associated interest costs.
Current wording
Other components of the Company’s consolidated information include Spire’s subsidiaries engaged in the operation of a natural gas liquids pipeline and risk management, among other activities, and unallocated corporate items, including certain debt and associated interest costs.
Previous wording
Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of net economic earnings, net economic earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to determine incentive compensation and to evaluate financial performance. These non-GAAP operating metrics should not be considered as alternatives to, or more meaningful than, the related GAAP measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are provided on the following pages.
Current wording
Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of adjusted earnings, adjusted earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to determine incentive compensation and to evaluate financial performance. These non-GAAP operating metrics should not be considered as alternatives to, or more meaningful than, the related GAAP measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are provided on the following pages.
Previous wording
Net economic earnings and net economic earnings per share are non-GAAP measures that exclude from net income, as applicable, the impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities, the largely non-cash impacts of impairments, and other non-recurring or unusual items such as certain regulatory, legislative or GAAP standard-setting actions. In addition, net economic earnings per share would exclude the impact, in the fiscal year of issuance, of any shares issued to finance such activities that have yet to be included in net economic earnings.
Current wording
Adjusted earnings and adjusted earnings per share are non-GAAP measures that exclude from net income, as applicable, the impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities, the largely non-cash impacts of impairments, and other non-recurring or unusual items such as certain regulatory, legislative or GAAP standard-setting actions. In addition, adjusted earnings per share would exclude the impact, in the fiscal year of issuance, of any shares issued to finance such activities that have yet to be included in adjusted earnings.
Previous wording
The following tables reconcile the Company’s net economic earnings to the most comparable GAAP number, net income.
Current wording
The following tables reconcile the Company’s adjusted earnings to the most comparable GAAP number, net income.
Previous wording
** Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares.
Current wording
** Adjusted earnings per share is calculated by replacing consolidated net income with consolidated adjusted earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares.
Previous wording
The increase in interest expense primarily reflects the increase in interest rates on both short-term and long-term debt. Weighted-average short-term interest rates were 5.6%in the current-year quarter versus 5.3% in the prior-year quarter.
Current wording
The decrease in interest expense reflects lower effective interest rates on short-term debt that more than offset higher average levels of debt in the current year. Weighted-average short-term interest rates were 4.6% in the current-year quarter versus 5.7% in the prior-year quarter.
Previous wording
The increase in income taxes reflects the significantly lower current-year book loss and mix.
Current wording
The decrease in income taxes reflects the lower current-year pre-tax book income and mix.
Previous wording
The primary driver of the current year decrease in revenue was the $25.7 impact of lower gas cost recoveries across all utilities, driven principally by lower usage. This reduction was only partly offset by higher current year ISRS billings at Spire Missouri, higher weather mitigation at Spire Missouri combined with the Spire Alabama customer charge reset, and favorable RSE adjustments at Spire Alabama.
Current wording
The primary driver of the current year decrease in revenue was the $101.3 impact of lower gas cost recoveries across all utilities, driven principally by lower PGA rates at Spire Missouri, combined with lower volumetric usage. These reductions were only partly offset by higher current year ISRS billings and higher off-system sales at Spire Missouri.
Previous wording
O&M expenses for the three months ended June 30, 2024, were $2.7 higher than the prior-year quarter, driven by the $4.4 current quarter charge relating to our customer affordability initiative. Excluding this charge, O&M expenses were $1.7 lower than the prior-year quarter, reflecting lowered employee-related costs, lower expense levels for non-payroll operations expense and reduced outside service costs that were only partly offset by higher bad debt expense in Spire Missouri.
Current wording
Reported operation and maintenance (“O&M”) expenses for the three months ended December 31, 2024 were $1.7 lower than the prior-year quarter. Excluding the impact of the NSC Transfer, O&M expenses were $0.6 lower than the prior-year quarter, as lower expense levels for non-payroll operations expense and reduced outside service costs were only partly offset by higher employee benefit costs and bad debt expense.
Previous wording
Taxes, other than income taxes, decreased $2.8, primarily due to lower gross receipt taxes resulting from lower revenues. Depreciation and amortization expenses for the quarter ended June 30, 2024 were $5.0 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities. Interest expense decreased $0.7, as decreases at the Southeast Utilities more than offset the slight increase at Spire Missouri. The benefit of current year gas carrying cost credits at Spire Missouri, included in other income, decreased $3.2 versus the corresponding prior-year quarter.
Current wording
Taxes, other than income taxes, decreased $3.6, primarily due to lower gross receipt taxes resulting from lower revenues more than offsetting increases in property taxes. Depreciation and amortization expenses for the quarter ended December 31, 2024 were $3.9 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities. Interest expense decreased $3.9, with both Spire Missouri and Spire Alabama benefiting from lower average short-term interest rates in the current year. The benefit of gas carrying cost credits at Spire Missouri, included in other income, decreased $3.9 versus the corresponding prior-year quarter.
Previous wording
Revenues in the current quarter decreased $1.9. Contribution margin increased $1.9 versus the prior-year quarter, reflecting the $2.9 (pre-tax) unfavorable mark-to-market activity. Excluding this impact, contribution margin increased $4.8, reflecting the favorable business drivers outlined above. O&M expenses were in line with prior year levels.
Current wording
Contribution margin decreased $12.8 versus the prior-year quarter, reflecting the $5.3 (pre-tax) unfavorable mark-to-market activity. Excluding this impact, contribution margin decreased $7.5, reflecting the unfavorable drivers noted above. O&M expenses were slightly lower than prior-year levels, the result of lower employee-related costs in the current year.
Previous wording
Net income and net economic earnings for the Company’s Midstream segment for the quarter ended June 30, 2024 versus the prior-year quarter increased $10.7 and $10.3, respectively. The increase was driven by higher storage earnings, reflecting additional capacity and contract renewals at higher rates at Spire Storage West and higher contracted rates at Salt Plains (both effective this quarter). Results also reflect the acquisition of MoGas earlier this year and the inclusion of Salt Plains in net economic earnings this year.
Current wording
Net income and adjusted earnings for the Company’s Midstream segment for the quarter ended December 31, 2024 versus the prior-year quarter increased $11.1 and $9.6, respectively. The increase was driven by higher Spire Storage earnings, reflecting additional storage capacity and contract renewals at higher rates. Current year results also reflect the January 2024 acquisition of MoGas.
Previous wording
Revenues in the current quarter increased $15.1 versus the prior-year quarter, and O&M expenses were flat quarter-over-quarter, due primarily to timing of expenses and current-year quarter offset by the added costs of Spire Storage Salt Plains and Spire MoGas.
Current wording
Revenues in the current quarter increased $18.6 versus the prior-year quarter, reflecting the higher rates and activity with storage. O&M expenses were up $2.4 quarter-over-quarter, due primarily to costs associated with the higher storage activity in the current year, combined with the added costs of MoGas.
Previous wording
Revenues for the quarter ended June 30, 2024 were $5.0 lower than the comparable prior-year period. Lower weather-driven volumes reduced gas cost recoveries by $11.8, which also reduced gross receipts taxes by $2.6. These negative impacts were only partly offset by $6.2 incremental ISRS revenues, $1.7 related to increased customer usage (including weather mitigation), and $1.0 attributable to higher off-system sales in the current-year quarter.
Current wording
Revenues for the quarter ended December 31, 2024 were $77.9 lower than the comparable prior-year period. Lower unit gas costs, combined with lower volumes in the western part of Spire Missouri’s territory reduced gas cost recoveries by $85.1. Decreased customer usage (including weather mitigation) reduced revenues by $3.4 versus the prior year quarter. These reduced revenue drivers also resulted in reduced gross receipts taxes of $3.0. These negative impacts were only partly offset by $7.0 incremental ISRS revenues and $5.8 attributable to higher off-system sales in the current-year quarter.
Previous wording
Contribution margin for the three months ended June 30, 2024 increased $8.6 from the same period in the prior year, primarily due to ISRS billings and weather-mitigated customer usage.
Current wording
Contribution margin for the three months ended December 31, 2024 increased $4.1 from the same period in the prior year, primarily due to the $7.0 incremental ISRS billings more than offsetting the unfavorable $3.4 weather-mitigated customer usage impact.
Previous wording
Degree days in Spire Missouri’s service areas during the three months ended June 30, 2024 were 39.9% warmer than normal, and 23.5% warmer than the same period last year. Spire Missouri’s total system volume sold and transported were 209.2 millioncentum (Latin for “hundred”) cubic feet (CCF) for the quarter, compared with 219.4 million CCF for the same period in the prior year. Total off-system volume sold and transported were 13.2 million CCF for the current-year quarter, compared with 10.3 million CCF a year ago.
Current wording
Degree days in Spire Missouri’s service areas during thethree months ended December 31, 2024 were 18.0% warmer than normal, though were flat with the same period last year. Spire Missouri’s total system volume sold and transported were 450.6 million centum (Latin for “hundred”) cubic feet (CCF) for the quarter, compared with 449.7 million CCF for the same period in the prior year. Total off-system volume sold and transported were 21.9 million CCF for the current-year quarter, compared with 2.2 million CCF a year ago.
Previous wording
O&M expenses for the current-year quarter increased $1.7 versus the prior-year quarter. The increase includes $3.5 in charges relating to our customer affordability initiative. Excluding these charges, run-rate O&M expenses decreased $1.8 versus the prior-year quarter. This decrease reflects lower employee and benefit costs in the current-year quarter, combined with lowered expense levels for non-payroll operations expense and reductions in outside service costs. These favorable impacts were only partly offset by higher bad debt expense.
Current wording
O&M expenses for the current-year quarter increased $1.3 versus the prior-year quarter. Excluding the NSC Transfer impact, the increase was $0.9. This increase reflects lowered expense levels for non-payroll operations expense and reductions in outside service costs that were more than offset by higher employee-related costs and higher bad debt expense.
Previous wording
Depreciation and amortization expenses increased $4.0 versus the prior-year quarter due to ongoing capital investments. Taxes, other than income taxes, decreased $1.7, driven by lower pass-through gross receipts taxes that were partly offset by higher real estate and property taxes.
Current wording
Depreciation and amortization expenses increased $3.6 versus the prior-year quarter due to ongoing capital investments. Taxes, other than income taxes decreased $1.9, driven by lower pass-through gross receipts taxes that were only partly offset by higher real estate and property taxes.
Previous wording
Other income declined by $2.9 versus the prior-year quarter, driven by the decrease in gas carrying cost credits of $3.2. Interest expense increased $0.4, primarily reflecting higher average short-term interest rates in the current year.
Current wording
Other income declined by $5.7 versus the prior-year quarter, primarily driven by the decrease in gas carrying cost credits of $3.9 and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts. Interest expense decreased $2.6, primarily reflecting lower average short-term interest rates in the current year.
Previous wording
Operating revenues for the three months ended June 30, 2024 decreased $9.6 from the same period in the prior year. The decrease in operating revenue was principally due to a $13.9 decrease in gas cost recovery that was only partly offset by the current year customer usage charge reset of $2.7, combined with favorable RSE adjustments of $1.9.
Current wording
Operating revenues for the three months ended December 31, 2024 decreased $21.7 from the same period in the prior year. The decrease in operating revenue was principally due to a $16.2 decrease in gas cost recovery, combined with annual rate update and volumetric usage, net of weather mitigation and lower gross receipts taxes totaling $4.2. Favorable RSE adjustments of $3.7 were also more than offset by a customer refund provision required to bring expected Return on Equity (ROE) within APSC (Alabama Public Service Commission) approved levels.
Previous wording
As measured in degree days, temperatures in Spire Alabama’s service area during the three months ended June 30, 2024, were 6.3% colder than normal, but 4.3% warmer than a year ago. Spire Alabama’s total system volume sold and transported were 231.8 million CCF for the three months ended June 30, 2024, compared with 237.0 million CCF for the same period in the prior year. Total off-system volume sold and transported were 28.2 million CCF for the current-year quarter, compared with 29.1 million CCF off-system volume sold and transported in last year’s third quarter.
Current wording
As measured in degree days, temperatures in Spire Alabama’s service area during the three months ended December 31, 2024, were 24.8% warmer than normal, and 10.3% warmer than a year ago. Spire Alabama’s total system volume sold and transported were 259.8 million CCF for the three months ended December 31, 2024, compared with 229.3 million CCF for the same period in the prior year. Total off-system volume sold and transported were 16.7 million CCF for the current-year quarter, compared with 26.4 million CCF off-system volume sold and transported in last year’s third quarter.
Previous wording
Depreciation and amortization expenses were up $0.9, the result of continued investment in infrastructure upgrades. Interest expense for the current-year quarter decreased $0.8 versus the prior-year quarter, primarily the result of lower short-term borrowings more than offsetting higher short-term interest rates.
Current wording
Interest expense for the current-year quarter decreased $1.5 versus the prior-year quarter, primarily the result of significantly lower short-term borrowings, combined with lower short-term interest rates.
Previous wording
For the quarter ended June 30, 2024, resulting net income increased $1.6 versus the prior-year quarter. Net economic earnings, which removes the expenses of the customer affordability initiative, increased $2.0 versus the prior-year quarter.
Current wording
For the quarter ended December 31, 2024, resulting net income increased $4.6 versus the prior-year quarter.
Previous wording
For thenine months ended June 30, 2024, net cash from operating activities improved$425.4 from the corresponding period of fiscal 2023. The key drivers of the favorable change are regulatory timing and fluctuations in working capital items, as discussed below in the Future Cash Requirements section, particularly the prior-year decreases in accounts payable and inventories and the current-year decrease in net regulatory assets.
Current wording
For thethree months ended December 31, 2024, net cash from operating activities improved $11.1 from the corresponding period of fiscal 2024. The key drivers of the favorable change are regulatory timing and fluctuations in working capital items, as discussed below in the Future Cash Requirements section.
Previous wording
For the nine months ended June 30, 2024, net cash used in investing activities was $285.6 greater than for the same period in the prior year. Payments for business acquisitions (net of cash acquired) were $175.9 for MoGas this year and $37.0 for Spire Storage Salt Plains last year. Total capital expenditures were $148.2 higher than last year, with a $62.3 spending increase in the Utilities and an $87.5 increase for Midstream (Spire Storage West expansion).
Current wording
For the three months ended December 31, 2024, net cash used in investing activities was $34.9 greater than for the same period in the prior year. Total capital expenditures were $34.1 higher than last year, with a $43.0 spending increase in the Utilities driven by infrastructure upgrades, advanced meter installations, and new business, and a $9.3 spending decrease for Midstream as the Spire Storage West expansion draws to a close.
Previous wording
Spire’s material cash requirements as of June 30, 2024, are related to capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations, and dividends. There were no material changes outside the ordinary course of business from the future cash requirements discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Total Company capital expenditures are planned to be $830 for fiscal 2024.
Current wording
Spire’s material cash requirements as of December 31, 2024, are related to capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations, and dividends. There were no material changes outside the ordinary course of business from the future cash requirements discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Total Company capital expenditures are planned to be $790 for fiscal 2025.
Previous wording
It is management’s view that the Company, Spire Missouri and Spire Alabama have adequate access to capital markets and will have sufficient capital resources, both internal and external, to meet anticipated requirements. Their debt is rated by two rating agencies: Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service (“Moody’s”). As of June 30, 2024, the debt ratings of the Company, Spire Missouri and Spire Alabama (shown in the following table) remain at investment grade with a stable outlook.
Current wording
It is management’s view that the Company, Spire Missouri and Spire Alabama have adequate access to credit and capital markets and will have sufficient liquidity and capital resources, both internal and external, to meet anticipated requirements. Their debt is rated by two rating agencies: Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service (“Moody’s”). As of December 31, 2024, the debt ratings of the Company, Spire Missouri and Spire Alabama (shown in the following table) remain at investment grade with a stable outlook.
Previous wording
The Company’s short-term cash requirements can be met through the sale of up to $1,300.0 of commercial paper or through the use of Spire’s $1,300.0 revolving credit facility. For information about short-term borrowings, see Note 6, Financing, of the Notes to Financial Statements in Item 1.
Current wording
The Company’s short-term cash requirements can be met through the sale of up to $1,500.0 of commercial paper or through the use of Spire’s $1,500.0 revolving credit facility. For information about these resources, see Note 6, Financing, of the Notes to Financial Statements in Item 1 and “Interest Rate Risk” under “Market Risk” below.
Previous wording
At June 30, 2024, Spire had outstanding principal of long-term debt totaling$3,751.1, of which $1,798.0 was issued by Spire Missouri, $750.0 was issued by Spire Alabama, and $223.1 was issued by other subsidiaries. For information about long-term debt issued this fiscal year, see Note 6, Financing, of the Notes to Financial Statements in Item 1.
Current wording
Factoring in the current portion of long-term debt, the Company’s long-term consolidated capitalization consisted of 47% equity at December 31, 2024 and 46% equity at September 30, 2024, respectively. At December 31, 2024, Spire had outstanding principal of long-term debt totaling $3,764.1, of which $1,818.0 was issued by Spire Missouri, $750.0 was issued by Spire Alabama, and $216.1 was issued by other subsidiaries.
Previous wording
Effective March 5, 2022, Spire Missouri was authorized by the MoPSC to issue conventional term loans, first mortgage bonds, unsecured debt, preferred stock and common stock in an aggregate amount of up to $800.0 for financings placed any time before December 31, 2024. Under this authorization through June 2024, Spire Missouri has issued $79.1 of common stock and $400.0 of first mortgage bonds. Spire Alabama has no standing authority to issue long-term debt and must petition the APSC for each planned issuance.
Current wording
Effective October 27, 2024, Spire Missouri was authorized by the MoPSC to issue conventional term loans, first mortgage bonds, unsecured debt, preferred stock and common stock in an aggregate amount not to exceed $850.0 any time from that date through December 31, 2027. As of December 31, 2024, approximately $817.7 may still be issued under this authorization. Spire Alabama has no standing authority to issue long-term debt and must petition the APSC for each planned issuance.
Previous wording
Spire has a shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission (SEC) for the issuance and sale of up to 250,000 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 224,371 and 218,716 shares at June 30, 2024 and July 28, 2024, respectively, remaining available for issuance under this Form S-3. Spire and Spire Missouri also have a universal shelf registration statement on Form S-3 on file with the SEC for the issuance of various equity and debt securities, which expires on May 9, 2025.
Current wording
Spire has a shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission (SEC) for the issuance and sale of up to 250,000 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 211,634 and 218,141 shares at December 31, 2024 and September 30, 2024, respectively, remaining available for issuance under this Form S-3. Spire and Spire Missouri also have a universal shelf registration statement on Form S-3 on file with the SEC for the issuance of various equity and debt securities, which expires on May 9, 2025.
Previous wording
For more information about the issuance of common stock, including Spire’s “at-the-market” (ATM) equity distribution agreement and the settlement of equity units, see Note 4, Shareholders’ Equity, of the Notes to Financial Statements in Item 1.
Current wording
For more information about the issuance of common stock under Spire’s “at-the-market” (ATM) equity distribution agreement, see Note 4, Shareholders’ Equity, of the Notes to Financial Statements in Item 1.
Previous wording
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources are based upon our financial statements, which have been prepared in accordance with GAAP, which requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting estimates used in the preparation of our financial statements are described in Item 7 of Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and include regulatory accounting, employee benefits and postretirement obligations, impairment of long-lived assets, and income taxes. There were no significant changes to critical accounting estimates during the nine months ended June 30, 2024.
Current wording
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources are based upon our financial statements, which have been prepared in accordance with GAAP, which requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting estimates used in the preparation of our financial statements are described in Item 7 of Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and include regulatory accounting, employee benefits and postretirement obligations, impairment of long-lived assets, and income taxes. There were no significant changes to critical accounting estimates during the three months ended December 31, 2024.
Previous wording
As of June 30, 2024, the Company has recorded through accumulated other comprehensive income a cumulative mark-to-market net gain of $32.2 on open swap contracts.
Current wording
The two interest rate swaps entered into during the first quarter of fiscal 2025 are hedging $350.0 of the Company's short-term commercial paper program. As of December 31, 2024, the Company has recorded through accumulated other comprehensive income a cumulative mark-to-market net gain of $16.1 on open swap contracts.
Rearranged previous paragraphs (11)
Previous report — wording carried elsewhere
Other income decreased $3.9 versus the prior-year quarter reflecting a decline of gas carrying cost credits at Spire Missouri.
Previous report — wording carried elsewhere
This section contains discussion and analysis of the results for the nine months ended June 30, 2024 compared to the results for the nine months ended June 30, 2023, in total and by registrant and segment.
Previous report — wording carried elsewhere
The following tables reconcile the Company’s net economic earnings to the most comparable GAAP number, net income.
Previous report — wording carried elsewhere
Income tax adjustments include amounts calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items.
Previous report — wording carried elsewhere
** Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares.
Previous report — wording carried elsewhere
Reconciliations of contribution margin to the most directly comparable GAAP measure are shown below.
Previous report — wording carried elsewhere
Select variances for the nine months ended June 30, 2024 compared to the nine months ended June 30, 2023 are summarized in the following table and discussed below.
Previous report — wording carried elsewhere
The $14.7 decrease in Gas Utility operating revenues was attributable to the following factors:
Previous report — wording carried elsewhere
The year-over-year increase in Gas Utility contribution margin was attributable to the following factors:
Previous report — wording carried elsewhere
As measured in degree days, temperatures in Spire Alabama’s service area during thenine months ended June 30, 2024, were 9.0% warmer than normal, but 12.8% colder than a year ago. Spire Alabama’s total system volume sold and transported were 783.9 million CCF for thenine months ended June 30, 2024, compared with 784.7 million CCF for the same period in the prior year. Total off-system volume sold and transported were 62.1 million CCF for the current year, compared with 57.2 million CCF off-system volume sold and transported in last year’s comparable period.
Previous report — wording carried elsewhere
Including the current portion of long-term debt, the Company’s long-term consolidated capitalization consisted of 47%and 44% equity at June 30, 2024 and September 30, 2023, respectively.