SPIRE INC

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 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.

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 LLC (“Spire MoGas Pipeline” or “MoGas”). 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

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.

Current wording

The decrease in interest expense reflects lower effective interest rates on long-term and short-term debt that more than offset higher average levels of debt in the current year. Weighted-average short-term interest rates were 4.5% in the current-year quarter versus 5.8% in the prior-year quarter.

Previous wording

The decrease in income taxes reflects the lower current-year pre-tax book income and mix.

Current wording

The increase in income taxes primarily reflects the higher current-year pre-tax book income.

Previous wording

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 wording

For the quarter ended March 31, 2025, Gas Utility net income and adjusted earnings were higher than the corresponding prior-year period by $6.9 and $7.2, respectively. The quarterly change in net income was driven by the $7.7 growth of Spire Missouri, which offset slightly lower performance by Spire Alabama and Spire EnergySouth.

Previous 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.

Current wording

The primary driver of the current year decrease in revenue was the $137.0 impact of lower gas cost recoveries across all utilities, driven principally by lower PGA rates at Spire Missouri. These reductions were only partly offset by higher volumetric usage, current year ISRS billings and favorable net RSE adjustments at Spire Alabama.

Previous 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.

Current wording

Reported operation and maintenance (“O&M”) expenses for the three months ended March 31, 2025 were $1.2 higher than the prior-year quarter. Excluding the impact of the NSC Transfer, O&M expenses were $0.2 higher than the prior-year quarter, as lower expense levels for Administrative and General (“A&G”) and support functions resulting from customer affordability initiatives implemented last year were more than offset by higher field operations costs and bad debt expense.

Previous 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.

Current wording

Taxes, other than income taxes, decreased $5.6, primarily due to lower gross receipt taxes resulting from lower revenues. Depreciation and amortization expenses for the quarter ended March 31, 2025 were $4.1 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities. Interest expense decreased $4.5, 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 $3.2 versus the corresponding prior-year quarter.

Previous wording

Including $4.0 (after-tax) unfavorable mark-to-market activity, net income decreased $9.0. The $5.0 quarter-over-quarter decrease in adjusted earnings primarily reflects reduced volatility in regional basis differentials combined with higher transportation and storage fees.

Current wording

Including $12.5 (after-tax) unfavorable mark-to-market activity, net income decreased $13.2. The $0.7 quarter-over-quarter decrease in adjusted earnings primarily reflects reduced volatility in regional basis differentials combined with higher transportation and storage fees.

Previous 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.

Current wording

Net income and adjusted earnings for the Company’s Midstream segment for the quarter ended March 31, 2025 versus the prior-year quarter increased $12.0, respectively. The increase was driven by higher Spire Storage earnings, reflecting increased asset optimization, additional storage capacity and contract renewals at higher rates.

Previous 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.

Current wording

Revenues in the current quarter increased $16.9 versus the prior-year quarter, reflecting the higher rates and activity with storage. O&M expenses were up $0.4 over the prior-year period, due primarily to costs associated with the higher storage activity in the current year.

Previous 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.

Current wording

Degree days in Spire Missouri’s service areas during thethree months ended March 31, 2025 were 0.6% colder than normal and 17.8% colder than the same period last year. Spire Missouri’s total system volume sold and transported were 731.1 million centum (Latin for “hundred”) cubic feet (CCF) for the quarter, compared with 640.7 million CCF for the same period in the prior year. Total off-system volume sold and transported were 25.9 million CCF for the current-year quarter, compared with 21.6 million CCF a year ago.

Previous 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.

Current wording

Depreciation and amortization expenses increased $3.9 versus the prior-year quarter due to ongoing capital investments. Taxes, other than income taxes decreased $4.4 driven by lower pass-through gross receipts taxes.

Previous 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.

Current wording

Other income declined by $4.2 versus the prior-year quarter, primarily driven by the decrease in gas carrying cost credits of $3.2 and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts. Interest expense decreased $3.0, primarily reflecting lower average short-term interest rates in the current year.

Previous wording

Resulting net income for the quarter ended December 31, 2024 decreased $3.6 versus the prior-year quarter.

Current wording

Resulting net income for the quarter ended March 31, 2025 increased $7.7 versus the prior-year quarter.

Previous 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.

Current wording

As measured in degree days, temperatures in Spire Alabama’s service area during the three months ended March 31, 2025, were 0.7% colder than normal, and 7.6% colder than a year ago. Spire Alabama’s total system volume sold and transported were 344.8 million CCF for the three months ended March 31, 2025, compared with 322.7 million CCF for the same period in the prior year. Total off-system volume sold and transported were 18.8 million CCF for the current-year quarter, compared with 7.4 million CCF off-system volume sold and transported in last year’s second quarter.

Previous wording

Reported O&M expenses for the three months ended December 31, 2024 decreased $2.3 versus the prior-year quarter. After excluding the impact of the NSC Transfer, O&M expenses in the current year quarter were $1.0 lower than the corresponding prior year period. Lower non-payroll operations expenses and reductions of outside service costs were only partly offset by higher employee benefit costs and higher bad debts expense.

Current wording

Reported O&M expenses for the three months ended March 31, 2025 increased $2.2 versus the prior-year quarter. After excluding the impact of the NSC Transfer, O&M expenses in the current year quarter were $2.4 higher than the corresponding prior year period. Higher field operations costs and bad debt expense were only partly offset by lower A&G and support function costs resulting from customer affordability initiatives implemented last year.

Previous 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.

Current wording

Interest expense for the current-year quarter decreased $0.9 versus the prior-year quarter, primarily the result of lower short-term borrowings, combined with lower short-term interest rates.

Previous wording

For the quarter ended December 31, 2024, resulting net income increased $4.6 versus the prior-year quarter.

Current wording

For the quarter ended March 31, 2025, resulting net income decreased $0.7 versus the prior-year quarter.

Previous wording

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 wording

Other income decreased $21.2 versus the prior-year period, $20.8 excluding the impact of the Postretirement Non-Service Costs Transfer (“NSC Transfer”), which has no impact on net income. The principal drivers of the decline was a one-time $8.2 pre-tax hedging gain recognized in the prior year period, a decline of gas-carrying cost credits at Spire Missouri of $7.1, and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts.

Previous wording

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.

Current wording

Contribution margin increased $23.1 versus the comparable prior-year period. Contribution margin benefited from the $15.7 Spire Missouri ISRS growth, $5.1 of growth from Spire Alabama’s RSE adjustments, Spire Missouri volumetric usage net of weather mitigation, and higher off-system sales. These favorable impacts more than offset the $4.1 negative impact of Spire Alabama’s volume usage net of weather mitigation adjustments.

Previous 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.

Current wording

Contribution margin decreased $29.8 versus the prior-year period, reflecting $22.0 (pre-tax) unfavorable mark-to-market activity. Excluding this impact, contribution margin decreased $7.8, reflecting the unfavorable drivers noted above. O&M expenses were slightly higher than prior-year levels, the result of marginally higher employee-related costs in the current year.

Previous wording

The Company’s other activities generated a $10.9 loss in the three months ended December 31, 2024. The major contributor to this variance was the $8.2 pre-tax ($6.3 after-tax) interest rate swap gain in the prior year that did not repeat. The remaining variance was mostly a result of higher interest expense in the current year.

Current wording

The Company’s other activities generated a $22.3 loss in the six months ended March 31, 2025. The major contributor to this variance was the $8.2 pre-tax ($6.3 after-tax) interest rate swap gain in the prior year that did not repeat. The remaining variance was mostly a result of higher interest expense in the current year that was only partly offset by lower corporate expenses.

Previous 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.

Current wording

Revenues for the six months ended March 31, 2025 were $172.8 lower than the comparable prior-year period. Lower unit gas costs reduced gas cost recoveries by $198.1. This reduced revenue driver also resulted in reduced gross receipts taxes of $7.1. These negative impacts were only partly offset by $15.7 incremental ISRS revenues, $13.1 attributable to higher off-system sales in the current-year, and increased weather-mitigated customer usage of $3.1 versus the prior-year period.

Previous 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.

Current wording

Contribution margin for the six months ended March 31, 2025 increased $19.6 from the same period in the prior year, primarily due to the $15.7 incremental ISRS billings and favorable $3.1 weather-mitigated customer usage impact.

Previous 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.

Current wording

Operating revenues for the six months ended March 31, 2025 decreased $28.8 from the same period in the prior year. The decrease in operating revenue was principally due to a $40.2 decrease in gas cost recovery, combined with lower gross receipts taxes totaling $1.9. These negative impacts were only partly offset by volumetric usage totaling $6.5, and favorable RSE adjustments of $5.3.

Previous 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.

Current wording

For thesix months ended March 31, 2025, net cash from operating activities decreased $105.6 from the corresponding period of fiscal 2024. The key drivers of the unfavorable change are regulatory timing and fluctuations in working capital items, as discussed below in the Future Cash Requirements section.

Previous 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.

Current wording

For the six months ended March 31, 2025, net cash used in investing activities was $106.6 less than the same period in the prior year due to payments for business acquisitions (net of cash acquired) of $177.4 for MoGas in the prior year. However, total capital expenditures were $69.9 higher than last year, with a $83.5 spending increase in the Utilities driven by infrastructure upgrades, advanced meter installations, and new business offset by a $14.6 spending decrease for Midstream.

Previous 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.

Current wording

Spire’s material cash requirements as of March 31, 2025, 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 $840 for fiscal 2025.

Previous 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.

Current wording

Factoring in the current portion of long-term debt, the Company’s long-term consolidated capitalization consisted of 48% equity at March 31, 2025 and 46% equity at September 30, 2024, respectively. At March 31, 2025, 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 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.

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 March 31, 2025, approximately $775.4 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 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.

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 201,834 and 218,141 shares at March 31, 2025 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

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.

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 six months ended March 31, 2025.

Previous 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.

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 March 31, 2025, the Company has recorded through accumulated other comprehensive income a cumulative mark-to-market net gain of $11.2 on open swap contracts.