Spire(SR) - 2025 Q1 - Quarterly Results

Overall Report Summary Spire reported adjusted earnings per share of $1.34 for fiscal 2025 first quarter, a decrease of $0.13, while affirming its fiscal 2025 adjusted earnings guidance range of $4.40–$4.60 per share Fiscal 2025 First Quarter Highlights Spire reported adjusted earnings per share of $1.34 for fiscal 2025 first quarter, a decrease of $0.13 compared to the prior year. Net income also decreased to $81.3 million ($1.34 per diluted share) from $85.1 million ($1.52 per share) a year ago. The company affirmed its fiscal 2025 adjusted earnings guidance range of $4.40–$4.60 per share Adjusted Earnings and Net Income Summary | Metric | FY25 Q1 (2024) | FY24 Q1 (2023) | Change | | :--- | :--- | :--- | :--- | | Adjusted Earnings per Share | $1.34 | $1.47 | -$0.13 | | Net Income | $81.3 million | $85.1 million | -$3.8 million | | Net Income per Diluted Share | $1.34 | $1.52 | -$0.18 | Segment Adjusted Earnings | Segment | FY25 Q1 Adjusted Earnings (Millions) | FY24 Q1 Adjusted Earnings (Millions) | | :--- | :--- | :--- | | Gas Utility | $77.8 | $75.8 | | Gas Marketing | $2.2 | $7.2 | | Midstream | $12.0 | $2.4 | | Other | ($10.9) | ($2.7) | | Total | $81.1 | $82.7 | - Affirmed fiscal 2025 adjusted earnings guidance range of $4.40–$4.60 per share[4] Management Commentary Scott Doyle, acting president and CEO, highlighted the execution of strategy, focus on safety, and strong operational performance. He reiterated confidence in achieving fiscal 2025 earnings guidance and commitment to financial objectives and operational excellence - Results reflect execution of strategy, focus on safety, and strong operational performance[3] - Company continues to expect fiscal 2025 earnings in the range of $4.40 to $4.60 per share[3] - Committed to achieving financial objectives and operational excellence while safely serving customers with reliable and affordable energy[3] Segment Performance The Gas Utility and Midstream segments showed increased adjusted earnings, while Gas Marketing and Other activities experienced declines Gas Utility The Gas Utility segment's adjusted earnings increased to $77.8 million from $75.8 million year-over-year, driven by higher earnings at Spire Alabama and Spire Gulf, partially offset by lower Spire Missouri earnings. Contribution margin improved due to increased Spire Missouri Infrastructure System Replacement (ISRS) revenues and higher margins at Spire Alabama from annual rate updates Gas Utility Segment Financial Metrics | Metric | FY25 Q1 (Millions) | FY24 Q1 (Millions) | Change | | :--- | :--- | :--- | :--- | | Adjusted Earnings | $77.8 | $75.8 | +$2.0 | | Contribution Margin | Higher by $8.4 | N/A | +$8.4 | | O&M Expense (adjusted) | Lower by $1.6 | N/A | -$1.6 | | Depreciation Expense | Higher by $3.9 | N/A | +$3.9 | | Interest Expense | Lower by $3.9 | N/A | -$3.9 | | Gas Carrying Cost Credits | Decreased by $3.9 | N/A | -$3.9 | - Increased Spire Missouri Infrastructure System Replacement (ISRS) revenues and higher margins at Spire Alabama due to annual rate updates and usage net of weather mitigation[7] - Lower Spire Missouri usage net of weather mitigation partially offset favorable items[7] Gas Marketing Gas Marketing's adjusted earnings decreased significantly to $2.2 million from $7.2 million in the prior year. This decline was attributed to reduced volatility in regional basis differentials and higher transportation and storage fees Gas Marketing Segment Adjusted Earnings | Metric | FY25 Q1 (Millions) | FY24 Q1 (Millions) | Change | | :--- | :--- | :--- | :--- | | Adjusted Earnings | $2.2 | $7.2 | -$5.0 | - Decrease due to reduced volatility in regional basis differentials[10] - Higher transportation and storage fees also contributed to the decrease[10] Midstream The Midstream segment saw a substantial increase in adjusted earnings, rising to $12.0 million from $2.4 million in the prior year. This growth was primarily driven by higher Spire Storage earnings due to additional capacity and contract renewals at higher rates, along with the acquisition of MoGas in January 2024 Midstream Segment Adjusted Earnings | Metric | FY25 Q1 (Millions) | FY24 Q1 (Millions) | Change | | :--- | :--- | :--- | :--- | | Adjusted Earnings | $12.0 | $2.4 | +$9.6 | - Improvement driven by higher Spire Storage earnings, reflecting additional capacity and contract renewals at higher rates[11] - Benefited from the acquisition of MoGas in January 2024[11] Other Spire's 'Other' activities reported an adjusted loss of $10.9 million, a significant increase from the $2.7 million loss in the prior year. This variance was mainly due to a $6.3 million after-tax benefit from an interest rate hedge settlement in the prior year and higher interest expense in the current period Other Activities Adjusted Loss | Metric | FY25 Q1 (Millions) | FY24 Q1 (Millions) | Change | | :--- | :--- | :--- | :--- | | Adjusted Loss | ($10.9) | ($2.7) | -$8.2 | - Variance primarily due to a $6.3 million after-tax benefit of an interest rate hedge settlement in the prior year[12] - Higher interest expense in the current year also contributed to the increased loss[12] Financial Guidance & Outlook Spire reaffirmed its fiscal 2025 earnings guidance and long-term growth targets, supported by significant capital investments in infrastructure Fiscal 2025 Guidance Spire reaffirmed its fiscal 2025 adjusted earnings guidance range of $4.40–$4.60 per share and maintained its expected total capital expenditures for fiscal 2025 at $790 million - Fiscal 2025 adjusted earnings guidance range remains $4.40–$4.60 per share[13] - Expected total capital expenditures for fiscal 2025 remains $790 million[14] Long-Term Outlook & Capital Investment The company projects long-term adjusted earnings per share growth of 5–7%, supported by an expected 7–8% annualized rate base growth at Spire Missouri and 6% equity growth at Spire Alabama and Spire Gulf. A 10-year capital investment target of $7.4 billion through fiscal 2034 is planned, primarily for infrastructure upgrades and new business in the Gas Utility segment - Confident in ability to grow long-term adjusted earnings per share 5–7%[13] - Driven by expected long-term 7–8% annualized rate base growth at Spire Missouri and 6% equity growth at Spire Alabama and Spire Gulf[13] - 10-year $7.4 billion capital investment target through fiscal 2034, focused on infrastructure upgrades and new business in the Gas Utility segment[14] Company Information Spire Inc. is a major natural gas company serving 1.7 million customers, committed to growth and innovation, with disclosures on forward-looking statements and non-GAAP measures Conference Call and Webcast Spire hosted a conference call and webcast on February 5, 2025, at 9 a.m. CT (10 a.m. ET) to discuss its fiscal 2025 first quarter financial results. A replay was made available until February 12, 2025 Conference Call and Webcast Details | Event | Details | | :--- | :--- | | Date and Time | Wednesday, February 5, 9 a.m. CT (10 a.m. ET) | | U.S. and Canada Phone | 844-824-3832 | | International Phone | 412-317-5142 | | Webcast Access | Investors.SpireEnergy.com under Events & Presentations | | Replay Availability | Feb 5 (10 a.m. CT) - Feb 12, 2025 | | Replay Access Code | 8652197 | About Spire Spire Inc. (NYSE: SR) is one of the largest publicly traded natural gas companies in the U.S., serving 1.7 million homes and businesses across Alabama, Mississippi, and Missouri. The company's operations include gas utilities, Spire Marketing, and Spire Midstream, with a strategic focus on organic growth, infrastructure investment, and innovation - Serves 1.7 million homes and businesses, making it one of the largest publicly traded natural gas companies in the country[17] - Operates gas utilities in Alabama, Mississippi, and Missouri, along with natural gas-related businesses Spire Marketing and Spire Midstream[17] - Committed to transforming its business through organic growth, infrastructure investment, and innovation[17] Forward-Looking Information and Non-GAAP Measures This section provides disclosures regarding forward-looking statements, noting that future operating results are subject to various uncertainties and risk factors. It also defines non-GAAP financial measures such as 'adjusted earnings,' 'adjusted earnings per share,' and 'contribution margin,' explaining their exclusion criteria and management's rationale for their use - Forward-looking statements are subject to uncertainties and risk factors, including weather, economic factors, competition, and regulatory policy[18] - Non-GAAP measures like 'adjusted earnings' and 'contribution margin' are used internally to evaluate performance and exclude impacts of fair value accounting, acquisition/divestiture activities, and non-recurring items[19] - Contribution margin adjusts revenues by removing wholesale natural gas costs and gross receipts taxes, which are directly passed on to customers[19] Financial Statements The financial statements detail Q1 FY25 performance, showing changes in income, balance sheet items, and cash flows compared to the prior year Condensed Consolidated Statements of Income – Unaudited The condensed consolidated statements of income show a decrease in operating revenues from $756.6 million in Q1 FY24 to $669.1 million in Q1 FY25. Net income available to common shareholders also declined from $81.3 million to $77.5 million, resulting in diluted earnings per common share of $1.34 for Q1 FY25, down from $1.52 in Q1 FY24 Condensed Consolidated Statements of Income | (In Millions, except per share amounts) | Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | | :--- | :--- | :--- | | Operating Revenues | $669.1 | $756.6 | | Total Operating Expenses | $520.3 | $617.4 | | Operating Income | $148.8 | $139.2 | | Net Income | $81.3 | $85.1 | | Net Income Available to Common Shareholders | $77.5 | $81.3 | | Diluted Earnings Per Common Share | $1.34 | $1.52 | | Dividends Declared Per Common Share | $0.785 | $0.755 | Condensed Consolidated Balance Sheets – Unaudited The balance sheet shows an increase in total assets to $11,275.8 million as of December 31, 2024, from $10,631.7 million a year prior. Net utility plant grew to $6,376.0 million. Total shareholders' equity increased to $3,308.9 million from $3,050.8 million, while long-term debt (less current portion) also rose to $3,697.7 million Condensed Consolidated Balance Sheets | (In Millions) | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $11,275.8 | $10,631.7 | | Net Utility Plant | $6,376.0 | $5,877.7 | | Total Shareholders' Equity | $3,308.9 | $3,050.8 | | Long-term debt (less current portion) | $3,697.7 | $3,247.8 | | Total Current Liabilities | $1,991.2 | $2,210.5 | Condensed Consolidated Statements of Cash Flows – Unaudited Net cash provided by operating activities increased to $81.1 million for the three months ended December 31, 2024, compared to $70.0 million in the prior year. Net cash used in investing activities increased to $260.1 million, primarily due to higher capital expenditures. Net cash provided by financing activities also increased to $186.0 million, driven by higher issuance of short-term debt Condensed Consolidated Statements of Cash Flows | (In Millions) | Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81.1 | $70.0 | | Net cash used in investing activities | ($260.1) | ($225.2) | | Net cash provided by financing activities | $186.0 | $154.7 | | Capital expenditures | ($260.6) | ($226.5) | | Issuance of short-term debt, net | $211.0 | $92.0 | Non-GAAP Reconciliations This section reconciles GAAP net income to adjusted earnings and operating income to contribution margin, providing insights into non-GAAP financial metrics Adjusted Earnings and Reconciliation to GAAP This section provides a reconciliation of GAAP Net Income to Non-GAAP Adjusted Earnings for the three months ended December 31, 2024 and 2023. For Q1 FY25, adjusted earnings were $81.1 million ($1.34 per diluted share), compared to GAAP net income of $81.3 million ($1.34 per diluted share), with minor adjustments for fair value and timing Adjusted Earnings Reconciliation to GAAP | (In Millions, except per share amounts) | FY25 Q1 (2024) | FY24 Q1 (2023) | | :--- | :--- | :--- | | Net Income (Loss) [GAAP] | $81.3 | $85.1 | | Fair value and timing adjustments, pre-tax | ($0.3) | ($5.2) | | Acquisition activities, pre-tax | — | $1.9 | | Income tax effect of adjustments | $0.1 | $0.9 | | Adjusted Earnings (Loss) [Non-GAAP] | $81.1 | $82.7 | | Adjusted Earnings Per Diluted Common Share | $1.34 | $1.47 | - Adjusted earnings per share is calculated by replacing consolidated net income with consolidated adjusted earnings in the GAAP diluted EPS calculation, including reductions for cumulative preferred dividends and participating shares[24] Contribution Margin and Reconciliation to GAAP This reconciliation details the calculation of Contribution Margin, a non-GAAP measure, from Operating Income. For Q1 FY25, consolidated contribution margin was $372.3 million, an increase from $358.5 million in Q1 FY24, primarily driven by the Gas Utility segment Contribution Margin Reconciliation to GAAP | (In Millions) | FY25 Q1 (2024) | FY24 Q1 (2023) | | :--- | :--- | :--- | | Operating Income [GAAP] | $148.8 | $139.2 | | Operation and maintenance expenses | $129.3 | $130.7 | | Depreciation and amortization | $72.3 | $67.0 | | Taxes, other than income taxes | $48.7 | $52.7 | | Less: Gross receipts tax expense | ($26.8) | ($31.1) | | Contribution Margin [Non-GAAP] | $372.3 | $358.5 | Segment Contribution Margin | Segment Contribution Margin (Millions) | FY25 Q1 (2024) | FY24 Q1 (2023) | | :--- | :--- | :--- | | Gas Utility | $332.2 | $323.8 | | Gas Marketing | $6.9 | $19.7 | | Midstream | $32.8 | $14.9 | | Other | $4.7 | $4.1 |