Spire(US:SR)2025-08-05 15:36PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Spire Inc. and its subsidiaries Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Spire Inc. and its subsidiaries for the three and nine months ended June 30, 2025, including detailed notes Spire Inc. Financial Statements Spire Inc. reported a net income of $20.9 million for Q3 FY2025 and $311.5 million for the nine months, with total assets reaching $11.4 billion Spire Inc. Condensed Consolidated Statements of Income (Unaudited) | (In millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $421.9 | $414.1 | $2,142.3 | $2,299.2 | | Operating Income | $69.2 | $30.7 | $524.4 | $468.5 | | Net Income (Loss) | $20.9 | $(12.6) | $311.5 | $276.8 | | Diluted EPS | $0.29 | $(0.28) | $5.13 | $4.76 | Spire Inc. Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Assets | $11,396.3 | $10,860.7 | | Total Liabilities | $7,910.9 | $7,540.8 | | Total Shareholders' Equity | $3,480.2 | $3,232.7 | Spire Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) | (In millions) | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $582.9 | $829.5 | | Net cash used in investing activities | $(696.7) | $(802.0) | | Net cash provided by (used in) financing activities | $127.0 | $(19.6) | Spire Missouri Inc. Financial Statements Spire Missouri Inc. reported a net loss of $13.0 million for Q3 FY2025 and net income of $153.3 million for the nine months, with total assets at $6.16 billion Spire Missouri Inc. Condensed Statements of Comprehensive Income (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $230.1 | $248.8 | $1,359.2 | $1,550.7 | | Operating Income | $4.7 | $4.8 | $244.1 | $233.4 | | Net (Loss) Income | $(13.0) | $(16.8) | $153.3 | $145.4 | Spire Alabama Inc. Financial Statements Spire Alabama Inc. reported net income of $4.5 million for Q3 FY2025 and $90.2 million for the nine months, with total assets at $2.56 billion Spire Alabama Inc. Condensed Statements of Income (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $98.8 | $103.5 | $471.6 | $505.1 | | Operating Income | $12.7 | $11.3 | $142.7 | $137.7 | | Net Income | $4.5 | $2.9 | $90.2 | $84.7 | Notes to Financial Statements Notes detail accounting policies, revenue disaggregation, regulatory updates, financing activities, and the pending acquisition of Piedmont Natural Gas's Tennessee business - Spire's business is composed of three reportable segments: Gas Utility (core business), Gas Marketing, and Midstream, with earnings typically concentrated in the November-April heating season5556 - Spire Missouri filed a general rate case and reached a settlement agreement in principle for a base rate increase of $210.0 million, which, if approved, will support recovery of system investments78 - Spire Alabama operates under a Rate Stabilization and Equalization (RSE) mechanism, allowing for annual rate reviews, and for fiscal 2025, no adjustment was required to base rates effective December 1, 20248182 - On July 29, 2025, Spire announced an agreement to acquire Piedmont Natural Gas Company's Tennessee business for $2.48 billion in cash, with the transaction expected to close in the first quarter of calendar 2026140 - On May 1, 2025, Spire Missouri issued $150.0 million of First Mortgage Bonds in two tranches for general corporate purposes94 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial results for the three and nine months ended June 30, 2025, covering segment performance, the pending acquisition, liquidity, and capital resources Overview and Pending Acquisition Spire's earnings are driven by its Gas Utility, Gas Marketing, and Midstream segments, with a key strategic focus on the pending $2.48 billion acquisition of Piedmont Natural Gas's Tennessee business - Spire entered into an agreement to acquire Piedmont Natural Gas's Tennessee business, serving over 200,000 customers in the Nashville area, for $2.48 billion153 - The acquisition is expected to be funded through a mix of debt, equity, and hybrid securities, with potential sales of non-utility assets like gas storage facilities to support financing154 Results of Operations - Three Months Ended June 30, 2025 Spire Inc. reported adjusted earnings of $4.1 million for Q3 FY2025, driven by stronger performance in Gas Marketing and Midstream segments Adjusted Earnings (Loss) [Non-GAAP] - Q3 FY2025 vs Q3 FY2024 | (In millions) | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Gas Utility | $(10.0) | $(11.0) | | Gas Marketing | $5.3 | $1.0 | | Midstream | $16.2 | $13.9 | | Other | $(7.4) | $(8.2) | | Total | $4.1 | $(4.3) | - Midstream segment earnings increased by $2.3 million, driven by higher Spire Storage earnings from increased asset optimization and additional capacity178 - Gas Marketing adjusted income increased by $4.3 million as its business portfolio was well-positioned to create value176 Results of Operations - Nine Months Ended June 30, 2025 Spire Inc.'s adjusted earnings for the nine months ended June 30, 2025, were $299.6 million, primarily driven by growth in the Midstream and Gas Utility segments Adjusted Earnings (Loss) [Non-GAAP] - YTD FY2025 vs YTD FY2024 | (In millions) | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Gas Utility | $263.0 | $252.8 | | Gas Marketing | $22.3 | $23.7 | | Midstream | $44.0 | $20.1 | | Other | $(29.7) | $(21.6) | | Total | $299.6 | $275.0 | - Midstream segment earnings grew significantly, with a $23.9 million increase driven by storage asset optimization, new capacity, higher contract rates, and the MoGas acquisition212 - Gas Utility contribution margin increased by $27.3 million, mainly due to a $24.5 million increase from Spire Missouri's ISRS mechanism206 Liquidity and Capital Resources The company maintains strong liquidity with $582.9 million in operating cash flow, plans $875 million in capital expenditures, and holds investment-grade debt ratings - Net cash from operating activities decreased to $582.9 million for the first nine months of fiscal 2025 from $829.5 million in the prior year, driven by regulatory timing and working capital fluctuations228 - Total capital expenditures for fiscal 2025 are planned to be approximately $875 million232 Debt Ratings | Entity | S&P | Moody's | | :--- | :--- | :--- | | Spire Inc. senior unsecured | BBB | Baa2 | | Spire Missouri senior secured | A | A1 | | Spire Alabama senior unsecured | BBB+ | A2 | Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk were reported, with the company utilizing $725.0 million in interest rate swaps to hedge against interest rate volatility - As of June 30, 2025, Spire had outstanding interest rate swaps with a total notional amount of $725.0 million to hedge against interest rate volatility246 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures for Spire Inc., Spire Missouri, and Spire Alabama are effective as of the end of the reporting period248250252 - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025249251253 PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, other information, and a list of exhibits Item 1. Legal Proceedings Details on legal, environmental, and regulatory proceedings are referenced in Notes 5 and 11, with no material effects expected - For details on legal proceedings, the report refers to Note 5 and Note 11 of the financial statements254 Item 1A. Risk Factors No material changes to the company's risk factors were reported compared to the prior fiscal year-end - No material changes in risk factors were reported for the period255 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Minor repurchases of 54 common shares occurred to cover employee tax withholding obligations related to restricted stock vesting - During the quarter, 54 shares of common stock were repurchased at an average price of $76.54 per share to cover employee tax withholding obligations257 Item 5. Other Information No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter260 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including agreements, indentures, plans, and certifications