ST. LOUIS, May 3, 2017 /PRNewswire/ -- Spire Inc.
(NYSE: SR) today reported operating results for its fiscal 2017
second quarter ended March 31, 2017.
Highlights include:
- Second quarter fiscal 2017 diluted earnings per share of
$2.36, compared to $2.31 in fiscal 2016
- Net economic earnings* (NEE) per share of $2.38 up from prior year results of $2.37
- Spire board of directors declared quarterly common stock
dividend of $0.525 per share
- Five-year capital expenditures forecast through 2021 increased
to nearly $2.3 billion
- Laclede Gas and Missouri Gas Energy file separate rate change
proposals in Missouri that include
plans to invest in customer service and continued infrastructure
upgrades
"Our operating performance was solid this quarter, as we grew
earnings even though winter weather across our footprint continued
to be warmer than normal. That's because our 3,300 employees in
Alabama, Mississippi and Missouri work hard every day to provide great
service that's safe and reliable, while delivering on our promises
and growing our company. We also continue to successfully ramp up
infrastructure upgrades that help lower long-term operating costs
and support our long-term growth," said Suzanne Sitherwood, president and chief
executive officer of Spire.
Second Quarter
Results
|
Three months ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
112.2
|
|
|
$
|
102.5
|
|
|
$
|
2.45
|
|
|
$
|
2.35
|
|
|
Gas
Marketing
|
—
|
|
|
3.0
|
|
|
—
|
|
|
0.07
|
|
|
Other
|
(3.2)
|
|
|
(2.0)
|
|
|
(0.07)
|
|
|
(0.05)
|
|
|
|
Total
|
$
|
109.0
|
|
|
$
|
103.5
|
|
|
$
|
2.38
|
|
|
$
|
2.37
|
|
|
Acquisition-related
costs, pre-tax
|
(0.1)
|
|
|
(2.0)
|
|
|
—
|
|
|
(0.04)
|
|
|
Fair value
adjustments, pre-tax
|
(1.6)
|
|
|
(2.5)
|
|
|
(0.04)
|
|
|
(0.06)
|
|
|
Income tax effect of
adjustments
|
0.7
|
|
|
1.8
|
|
|
0.02
|
|
|
0.04
|
|
Net
Income
|
$
|
108.0
|
|
|
$
|
100.8
|
|
|
$
|
2.36
|
|
|
$
|
2.31
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding in Millions
|
|
|
|
|
45.7
|
|
|
43.5
|
|
* Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
For the three months ended March 31,
2017, the second quarter of our fiscal year, we reported
consolidated net income of $108.0
million (or $2.36 per diluted
share) compared to $100.8 million (or
$2.31 per diluted share) in the prior
year period. Net economic earnings (NEE) for the second quarter of
fiscal 2017 were $109.0 million, up
$5.5 million or 5.3 percent compared
to last year, reflecting higher earnings in Gas Utility partially
offset by lower results in Gas Marketing and higher corporate
costs. NEE excludes from net income the effect of unrealized gains
and losses on energy-related derivatives. It also excludes the
impacts of acquisition, divestiture and restructuring activities in
the fiscal year in which they occur, including expenses, financing
impacts and operating results in fiscal 2016 associated with the
acquisition of EnergySouth (Mobile Gas and Willmut Gas) as well as
overall integration activities. While NEE increased, NEE per share
was $2.38 in the current period, up
slightly from $2.37 a year ago,
reflecting a 5 percent increase in average shares outstanding
related to the EnergySouth acquisition in 2016.
Fiscal 2017 results were impacted by winter weather that was
warmer in comparison to both normal and last year across our
footprint. In general, warmer weather reduces demand and
contribution margin (non-GAAP; see "Contribution Margin and
Reconciliation to GAAP") and benefits certain weather-sensitive
expenses. For Laclede Gas and MGE (collectively our Missouri
Utilities), second quarter weather was 23 percent warmer than
normal this year and 10 percent warmer than a year ago. For
Alagasco, second quarter temperatures were 37 percent warmer than
normal this year and 24 percent warmer than the prior year.
Temperatures were also more volatile this year when compared to
both prior year and normal patterns.
Gas Utility
The Gas Utility segment includes the regulated gas distribution
operations of our five gas utilities across Alabama, Mississippi and Missouri. Second quarter net income was
$112.3 million for fiscal 2017, up
from $102.4 million a year ago. NEE
for the segment was $112.2 million,
up $9.7 million or more than 9
percent compared to prior year. The increase in earnings was
largely driven by the addition of EnergySouth.
Contribution margin increased by $26.5
million reflecting the addition of EnergySouth ($27.6 million), lower net regulatory adjustments
for Alagasco ($4.6 million), and
higher Infrastructure System Replacement Surcharge (ISRS) revenues
for the Missouri Utilities ($3.5
million). These benefits to contribution margin were more
than offset by a $9.6 million impact
from the warmer weather when compared to last year as described
earlier.
Operation and maintenance (O&M) expenses of $98.4 million for the quarter were up
$4.1 million, reflecting the addition
of EnergySouth ($10.3 million).
Excluding EnergySouth, O&M expenses were lower by $6.2 million driven by a decrease in
employee-related costs and lower bad debt expense, a portion of
which was beneficially impacted by weather. Depreciation and
amortization expenses increased by $4.1
million from last year, with $2.6
million from the addition of EnergySouth and the remainder
reflecting higher capital investment including infrastructure
upgrades for the other utilities. Taxes other than for income and
gross receipts increased by $2.5
million reflecting mainly an increase in property taxes
including those associated with the addition of EnergySouth.
Gas Marketing
The Gas Marketing segment includes the results of Spire
Marketing, which provides natural gas marketing and related
services on a non-regulated basis across the country, with a core
operating footprint in the central U.S. For the second quarter of
fiscal 2017, Gas Marketing reported a loss of $1.0 million compared to net income of
$1.5 million in the prior-year
period. Removing fair value adjustments in both periods, second
quarter NEE was breakeven in fiscal 2017, down from $3.0 million in the prior year. The decrease
reflects a lower contribution margin primarily due to the timing of
storage optimization and lower market volatility in the
current-year quarter.
Other
Other non-utility operations and corporate costs were
$3.3 million in the second quarter of
2017 compared to $3.1 million in the
year-ago period. On an NEE basis, second quarter costs were
$3.2 million in 2017, up from
$2.0 million a year ago. A
significant portion of these costs are related to interest expense
which increased from prior year reflecting the addition of
EnergySouth as well as higher interest costs on floating-rate
debt.
Year-to-Date
Results
|
Six Months Ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
164.0
|
|
|
$
|
152.5
|
|
|
$
|
3.59
|
|
|
$
|
3.50
|
|
|
Gas
Marketing
|
1.4
|
|
|
2.7
|
|
|
0.03
|
|
|
0.07
|
|
|
Other
|
(8.9)
|
|
|
(6.6)
|
|
|
(0.20)
|
|
|
(0.16)
|
|
|
|
|
Total
|
$
|
156.5
|
|
|
$
|
148.6
|
|
|
$
|
3.42
|
|
|
$
|
3.41
|
|
|
|
Acquisition-related
costs, pre-tax
|
(0.2)
|
|
|
(3.3)
|
|
|
(0.01)
|
|
|
(0.07)
|
|
|
Fair value
adjustments, pre-tax
|
(5.2)
|
|
|
1.9
|
|
|
(0.12)
|
|
|
0.04
|
|
|
Income tax effect of
adjustments
|
2.1
|
|
|
0.5
|
|
|
0.05
|
|
|
0.01
|
|
Net
Income
|
$
|
153.2
|
|
|
$
|
147.7
|
|
|
$
|
3.34
|
|
|
$
|
3.39
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding in Millions
|
|
|
|
|
45.7
|
|
|
43.5
|
|
* Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
For the first half of fiscal 2017, we reported consolidated net
income of $153.2 million (or
$3.34 per diluted share) compared to
$147.7 million (or $3.39 per diluted share) for the prior year. NEE
for the first half of the year was $156.5
million (or $3.42 per share)
up $7.9 million or 5.3 percent
compared to $148.6 million (or
$3.41 per share) a year ago. The
increase in earnings reflects higher Gas Utility results mainly due
to the addition of EnergySouth, partially offset by a decrease in
Gas Marketing earnings and higher corporate costs. Per share
results were impacted by a 5 percent increase in shares outstanding
related to the EnergySouth acquisition in 2016.
Gas Utility
For the first half of fiscal 2017, the Gas Utility segment
reported net income of $164.0 million
compared to $151.7 million in the
prior year. Segment NEE for the first six months was $164.0 million in fiscal 2017, up $11.5 million or 7.5 percent from a year ago. The
increase in earnings was driven primarily by the inclusion of
EnergySouth in the current year, as well as higher earnings from
the Missouri Utilities, slightly offset by lower results for
Alagasco.
Year-to-date segment contribution margin increased by
$49.6 million, including $46.9 million from the addition of EnergySouth.
In addition, operating margin reflects $6.8
million higher ISRS revenues at the Missouri Utilities and
$5.8 million in lower regulatory
adjustments in Alabama. These
positive factors were largely offset by a $10.1 million impact to contribution margin from
lower consumption and demand due to warmer winter temperatures.
O&M expenses increased by $11.9
million, reflecting the addition of EnergySouth
($19.1 million). Excluding
EnergySouth expenses, O&M expenses were lower by $7.2 million in part due to the warmer weather
during the heating season which resulted in lower bad debt expense
and lower employee-related costs. Depreciation and amortization
rose by $8.3 million with
$5.3 million attributable to
EnergySouth and the remainder reflecting increased capital
investment at the Missouri Utilities and Alagasco including
infrastructure upgrades.
Gas Marketing
The Gas Marketing segment reported a fiscal year-to-date loss of
$1.8 million compared to net income
of $3.8 million a year ago. Excluding
adverse mark-to-market and fair value adjustments, NEE was
$1.4 million, down from $2.7 million in the prior year. The earnings
decrease reflects a lower contribution margin primarily due to
lower storage optimization and narrowing spreads, partially offset
by higher overall volumes.
Other
Other non-utility operations and corporate costs in the first
half of fiscal 2017 were $9.0 million
compared to $7.8 million a year ago.
On an NEE basis, year-to-date costs were $8.9 million up from $6.6
million in the prior-year period. A significant portion of
these costs are related to interest expense which increased from
the prior year reflecting the addition of EnergySouth as well as
higher interest costs on floating-rate debt.
Balance Sheets and Cash Flows
We continue to maintain a strong capital structure with ample
liquidity. Short-term borrowings outstanding at March 31, 2017 were $567.4
million compared to $253.6
million a year ago. These levels of short-term debt are in
line with our typical seasonal borrowing needs, with the increase
due to the acquisition of EnergySouth and the timing of capital
market activity as noted below.
During and immediately following the second quarter, Spire
completed a series of planned debt and equity transactions tied to
the Alagasco acquisition financing originally raised in 2014. The
net result of these transactions was to secure a net $142.0 million in equity proceeds and decrease
total long-term debt (including current portions) by $143.8 million.
In 2014, Spire issued 2.875 million equity units consisting of
$143.8 million of remarketable junior
subordinated notes and an equity purchase contract requiring unit
holders to purchase common shares three years in the future. During
the same time period, Spire issued three-year $250 million floating rate notes to mature
August 15, 2017.
Over the last three months, the equity units and notes were
effectively replaced as follows:
- On February 22, Spire issued
$150 million 3.543% senior notes due
2024, including $143.8 million of
remarketed junior subordinated notes sold by the unit holders and
$6.2 million of new senior
notes.
- On March 10, Spire redeemed
$250 million floating rate notes at
par using short-term borrowings.
- On March 15, Spire funded the
private placement of $100 million
3.93% 10-year senior notes, using proceeds to reduce short-term
borrowings incurred to retire the floating rate notes.
- On April 3, Spire issued
2,504,700 shares of common stock in conjunction with settlement of
the purchase contracts underlying the equity units, receiving net
cash proceeds of $142.0 million which
was used to repay the remaining short-term borrowings incurred
above.
The result of these transactions was to increase the equity
component of our long-term capitalization (on a pro forma basis
including the April 3rd
equity issuance) to 51.3 percent equity, compared to 49.8 percent
equity at September 30, 2016.
Separately, on March 15, Laclede
Gas Company finalized terms for a private placement of $170 million of first mortgage bonds, in 15-year,
30-year and 40-year tranches. These bonds can be funded, at the
Company's option, at any time up to September 15, 2017 given standard notice periods
and other funding requirements typical in this type of private
placement.
Net cash provided by operating activities was $226.1 million for the six months ended
March 31, 2017, compared to
$243.0 million for the first half of
2016. The decrease is primarily due to changes in working capital
largely driven by the relative weather conditions and gas prices
during the periods.
Capital expenditures for the first six months of our fiscal year
were $187.3 million in 2017, up from
$121.8 million in the prior year with
approximately $8 million of the
increase driven by the addition of EnergySouth. Capital spend for
the rest of our utilities was up nearly $50
million, or more than 40 percent, reflecting increased
infrastructure upgrades as well as investment to support customer
growth and new business development.
For additional details on Spire's results for the second quarter
and first six months of fiscal 2017, please see the accompanying
unaudited Condensed Consolidated Statements of Income, unaudited
Condensed Consolidated Balance Sheets, and unaudited Condensed
Consolidated Statements of Cash Flows.
Regulatory Update
Missouri Rate Cases
As required by the state of Missouri, Laclede Gas and MGE each filed with
the Missouri Public Service Commission (MoPSC) a general rate case
on April 11, 2017, requesting
proposed rate changes. These requests are the first to be made by
our Missouri utilities in
approximately four years.
The proposed rate changes reflect plans and ongoing investments
to upgrade technology for easier and faster customer service, and a
continued commitment to modernizing pipeline infrastructure, all
while creating benefits for our customers through growth. The
filings include accelerated infrastructure upgrades and significant
costs savings that keep price increases for customers down.
The requests are based on filed rate bases as of the
December 31, 2016 test year of
$1,232 million for Laclede Gas and
$793 million for MGE, representing 34
percent growth in the combined rate base of our Missouri utilities. This growth reflects
significant investments made in infrastructure upgrades, technology
and other system investments.
Laclede Gas requested a rate increase of $28.5 million, which is net of $29.5 million already being recovered through
ISRS. If approved, the increase for a typical residential customer
will be $3.70 per month. MGE
requested a $37.0 million increase,
net of $13.4 million in current ISRS
recovery, that would result in an increase for a typical
residential customer of $5.50 per
month. Even with these increases, customer bills will still be
lower than they were 10 years ago.
The current filings include proposed changes to rate designs and
other mechanisms to modernize and simplify the rate-setting process
and align practices between Laclede Gas and MGE. The filings also
seek cash recovery of regulatory assets including funding of
retirement plans and deferred costs of integration.
The regulatory process in Missouri provides the MoPSC up to 11 months to
consider these filings. We expect a procedural schedule to be
agreed upon mid-May, which will outline the timeframe for the
overall process, including evidentiary hearings preliminarily set
for early to mid-December. The process includes discovery, filing
of testimony and case by MoPSC Staff, and responses from various
parties to the case. The prudence review and consideration by the
MoPSC and Staff will cover all aspects of the filing, including
such factors as rate base, weighted average cost of capital,
certain run rate operating costs, capital structure, energy
efficiency programs and overall rate design.
Missouri ISRS
On April 26, 2017, the MoPSC
approved additional ISRS revenue in the amount of $3.0 million each for Laclede Gas and MGE,
effective June 1, 2017. The
additional amounts bring the annual ISRS run rate to $49 million. ISRS allows for more timely
regulatory recovery of investments made by our Missouri utilities to improve the integrity
and safety of their distribution systems.
Spire STL Pipeline
On January 26, 2017, we filed a
certificate application with the Federal Energy Regulatory
Commission (FERC) seeking approval for our Spire STL Pipeline, a
65-mile natural gas supply pipeline that will enhance reliability
and the diversity of our physical transport portfolio while
providing access to lower-cost shale gas from the
Marcellus/Utica producing regions.
Under the terms of a precedent agreement with Laclede Gas, executed
on January 25, Laclede Gas will be a
foundation shipper with a contractual commitment of 350 MMcf/d out
of the total capacity of 400 MMcf/d.
As is typical for a project of this type, a limited number of
parties have filed interventions and protests with the FERC, which
we are continuing to monitor and respond to as appropriate. Our
plans continue to reflect an expected fiscal 2019 in-service date
and an estimated project cost of $190
million-$210 million.
On April 21, we filed an amended
certificate application to adjust the preferred route for the
pipeline to include a new six-mile segment rather than
refurbishment of an existing line. The change offers a number of
benefits including eliminating potential supply disruption risk for
Laclede Gas, eliminating uncertainty regarding upgrade costs and
reducing long-term integrity management costs.
Dividends
The Spire board of directors declared a quarterly common stock
dividend of $0.525 per share, payable
July 5, 2017, to shareholders of
record on June 12, 2017. We
have continuously paid a cash dividend since 1946, with 2017
marking the 14th consecutive year of increasing dividends on an
annualized basis.
Earnings Guidance and Outlook
As noted earlier, Spire's capital spending for the Missouri
Utilities and Alagasco for the first six months of the current
fiscal year is more than 40 percent higher than the comparable
period last year, tangible proof of our success in ramping up our
infrastructure upgrades as well as investments to support new
business and technology enhancements. As a result, we now
anticipate our capital expenditures for fiscal 2017 to be
approximately $445 million, up from
our original estimate of $410
million. This compares to actual fiscal 2016 capital
spending of $293 million. Investment
in our gas utilities is now expected to be approximately
$415 million, up from $370 million, and we still expect that roughly 75
percent will be recovered with minimal regulatory lag.
We have also updated our longer-term capital expenditure
outlook, extending that view through 2021. We now anticipate
our five-year capital spend for the fiscal years 2017-2021 to total
approximately $2.3 billion, up from
$2.0 billion for our last five-year
forecast ended 2020.
We also confirm our long-term NEE per share growth target
remains 4-6 percent. Further, we expect that dividends should grow
at the higher end of that range as we strive to get to the middle
of our target payout ratio of 55-65 percent.
Looking to the rest of fiscal 2017, we are confirming our
original NEE guidance range of $3.50-$3.60 per fully diluted share. It is likely
that earnings will fall in the lower half of that range given the
significantly warmer and more volatile weather during the first
half of fiscal 2017, which represents a majority of the heating
season in our service territories.
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss
its fiscal 2017 second quarter financial results. To access the
call, please dial the applicable number approximately 5-10 minutes
prior to the start time.
Date and
Time:
|
Wednesday, May
3
|
|
|
8 a.m. CT (9 a.m.
ET)
|
|
|
|
|
|
Phone
Numbers:
|
U.S. and
Canada:
|
844-824-3832
412-317-5142
|
|
International:
|
|
|
|
|
The call will also be webcast in a listen-only format for the
media and general public. The webcast can be accessed at
SpireEnergy.com under the Investors tab. A replay of the call will
be available from 10 a.m. CT
(11 a.m. ET) on May 3 to June 3 by dialing 877-344-7529 (U.S.),
855-669-9658 (Canada), or
412-317-0088 (international). The replay access code is 10105352. A
replay of the webcast will be available at SpireEnergy.com.
About Spire
At Spire Inc. (NYSE: SR) we believe energy exists to help make
people's lives better. It's a simple idea, but one that's at the
heart of our company. Every day we serve 1.7 million customers
making us the fifth largest publicly traded natural gas company in
the country. We help families and business owners fuel their daily
lives through our gas utilities - Alagasco, Laclede Gas, Missouri
Gas Energy, Mobile Gas and Willmut Gas. Our non-utility operations
include Spire Marketing which provides natural gas marketing and
related services. We are committed to transforming our business and
pursuing growth by 1) growing our gas utility business through
prudent infrastructure upgrades and organic growth initiatives, 2)
acquiring and integrating gas utilities, 3) modernizing our gas
assets, and 4) investing in innovation. Learn more at
SpireEnergy.com.
Cautionary Statements on Forward-Looking Information and
Non-GAAP Measures
This news release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Spire's future operating results may be affected by
various uncertainties and risk factors, many of which are beyond
the Company's control, including weather conditions, economic
factors, the competitive environment, governmental and regulatory
policy and action, and risks associated with recent and pending
acquisitions. For a more complete description of these
uncertainties and risk factors, see the Company's Form 10-Q for the
quarter ended March 31, 2017 to be
filed with the Securities and Exchange Commission later today.
This news release includes the non-GAAP financial measures of
"net economic earnings," "net economic earnings per share," and
"contribution margin." Management also uses these non-GAAP measures
internally when evaluating the Company's performance and results of
operations. Net economic earnings exclude from net income the
after-tax impacts of fair value accounting and timing adjustments
associated with energy-related transactions. These adjustments,
which primarily impact the Gas Marketing segment, include net
unrealized gains and losses on energy-related derivatives resulting
from the current changes in the fair value of financial and
physical transactions prior to their completion and settlement,
lower of cost or market inventory adjustments, and realized gains
and losses on economic hedges prior to the sale of the physical
commodity. In calculating net economic earnings, management also
excludes from net income the after-tax impacts related to
acquisition, divestiture, and restructuring activities, including
costs related to acquisitions and integration. Management believes
that excluding these items provides a useful representation of the
economic impact of actual settled transactions and overall results
of ongoing operations. Contribution margin adjusts revenues to
remove the costs that are directly passed on to customers and
collected through revenues, which are the wholesale cost of natural
gas and propane and gross receipts taxes. These internal non-GAAP
operating metrics should not be considered as an alternative to, or
more meaningful than, GAAP measures such as operating income, net
income, or earnings per share.
Investor Contact:
Scott W. Dudley Jr.
314-342-0878
Scott.Dudley@SpireEnergy.com
Media Contact:
Jessica B. Willingham
314-342-3300
Jessica.Willingham@SpireEnergy.com
Condensed
Consolidated Statements of Income - Unaudited
|
|
(In Millions,
except per share amounts)
|
Three months
ended
March 31,
|
|
Six months
ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
641.1
|
|
|
$
|
611.5
|
|
|
$
|
1,113.4
|
|
|
$
|
1,010.3
|
|
|
Gas Marketing and
other
|
22.3
|
|
|
(2.2)
|
|
|
45.1
|
|
|
(1.6)
|
|
|
Total
Operating Revenues
|
663.4
|
|
|
609.3
|
|
|
1,158.5
|
|
|
1,008.7
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
|
|
|
|
|
|
|
|
Natural and
propane gas
|
254.3
|
|
|
261.1
|
|
|
448.1
|
|
|
409.6
|
|
|
Operation and
maintenance
|
98.4
|
|
|
94.3
|
|
|
197.8
|
|
|
185.9
|
|
|
Depreciation
and amortization
|
37.9
|
|
|
33.8
|
|
|
75.6
|
|
|
67.3
|
|
|
Taxes, other
than income taxes
|
48.3
|
|
|
43.9
|
|
|
81.7
|
|
|
72.1
|
|
|
Total
Gas Utility Operating Expenses
|
438.9
|
|
|
433.1
|
|
|
803.2
|
|
|
734.9
|
|
|
Gas Marketing and
other
|
44.1
|
|
|
8.5
|
|
|
85.8
|
|
|
19.1
|
|
|
Total
Operating Expenses
|
483.0
|
|
|
441.6
|
|
|
889.0
|
|
|
754.0
|
|
Operating
Income
|
180.4
|
|
|
167.7
|
|
|
269.5
|
|
|
254.7
|
|
Other
Income
|
3.6
|
|
|
0.8
|
|
|
4.1
|
|
|
2.2
|
|
Interest
Charges:
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
19.2
|
|
|
16.7
|
|
|
38.3
|
|
|
33.6
|
|
|
Other interest
charges
|
3.5
|
|
|
2.6
|
|
|
6.5
|
|
|
4.7
|
|
|
Total Interest
Charges
|
22.7
|
|
|
19.3
|
|
|
44.8
|
|
|
38.3
|
|
Income Before Income
Taxes
|
161.3
|
|
|
149.2
|
|
|
228.8
|
|
|
218.6
|
|
Income Tax
Expense
|
53.3
|
|
|
48.4
|
|
|
75.6
|
|
|
70.9
|
|
Net Income
|
$
|
108.0
|
|
|
$
|
100.8
|
|
|
$
|
153.2
|
|
|
$
|
147.7
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
45.6
|
|
|
43.3
|
|
|
45.6
|
|
|
43.3
|
|
|
Diluted
|
45.7
|
|
|
43.5
|
|
|
45.7
|
|
|
43.5
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share of Common Stock
|
$
|
2.36
|
|
|
$
|
2.32
|
|
|
$
|
3.35
|
|
|
$
|
3.40
|
|
Diluted Earnings Per
Share of Common Stock
|
$
|
2.36
|
|
|
$
|
2.31
|
|
|
$
|
3.34
|
|
|
$
|
3.39
|
|
Dividends Declared
Per Share of Common Stock
|
$
|
0.53
|
|
|
$
|
0.49
|
|
|
$
|
1.05
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets - Unaudited
|
|
(In
Millions)
|
March
31,
|
|
September
30,
|
|
March
31,
|
|
2017
|
|
2016
|
|
2016
|
ASSETS
|
|
|
|
|
|
Utility
Plant
|
$
|
4,978.8
|
|
|
$
|
4,793.6
|
|
|
$
|
4,271.3
|
|
Less:
Accumulated depreciation and amortization
|
1,585.9
|
|
|
1,506.4
|
|
|
1,286.1
|
|
Net Utility
Plant
|
3,392.9
|
|
|
3,287.2
|
|
|
2,985.2
|
|
Non-utility
Property
|
26.6
|
|
|
13.7
|
|
|
13.8
|
|
Goodwill
|
1,163.9
|
|
|
1,164.9
|
|
|
946.0
|
|
Other
Investments
|
63.2
|
|
|
62.1
|
|
|
61.1
|
|
Other Property and
Investments
|
1,253.7
|
|
|
1,240.7
|
|
|
1,020.9
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
19.6
|
|
|
5.2
|
|
|
8.7
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
345.6
|
|
|
220.7
|
|
|
265.0
|
|
Delayed customer
billings
|
11.6
|
|
|
1.6
|
|
|
10.1
|
|
Inventories
|
146.4
|
|
|
202.3
|
|
|
124.0
|
|
Other
|
161.1
|
|
|
139.8
|
|
|
96.0
|
|
Total Current
Assets
|
684.3
|
|
|
569.6
|
|
|
503.8
|
|
Regulatory Assets and
Other Deferred Charges
|
925.8
|
|
|
966.9
|
|
|
797.6
|
|
Total
Assets
|
$
|
6,256.7
|
|
|
$
|
6,064.4
|
|
|
$
|
5,307.5
|
|
|
|
|
|
|
|
CAPITALIZATION AND
LIABILITIES
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
Common stock and
paid-in capital
|
$
|
1,223.4
|
|
|
$
|
1,221.5
|
|
|
$
|
1,083.7
|
|
Retained
earnings
|
655.9
|
|
|
550.9
|
|
|
599.4
|
|
Accumulated other
comprehensive income (loss)
|
3.7
|
|
|
(4.2)
|
|
|
(1.7)
|
|
Total Common
Stock Equity
|
1,883.0
|
|
|
1,768.2
|
|
|
1,681.4
|
|
Long-term
debt
|
1,925.3
|
|
|
1,820.7
|
|
|
1,839.3
|
|
Total
Capitalization
|
3,808.3
|
|
|
3,588.9
|
|
|
3,520.7
|
|
Current
Liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
—
|
|
|
250.0
|
|
|
—
|
|
Notes
payable
|
567.4
|
|
|
398.7
|
|
|
253.6
|
|
Accounts
payable
|
218.6
|
|
|
210.9
|
|
|
127.1
|
|
Advance customer
billings
|
14.5
|
|
|
70.2
|
|
|
31.7
|
|
Accrued liabilities
and other
|
214.8
|
|
|
231.5
|
|
|
206.4
|
|
Total Current
Liabilities
|
1,015.3
|
|
|
1,161.3
|
|
|
618.8
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
|
|
Deferred income
taxes
|
690.6
|
|
|
607.3
|
|
|
564.2
|
|
Pension and
postretirement benefit costs
|
308.1
|
|
|
303.7
|
|
|
254.8
|
|
Asset retirement
obligations
|
212.4
|
|
|
206.4
|
|
|
162.8
|
|
Regulatory
liabilities
|
144.1
|
|
|
130.7
|
|
|
110.7
|
|
Other
|
77.9
|
|
|
66.1
|
|
|
75.5
|
|
Total Deferred
Credits and Other Liabilities
|
1,433.1
|
|
|
1,314.2
|
|
|
1,168.0
|
|
Total Capitalization
and Liabilities
|
$
|
6,256.7
|
|
|
$
|
6,064.4
|
|
|
$
|
5,307.5
|
|
Condensed
Consolidated Statements of Cash Flows - Unaudited
|
|
(In
Millions)
|
Six months ended
March 31,
|
|
2017
|
|
2016
|
Operating
Activities:
|
|
|
|
Net Income
|
$
|
153.2
|
|
|
$
|
147.7
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, and accretion
|
75.8
|
|
|
67.6
|
|
Deferred income
taxes and investment tax credits
|
75.4
|
|
|
71.0
|
|
Changes in
assets and liabilities
|
(81.4)
|
|
|
(42.9)
|
|
Other
|
3.1
|
|
|
(0.4)
|
|
Net cash provided by
operating activities
|
226.1
|
|
|
243.0
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(187.3)
|
|
|
(121.8)
|
|
Acquisition
activity
|
3.8
|
|
|
—
|
|
Other
|
0.6
|
|
|
(0.7)
|
|
Net cash used in
investing activities
|
(182.9)
|
|
|
(122.5)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
Repayment of long-term
debt
|
(393.8)
|
|
|
(80.0)
|
|
Issuance of long-term
debt
|
250.0
|
|
|
80.0
|
|
Issuance (repayment)
of short-term debt - net
|
168.7
|
|
|
(84.4)
|
|
Issuance of common
stock
|
0.1
|
|
|
2.1
|
|
Dividends
paid
|
(46.8)
|
|
|
(41.6)
|
|
Other
|
(7.0)
|
|
|
(1.7)
|
|
Net cash provided by
financing activities
|
(28.8)
|
|
|
(125.6)
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
14.4
|
|
|
(5.1)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
5.2
|
|
|
13.8
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
19.6
|
|
|
$
|
8.7
|
|
Net Economic Earnings
and Reconciliation to GAAP - Quarter
|
|
(In Millions,
except per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per
Diluted
Share
(2)
|
Three Months Ended
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
112.3
|
|
|
$
|
(1.0)
|
|
|
$
|
(3.3)
|
|
|
$
|
108.0
|
|
|
$
|
2.36
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
0.04
|
|
|
|
|
Lower of cost or
market inventory adjustments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.1)
|
|
|
(0.6)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.02)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
112.2
|
|
|
$
|
—
|
|
|
$
|
(3.2)
|
|
|
$
|
109.0
|
|
|
$
|
2.38
|
|
|
|
|
Diluted EPS
(GAAP)
|
2.45
|
|
|
(0.02)
|
|
|
(0.07)
|
|
|
2.36
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
2.45
|
|
|
—
|
|
|
(0.07)
|
|
|
2.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
102.4
|
|
|
$
|
1.5
|
|
|
$
|
(3.1)
|
|
|
$
|
100.8
|
|
|
$
|
2.31
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
|
0.07
|
|
|
|
|
Lower of cost or
market inventory adjustments
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.5)
|
|
|
—
|
|
|
(0.5)
|
|
|
(0.01)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.2
|
|
|
—
|
|
|
1.8
|
|
|
2.0
|
|
|
0.04
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.1)
|
|
|
(1.0)
|
|
|
(0.7)
|
|
|
(1.8)
|
|
|
(0.04)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
102.5
|
|
|
$
|
3.0
|
|
|
$
|
(2.0)
|
|
|
$
|
103.5
|
|
|
$
|
2.37
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
2.34
|
|
|
$
|
0.04
|
|
|
$
|
(0.07)
|
|
|
$
|
2.31
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
2.35
|
|
|
$
|
0.07
|
|
|
$
|
(0.05)
|
|
|
$
|
2.37
|
|
|
|
(1) Income taxes are
calculated by applying federal, state, and local income tax rates
applicable to ordinary income to the amounts of the pre-tax
reconciling items.
|
|
(2) Net economic
earnings per share is generally calculated by replacing
consolidated net income with consolidated net economic earnings in
the GAAP diluted EPS calculation.
|
|
Note: EPS amounts by
segment represent contributions to Spire's consolidated
EPS.
|
Net Economic Earnings
and Reconciliation to GAAP - Year-to-Date
|
|
(In Millions,
except per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per
Diluted
Share(2)
|
Six Months Ended
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
164.0
|
|
|
$
|
(1.8)
|
|
|
$
|
(9.0)
|
|
|
$
|
153.2
|
|
|
$
|
3.34
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
5.4
|
|
|
—
|
|
|
5.4
|
|
|
0.12
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
0.01
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.1)
|
|
|
(2.0)
|
|
|
—
|
|
|
(2.1)
|
|
|
(0.05)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
164.0
|
|
|
$
|
1.4
|
|
|
$
|
(8.9)
|
|
|
$
|
156.5
|
|
|
$
|
3.42
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.58
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.20)
|
|
|
$
|
3.34
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.59
|
|
|
$
|
0.03
|
|
|
$
|
(0.20)
|
|
|
$
|
3.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
151.7
|
|
|
$
|
3.8
|
|
|
$
|
(7.8)
|
|
|
$
|
147.7
|
|
|
$
|
3.39
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on
energy-related derivatives
|
(0.1)
|
|
|
(1.9)
|
|
|
—
|
|
|
(2.0)
|
|
|
(0.04)
|
|
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
0.02
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.6)
|
|
|
—
|
|
|
(0.6)
|
|
|
(0.02)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
1.4
|
|
|
—
|
|
|
1.9
|
|
|
3.3
|
|
|
0.07
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.5)
|
|
|
0.7
|
|
|
(0.7)
|
|
|
(0.5)
|
|
|
(0.01)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
152.5
|
|
|
$
|
2.7
|
|
|
$
|
(6.6)
|
|
|
$
|
148.6
|
|
|
$
|
3.41
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.48
|
|
|
$
|
0.09
|
|
|
$
|
(0.18)
|
|
|
$
|
3.39
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.50
|
|
|
$
|
0.07
|
|
|
$
|
(0.16)
|
|
|
$
|
3.41
|
|
|
|
(1) Income taxes are
calculated by applying federal, state, and local income tax rates
applicable to ordinary income to the amounts of the pre-tax
reconciling items.
|
|
(2) Net economic
earnings per share is generally calculated by replacing
consolidated net income with consolidated net economic earnings in
the GAAP diluted EPS calculation.
|
|
Note: EPS amounts by
segment represent contributions to Spire's consolidated
EPS.
|
Contribution Margin
and Reconciliation to GAAP
|
|
(In
Millions)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
Three Months Ended
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
182.6
|
|
|
$
|
(1.7)
|
|
|
$
|
(0.5)
|
|
|
$
|
—
|
|
|
$
|
180.4
|
|
|
Operation and
maintenance expenses
|
99.3
|
|
|
1.5
|
|
|
2.1
|
|
|
(1.4)
|
|
|
101.5
|
|
|
Depreciation and
amortization
|
37.9
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
38.0
|
|
|
Taxes, other than
income taxes
|
48.3
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
48.4
|
|
|
Less: Gross receipts
tax expense
|
(34.1)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(34.2)
|
|
|
Contribution
Margin (Non-GAAP)
|
334.0
|
|
|
(0.2)
|
|
|
1.7
|
|
|
(1.4)
|
|
|
334.1
|
|
|
Natural and propane
gas costs
|
275.6
|
|
|
22.3
|
|
|
0.1
|
|
|
(2.9)
|
|
|
295.1
|
|
|
Gross receipts tax
expense
|
34.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
34.2
|
|
|
Operating
Revenues
|
$
|
643.7
|
|
|
$
|
22.2
|
|
|
$
|
1.8
|
|
|
$
|
(4.3)
|
|
|
$
|
663.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
167.4
|
|
|
$
|
2.5
|
|
|
$
|
(2.2)
|
|
|
$
|
—
|
|
|
$
|
167.7
|
|
|
Operation and
maintenance expenses
|
94.6
|
|
|
1.4
|
|
|
3.1
|
|
|
(0.3)
|
|
|
98.8
|
|
|
Depreciation and
amortization
|
33.8
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
33.9
|
|
|
Taxes, other than
income taxes
|
43.9
|
|
|
0.1
|
|
|
(0.1)
|
|
|
—
|
|
|
43.9
|
|
|
Less: Gross receipts
tax expense
|
(32.2)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(32.3)
|
|
|
Contribution
Margin (Non-GAAP)
|
307.5
|
|
|
3.9
|
|
|
0.9
|
|
|
(0.3)
|
|
|
312.0
|
|
|
Natural and propane
gas costs
|
273.0
|
|
|
4.0
|
|
|
—
|
|
|
(12.0)
|
|
|
265.0
|
|
|
Gross receipts tax
expense
|
32.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
32.3
|
|
|
Operating
Revenues
|
$
|
612.7
|
|
|
$
|
8.0
|
|
|
$
|
0.9
|
|
|
$
|
(12.3)
|
|
|
$
|
609.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
273.2
|
|
|
$
|
(3.0)
|
|
|
$
|
(0.7)
|
|
|
$
|
—
|
|
|
$
|
269.5
|
|
|
Operation and
maintenance expenses
|
199.8
|
|
|
2.9
|
|
|
3.9
|
|
|
(2.6)
|
|
|
204.0
|
|
|
Depreciation and
amortization
|
75.6
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
75.8
|
|
|
Taxes, other than
income taxes
|
81.7
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
82.0
|
|
|
Less: Gross receipts
tax expense
|
(53.1)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(53.2)
|
|
|
Contribution
Margin (Non-GAAP)
|
577.2
|
|
|
—
|
|
|
3.5
|
|
|
(2.6)
|
|
|
578.1
|
|
|
Natural and propane
gas costs
|
490.1
|
|
|
43.8
|
|
|
0.1
|
|
|
(6.8)
|
|
|
527.2
|
|
|
Gross receipts tax
expense
|
53.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
53.2
|
|
|
Operating
Revenues
|
$
|
1,120.4
|
|
|
$
|
43.9
|
|
|
$
|
3.6
|
|
|
$
|
(9.4)
|
|
|
$
|
1,158.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
251.4
|
|
|
$
|
6.3
|
|
|
$
|
(3.0)
|
|
|
$
|
—
|
|
|
$
|
254.7
|
|
|
Operation and
maintenance expenses
|
186.5
|
|
|
3.0
|
|
|
4.5
|
|
|
(0.6)
|
|
|
193.4
|
|
|
Depreciation and
amortization
|
67.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
67.6
|
|
|
Taxes, other than
income taxes
|
72.1
|
|
|
0.1
|
|
|
(0.1)
|
|
|
—
|
|
|
72.1
|
|
|
Less: Gross receipts
tax expense
|
(49.7)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(49.8)
|
|
|
Contribution
Margin (Non-GAAP)
|
527.6
|
|
|
9.3
|
|
|
1.7
|
|
|
(0.6)
|
|
|
538.0
|
|
|
Natural and propane
gas costs
|
434.9
|
|
|
11.4
|
|
|
—
|
|
|
(25.4)
|
|
|
420.9
|
|
|
Gross receipts tax
expense
|
49.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
49.8
|
|
|
Operating
Revenues
|
$
|
1,012.2
|
|
|
$
|
20.8
|
|
|
$
|
1.7
|
|
|
$
|
(26.0)
|
|
|
$
|
1,008.7
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/spire-reports-second-quarter-results-300450226.html
SOURCE Spire Inc.