ST. LOUIS, May 2, 2018 /PRNewswire/ -- Spire Inc. (NYSE: SR)
today reported operating results for its fiscal 2018 second quarter
ended March 31, 2018. Highlights
include:
- Initiation of fiscal 2018 net economic earnings guidance of
$3.65 to $3.75 per share and increasing long-term earnings
growth target to 4-7 percent
- Five-year capital expenditures plan increased to $2.5 billion
- GAAP earnings per diluted share of $2.03, compared to $2.36 a year ago, reflecting largely non-cash
fair value accounting and regulatory adjustments
- Net economic earnings* per share of $2.83, up from $2.38 a year ago, reflecting strong Spire
Marketing results, lower federal income taxes and the impact of
regulatory adjustments
"During this quarter, we wrapped up two year-long Missouri rate cases and reduced customer rates
across all of our gas companies as a result of tax reform," said
Suzanne Sitherwood, president and
chief executive officer of Spire. "Having successfully managed
these two significant matters, we have greater clarity and
continued confidence in our growth plan. Our outlook reflects that
we are achieving additional organic growth and increasing our
capital investment, not only for our gas utilities but across all
of our businesses."
Second Quarter
Results
|
Three months ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
131.7
|
|
|
$
|
112.2
|
|
|
$
|
2.72
|
|
|
$
|
2.45
|
|
|
Gas
Marketing
|
10.2
|
|
|
—
|
|
|
0.21
|
|
|
—
|
|
|
Other
|
(4.7)
|
|
|
(3.2)
|
|
|
(0.10)
|
|
|
(0.07)
|
|
|
|
Total
|
$
|
137.2
|
|
|
$
|
109.0
|
|
|
$
|
2.83
|
|
|
$
|
2.38
|
|
|
Missouri regulatory
adjustments, pre-tax
|
(30.6)
|
|
|
—
|
|
|
(0.63)
|
|
|
—
|
|
|
Fair value
adjustments, pre-tax
|
(11.6)
|
|
|
(1.6)
|
|
|
(0.23)
|
|
|
(0.04)
|
|
|
Acquisition-related
costs, pre-tax
|
(2.0)
|
|
|
(0.1)
|
|
|
(0.04)
|
|
|
—
|
|
|
Income tax effect of
pre-tax adjustments
|
11.1
|
|
|
0.7
|
|
|
0.22
|
|
|
0.02
|
|
|
Effects of the Tax
Cuts and Jobs Act
|
(5.9)
|
|
|
—
|
|
|
(0.12)
|
|
|
—
|
|
Net
Income
|
$
|
98.2
|
|
|
$
|
108.0
|
|
|
$
|
2.03
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
48.4
|
|
|
45.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
Consolidated net income for the three months ended March 31, 2018, the second quarter of our fiscal
year, was $98.2 million ($2.03 per diluted share), down from $108.0 million ($2.36 per diluted share) in the prior year
period.
These GAAP results for the second quarter of fiscal 2018 include
significant, largely non-cash regulatory adjustments to reflect the
order received in March for our Missouri rate cases. These include the
write-off of assets and expenses disallowed by the Missouri Public
Service Commission (MoPSC) with a total after-tax impact of
$23.6 million (or $0.49 per share) as outlined below.
|
Millions, after
tax
|
Certain pension
contributions (prior to 1997)
|
|
$17.7
|
A portion of
incentive compensation expense from January 2016 forward
|
|
4.2
|
The net book value of
property sold in 2014
|
|
1.1
|
Rate case
expenses
|
|
0.6
|
|
Total
|
$23.6
|
Results for the quarter also include the impact of a lower
federal income tax rate due to the Tax Cuts and Jobs Act (TCJA).
This significant legislation also allowed us, working with our
regulators, to lower customer rates across all of our
jurisdictions.
Net economic earnings (NEE) exclude from net income the impacts
of fair value accounting and timing adjustments associated with
energy-related transactions and the impacts of acquisition,
divestiture and restructuring activities. NEE also excludes the
largely non-cash impacts of other non-recurring or unusual items
such as certain regulatory, legislative, or GAAP standard-setting
actions. In fiscal 2018, these impacts include the revaluation of
deferred tax assets and liabilities under the TCJA and the
write-off of assets related to pension costs and property sold as
described above.
NEE for the second quarter of fiscal 2018 were $137.2 million ($2.83 per diluted share), up from $109.0 million ($2.38 per diluted share) last year, reflecting
higher earnings in both our Gas Utility and Gas Marketing segments,
driven by the benefits of lower federal income taxes and the return
to more normal weather. The year-over-year change in per share
results was impacted by a 6 percent increase in average shares
outstanding tied to the maturity of equity units in April 2017.
Gas Utility
The Gas Utility segment includes the regulated distribution
operations of our five gas utilities across Alabama, Mississippi and Missouri. Second quarter NEE were $131.7 million, up from $112.2 million in the prior year, reflecting a
higher contribution margin and the benefit of lower federal income
taxes, net of amounts now reflected in lower customer rates,
partially offset by higher expenses.
Contribution margin increased by $10.1
million, driven by higher usage due to colder weather
compared to a year ago ($17.6
million) as well as higher Infrastructure System Replacement
Surcharge (ISRS) revenues for the Missouri utilities ($2.2 million) and modest customer growth. These
factors were partially offset by a $9.0
million reduction in customer rates at Spire Alabama and
Spire Gulf to reflect the benefit of tax reform, and a $1.8 million increase in the regulatory
adjustment under Spire Gulf's Rate Stabilization and
Equalization (RSE) mechanism.
O&M expenses of $143.6 million
for the quarter were up $45.2
million, with $38.4 million of
the increase attributable to the gross (pre-tax) write-off of
assets and expenses disallowed in our Missouri rate cases, as previously mentioned.
Excluding these costs, remaining O&M expenses were up
$6.8 million largely due to
weather-driven increases in employee-related costs and bad debt
expense. Depreciation and amortization expenses increased by
$3.2 million from last year,
reflecting higher capital investment in infrastructure and
technology upgrades, and new business. Taxes other than income
increased $9.7 million
reflecting higher volume-driven gross receipts taxes.
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 2018, Gas Marketing reported NEE of $10.2 million,
compared to break-even results in the prior year. The increase in
earnings was driven by improved market conditions and wider basis
differentials, partially as a result of colder weather and greater
temperature volatility, that resulted in improved margins and
increased storage optimization.
Other
Other non-utility operations and corporate costs on an NEE basis
for the second quarter were $4.7 million in fiscal 2018, up from
$3.2 million a year ago. The increase
is largely due to higher after-tax interest expense.
Year-to-Date
Results
|
Six Months Ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net Economic
Earnings (Loss) by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
191.2
|
|
|
$
|
164.0
|
|
|
$
|
3.94
|
|
|
$
|
3.59
|
|
|
Gas
Marketing
|
13.8
|
|
|
1.4
|
|
|
0.29
|
|
|
0.03
|
|
|
Other
|
(9.9)
|
|
|
(8.9)
|
|
|
(0.21)
|
|
|
(0.20)
|
|
|
|
|
Total
|
$
|
195.1
|
|
|
$
|
156.5
|
|
|
$
|
4.02
|
|
|
$
|
3.42
|
|
|
|
Missouri regulatory
adjustments, pre-tax
|
(30.6)
|
|
|
—
|
|
|
(0.63)
|
|
|
—
|
|
|
|
Fair value
adjustments, pre-tax
|
(12.3)
|
|
|
(5.2)
|
|
|
(0.25)
|
|
|
(0.12)
|
|
|
|
Acquisition-related
costs, pre-tax
|
(3.7)
|
|
|
(0.2)
|
|
|
(0.08)
|
|
|
(0.01)
|
|
|
Income tax effect of
pre-tax adjustments
|
11.7
|
|
|
2.1
|
|
|
0.24
|
|
|
0.05
|
|
|
Effects of the Tax
Cuts and Jobs Act
|
54.0
|
|
|
—
|
|
|
1.12
|
|
|
—
|
|
Net
Income
|
$
|
214.2
|
|
|
$
|
153.2
|
|
|
$
|
4.42
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding
|
48.4
|
|
|
45.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the first six months of fiscal 2018, we reported
consolidated net income of $214.2
million (or $4.42 per diluted
share) compared to $153.2 million (or
$3.34 per diluted share) for the
prior year. NEE for the six months ended March 31, 2018 were $195.1
million (or $4.02 per diluted
share) up from $156.5 million (or
$3.42 per diluted share) a year ago.
The increase in NEE reflects the return of normal weather, which
benefited our Gas Utility segment and contributed to more favorable
market conditions for our Gas Marketing segment. NEE also reflect
the net benefits of federal income tax reform and the impact of the
6 percent increase in shares outstanding due to the issuance
of shares as noted earlier.
Gas Utility
For the first six months of fiscal 2018, the Gas Utility segment
reported NEE of $191.2 million, up
from $164.0 million a year ago,
reflecting a higher contribution margin and the benefits of lower
federal income tax rates, partially offset by higher operating
expenses.
Year-to-date segment contribution margin increased by
$22.4 million, with $25.9 million due to higher volumes. Contribution
margin also benefited from a $5.6
million increase in ISRS revenues and modest customer growth
at the Missouri utilities. These
positive factors were partially offset by a $9.0 million reduction in customer rates at Spire
Alabama and Spire Gulf to reflect the lower federal income taxes,
and a $1.8 million increase in Spire
Gulf's RSE adjustment.
O&M expenses increased by $43.7
million, or by a net $5.3
million after removing the $38.4
million gross write-off noted earlier. The net O&M
increase is largely due to weather-driven increases in
employee-related costs and bad debt expense. Depreciation and
amortization rose by $5.8 million
reflecting increased capital investment across our utilities. Taxes
other than income taxes were up $13.0
million due to higher gross receipts taxes reflecting an
increase in volumes.
Gas Marketing
Net economic earnings, which exclude adverse mark-to-market and
fair value adjustments, were $13.8 million, up from $1.4 million in the prior year. Higher earnings
were driven by a $9.2 million
increase in contribution margin due to improved market conditions
leading to higher overall volumes, margins and storage
optimization.
Other
On an NEE basis, year-to-date costs were $9.9 million, up from $8.9
million in the prior-year period. The increase in costs
largely reflects a lower tax benefit from the reduction in federal
income tax. A significant portion of costs in Other is interest
expense on corporate-level debt, which was slightly higher.
Earnings Guidance and Outlook
We expect fiscal 2018 NEE to be in the range of $3.65 to $3.75 per
fully diluted share. This range reflects our strong performance in
the first half of our fiscal year and the impacts of tax reform now
that we have reduced our customer rates across all of our
utilities. It also includes the impacts of the Missouri rate cases, including an increase in
the annualized run rate of expenses and a change in rate design
that will concentrate more of our margins and earnings in the
winter heating season.
We have increased our longer-term NEE per share growth target to
4-7 percent. This target uses run-rate 2018 earnings as the base,
which removes an estimated $0.17 per
share of performance from Spire Marketing due to significantly more
favorable market conditions due in large part to weather conditions
that are not expected to recur next year. Our growth reflects
stronger growth in our utility rate base, as well as continued
organic growth across our utilities and increasing contributions
from our non-utility businesses.
Our capital expenditures forecast for fiscal 2018 has increased
to $500 million, reflecting a
$10 million increase in investment
for our gas utilities to approximately $425
million. Our five-year capital spend outlook for the fiscal
years 2018-2022 is $2.5 billion, a 9
percent increase over our prior five-year forecast through 2021. A
significant portion of our capital investment is driven by
infrastructure upgrade plans for our gas utilities that are up to
20 years in duration. We expect more than 80 percent of our
five-year capital spend will be recovered in rates with minimal lag
under regulatory mechanisms or reflected in earnings.
Balance Sheets and Cash Flows
We maintain a strong capital structure with ample liquidity. At
March 31, 2018, our long-term
capitalization was 49.8 percent equity, compared to 48.7 percent
equity capitalization at September 30,
2017, the end of our prior fiscal year. Short-term
borrowings outstanding at March 31,
2018 were $391.7 million,
down from $567.4 million a year ago,
reflecting an increase in long-term borrowing for our gas utilities
over the last year. We retain significant capacity in our
$975 million revolving credit
facility and related commercial paper program to meet our liquidity
needs.
Net cash provided by operating activities was $309.6 million for the six months ended
March 31, 2018, compared to
$226.1 million for the prior-year
period. The increase was due to the timing of purchased gas
adjustments, fluctuations in working capital items, and higher net
income. Capital expenditures for the first six months of fiscal
2018 were $215.8 million, up 15.2
percent from $187.3 million in the
prior year, reflecting increased infrastructure upgrades to our gas
utilities, investment to support customer growth and new business
development, and for the Spire STL Pipeline.
For additional details on Spire's results for the second quarter
of fiscal 2018, please see the accompanying unaudited Consolidated
Statements of Income, unaudited Condensed Consolidated Balance
Sheets, and unaudited Condensed Consolidated Statements of Cash
Flows.
Regulatory Update
Missouri
On March 7, 2018, the MoPSC issued
an amended order in the general rate case filings we made in
April 2017 for Spire Missouri East
and Spire Missouri West. The MoPSC authorized a base rate increase
of $66.2 million, or a net decrease
of $15.8 million, after including the
benefits of lower federal income taxes as a result of tax reform
and removing the annualized ISRS surcharge of $49.0 million already included in rates.
Impact ($
Millions)
|
Customer
rates
|
Earnings
|
Base rate
increase
|
$66.2
|
$66.2
|
Rate reduction for
tax benefits
|
(33.0)
|
|
Current ISRS reset to
zero
|
(49.0)
|
(49.0)
|
Amort. of reg. assets
and other
|
|
(23.1)
|
Total
|
($15.8)
|
($5.9)
|
New customer rates went into effect on April 19, 2018 and reflect significant cost
savings and synergies, totaling nearly $70
million, achieved from our growth and transformation over
the last several years. Rates are based upon an allowed return on
equity of 9.8 percent, an equity capitalization of 54.2 percent for
our Missouri utilities, and a rate
base of $2.0 billion.
The impact of the new rates on future annual earnings of
$5.9 million reflects the net impact
of higher expenses not recovered in rates as well as true up of
rate base. The reduction in customer rates for the benefit of tax
reform does not impact earnings.
As discussed earlier, the MoPSC order disallowed certain assets
and expenses, including regulatory assets of certain pension costs
from prior to 1997, a portion of capitalized incentive compensation
costs, assets related to property sold in 2014, and rate case
expenses. While Spire has appealed the MoPSC's decisions on pension
costs, assets related to property sold and rate case expenses, a
charge of $38.4 million to reflect
the write-off of the disallowed costs is included in our financial
statements, primarily in O&M expenses on the income statements
for the three and six months ended March 31,
2018. The after-tax reduction to net income from these
write-offs was $23.6 million, or
$0.49 per share.
Alabama and Mississippi
The parameters for the Spire Gulf RSE mechanism were set in
September 2017, and effective for
rates beginning December 1, 2017. The
RSE is based on a return on equity of 10.7 percent and an equity
capitalization of 55.5 percent. Spire Gulf refiled its RSE to
reflect the impact of the lower federal income tax rate. Effective
February 1, 2018, we reduced customer
rates by $1.9 million for Spire Gulf
and $12.8 million for Spire
Alabama to reflect the benefit of lower taxes in fiscal 2018 from
January 1 to September 30, 2018.
Similarly, parameters for the Rate Stabilization Adjustment
mechanism for Spire Mississippi were approved in April 2018, including a return on equity of 9.34
percent, an equity capitalization of 50 percent, and a rate
base of approximately $23 million.
Customer rates have been reduced by $0.2 million for the lower federal income
taxes in fiscal 2018.
Pipelines and Storage
Our growth strategy includes the development of our Spire STL
Pipeline project and investing in natural gas storage.
Spire STL Pipeline is a planned 65-mile natural gas supply
pipeline that will provide Spire Missouri East with access to
lower-cost shale gas from the Marcellus/Utica producing regions, while enhancing
reliability and the diversity of our physical transport portfolio.
We anticipate that we will receive later in fiscal 2018 a
Certificate of Public Convenience and Necessity from the Federal
Energy Regulatory Commission, allowing us to complete the necessary
land acquisitions and shift into the construction phase of the
project. We continue to expect a 2019 in-service date and a total
project cost of $190-$210 million.
As previously announced, in late December
2017, we acquired a majority interest in a natural gas
storage facility in Wyoming
certificated for 35 Bcf of working gas, for $26 million. Our plans are underway to enhance
its operating and financial performance. The operating results of
storage, including integration costs, are included in Other, but
are excluded from NEE in fiscal 2018.
Dividends
The Spire board of directors declared a quarterly common stock
dividend of $0.5625 per share,
payable July 3, 2018, to shareholders
of record on June 11, 2018. We have
continuously paid a cash dividend since 1946, with 2018 marking the
15th consecutive year of increasing dividends on an annualized
basis.
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss
its fiscal 2018 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
2
|
|
|
8 a.m. CT (9 a.m.
ET)
|
|
|
|
|
|
Phone
Numbers:
|
U.S. and
Canada:
|
844-824-3832
|
|
|
International:
|
412-317-5142
|
|
The call will also be webcast in a listen-only format for the
media and general public. The webcast (and subsequent replay) can
be accessed at Investors.SpireEnergy.com under the Events &
presentations tab. A replay of the call will be available from
10 a.m. CT (11
a.m. ET) on May 2 until
June 2 by dialing 877‑344-7529
(U.S.), 855-669-9658 (Canada), or
412-317-0088 (international). The replay access code is
10119141.
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 serving Alabama, Mississippi and Missouri. 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 through 1) growing organically,
2) investing in infrastructure, 3) acquiring and
integrating, and 4) innovation and technology. 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, 2018, 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
impacts of fair value accounting and timing adjustments associated
with energy-related transactions, the impacts of acquisition,
divestiture and restructuring activities and the largely non-cash
impacts of other non-recurring or unusual items such as certain
regulatory, legislative, or GAAP standard-setting actions. In
fiscal 2018, these items include the revaluation of deferred tax
assets and liabilities due to the federal Tax Cuts and Jobs Act and
the write-off of certain long-standing assets related to pension
costs and property sold as a result of disallowances in our
Missouri rate proceedings. The
fair value and timing 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. 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.
Condensed
Consolidated Statements of Income - Unaudited
|
|
(In Millions,
except per share amounts)
|
Three months
ended
March 31,
|
|
Six months
ended
March 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
790.6
|
|
|
$
|
641.1
|
|
|
$
|
1,332.5
|
|
|
$
|
1,113.4
|
|
|
Gas Marketing and
other
|
22.8
|
|
|
22.3
|
|
|
42.7
|
|
|
45.1
|
|
|
Total Operating
Revenues
|
813.4
|
|
|
663.4
|
|
|
1,375.2
|
|
|
1,158.5
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
|
|
|
|
|
|
|
|
Natural and
propane gas
|
383.7
|
|
|
254.3
|
|
|
624.5
|
|
|
448.1
|
|
|
Operation and
maintenance
|
143.6
|
|
|
98.4
|
|
|
241.5
|
|
|
197.8
|
|
|
Depreciation
and amortization
|
41.1
|
|
|
37.9
|
|
|
81.4
|
|
|
75.6
|
|
|
Taxes, other
than income taxes
|
58.0
|
|
|
48.3
|
|
|
94.7
|
|
|
81.7
|
|
|
Total Gas Utility
Operating Expenses
|
626.4
|
|
|
438.9
|
|
|
1,042.1
|
|
|
803.2
|
|
|
Gas Marketing and
other
|
45.2
|
|
|
44.1
|
|
|
86.2
|
|
|
85.8
|
|
|
Total Operating
Expenses
|
671.6
|
|
|
483.0
|
|
|
1,128.3
|
|
|
889.0
|
|
Operating
Income
|
141.8
|
|
|
180.4
|
|
|
246.9
|
|
|
269.5
|
|
Other Income -
Net
|
0.7
|
|
|
3.6
|
|
|
2.9
|
|
|
4.1
|
|
Interest
Charges:
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
21.0
|
|
|
19.2
|
|
|
41.7
|
|
|
38.3
|
|
|
Other interest
charges
|
4.4
|
|
|
3.5
|
|
|
8.1
|
|
|
6.5
|
|
|
Total Interest
Charges
|
25.4
|
|
|
22.7
|
|
|
49.8
|
|
|
44.8
|
|
Income Before Income
Taxes
|
117.1
|
|
|
161.3
|
|
|
200.0
|
|
|
228.8
|
|
Income Tax Expense
(Benefit)
|
18.9
|
|
|
53.3
|
|
|
(14.2)
|
|
|
75.6
|
|
Net Income
|
$
|
98.2
|
|
|
$
|
108.0
|
|
|
$
|
214.2
|
|
|
$
|
153.2
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
Basic
|
48.2
|
|
|
45.6
|
|
|
48.2
|
|
|
45.6
|
|
|
Diluted
|
48.4
|
|
|
45.7
|
|
|
48.4
|
|
|
45.7
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share of Common Stock
|
$
|
2.03
|
|
|
$
|
2.36
|
|
|
$
|
4.43
|
|
|
$
|
3.35
|
|
Diluted Earnings Per
Share of Common Stock
|
$
|
2.03
|
|
|
$
|
2.36
|
|
|
$
|
4.42
|
|
|
$
|
3.34
|
|
Dividends Declared
Per Share of Common Stock
|
$
|
0.5625
|
|
|
$
|
0.525
|
|
|
$
|
1.125
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets - Unaudited
|
|
(In
Millions)
|
March
31,
|
|
September
30,
|
|
March
31,
|
|
2018
|
|
2017
|
|
2017
|
ASSETS
|
|
|
|
|
|
Utility
Plant
|
$
|
5,403.4
|
|
|
$
|
5,278.4
|
|
|
$
|
4,978.8
|
|
Less:
Accumulated depreciation and amortization
|
1,645.0
|
|
|
1,613.2
|
|
|
1,585.9
|
|
Net Utility
Plant
|
3,758.4
|
|
|
3,665.2
|
|
|
3,392.9
|
|
Non-utility
Property
|
116.9
|
|
|
52.0
|
|
|
26.6
|
|
Goodwill
|
1,171.6
|
|
|
1,171.6
|
|
|
1,163.9
|
|
Other
Investments
|
66.4
|
|
|
64.2
|
|
|
63.2
|
|
Other Property and
Investments
|
1,354.9
|
|
|
1,287.8
|
|
|
1,253.7
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
17.8
|
|
|
7.4
|
|
|
19.6
|
|
Accounts receivable,
net
|
388.0
|
|
|
271.4
|
|
|
345.6
|
|
Delayed customer
billings
|
45.6
|
|
|
3.4
|
|
|
11.6
|
|
Inventories
|
128.5
|
|
|
225.8
|
|
|
146.4
|
|
Other
|
138.4
|
|
|
217.5
|
|
|
161.1
|
|
Total Current
Assets
|
718.3
|
|
|
725.5
|
|
|
684.3
|
|
Regulatory Assets and
Other Deferred Charges
|
755.2
|
|
|
868.2
|
|
|
925.8
|
|
Total
Assets
|
$
|
6,586.8
|
|
|
$
|
6,546.7
|
|
|
$
|
6,256.7
|
|
|
|
|
|
|
|
CAPITALIZATION AND
LIABILITIES
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
Common stock and
paid-in capital
|
$
|
1,375.7
|
|
|
$
|
1,373.9
|
|
|
$
|
1,223.4
|
|
Retained
earnings
|
773.7
|
|
|
614.2
|
|
|
655.9
|
|
Accumulated other
comprehensive income
|
4.1
|
|
|
3.2
|
|
|
3.7
|
|
Total
Equity
|
2,153.5
|
|
|
1,991.3
|
|
|
1,883.0
|
|
Redeemable
noncontrolling interest
|
6.5
|
|
|
—
|
|
|
—
|
|
Long-term debt (less
current portion)
|
2,073.9
|
|
|
1,995.0
|
|
|
1,925.3
|
|
Total
Capitalization
|
4,233.9
|
|
|
3,986.3
|
|
|
3,808.3
|
|
Current
Liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
105.5
|
|
|
100.0
|
|
|
—
|
|
Notes
payable
|
391.7
|
|
|
477.3
|
|
|
567.4
|
|
Accounts
payable
|
194.8
|
|
|
257.1
|
|
|
218.6
|
|
Advance customer
billings
|
8.1
|
|
|
32.0
|
|
|
14.5
|
|
Accrued liabilities
and other
|
227.9
|
|
|
231.5
|
|
|
214.8
|
|
Total
Current Liabilities
|
928.0
|
|
|
1,097.9
|
|
|
1,015.3
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
|
|
Deferred income
taxes
|
465.6
|
|
|
707.5
|
|
|
690.6
|
|
Pension and
postretirement benefit costs
|
233.4
|
|
|
237.4
|
|
|
308.1
|
|
Asset retirement
obligations
|
302.8
|
|
|
296.6
|
|
|
212.4
|
|
Regulatory
liabilities
|
353.1
|
|
|
157.2
|
|
|
144.1
|
|
Other
|
70.0
|
|
|
63.8
|
|
|
77.9
|
|
Total
Deferred Credits and Other Liabilities
|
1,424.9
|
|
|
1,462.5
|
|
|
1,433.1
|
|
Total Capitalization
and Liabilities
|
$
|
6,586.8
|
|
|
$
|
6,546.7
|
|
|
$
|
6,256.7
|
|
Condensed
Consolidated Statements of Cash Flows - Unaudited
|
|
(In
Millions)
|
Six months
ended
March
31,
|
|
2018
|
|
2017
|
Operating
Activities:
|
|
|
|
Net Income
|
$
|
214.2
|
|
|
$
|
153.2
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
81.9
|
|
|
75.8
|
|
Deferred income taxes
and investment tax credits
|
(15.2)
|
|
|
75.4
|
|
Changes in assets and
liabilities
|
(13.1)
|
|
|
(81.4)
|
|
Other
|
41.8
|
|
|
3.1
|
|
Net cash provided by
operating activities
|
309.6
|
|
|
226.1
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(215.8)
|
|
|
(187.3)
|
|
Acquisition
activity
|
(17.1)
|
|
|
3.8
|
|
Other
|
(0.4)
|
|
|
0.6
|
|
Net cash used in
investing activities
|
(233.3)
|
|
|
(182.9)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
Repayment of long-term
debt
|
—
|
|
|
(393.8)
|
|
Issuance of long-term
debt
|
75.0
|
|
|
250.0
|
|
(Repayment) issuance
of short-term debt - net
|
(85.6)
|
|
|
168.7
|
|
Issuance of common
stock
|
0.8
|
|
|
0.1
|
|
Dividends
paid
|
(53.0)
|
|
|
(46.8)
|
|
Other
|
(3.1)
|
|
|
(7.0)
|
|
Net cash used in
financing activities
|
(65.9)
|
|
|
(28.8)
|
|
|
|
|
|
Net Increase in Cash
and Cash Equivalents
|
10.4
|
|
|
14.4
|
|
Cash and Cash
Equivalents at Beginning of Period
|
7.4
|
|
|
5.2
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
17.8
|
|
|
$
|
19.6
|
|
|
|
|
|
Net Economic Earnings
and Reconciliation to GAAP
|
|
(In Millions,
except per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per Diluted
Share (2)
|
Three Months Ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
102.5
|
|
|
$
|
0.3
|
|
|
$
|
(4.6)
|
|
|
$
|
98.2
|
|
|
$
|
2.03
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri regulatory
adjustments
|
30.6
|
|
|
—
|
|
|
—
|
|
|
30.6
|
|
|
0.63
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
11.8
|
|
|
—
|
|
|
11.8
|
|
|
0.24
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.2)
|
|
|
(0.01)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.2
|
|
|
—
|
|
|
1.8
|
|
|
2.0
|
|
|
0.04
|
|
|
|
Income tax effect of
pre-tax adjustments (1)
|
(7.6)
|
|
|
(3.0)
|
|
|
(0.5)
|
|
|
(11.1)
|
|
|
(0.22)
|
|
|
|
Effects of the Tax
Cuts and Jobs Act
|
6.0
|
|
|
1.3
|
|
|
(1.4)
|
|
|
5.9
|
|
|
0.12
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
131.7
|
|
|
$
|
10.2
|
|
|
$
|
(4.7)
|
|
|
$
|
137.2
|
|
|
$
|
2.83
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
2.12
|
|
|
$
|
0.01
|
|
|
$
|
(0.10)
|
|
|
$
|
2.03
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
2.72
|
|
|
$
|
0.21
|
|
|
$
|
(0.10)
|
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
pre-tax 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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, 2018
|
|
|
|
|
|
|
|
|
|
|
Net Income
(GAAP)
|
$
|
147.7
|
|
|
$
|
3.8
|
|
|
$
|
62.7
|
|
|
$
|
214.2
|
|
|
$
|
4.42
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri regulatory
adjustments
|
30.6
|
|
|
—
|
|
|
—
|
|
|
30.6
|
|
|
0.63
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
12.6
|
|
|
—
|
|
|
12.6
|
|
|
0.26
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.01)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.2
|
|
|
—
|
|
|
3.5
|
|
|
3.7
|
|
|
0.08
|
|
|
|
Income tax effect of
pre-tax adjustments (1)
|
(7.6)
|
|
|
(3.2)
|
|
|
(0.9)
|
|
|
(11.7)
|
|
|
(0.24)
|
|
|
|
Effects of the Tax
Cuts and Jobs Act
|
20.3
|
|
|
0.9
|
|
|
(75.2)
|
|
|
(54.0)
|
|
|
(1.12)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
191.2
|
|
|
$
|
13.8
|
|
|
$
|
(9.9)
|
|
|
$
|
195.1
|
|
|
$
|
4.02
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.05
|
|
|
$
|
0.08
|
|
|
$
|
1.29
|
|
|
$
|
4.42
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.94
|
|
|
$
|
0.29
|
|
|
$
|
(0.21)
|
|
|
$
|
4.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
pre-tax 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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, 2018
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
142.7
|
|
|
$
|
1.1
|
|
|
$
|
(2.0)
|
|
|
$
|
—
|
|
|
$
|
141.8
|
|
|
Operation and
maintenance expenses
|
145.8
|
|
|
1.5
|
|
|
5.8
|
|
|
(2.6)
|
|
|
150.5
|
|
|
Depreciation and
amortization
|
41.1
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
41.5
|
|
|
Taxes, other than
income taxes
|
58.0
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
58.2
|
|
|
Less: Gross receipts
tax expense
|
(43.5)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(43.6)
|
|
|
Contribution
Margin (Non-GAAP)
|
344.1
|
|
|
2.6
|
|
|
4.3
|
|
|
(2.6)
|
|
|
348.4
|
|
|
Natural and propane
gas costs
|
403.2
|
|
|
18.6
|
|
|
0.1
|
|
|
(0.5)
|
|
|
421.4
|
|
|
Gross receipts tax
expense
|
43.5
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
43.6
|
|
|
Operating
Revenues
|
$
|
790.8
|
|
|
$
|
21.3
|
|
|
$
|
4.4
|
|
|
$
|
(3.1)
|
|
|
$
|
813.4
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
244.5
|
|
|
$
|
6.1
|
|
|
$
|
(3.7)
|
|
|
$
|
—
|
|
|
$
|
246.9
|
|
|
Operation and
maintenance expenses
|
245.6
|
|
|
3.1
|
|
|
10.1
|
|
|
(4.9)
|
|
|
253.9
|
|
|
Depreciation and
amortization
|
81.4
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
81.9
|
|
|
Taxes, other than
income taxes
|
94.7
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
94.9
|
|
|
Less: Gross receipts
tax expense
|
(66.6)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(66.7)
|
|
|
Contribution
Margin (Non-GAAP)
|
599.6
|
|
|
9.2
|
|
|
7.0
|
|
|
(4.9)
|
|
|
610.9
|
|
|
Natural and propane
gas costs
|
666.6
|
|
|
31.6
|
|
|
0.2
|
|
|
(0.8)
|
|
|
697.6
|
|
|
Gross receipts tax
expense
|
66.6
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
66.7
|
|
|
Operating
Revenues
|
$
|
1,332.8
|
|
|
$
|
40.9
|
|
|
$
|
7.2
|
|
|
$
|
(5.7)
|
|
|
$
|
1,375.2
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
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
View original
content:http://www.prnewswire.com/news-releases/spire-reports-second-quarter-results-300640899.html
SOURCE Spire Inc.