ST. LOUIS, July 30, 2019 /PRNewswire/ -- Spire Inc.
(NYSE: SR) today reported operating results for its fiscal 2019
third quarter ended June 30, 2019.
Highlights include:
- Third quarter FY19 loss per diluted share of $0.09, compared to earnings per share of
$0.52 in the prior-year period
- As expected, net economic earnings* per share of $0.07 were down from $0.31 a year ago, reflecting a rate design change
and increased amortization reset in our 2018 Missouri rate
cases
- Construction of Spire STL Pipeline nearing completion; expected
in-service date later in calendar 2019
- On track with our FY19 earnings target of $3.70 – $3.80 per
share
- Capital expenditures forecast increased to $780 million for FY19 and $2.9 billion for 2019 – 2023
![Spire color logo Spire color logo](https://mma.prnewswire.com/media/347388/Spire_Orange_Logo.jpg)
"With strong performance through the first three quarters of
fiscal 2019, we're on track to achieve our financial and operating
performance targets for the year. We're successfully executing on
our strategy to drive growth through capital investment and organic
growth initiatives, while improving safety, service and system
integrity for the benefit of our customers and communities," said
Suzanne Sitherwood, president and
chief executive officer of Spire. "At the same time, we continue to
grow and develop our gas-related businesses including Spire STL
Pipeline which will be placed in service later this year, despite a
delay in completing construction due to historic flooding in the
Midwest. Overall, we remain well-positioned to continue delivering
consistent long-term earnings growth for our investors and
exceptional service for our customers."
Third Quarter
Results
|
|
Three Months Ended
June 30,
|
|
|
|
(Millions)
|
|
|
(Per Diluted Common
Share)
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility
|
|
$
|
7.6
|
|
|
$
|
16.9
|
|
|
|
|
|
|
|
|
|
Gas
Marketing
|
|
|
3.3
|
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
(5.9)
|
|
|
|
(6.1)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5.0
|
|
|
$
|
15.2
|
|
|
$
|
0.07
|
|
|
$
|
0.31
|
|
Net economic earnings
adjustments, pre-tax
|
|
|
(10.7)
|
|
|
|
12.7
|
|
|
|
(0.21)
|
|
|
|
0.25
|
|
Income tax effect of
pre-tax adjustments
|
|
|
2.7
|
|
|
|
(2.0)
|
|
|
|
0.05
|
|
|
|
(0.04)
|
|
Net (Loss)
Income
|
|
$
|
(3.0)
|
|
|
$
|
25.9
|
|
|
$
|
(0.09)
|
|
|
$
|
0.52
|
|
Weighted Average
Diluted Shares Outstanding
|
|
|
50.9
|
|
|
|
49.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
Consolidated net loss for the three months ended June 30, the third quarter of our fiscal year,
was $3.0 million ($0.09 per diluted share), down from net income of
$25.9 million ($0.52 per share), a year ago.
Net economic earnings (NEE) for the third quarter of fiscal 2019
was $5.0 million ($0.07 per share), compared to $15.2 million ($0.31 per share) in the prior-year period,
primarily due to a lower contribution from the Gas Utility segment
as discussed below.
NEE excludes 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 impacts included the revaluation of deferred tax assets and
liabilities due to the Tax Cuts and Jobs Act and the write-offs
from our 2018 Missouri rate proceedings.
Gas Utility
The Gas Utility segment includes the regulated distribution
operations of our five gas utilities across Alabama, Mississippi and Missouri. Third quarter fiscal 2019 NEE was
$7.6 million, down from $16.9 million in the prior year, reflecting
a change in rate design and increased costs at our Missouri utilities resulting from the 2018
rate cases.
Contribution margin decreased $1.2
million, reflecting higher Infrastructure System Replacement
Surcharge (ISRS) revenues of $2.9
million and a favorable Alabama Rate Stabilization and
Equalization (RSE) adjustment totaling $1.6
million. These benefits were offset by a $4.4 million impact from the Missouri rate design change and $1.4 million in lower rates to reflect lower
income taxes resulting from tax reform. The lower rates for income
taxes were offset by lower income tax expense, with minimal impact
to earnings. The Missouri rate
design change lowers the fixed monthly charge and increases the
volumetric component, resulting in a shift in margin from the third
and fourth quarters of our fiscal year to the first and second
quarters (during the winter heating season) when usage is
highest.
Operation and maintenance (O&M) expenses of $111.2 million for the third quarter were up
$12.1 million compared to the
prior-year period. The increase is largely due to a $8.1 million quarter-over-quarter
reclassification of certain postretirement benefit costs to below
the operating income line (no impact on net income). Excluding this
reclassification, O&M increased $1.2
million due to higher employee benefits and energy
efficiency costs reset in our Missouri rate cases and a $2.8 million increase in other operating costs.
Depreciation and amortization expenses increased by $4.6 million from last year, reflecting higher
capital investment.
Gas Marketing
The Gas Marketing segment includes the results of Spire
Marketing, which provides natural gas marketing services across the
central and southern United
States. Third quarter NEE was $3.3
million, down from $4.4
million in the prior year. Performance in the current-year
period reflects the benefit of the geographic expansion of the
business that created additional opportunities to optimize our
supply, transportation and storage portfolio. This was more than
offset by higher costs and the return of more normal market
conditions.
Other
Other gas-related operations and corporate costs on a NEE
basis for the third quarter were $5.9
million in fiscal 2019, down slightly from $6.1 million a year ago. Current year results
include a loss for Spire Storage of $5.1
million (excluded from NEE in the prior year) and higher
interest expense due to an increase in short-term rates and
borrowings, both of which were largely offset by higher non-cash
Allowance for Funds Used During Construction (AFUDC) income from
Spire STL Pipeline.
Year-to-Date
Results
|
|
For the Nine
Months Ended June 30,
|
|
|
|
(Millions)
|
|
|
(Per Diluted Common
Share)
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility
|
|
$
|
220.7
|
|
|
$
|
208.1
|
|
|
|
|
|
|
|
|
|
Gas
Marketing
|
|
|
17.8
|
|
|
|
18.2
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
(19.7)
|
|
|
|
(16.0)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
218.8
|
|
|
$
|
210.3
|
|
|
$
|
4.27
|
|
|
$
|
4.30
|
|
Net economic earnings
adjustments, pre-tax
|
|
|
0.2
|
|
|
|
20.1
|
|
|
|
—
|
|
|
|
0.41
|
|
Income tax effect of
pre-tax adjustments
|
|
|
(0.1)
|
|
|
|
9.7
|
|
|
|
—
|
|
|
|
0.20
|
|
Net
Income
|
|
$
|
218.9
|
|
|
$
|
240.1
|
|
|
$
|
4.27
|
|
|
$
|
4.91
|
|
Weighted Average
Diluted Shares Outstanding
|
|
|
50.8
|
|
|
|
48.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
For the first nine months of fiscal 2019, we reported
consolidated net income of $218.9
million ($4.27 per diluted
share) compared to $240.1 million
($4.91 per share) for the prior year.
Prior-year net income included pre-tax rate case-related write-offs
of $30.6 million and a $54.0 million positive impact from tax
reform.
NEE for the nine months ended June 30,
2019 was $218.8 million
($4.27 per share), up from
$210.3 million ($4.30 per share) a year ago. The increase in NEE
reflects higher Gas Utility earnings, slightly lower Gas Marketing
earnings and higher other costs. The per share calculations in the
current year include an adjustment to net income for cumulative
preferred dividends of $1.6 million
and the full impact of 2.3 million common shares issued in
May 2018.
Gas Utility
For the first nine months of fiscal 2019, the Gas Utility
segment reported NEE of $220.7
million, up from $208.1
million a year ago, reflecting a higher contribution margin
and lower operating expenses.
Year-to-date segment contribution margin increased by
$23.4 million, reflecting the rate
design change at the Missouri
utilities that resulted in $29.5
million higher margins during the winter heating season, as
described earlier. Margin also benefitted a combined $14.8 million from higher gas usage due to colder
weather, the favorable RSE adjustment, higher ISRS revenues, modest
customer growth, and increased off-system sales and capacity
release in Missouri. These
benefits were partially offset by a reduction in Missouri customer rates of $21.4 million to reflect the lower federal
income taxes resulting from tax reform. This rate reduction is
offset by lower income tax expense, resulting in minimal impact on
earnings.
O&M expenses decreased by $10.2 million compared to the prior-year
period, reflecting the $38.4 million
write-off of assets and expenses disallowed in our Missouri rate cases recorded in the prior-year
period, as well as a $18.0 million reclassification of benefit
costs below the operating income line, both noted earlier.
Excluding these adjustments, O&M expenses were higher by
$10.2 million largely due to
higher employee benefits and energy efficiency costs reset in our
Missouri rate cases totaling
$9.3 million. Depreciation and
amortization rose by $11.3 million
reflecting increased capital investment across our utilities.
Gas Marketing
Gas Marketing NEE, which excludes mark-to-market and fair value
adjustments, was $17.8 million,
comparable to $18.2 million in the
prior year. The solid current year performance reflects the benefit
of geographic expansion of the business offset by a return of more
normal market conditions.
Other
On a NEE basis, year-to-date other gas-related operations and
corporate costs were $19.7 million,
up from $16.0 million from a
year ago. The higher costs reflect a loss from Spire Storage
of $12.5 million and higher corporate interest costs,
partially offset by increased AFUDC income from Spire STL
Pipeline.
Balance Sheets and Cash Flows
On May 21, 2019, Spire completed
an offering of $250 million of
perpetual preferred stock with a 5.90 percent coupon, issuing 10
million $25-par depository shares.
Proceeds have been used to finance capital investments and are
expected to fund $125 million in
Spire Inc. debt maturing in August.
Also, in May, Spire launched a $150
million At-the-Market (ATM) equity program. During the third
quarter of fiscal 2019, Spire issued approximately 60,000 shares
resulting in net proceeds of $4.9
million.
We maintain a strong capital structure with ample liquidity and
a long-term capitalization of 54.2 percent equity at June 30, 2019. Our long-term capitalization was
51.5 percent equity a year ago. Our adjusted long-term
capitalization was 53.1 percent equity at June 30, 2019 reflecting 50 percent ($121 million) equity treatment for preferred
stock and the maturity of $125
million of Spire debt.
Net cash provided by operating activities was $440.6 million for the nine months ended
June 30, 2019, compared to
$511.3 million for the same period a
year ago. The decrease was largely driven by fluctuations in
working capital items.
Capital expenditures for the first nine months of fiscal 2019
were $608.5 million, up from
$334.3 million in the prior year.
This increase reflects higher investment in infrastructure
upgrades, support of customer growth and new business development
initiatives, as well as construction of Spire STL Pipeline and
development of Spire Storage.
Short-term borrowings outstanding at June
30, 2019 increased to $434.0 million from $191.0 million a year ago primarily due to the
higher capital expenditures. We retain significant capacity in our
$975 million revolving credit
facility and related commercial paper program to meet our liquidity
needs.
For additional details on Spire's results through the third
quarter of fiscal 2019, please see the accompanying unaudited
Condensed Consolidated Statements of Income, unaudited Condensed
Consolidated Balance Sheets, and unaudited Condensed Consolidated
Statements of Cash Flows.
Pipelines and Storage
We continue to develop our gas-related businesses as part of our
long-term growth strategy, including Spire STL Pipeline and Spire
Storage.
Spire STL Pipeline
Construction of Spire STL Pipeline is substantially complete
with approximately 97% of the mainline pipe installed. Due to
historic flooding along portions of the pipeline route, our
construction contractor is unable to complete approximately 3 miles
of the project near the confluence of the Mississippi and Missouri
rivers. Construction in the impacted area will resume once water
levels sufficiently decrease.
We now expect the pipeline to be in service later in calendar
2019. Reflecting actual expenditures to date of $188 million and the increased costs associated
with the remaining work to be completed, we expect the total
project cost to exceed the top end of our current estimate of
$240 million.
The 65-mile natural gas supply pipeline will provide Spire
Missouri East with access to lower-cost shale gas from the
Marcellus and Utica producing
regions. It will also enhance the reliability and diversity of our
physical transportation portfolio.
Spire Storage
Spire Storage is comprised of two adjacent storage facilities in
Wyoming. It is strategically
located near the Opal hub and interconnects with five interstate
pipelines serving the Rockies and western United States. We continue to build our team
and engage with current and potential customers to better
understand their needs.
We are currently focused on completing operational investments
to ensure our ability to serve our customers in the upcoming winter
heating season. We anticipate spending approximately $25 million during the remainder of fiscal
2019.
Missouri Regulatory Update
Effective May 3, 2019, Spire
Missouri received approval by the Missouri Public Service
Commission (MoPSC) to increase Infrastructure System Replacement
Surcharge (ISRS) revenues by $13.2
million. The additional ISRS revenues excluded $3.2 million that Spire Missouri had requested as
part of its June 2018 ISRS filing
related to replacement of plastic pipeline materials that was not
approved under ISRS. The amount excluded for ISRS recovery purposes
is under appeal in the Missouri Western District Court and would be
available for recovery in our next rate case if the appeal is
unsuccessful.
On July 15, 2019, Spire filed a
request for $11.0 million in
additional ISRS revenues for recovery of new investments in
infrastructure upgrades. The company also filed to recover
$3.4 million related to plastic pipe
materials in its June 2018 filing and
in the current filing.
The ISRS mechanism allows for more timely recovery of
investments in infrastructure upgrades that improve the integrity
and safety of our distribution system.
Dividends
The Spire board of directors declared a quarterly common stock
dividend of $0.5925 per share,
payable October 2, 2019, to
shareholders of record on September 11,
2019. We have continuously paid a cash dividend since 1946,
with 2019 marking the 16th consecutive year of
increasing dividends on an annualized basis.
The board of directors also declared a prorated regular
quarterly dividend of $0.34417 per
depository share on the company's 5.90 percent Series A Cumulative
Redeemable Perpetual Preferred Stock, payable August 15, 2019, to holders of record on
August 5, 2019. Current year per
share earnings calculations include an adjustment to net income for
cumulative preferred dividends of $1.6
million.
Earnings Guidance and Outlook
We affirm our fiscal 2019 NEE guidance range of $3.70 – $3.80 per
diluted share. Our longer-term NEE per share growth target remains
4 – 7 percent.
Our capital expenditures forecast for fiscal 2019 has increased
to $780 million, reflecting higher
utility spend and updates for Spire STL Pipeline and Spire Storage.
Our five-year (2019 – 2023) capital spend outlook also increased to
$2.9 billion.
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss
its fiscal 2019 third quarter financial results. To access the
call, please dial the applicable number approximately 5 – 10
minutes prior to the start time.
Date and
Time:
|
|
Tuesday, July
30
|
|
|
8 a.m. CT (9 a.m.
ET)
|
|
|
|
|
Phone
Numbers:
|
|
U.S. and
Canada:
|
844-824-3832
|
|
|
International:
|
412-307-5142
|
The call will also be webcast and can be accessed at
Investors.SpireEnergy.com under the Events & presentations
tab. A replay of the call will be available at 11 a.m. CT (Noon
ET) on July 30 until
August 30 by dialing 877-344-7529
(U.S.), 855-669-9658 (Canada), or
412-307-0088 (international). The replay access code is
10132808.
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 natural gas-related businesses
include Spire Marketing, Spire STL Pipeline and Spire Storage. We
are committed to transforming our business and pursuing growth
through 1) growing organically, 2) investing in
infrastructure, 3) acquiring and integrating, and
4) innovating and advancing 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 acquisitions. More
complete descriptions and listings of these uncertainties and risk
factors can be found in the Company's annual (Form 10-K) and
quarterly (Form 10-Q) filings with the Securities and Exchange
Commission.
This news release includes the non-GAAP financial measures of
"net economic earnings," "net economic earnings per share,"
"adjusted long-term capitalization," 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 included the revaluation of deferred tax assets and
liabilities due to the Tax Cuts and Jobs Act and the write-off of
certain long-standing assets as a result of disallowances in our
2018 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
June
30,
|
|
|
Nine Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility
|
|
$
|
301.4
|
|
|
$
|
334.8
|
|
|
$
|
1,651.9
|
|
|
$
|
1,667.3
|
|
Gas Marketing and
other
|
|
|
19.9
|
|
|
|
15.8
|
|
|
|
74.9
|
|
|
|
58.5
|
|
Total Operating
Revenues
|
|
|
321.3
|
|
|
|
350.6
|
|
|
|
1,726.8
|
|
|
|
1,725.8
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural and propane
gas
|
|
|
75.5
|
|
|
|
107.2
|
|
|
|
664.6
|
|
|
|
731.7
|
|
Operation and
maintenance
|
|
|
111.2
|
|
|
|
99.1
|
|
|
|
323.2
|
|
|
|
333.4
|
|
Depreciation and
amortization
|
|
|
45.1
|
|
|
|
40.5
|
|
|
|
133.2
|
|
|
|
121.9
|
|
Taxes, other than
income taxes
|
|
|
29.7
|
|
|
|
33.5
|
|
|
|
126.3
|
|
|
|
128.2
|
|
Total Gas Utility
Operating Expenses
|
|
|
261.5
|
|
|
|
280.3
|
|
|
|
1,247.3
|
|
|
|
1,315.2
|
|
Gas Marketing and
other
|
|
|
46.5
|
|
|
|
11.4
|
|
|
|
151.6
|
|
|
|
97.6
|
|
Total Operating
Expenses
|
|
|
308.0
|
|
|
|
291.7
|
|
|
|
1,398.9
|
|
|
|
1,412.8
|
|
Operating
Income
|
|
|
13.3
|
|
|
|
58.9
|
|
|
|
327.9
|
|
|
|
313.0
|
|
Other Income
(Expense), Net
|
|
|
6.4
|
|
|
|
(3.1)
|
|
|
|
15.3
|
|
|
|
(7.4)
|
|
Interest
Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
|
|
20.5
|
|
|
|
20.8
|
|
|
|
62.4
|
|
|
|
62.5
|
|
Other interest
charges
|
|
|
5.1
|
|
|
|
3.4
|
|
|
|
16.7
|
|
|
|
11.5
|
|
Total Interest
Charges
|
|
|
25.6
|
|
|
|
24.2
|
|
|
|
79.1
|
|
|
|
74.0
|
|
(Loss) Income Before
Income Taxes
|
|
|
(5.9)
|
|
|
|
31.6
|
|
|
|
264.1
|
|
|
|
231.6
|
|
Income Tax (Benefit)
Expense
|
|
|
(2.9)
|
|
|
|
5.7
|
|
|
|
45.2
|
|
|
|
(8.5)
|
|
Net (Loss)
Income
|
|
|
(3.0)
|
|
|
|
25.9
|
|
|
|
218.9
|
|
|
|
240.1
|
|
Provision for
preferred dividends
|
|
|
1.6
|
|
|
|
—
|
|
|
|
1.6
|
|
|
|
—
|
|
Income allocated to
participating securities
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.5
|
|
|
|
0.5
|
|
Net (Loss) Income
Available to Common Shareholders
|
|
$
|
(4.6)
|
|
|
$
|
25.8
|
|
|
$
|
216.8
|
|
|
$
|
239.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
50.7
|
|
|
|
49.6
|
|
|
|
50.6
|
|
|
|
48.7
|
|
Diluted
|
|
|
50.9
|
|
|
|
49.7
|
|
|
|
50.8
|
|
|
|
48.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (Loss) Earnings
Per Share
|
|
$
|
(0.09)
|
|
|
$
|
0.52
|
|
|
$
|
4.28
|
|
|
$
|
4.92
|
|
Diluted (Loss)
Earnings Per Share
|
|
$
|
(0.09)
|
|
|
$
|
0.52
|
|
|
$
|
4.27
|
|
|
$
|
4.91
|
|
Dividends Declared
Per Share
|
|
$
|
0.5925
|
|
|
$
|
0.5625
|
|
|
$
|
1.7775
|
|
|
$
|
1.6875
|
|
Condensed
Consolidated Balance Sheets – Unaudited
|
|
(In
Millions)
|
|
June
30,
2019
|
|
|
September
30,
2018
|
|
|
June
30,
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
Plant
|
|
$
|
5,990.6
|
|
|
$
|
5,653.3
|
|
|
$
|
5,501.6
|
|
Less:
Accumulated depreciation and amortization
|
|
|
1,770.4
|
|
|
|
1,682.8
|
|
|
|
1,669.8
|
|
Net Utility
Plant
|
|
|
4,220.2
|
|
|
|
3,970.5
|
|
|
|
3,831.8
|
|
Non-utility
Property
|
|
|
416.6
|
|
|
|
174.5
|
|
|
|
143.5
|
|
Goodwill
|
|
|
1,171.6
|
|
|
|
1,171.6
|
|
|
|
1,171.6
|
|
Other
Investments
|
|
|
74.8
|
|
|
|
68.7
|
|
|
|
71.0
|
|
Total Other Property
and Investments
|
|
|
1,663.0
|
|
|
|
1,414.8
|
|
|
|
1,386.1
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
5.8
|
|
|
|
4.4
|
|
|
|
6.9
|
|
Accounts receivable,
net
|
|
|
336.7
|
|
|
|
296.8
|
|
|
|
246.7
|
|
Inventories
|
|
|
158.2
|
|
|
|
210.3
|
|
|
|
153.2
|
|
Other
|
|
|
149.1
|
|
|
|
148.1
|
|
|
|
178.1
|
|
Total Current
Assets
|
|
|
649.8
|
|
|
|
659.6
|
|
|
|
584.9
|
|
Deferred Charges and
Other Assets
|
|
|
799.0
|
|
|
|
798.7
|
|
|
|
782.1
|
|
Total
Assets
|
|
$
|
7,332.0
|
|
|
$
|
6,843.6
|
|
|
$
|
6,584.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITALIZATION AND
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
$
|
242.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock and
paid-in capital
|
|
|
1,543.5
|
|
|
|
1,533.4
|
|
|
|
1,530.9
|
|
Retained
earnings
|
|
|
844.3
|
|
|
|
715.6
|
|
|
|
772.4
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(17.2)
|
|
|
|
6.4
|
|
|
|
4.4
|
|
Total Shareholders'
Equity
|
|
|
2,612.6
|
|
|
|
2,255.4
|
|
|
|
2,307.7
|
|
Redeemable
noncontrolling interest
|
|
|
—
|
|
|
|
7.9
|
|
|
|
6.5
|
|
Long-term debt (less
current portion)
|
|
|
2,042.3
|
|
|
|
1,900.1
|
|
|
|
2,024.5
|
|
Total
Capitalization
|
|
|
4,654.9
|
|
|
|
4,163.4
|
|
|
|
4,338.7
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
165.0
|
|
|
|
175.5
|
|
|
|
155.5
|
|
Notes
payable
|
|
|
434.0
|
|
|
|
553.6
|
|
|
|
191.0
|
|
Accounts
payable
|
|
|
297.6
|
|
|
|
290.1
|
|
|
|
195.5
|
|
Accrued liabilities
and other
|
|
|
323.0
|
|
|
|
302.5
|
|
|
|
272.1
|
|
Total Current
Liabilities
|
|
|
1,219.6
|
|
|
|
1,321.7
|
|
|
|
814.1
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
|
490.4
|
|
|
|
435.8
|
|
|
|
476.8
|
|
Pension and
postretirement benefit costs
|
|
|
172.1
|
|
|
|
180.2
|
|
|
|
219.3
|
|
Asset retirement
obligations
|
|
|
328.9
|
|
|
|
321.1
|
|
|
|
305.9
|
|
Regulatory
liabilities
|
|
|
396.3
|
|
|
|
354.6
|
|
|
|
364.3
|
|
Other
|
|
|
69.8
|
|
|
|
66.8
|
|
|
|
65.8
|
|
Total Deferred Credits
and Other Liabilities
|
|
|
1,457.5
|
|
|
|
1,358.5
|
|
|
|
1,432.1
|
|
Total Capitalization
and Liabilities
|
|
$
|
7,332.0
|
|
|
$
|
6,843.6
|
|
|
$
|
6,584.9
|
|
Condensed
Consolidated Statements of Cash Flows – Unaudited
|
|
(In
Millions)
|
|
Nine Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
218.9
|
|
|
$
|
240.1
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
134.9
|
|
|
|
122.9
|
|
Deferred income taxes
and investment tax credits
|
|
|
42.6
|
|
|
|
(9.5)
|
|
Changes in assets and
liabilities
|
|
|
46.1
|
|
|
|
113.3
|
|
Other
|
|
|
(1.9)
|
|
|
|
44.5
|
|
Net cash provided by
operating activities
|
|
|
440.6
|
|
|
|
511.3
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(608.5)
|
|
|
|
(334.3)
|
|
Business
acquisitions
|
|
|
(7.9)
|
|
|
|
(28.1)
|
|
Other
|
|
|
(7.1)
|
|
|
|
(8.9)
|
|
Net cash used in
investing activities
|
|
|
(623.5)
|
|
|
|
(371.3)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Issuance of preferred
stock
|
|
|
242.0
|
|
|
|
—
|
|
Issuance of long-term
debt
|
|
|
190.0
|
|
|
|
75.0
|
|
Repayment of long-term
debt
|
|
|
(59.1)
|
|
|
|
—
|
|
Repayment of
short-term debt, net
|
|
|
(119.6)
|
|
|
|
(286.3)
|
|
Issuance of common
stock
|
|
|
5.6
|
|
|
|
154.2
|
|
Dividends
paid
|
|
|
(88.9)
|
|
|
|
(80.2)
|
|
Other
|
|
|
(2.7)
|
|
|
|
(3.2)
|
|
Net cash provided by
(used in) financing activities
|
|
|
167.3
|
|
|
|
(140.5)
|
|
|
|
|
|
|
|
|
|
|
Net Decrease in Cash,
Cash Equivalents, and Restricted Cash
|
|
|
(15.6)
|
|
|
|
(0.5)
|
|
Cash, Cash
Equivalents, and Restricted Cash at Beginning of Period
|
|
|
21.4
|
|
|
|
7.4
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
5.8
|
|
|
$
|
6.9
|
|
Net Economic Earnings
and Reconciliation to GAAP
|
(In
Millions, except per share amounts)
|
|
Gas
Utility
|
|
|
Gas
Marketing
|
|
|
Other
|
|
|
Total
|
|
|
Per
Diluted
Common
Share (2)
|
|
Three Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
[GAAP]
|
|
$
|
7.6
|
|
|
$
|
(4.7)
|
|
|
$
|
(5.9)
|
|
|
$
|
(3.0)
|
|
|
$
|
(0.09)
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss
on energy-related derivatives
|
|
|
—
|
|
|
|
8.0
|
|
|
|
—
|
|
|
|
8.0
|
|
|
|
0.16
|
|
Lower of cost
or market inventory adjustments
|
|
|
—
|
|
|
|
2.7
|
|
|
|
—
|
|
|
|
2.7
|
|
|
|
0.05
|
|
Income tax effect of
adjustments (1)
|
|
|
—
|
|
|
|
(2.7)
|
|
|
|
—
|
|
|
|
(2.7)
|
|
|
|
(0.05)
|
|
Net Economic
Earnings (Loss) [Non-GAAP]
|
|
$
|
7.6
|
|
|
$
|
3.3
|
|
|
$
|
(5.9)
|
|
|
$
|
5.0
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
[GAAP]
|
|
$
|
18.5
|
|
|
$
|
16.2
|
|
|
$
|
(8.8)
|
|
|
$
|
25.9
|
|
|
$
|
0.52
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain
on energy-related derivatives
|
|
|
—
|
|
|
|
(16.0)
|
|
|
|
—
|
|
|
|
(16.0)
|
|
|
|
(0.32)
|
|
Acquisition,
divestiture and restructuring activities
|
|
|
—
|
|
|
|
—
|
|
|
|
3.3
|
|
|
|
3.3
|
|
|
|
0.07
|
|
Income tax effect of
adjustments (1)
|
|
|
(1.6)
|
|
|
|
4.2
|
|
|
|
(0.6)
|
|
|
|
2.0
|
|
|
|
0.04
|
|
Net Economic
Earnings (Loss) [Non-GAAP]
|
|
$
|
16.9
|
|
|
$
|
4.4
|
|
|
$
|
(6.1)
|
|
|
$
|
15.2
|
|
|
$
|
0.31
|
|
Nine Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
[GAAP]
|
|
$
|
220.7
|
|
|
$
|
18.2
|
|
|
$
|
(20.0)
|
|
|
$
|
218.9
|
|
|
$
|
4.27
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain
on energy-related derivatives
|
|
|
—
|
|
|
|
(3.3)
|
|
|
|
—
|
|
|
|
(3.3)
|
|
|
|
(0.06)
|
|
Lower of cost
or market inventory adjustments
|
|
|
—
|
|
|
|
2.7
|
|
|
|
—
|
|
|
|
2.7
|
|
|
|
0.05
|
|
Acquisition,
divestiture and restructuring activities
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
0.01
|
|
Income tax effect of
adjustments (1)
|
|
|
—
|
|
|
|
0.2
|
|
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
—
|
|
Net Economic
Earnings (Loss) [Non-GAAP]
|
|
$
|
220.7
|
|
|
$
|
17.8
|
|
|
$
|
(19.7)
|
|
|
$
|
218.8
|
|
|
$
|
4.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
[GAAP]
|
|
$
|
166.2
|
|
|
$
|
20.0
|
|
|
$
|
53.9
|
|
|
$
|
240.1
|
|
|
$
|
4.91
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri
regulatory adjustments
|
|
|
30.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30.6
|
|
|
|
0.63
|
|
Unrealized gain
on energy-related derivatives
|
|
|
—
|
|
|
|
(3.4)
|
|
|
|
—
|
|
|
|
(3.4)
|
|
|
|
(0.07)
|
|
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
|
|
|
|
—
|
|
|
|
6.8
|
|
|
|
7.0
|
|
|
|
0.14
|
|
Income tax effect of
adjustments (1)
|
|
|
(9.2)
|
|
|
|
1.0
|
|
|
|
(1.5)
|
|
|
|
(9.7)
|
|
|
|
(0.20)
|
|
Effect of the Tax Cuts
and Jobs Act
|
|
|
20.3
|
|
|
|
0.9
|
|
|
|
(75.2)
|
|
|
|
(54.0)
|
|
|
|
(1.10)
|
|
Net Economic
Earnings (Loss) [Non-GAAP]
|
|
$
|
208.1
|
|
|
$
|
18.2
|
|
|
$
|
(16.0)
|
|
|
$
|
210.3
|
|
|
$
|
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income tax effect
is calculated by applying federal, state, and local income tax
rates applicable to ordinary income to the amounts of the pre-tax
reconciling items and then adding any estimated effects of enacted
state or local income tax laws for periods before the related
effective date.
|
(2) Net economic
earnings per share is calculated by replacing consolidated net
income with consolidated net economic earnings in the GAAP diluted
EPS calculation, which includes reductions for cumulative preferred
dividends and participating shares.
|
Contribution Margin
and Reconciliation to GAAP
|
|
(In
Millions)
|
|
Gas
Utility
|
|
|
Gas
Marketing
|
|
|
Other
|
|
|
Eliminations
|
|
|
Consolidated
|
|
Three Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) [GAAP]
|
|
$
|
25.3
|
|
|
$
|
(7.0)
|
|
|
$
|
(5.0)
|
|
|
$
|
—
|
|
|
$
|
13.3
|
|
Operation and
maintenance expenses
|
|
|
113.4
|
|
|
|
3.2
|
|
|
|
8.4
|
|
|
|
(2.6)
|
|
|
|
122.4
|
|
Depreciation and
amortization
|
|
|
45.1
|
|
|
|
—
|
|
|
|
0.7
|
|
|
|
—
|
|
|
|
45.8
|
|
Taxes, other than
income taxes
|
|
|
29.7
|
|
|
|
0.1
|
|
|
|
0.4
|
|
|
|
—
|
|
|
|
30.2
|
|
Less: Gross receipts
tax expense
|
|
|
(18.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(18.2)
|
|
Contribution Margin
[Non-GAAP]
|
|
|
195.3
|
|
|
|
(3.7)
|
|
|
|
4.5
|
|
|
|
(2.6)
|
|
|
|
193.5
|
|
Natural and propane
gas costs
|
|
|
88.1
|
|
|
|
22.0
|
|
|
|
0.1
|
|
|
|
(0.6)
|
|
|
|
109.6
|
|
Gross receipts tax
expense
|
|
|
18.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18.2
|
|
Operating
Revenues
|
|
$
|
301.6
|
|
|
$
|
18.3
|
|
|
$
|
4.6
|
|
|
$
|
(3.2)
|
|
|
$
|
321.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) [GAAP]
|
|
$
|
41.5
|
|
|
$
|
21.6
|
|
|
$
|
(4.2)
|
|
|
$
|
—
|
|
|
$
|
58.9
|
|
Operation and
maintenance expenses
|
|
|
101.4
|
|
|
|
2.0
|
|
|
|
7.7
|
|
|
|
(2.6)
|
|
|
|
108.5
|
|
Depreciation and
amortization
|
|
|
40.5
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
41.0
|
|
Taxes, other than
income taxes
|
|
|
33.5
|
|
|
|
0.1
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
33.9
|
|
Less: Gross receipts
tax expense
|
|
|
(20.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(20.4)
|
|
Contribution Margin
[Non-GAAP]
|
|
|
196.5
|
|
|
|
23.7
|
|
|
|
4.3
|
|
|
|
(2.6)
|
|
|
|
221.9
|
|
Natural and propane
gas costs
|
|
|
117.9
|
|
|
|
(9.3)
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
108.3
|
|
Gross receipts tax
expense
|
|
|
20.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20.4
|
|
Operating
Revenues
|
|
$
|
334.8
|
|
|
$
|
14.4
|
|
|
$
|
4.3
|
|
|
$
|
(2.9)
|
|
|
$
|
350.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) [GAAP]
|
|
$
|
317.2
|
|
|
$
|
22.3
|
|
|
$
|
(11.6)
|
|
|
$
|
—
|
|
|
$
|
327.9
|
|
Operation and
maintenance expenses
|
|
|
330.3
|
|
|
|
8.5
|
|
|
|
22.3
|
|
|
|
(8.2)
|
|
|
|
352.9
|
|
Depreciation and
amortization
|
|
|
133.2
|
|
|
|
—
|
|
|
|
1.7
|
|
|
|
—
|
|
|
|
134.9
|
|
Taxes, other than
income taxes
|
|
|
126.3
|
|
|
|
0.6
|
|
|
|
1.2
|
|
|
|
—
|
|
|
|
128.1
|
|
Less: Gross receipts
tax expense
|
|
|
(87.5)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.6)
|
|
Contribution Margin
[Non-GAAP]
|
|
|
819.5
|
|
|
|
31.3
|
|
|
|
13.6
|
|
|
|
(8.2)
|
|
|
|
856.2
|
|
Natural and propane
gas costs
|
|
|
746.6
|
|
|
|
38.2
|
|
|
|
0.7
|
|
|
|
(2.5)
|
|
|
|
783.0
|
|
Gross receipts tax
expense
|
|
|
87.5
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
87.6
|
|
Operating
Revenues
|
|
$
|
1,653.6
|
|
|
$
|
69.6
|
|
|
$
|
14.3
|
|
|
$
|
(10.7)
|
|
|
$
|
1,726.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) [GAAP]
|
|
$
|
293.2
|
|
|
$
|
27.7
|
|
|
$
|
(7.9)
|
|
|
$
|
—
|
|
|
$
|
313.0
|
|
Operation and
maintenance expenses
|
|
|
339.8
|
|
|
|
5.1
|
|
|
|
17.8
|
|
|
|
(7.5)
|
|
|
|
355.2
|
|
Depreciation and
amortization
|
|
|
121.9
|
|
|
|
—
|
|
|
|
1.0
|
|
|
|
—
|
|
|
|
122.9
|
|
Taxes, other than
income taxes
|
|
|
128.2
|
|
|
|
0.2
|
|
|
|
0.4
|
|
|
|
—
|
|
|
|
128.8
|
|
Less: Gross receipts
tax expense
|
|
|
(87.0)
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(87.1)
|
|
Contribution Margin
[Non-GAAP]
|
|
|
796.1
|
|
|
|
32.9
|
|
|
|
11.3
|
|
|
|
(7.5)
|
|
|
|
832.8
|
|
Natural and propane
gas costs
|
|
|
784.5
|
|
|
|
22.3
|
|
|
|
0.2
|
|
|
|
(1.1)
|
|
|
|
805.9
|
|
Gross receipts tax
expense
|
|
|
87.0
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
87.1
|
|
Operating
Revenues
|
|
$
|
1,667.6
|
|
|
$
|
55.3
|
|
|
$
|
11.5
|
|
|
$
|
(8.6)
|
|
|
$
|
1,725.8
|
|
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
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SOURCE Spire Inc.