Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in millions, except per share amounts)
This section analyzes the financial condition and results of operations of Spire Inc. (the “Company”), Spire Missouri Inc., and Spire Alabama Inc. Spire Missouri, Spire Alabama and Spire EnergySouth are wholly-owned subsidiaries of the Company. Spire Missouri, Spire Alabama, the subsidiaries of Spire EnergySouth (Spire Gulf and Spire Mississippi), and Spire Tennessee are collectively referred to as the “Utilities.” This section includes management’s view of factors that affect the respective businesses of the Company, Spire Missouri and Spire Alabama, explanations of financial results including changes in earnings and costs from the prior periods, and the effects of such factors on the Company’s, Spire Missouri’s and Spire Alabama’s overall financial condition and liquidity.
Certain matters discussed in this report, excluding historical information, include forward-looking statements. All statements, other than statements of historical fact, including statements regarding our expectations, plans and objectives for future performance, future operating results, earnings guidance, capital investment plans, and the expected timing and benefits of, and risks associated with, acquisitions, dispositions and related integration and transition activities (including the completed acquisition of the Piedmont Tennessee business, the completed sale of Spire Marketing and Spire Storage, and the pending sale of Spire Mississippi), are forward-looking statements. Certain words, such as “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “seek,” “target,” and similar words and expressions identify forward-looking statements that involve uncertainties and risks. Future developments may not be in accordance with our current expectations or beliefs and the effect of future developments may not be those anticipated. Among the factors that may cause results or outcomes to differ materially from those contemplated in any forward-looking statement are:
•Weather conditions and catastrophic events, particularly severe weather in U.S. natural gas producing areas;
•Volatility in gas prices, particularly sudden and sustained changes in natural gas prices, including the related impact on margin deposits associated with the use of natural gas derivative instruments, and the impact on our competitive position in relation to suppliers of alternative heating sources, such as electricity;
•Changes in gas supply and pipeline availability, including as a result of decisions by natural gas producers to reduce production or shut in producing natural gas wells and expiration or termination of existing supply and transportation arrangements that are not replaced with contracts with similar terms and pricing, as well as other changes that impact supply for and access to the markets in which our subsidiaries transact business;
•Acquisitions may not achieve their intended results;
•Legislative, regulatory and judicial mandates and decisions, some of which may be retroactive, including those affecting:
▪allowed rates of return and recovery of prudent costs,
▪purchased gas adjustment provisions,
▪rate design structure and implementation,
▪capital structures established for rate-setting purposes,
▪non-regulated and affiliate transactions,
▪authorization to operate facilities,
▪environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change and pipeline safety and security,
▪pension and other postretirement benefit liabilities and funding obligations, or
•The results of litigation;
•The availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets;
•Retention of, ability to attract, ability to collect from, and conservation efforts of, customers;
•Our ability to comply with all covenants in our indentures and credit facilities, any violations of which, if not cured in a timely manner, could trigger a default of our obligation;
•Energy commodity market conditions;
•Discovery of material weakness in internal controls;
•The disruption, failure or malfunction of our operational and information technology systems, including due to cyberattacks; and
•Employee workforce issues, including but not limited to labor disputes, the inability to attract and retain key talent, and future wage and employee benefit costs, including costs resulting from changes in discount rates and returns on benefit plan assets.
•The satisfaction of conditions to, and the timing and completion of, the pending sale of Spire Mississippi (including receipt of required regulatory approvals), and Spire’s ability to realize the anticipated benefits of, and successfully integrate or separate from, the recently completed Piedmont Tennessee Transaction and the Spire Marketing and Spire Storage dispositions;
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s Condensed Consolidated Financial Statements, Spire Missouri’s and Spire Alabama’s Condensed Financial Statements, and the notes thereto.
RECENT EVENTS
Acquisition of Tennessee Piedmont Natural Gas business. On March 31, 2026, Spire completed the acquisition of the Tennessee natural gas business of Piedmont, a wholly owned subsidiary of Duke Energy, for a total cash purchase price of $2.50 billion. Upon closing, Piedmont's Tennessee business began operating as Spire Tennessee. The acquisition increased Spire's scale of regulated utility operations and expanded its presence in the growing Middle Tennessee region.
Sale of Spire Marketing. On March 28, 2026, Spire, entered into an agreement to sell Spire Marketing Inc., to Boardwalk. The transaction closed on April 30, 2026, for cash consideration of approximately $212, subject to customary post-closing adjustments. Spire Marketing has been classified as a discontinued operation.
Sale of Spire Storage. On April 14, 2026, Spire, entered into an agreement to sell Spire Storage to Subterra Energy Holdings, LLC an affiliate of I Squared Capital. The transaction closed on June 30, 2026 and provides for total consideration of approximately $657, consisting of $607 payable in cash and a $50 deferred consideration payment to be paid on or before September 30, 2027.
Sale of Spire Mississippi. On April 21, 2026, Spire entered into an agreement to sell Spire Mississippi Inc., to Delta Utilities. The transaction provides for a cash purchase price of $75.0, subject to customary purchase price adjustments, and is expected to close during the first quarter of Spire’s fiscal year 2027, subject to regulatory approval by the MSPSC and other customary closing conditions.
Sale of Non-Core Equity Interest. During the second quarter of fiscal 2026, the Company completed the sale of a non-core equity interest that was outside its reportable segments. The investment had previously been accounted for under the equity method and was carried at an immaterial value. The Company received approximately $30.0 in cash proceeds.
For additional information on the transaction above, see Note 2 – Acquisitions and Note 3 - Divestitures.
OVERVIEW
Due to recently announced corporate transactions, the Company has one reportable segment: Gas Utility. See Note 12 - Segment Information for additional information on Spire’s segment structure. Spire’s earnings are derived primarily from its Gas Utility segment, which reflects the regulated activities of the Utilities. Due to the seasonal nature of the Utilities’ business and the volumetric rate designs of the Utilities, earnings of Spire and each of the Utilities are typically concentrated during the heating season of November through April each fiscal year.
Gas Utility – Spire Missouri
Spire Missouri is Missouri’s largest natural gas distribution utility and is regulated by the MoPSC. Spire Missouri serves St. Louis, Kansas City, and other areas throughout the state. Spire Missouri purchases natural gas in the wholesale market from producers and marketers and ships the gas through interstate pipelines into its own distribution facilities for sale to residential, commercial and industrial customers. Spire Missouri also transports gas through its distribution system for certain larger customers who buy their own gas on the wholesale market. Spire Missouri delivers natural gas to customers at rates and in accordance with tariffs authorized by the MoPSC. The earnings of Spire Missouri are primarily generated by the sale of heating energy.
Gas Utility – Spire Alabama
Spire Alabama is the largest natural gas distribution utility in the state of Alabama and is regulated by the APSC. Spire Alabama’s service territory is located in central and northern Alabama. Among the cities served by Spire Alabama are Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential, commercial, and industrial customers, and other end users of natural gas. Spire Alabama also transports gas through its distribution system for certain large commercial and industrial customers
for a transportation fee. For most of these transportation service customers, Spire Alabama also purchases gas on the wholesale market for sale to the customer upon delivery to the Spire Alabama distribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.
Gas Utility - Spire Tennessee
Spire Tennessee is the largest investor-owned natural gas distribution utility in the state of Tennessee and is regulated by the TPUC. Spire Tennessee is a regulated natural gas utility engaged in the purchase, retail distribution, and sale of natural gas to more than 200,000 customers primarily in the Nashville metropolitan area and surrounding communities in Tennessee. Spire Tennessee delivers natural gas to customers at rates and in accordance with tariffs authorized by the TPUC. The earnings of Spire Tennessee are primarily generated by the sale of heating energy.
Gas Utility – Spire EnergySouth
Spire Gulf and Spire Mississippi are utilities engaged in the purchase, retail distribution and sale of natural gas to approximately 100,000 customers in southern Alabama and south-central Mississippi. Spire Gulf is regulated by the APSC, and Spire Mississippi is regulated by the MSPSC.
Other
Other components of the Company’s consolidated information include Spire’s subsidiaries engaged in the transportation of natural gas, risk management, among other activities, and unallocated corporate items, including certain debt and associated interest costs.
NON-GAAP MEASURES
Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of adjusted earnings, adjusted earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to determine incentive compensation and to evaluate financial performance. These non-GAAP operating metrics should not be considered as alternatives to, or more meaningful than, the related GAAP measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are provided on the following pages.
Adjusted Earnings and Adjusted Earnings Per Share
Adjusted earnings and adjusted earnings per share are non-GAAP measures that exclude from net income to the extent incurred in a given period the impacts of acquisition, divestiture and restructuring activities, the largely non-cash impacts of impairments, and the impact of certain regulatory, legislative or GAAP standard-setting actions. Second quarter fiscal 2026 excludes the cost of redemption of preferred stock. In addition, adjusted earnings per share would exclude the impact, in the fiscal year of issuance, of any shares issued to finance such activities that have yet to be included in adjusted earnings.
Contribution Margin
In addition to operating revenues and operating expenses, management also uses the non-GAAP measure of contribution margin when evaluating results of operations. Contribution margin is defined as operating revenues less natural gas costs and gross receipts tax expense. The Utilities pass to their customers (subject to prudence review by, as applicable, the MoPSC, APSC, MSPSC or TPUC) increases and decreases in the wholesale cost of natural gas in accordance with their PGA clauses or GSA riders. The volatility of the wholesale natural gas market results in fluctuations from period to period in the recorded levels of, among other items, revenues and natural gas cost expense. Nevertheless, increases and decreases in the cost of gas associated with system gas sales volumes and gross receipts tax expense (which are calculated as a percentage of revenues), with the same amount (excluding immaterial timing differences) included in revenues, have no direct effect on operating income. Therefore, management believes that contribution margin is a useful supplemental measure, along with the remaining operating expenses, for assessing the Company’s and the Utilities’ performance.
EARNINGS – THREE MONTHS ENDED June 30, 2026
This section contains discussion and analysis of the results for the three months ended June 30, 2026 compared to the results for the three months ended June 30, 2025, in total and by registrant and segment.
Spire
Total Company
Net income for the quarter was $211.2 versus $20.9 in the prior-year quarter. The increase was largely due to the increase in net income from discontinued operations, driven by the $254.6 after-tax gain related to the sale Spire Marketing and Spire Storage. The $29.3 increase in net loss from continuing operations reflect improved results at Spire Missouri and Spire Alabama that were offset by the inclusion of Spire Tennessee’s $6.9 loss for the quarter, combined with higher corporate expenses and interest primarily related to acquisition activity, slightly offset by pipeline operations. The Company will describe further the results of its ongoing business.
Continuing Operations
Net Income and Adjusted Earnings
The following tables reconcile the Company’s adjusted earnings to the most comparable GAAP number, net income.
|
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Gas Utility Segment |
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Other |
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Discontinued Operations |
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Total |
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|
Per Diluted
Common
Share** |
|
Three Months Ended June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income [GAAP] |
|
$ |
(11.1 |
) |
|
$ |
(31.5 |
) |
|
$ |
253.8 |
|
|
$ |
211.2 |
|
|
$ |
3.57 |
|
Net Loss Continuing Operations |
|
|
(11.1 |
) |
|
|
(31.5 |
) |
|
|
— |
|
|
|
(42.6 |
) |
|
|
(0.72 |
) |
Net Income Discontinued Operations |
|
|
— |
|
|
|
— |
|
|
|
253.8 |
|
|
|
253.8 |
|
|
|
4.29 |
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|
|
|
Continuing Operations |
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Gas Utility Segment |
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Other |
|
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Total |
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Per Diluted
Common
Share** |
|
|
|
|
Net Income (Loss) [GAAP] |
|
$ |
(11.1 |
) |
|
$ |
(31.5 |
) |
|
$ |
(42.6 |
) |
|
$ |
(0.72 |
) |
|
|
|
Adjustments, pre-tax: |
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|
|
|
|
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Acquisition activities* |
|
|
9.5 |
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|
|
26.5 |
|
|
|
36.0 |
|
|
|
0.61 |
|
|
|
|
Impairments |
|
|
1.5 |
|
|
|
— |
|
|
|
1.5 |
|
|
|
0.03 |
|
|
|
|
Income tax adjustments** |
|
|
(3.1 |
) |
|
|
(7.5 |
) |
|
|
(10.6 |
) |
|
|
(0.18 |
) |
|
|
|
Adjusted (Loss) Earnings [Non-GAAP] |
|
$ |
(3.2 |
) |
|
$ |
(12.5 |
) |
|
$ |
(15.7 |
) |
|
$ |
(0.26 |
) |
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|
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|
|
|
|
|
Gas Utility Segment |
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|
Other |
|
|
Discontinued Operations |
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|
Total |
|
|
Per Diluted
Common
Share** |
|
Three Months Ended June 30, 2025 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Net (Loss) Income [GAAP] |
|
$ |
(10.0 |
) |
|
$ |
(3.3 |
) |
|
$ |
34.2 |
|
|
$ |
20.9 |
|
|
$ |
0.29 |
|
Net Loss Continuing Operations |
|
|
(10.0 |
) |
|
|
(3.3 |
) |
|
|
— |
|
|
$ |
(13.3 |
) |
|
|
(0.29 |
) |
Net Income Discontinued Operations |
|
|
— |
|
|
$ |
— |
|
|
$ |
34.2 |
|
|
$ |
34.2 |
|
|
|
0.58 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
|
Gas Utility Segment |
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|
Other |
|
|
Total |
|
|
Per Diluted
Common
Share** |
|
|
|
|
Net Loss [GAAP] and Adjusted Loss [Non-GAAP] |
|
$ |
(10.0 |
) |
|
$ |
(3.3 |
) |
|
$ |
(13.3 |
) |
|
$ |
(0.29 |
) |
|
|
|
* Includes transaction, transition and financing costs for the Piedmont Tennessee Transaction.
** Income tax adjustments include amounts calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items.
Reconciliations of contribution margin to the most directly comparable GAAP measure are shown below.
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Gas Utility Segment |
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Other |
|
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Eliminations |
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Consolidated |
|
Three Months Ended June 30, 2026 |
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|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) [GAAP] |
|
$ |
27.3 |
|
|
$ |
(3.9 |
) |
|
$ |
— |
|
|
$ |
23.4 |
|
Operation and maintenance expenses |
|
|
134.8 |
|
|
|
18.3 |
|
|
|
(4.8 |
) |
|
|
148.3 |
|
Depreciation and amortization |
|
|
92.3 |
|
|
|
2.9 |
|
|
|
— |
|
|
|
95.2 |
|
Taxes, other than income taxes |
|
|
51.3 |
|
|
|
0.8 |
|
|
|
— |
|
|
|
52.1 |
|
Less: Gross receipts tax expense |
|
|
(21.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
(21.0 |
) |
Contribution Margin [Non-GAAP] |
|
|
284.7 |
|
|
|
18.1 |
|
|
|
(4.8 |
) |
|
|
298.0 |
|
Natural gas costs |
|
|
110.4 |
|
|
|
5.3 |
|
|
|
(14.5 |
) |
|
|
101.2 |
|
Gross receipts tax expense |
|
|
21.0 |
|
|
|
— |
|
|
|
— |
|
|
|
21.0 |
|
Operating Revenues |
|
$ |
416.1 |
|
|
$ |
23.4 |
|
|
$ |
(19.3 |
) |
|
$ |
420.2 |
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|
|
|
|
|
Three Months Ended June 30, 2025 |
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|
|
|
|
|
|
|
|
|
Operating Income [GAAP] |
|
$ |
16.7 |
|
|
$ |
5.4 |
|
|
$ |
— |
|
|
$ |
22.1 |
|
Operation and maintenance expenses |
|
|
114.1 |
|
|
|
10.1 |
|
|
|
(4.6 |
) |
|
|
119.6 |
|
Depreciation and amortization |
|
|
70.0 |
|
|
|
2.8 |
|
|
|
— |
|
|
|
72.8 |
|
Taxes, other than income taxes |
|
|
41.8 |
|
|
|
0.8 |
|
|
|
(0.1 |
) |
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|
42.5 |
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Less: Gross receipts tax expense |
|
|
(19.6 |
) |
|
|
(0.2 |
) |
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|
0.2 |
|
|
|
(19.6 |
) |
Contribution Margin [Non-GAAP] |
|
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223.0 |
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|
18.9 |
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|
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(4.5 |
) |
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|
237.4 |
|
Natural gas costs |
|
|
104.9 |
|
|
|
5.2 |
|
|
|
(14.6 |
) |
|
|
95.5 |
|
Gross receipts tax expense |
|
|
19.6 |
|
|
|
0.2 |
|
|
|
(0.2 |
) |
|
|
19.6 |
|
Operating Revenues |
|
$ |
347.5 |
|
|
$ |
24.3 |
|
|
$ |
(19.3 |
) |
|
$ |
352.5 |
|
Select variances for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025 are summarized in the following table and discussed below.
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Gas Utility |
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Other,
Net of |
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Variances: Fiscal 2026 Versus Fiscal 2025 |
|
Segment |
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Eliminations |
|
|
Consolidated |
|
Net Loss |
|
$ |
(1.1 |
) |
|
$ |
(28.2 |
) |
|
$ |
(29.3 |
) |
Adjusted Earnings (Loss) [Non-GAAP] |
|
|
6.8 |
|
|
|
(9.2 |
) |
|
|
(2.4 |
) |
Operating Revenues |
|
|
68.6 |
|
|
|
(0.9 |
) |
|
|
67.7 |
|
Contribution Margin [Non-GAAP] |
|
|
61.7 |
|
|
|
(1.1 |
) |
|
|
60.6 |
|
Operation and Maintenance Expenses |
|
|
20.7 |
|
|
|
8.0 |
|
|
|
28.7 |
|
Interest Expense |
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|
|
|
|
|
|
|
(37.7 |
) |
Other Income |
|
|
|
|
|
|
|
|
1.2 |
|
Income Tax |
|
|
|
|
|
|
|
|
(7.4 |
) |
The increase in interest expense reflects higher average long-term debt rates and higher levels of long-term debt in the current year, which includes the financing activity undertaken for the Piedmont Tennessee Transaction. Financing costs related to the acquisition activity and Tennessee operations totaled approximately $31.0 in the current quarter. The increase in the servicing costs for long-term debt were only partly mitigated by lower average levels of short-term debt and lower effective interest rates on short-term debt. Weighted-average short-term interest rates were 4.3% in the current-year quarter versus 4.5% in the prior-year quarter.
Other income increased $1.2 versus the prior-year quarter. The principal driver of the variance was favorable investment and mark-to-market activity with non-qualified benefit trusts.
The decrease in income taxes primarily reflects the higher current-year pre-tax book loss.
The Company’s other activities generated a $31.5 loss in the three months ended June 30, 2026, $28.2 higher than the prior year period. The major contributor to this variance was $26.5 pre-tax ($19.0 after-tax) of current year costs associated with the Piedmont Tennessee acquisition and transition activities. Higher corporate expenses and interest expense in the current year were the other contributors to the higher current year loss.
For the quarter ended June 30, 2026, Gas Utility net income was lower than the corresponding prior-year period by $1.1, while adjusted earnings increased by $6.8. The quarterly net income change was driven by the inclusion of a $6.9 net loss from Spire Tennessee operations and a $1.5 pre-tax impairment associated with the pending sale of Spire Mississippi. Excluding these impacts for adjusted earnings, growth for the quarter was driven by Spire Alabama and Spire EnergySouth, combined with slightly improved results at Spire Missouri.
The increase in Gas Utility operating revenues was attributable to the following factors:
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|
|
|
|
Spire Tennessee |
|
$ |
44.8 |
|
Spire Missouri Rate Case Implementation |
|
|
12.5 |
|
Spire Missouri – Infrastructure System Replacement Surcharge ("ISRS") |
|
|
4.5 |
|
Spire Alabama – Annual RSE update |
|
|
2.7 |
|
Spire Alabama – Cost Control Mechanism ("CCM") Benefit |
|
|
3.1 |
|
Spire Missouri and Spire Alabama – Off-system sales and capacity release |
|
|
2.5 |
|
Spire Alabama and Spire Missouri – Volumetric usage |
|
|
(5.0 |
) |
Spire Missouri and Spire Alabama – Lower PGA/GSA collections (gas cost recovery) |
|
|
(2.9 |
) |
All other factors (net) |
|
|
6.4 |
|
Total Variation |
|
$ |
68.6 |
|
The primary driver of the current year increase in revenue was the inclusion of Spire Tennessee’s quarterly results, combined with the impact of the October 2025 Missouri rate case implementation. Current year revenue also benefited from $4.5 incremental Spire Missouri ISRS surcharges, Spire Alabama’s favorable annual RSE update impact of $2.7, combined with the $3.1 increase in the year-over-year CCM benefit. These favorable impacts more than offset the $5.0 negative impact of lower volume usage net of weather mitigation adjustments and the $2.9 reduction attributable to lower gas cost recoveries.
The year-over-year increase in Gas Utility contribution margin was attributable to the following factors:
|
|
|
|
|
Spire Tennessee |
|
$ |
31.1 |
|
Spire Missouri Rate Case Implementation |
|
|
12.5 |
|
Spire Missouri – Infrastructure System Replacement Surcharge ("ISRS") |
|
|
4.5 |
|
Spire Alabama – Cost Control Mechanism ("CCM") Benefit |
|
|
3.1 |
|
Spire Alabama – Annual RSE update |
|
|
2.6 |
|
Spire Missouri and Spire Alabama – Off-system sales and capacity release |
|
|
2.1 |
|
Spire Missouri and Spire Alabama– Volumetric margin net of weather mitigation |
|
|
1.8 |
|
All other factors (net) |
|
|
4.0 |
|
Total Variation |
|
$ |
61.7 |
|
Contribution margin increased $61.7 versus the prior-year quarter. Contribution margin benefited $31.1 resulting from the inclusion of Spire Tennessee operations and the $12.5 positive impact of the October 2025 Missouri rate case implementation, Spire Missouri ISRS growth of $4.5, combined with $2.1 higher off system sales. Current year contribution margin also benefited from Spire Alabama’s favorable annual RSE update impact of $2.6 combined with the $3.1 increase in the year-over-year CCM benefit.
Reported operation and maintenance (“O&M”) expenses for the three months ended June 30, 2026 were $20.7 higher than the prior-year quarter, the inclusion of $16.9 relating to Spire Tennessee being the major driver. O&M expense at Spire Missouri and Spire Alabama increased $2.0 and $2.2, respectively, due principally to higher levels for non-payroll operations expense and bad debt expense that were only partly offset by lower employee-related costs.
Depreciation and amortization expenses for the quarter ended June 30, 2026 were $22.3 higher than the same period in the prior year primarily driven by the inclusion of $10.5 relating to Spire Tennessee’s operations. The remaining variance are the results of rate changes at Spire Missouri and Spire Alabama, combined with continued infrastructure capital expenditures across all the Utilities.
Taxes, other than income taxes, increased $9.5 versus the prior year quarter. $4.7 of the increase results from the inclusion of Spire Tennessee operations. The remaining variance relates primarily to higher remaining utility property tax expense due primarily to higher amortization levels of regulatory deferrals in Missouri along with continued infrastructure investments.
Interest expense increased $11.5, with $9.0 of the increase attributable to the inclusion of Tennessee operations. While both Spire Missouri and Spire Alabama benefited from lower average short-term interest rates in the current year, the impact of lower rates at Spire Missouri was more than offset by the impact of higher average levels of long-term debt in the current year.
Spire Missouri
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
Operating Income [GAAP] |
|
$ |
7.7 |
|
|
$ |
4.7 |
|
Operation and maintenance expenses |
|
|
76.1 |
|
|
|
74.1 |
|
Depreciation and amortization |
|
|
56.4 |
|
|
|
47.7 |
|
Taxes, other than income taxes |
|
|
36.1 |
|
|
|
31.7 |
|
Less: Gross receipts tax expense |
|
|
(14.5 |
) |
|
|
(13.9 |
) |
Contribution Margin [Non-GAAP] |
|
|
161.8 |
|
|
|
144.3 |
|
Natural gas costs |
|
|
72.5 |
|
|
|
71.9 |
|
Gross receipts tax expense |
|
|
14.5 |
|
|
|
13.9 |
|
Operating Revenues |
|
$ |
248.8 |
|
|
$ |
230.1 |
|
Net Loss |
|
$ |
(12.2 |
) |
|
$ |
(13.0 |
) |
Operating revenues for the quarter ended June 30, 2026 were $18.7 higher than the comparable prior-year period. The increase was primarily the result of three drivers: $12.5 due to implementation of the most recent rate case, $4.5 attributable to ISRS surcharges in the current year and higher off-system sales of $3.7. These favorable impacts were only partly offset by $1.8 lower gas cost recoveries and negative volume impact (net of weather mitigation) of $1.4.
Contribution margin for the three months ended June 30, 2026 increased $17.5 from the same period in the prior year, primarily due to the $12.5 increase relating to implementation of the most recent rate case and $4.5 attributable to ISRS surcharges in the current year, combined with the $1.3 favorable impact of higher off-system sales. These favorable impacts more than offset the unfavorable $1.4 weather-mitigated margin impact.
Degree days in Spire Missouri’s service areas during the three months ended June 30, 2026 were 36.1% warmer than normal, and 19.3% warmer than the comparable prior year period. Spire Missouri’s total system volume sold and transported were 204.5 million centum (Latin for “hundred”) cubic feet (CCF) for the quarter, compared with 220.5 million CCF for the same period in the prior year. Total off-system volume sold and transported were 11.9 million CCF for the current-year quarter, compared with 17.6 million CCF a year ago.
O&M expenses for the current-year quarter increased $2.0 versus the prior-year quarter. This increase reflects higher levels for non-payroll operations expense and bad debt that were only partly offset by lower employee-related costs.
Depreciation and amortization expenses increased $8.7 versus the prior-year quarter due to higher rates approved in the recent rate case, in addition to ongoing capital investments.
Taxes, other than income taxes increased $4.4, driven primarily by higher property taxes due to higher amortization levels of regulatory deferrals along with continued infrastructure investments.
Interest expense increased $2.3, reflecting higher average levels of long-term debt in the current year. The increase in the servicing costs for long-term debt were only partly mitigated by lower effective interest rates on short-term debt.
Resulting net loss for the quarter ended June 30, 2026 decreased $0.8 versus the prior-year quarter.
Spire Alabama
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
Operating Income [GAAP] |
|
$ |
16.5 |
|
|
$ |
12.7 |
|
Operation and maintenance expenses |
|
|
34.5 |
|
|
|
32.3 |
|
Depreciation and amortization |
|
|
21.3 |
|
|
|
17.8 |
|
Taxes, other than income taxes |
|
|
8.2 |
|
|
|
8.0 |
|
Less: Gross receipts tax expense |
|
|
(5.0 |
) |
|
|
(5.0 |
) |
Contribution Margin [Non-GAAP] |
|
|
75.5 |
|
|
|
65.8 |
|
Natural gas costs |
|
|
18.5 |
|
|
|
28.0 |
|
Gross receipts tax expense |
|
|
5.0 |
|
|
|
5.0 |
|
Operating Revenues |
|
$ |
99.0 |
|
|
$ |
98.8 |
|
Net Income |
|
$ |
7.3 |
|
|
$ |
4.5 |
|
Operating revenues for the three months ended June 30, 2026 were essentially flat versus the same period in the prior year. This slight increase was attributable to the $2.7 increase resulting from the annual RSE update and the $3.1 CCM benefit in the current year. These favorable impacts offset the unfavorable volume impacts and a slight decrease in gas cost recoveries.
Contribution margin was $9.7 higher versus the prior-year quarter, driven primarily by the $3.1 current quarter CCM benefit and favorable $2.6 annual RSE rate update, combined with a $3.2 increase attributable to weather-mitigated volume impact.
As measured in degree days, temperatures in Spire Alabama’s service area during the three months ended June 30, 2026, were 36.0% warmer than normal, and 43.6% warmer than a year ago. Spire Alabama’s total system volume sold and transported were 204.3 million CCF for the three months ended June 30, 2026, compared with 241.3 million CCF for the same period in the prior year. Total off-system volume sold and transported were 24.8 million CCF for the current-year quarter, compared with 23.0 million CCF off-system volume sold and transported in last year’s first quarter.
Reported O&M expenses for the three months ended June 30, 2026 increased $2.2 versus the prior-year quarter. This increase was primarily driven by higher levels for non-payroll operations expense.
Depreciation and amortization expenses increased $3.5 versus the prior-year period due to rate changes and ongoing capital investments.
Interest expense for the current-year quarter increased $0.2 versus the prior-year quarter, as higher average level of short term borrowings offset the impact of lower average long-term debt levels combined with lower short-term interest rates.
For the quarter ended June 30, 2026, resulting net income increased $2.8 versus the prior-year quarter.
EARNINGS – NINE MONTHS ENDED June 30, 2026
This section contains discussion and analysis of the results for the Nine months ended June 30, 2026 compared to the results for the Nine months ended June 30, 2025, in total and by registrant and segment.
Spire
Total Company
Net income for the year-to-date ended June 30, 2026 was $588.4 versus $311.5 in the comparable prior-year period. The increase was driven by the $254.6 after-tax gain relating to the divestitures of Spire Marketing and Spire Storage. Continuing operations increased $14.7, driven by the $61.6 increase from utilities that were only partially offset by higher corporate expenses, interest expense, and pipeline operations, net, of $46.9. Excluding the $254.6 gain on the divestiture of Spire Marketing and Spire Storage, discontinued operations increased $7.6, with growth at Spire Marketing being the primary driver of the growth in net income from discontinued operations. The Company will describe further the results of its ongoing business.
Continuing Operations
Net Income and Adjusted Earnings
The following tables reconcile the Company’s adjusted earnings to the most comparable GAAP number, net income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility Segment |
|
|
Other |
|
|
Discontinued Operations |
|
|
Total |
|
|
Per Diluted
Common
Share** |
|
Nine Months Ended June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) [GAAP] |
|
$ |
324.6 |
|
|
$ |
(61.8 |
) |
|
$ |
325.6 |
|
|
$ |
588.4 |
|
|
$ |
9.70 |
|
Net Income (Loss) Continuing Operations |
|
|
324.6 |
|
|
|
(61.8 |
) |
|
|
|
|
|
262.8 |
|
|
|
4.21 |
|
Net Income Discontinued Operations |
|
|
— |
|
|
|
— |
|
|
|
325.6 |
|
|
|
325.6 |
|
|
|
5.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
|
Gas Utility Segment |
|
|
Other |
|
|
Total |
|
|
Per Diluted
Common
Share** |
|
|
|
|
Net Income (Loss) [GAAP] |
|
$ |
324.6 |
|
|
$ |
(61.8 |
) |
|
$ |
262.8 |
|
|
$ |
4.21 |
|
|
|
|
Adjustments, pre-tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition activities* |
|
|
9.5 |
|
|
|
65.3 |
|
|
|
74.8 |
|
|
|
1.27 |
|
|
|
|
Impairments |
|
|
5.4 |
|
|
|
— |
|
|
|
5.4 |
|
|
|
0.09 |
|
|
|
|
Gain on sale of subsidiary |
|
|
— |
|
|
|
(28.9 |
) |
|
|
(28.9 |
) |
|
|
(0.49 |
) |
|
|
|
Income tax effect of adjustments** |
|
|
(4.0 |
) |
|
|
(8.3 |
) |
|
|
(12.3 |
) |
|
|
(0.21 |
) |
|
|
|
Preferred share redemption costs*** |
|
|
|
|
|
|
|
|
|
|
|
0.14 |
|
|
|
|
Adjusted Earnings (Loss) [Non- GAAP] |
|
$ |
335.5 |
|
|
$ |
(33.7 |
) |
|
$ |
301.8 |
|
|
$ |
5.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility Segment |
|
|
Other |
|
|
Discontinued Operations |
|
|
Total |
|
|
Per Diluted
Common
Share** |
|
Nine Months Ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) [GAAP] |
|
$ |
263.0 |
|
|
$ |
(14.9 |
) |
|
$ |
63.4 |
|
|
$ |
311.5 |
|
|
$ |
5.13 |
|
Net Income (Loss) Continuing Operations |
|
|
263.0 |
|
|
|
(14.9 |
) |
|
|
|
|
|
248.1 |
|
|
|
4.05 |
|
Net Income Discontinued Operations |
|
|
— |
|
|
|
— |
|
|
|
63.4 |
|
|
|
63.4 |
|
|
|
1.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations |
|
Gas Utility Segment |
|
|
Other |
|
|
Total |
|
|
Per Diluted
Common
Share** |
|
|
|
|
Net Income (Loss) [GAAP] and Adjusted Earnings (Loss) [Non-GAAP] |
|
$ |
263.0 |
|
|
$ |
(14.9 |
) |
|
$ |
248.1 |
|
|
$ |
4.05 |
|
|
|
|
* Includes transaction, transition and financing costs for the Piedmont Tennessee Transaction.
** Income tax adjustments include amounts calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items.
***Adjusted earnings per share is calculated by replacing consolidated net income with consolidated adjusted earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares and excludes the $8.0 impact of the February 2026 cost of redemption of Spire’s 5.9% Series A Preferred Stock, including related depositary shares.
Reconciliations of contribution margin to the most directly comparable GAAP measure are shown below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utility Segment |
|
|
Other |
|
|
Eliminations |
|
|
Consolidated |
|
Nine Months Ended June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) [GAAP] |
|
$ |
514.0 |
|
|
$ |
(25.2 |
) |
|
$ |
— |
|
|
$ |
488.8 |
|
Operation and maintenance expenses |
|
|
376.5 |
|
|
|
70.0 |
|
|
|
(14.0 |
) |
|
|
432.5 |
|
Depreciation and amortization |
|
|
248.7 |
|
|
|
8.7 |
|
|
|
— |
|
|
|
257.4 |
|
Taxes, other than income taxes |
|
|
187.6 |
|
|
|
2.3 |
|
|
|
— |
|
|
|
189.9 |
|
Less: Gross receipts tax expense |
|
|
(107.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(107.2 |
) |
Contribution Margin [Non-GAAP] |
|
|
1,219.6 |
|
|
|
55.8 |
|
|
|
(14.0 |
) |
|
|
1,261.4 |
|
Natural gas costs |
|
|
797.5 |
|
|
|
7.6 |
|
|
|
(34.8 |
) |
|
|
770.3 |
|
Gross receipts tax expense |
|
|
107.2 |
|
|
|
— |
|
|
|
— |
|
|
|
107.2 |
|
Operating Revenues |
|
$ |
2,124.3 |
|
|
$ |
63.4 |
|
|
$ |
(48.8 |
) |
|
$ |
2,138.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income [GAAP] |
|
$ |
416.5 |
|
|
$ |
18.4 |
|
|
$ |
— |
|
|
$ |
434.9 |
|
Operation and maintenance expenses |
|
|
351.9 |
|
|
|
26.8 |
|
|
|
(13.4 |
) |
|
|
365.3 |
|
Depreciation and amortization |
|
|
207.6 |
|
|
|
8.5 |
|
|
|
— |
|
|
|
216.1 |
|
Taxes, other than income taxes |
|
|
164.9 |
|
|
|
2.3 |
|
|
|
(0.1 |
) |
|
|
167.1 |
|
Less: Gross receipts tax expense |
|
|
(101.4 |
) |
|
|
(0.2 |
) |
|
|
0.2 |
|
|
|
(101.4 |
) |
Contribution Margin [Non-GAAP] |
|
|
1,039.5 |
|
|
|
55.8 |
|
|
|
(13.3 |
) |
|
|
1,082.0 |
|
Natural gas costs |
|
|
790.3 |
|
|
|
7.7 |
|
|
|
(34.5 |
) |
|
|
763.5 |
|
Gross receipts tax expense |
|
|
101.4 |
|
|
|
0.2 |
|
|
|
(0.2 |
) |
|
|
101.4 |
|
Operating Revenues |
|
$ |
1,931.2 |
|
|
$ |
63.7 |
|
|
$ |
(48.0 |
) |
|
$ |
1,946.9 |
|
Select variances for the nine m0nths ended June 30, 2026 compared to the nine months ended June 30, 2025 are summarized in the following table and discussed below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas |
|
|
Other,
Net of |
|
|
|
|
Variances: Fiscal 2026 Versus Fiscal 2025 |
|
Utility |
|
|
Eliminations |
|
|
Consolidated |
|
Net Income (Loss) |
|
$ |
61.6 |
|
|
$ |
(46.9 |
) |
|
$ |
14.7 |
|
Adjusted Earnings (Loss) [Non-GAAP] |
|
|
72.5 |
|
|
|
(18.8 |
) |
|
|
53.7 |
|
Operating Revenues |
|
|
193.1 |
|
|
|
(1.1 |
) |
|
|
192.0 |
|
Contribution Margin [Non-GAAP] |
|
|
180.1 |
|
|
|
(0.7 |
) |
|
|
179.4 |
|
Operation and Maintenance Expenses |
|
|
24.6 |
|
|
|
42.6 |
|
|
|
67.2 |
|
Interest Expense |
|
|
|
|
|
|
|
|
(66.8 |
) |
Other Income |
|
|
|
|
|
|
|
|
7.3 |
|
Income Tax |
|
|
|
|
|
|
|
|
3.2 |
|
The increase in interest expense reflects higher levels of long-term debt and corresponding higher average long-term debt rates in the current year, which includes the financing activity undertaken for the Piedmont Tennessee Transaction. Financing costs related to the acquisition activity and Spire Tennessee operations totaled approximately $40.5 for the nine months ended June 30, 2026. The increase in the servicing costs for long-term debt were only partly mitigated by lower average levels of short-term debt and lower effective interest rates on short-term debt. Weighted-average short-term interest rates were 4.2% in the current year versus 4.5% in the prior year.
Other income increased $7.3 versus the prior-year period, primarily due to investment activity in non-qualified benefit trusts combined with the NSC Transfer benefit (income neutral).
The increase in income taxes primarily reflects the higher current-year pre-tax book income.
The Company’s other activities generated a $61.8 loss in the nine months ended June 30, 2026, $46.9 higher than the prior year period. The major contributor to this variance was $65.3 pre-tax of current year costs and interest expense associated with the Piedmont Tennessee acquisition that was only partly offset by the pre-tax $28.9 gain on the sale of a non-core subsidiary. Higher corporate expenses and interest expense in the current year were the other contributors to the higher current year loss.
For the year-to-date ended June 30, 2026, Gas Utility net income and adjusted earnings were higher than the corresponding prior-year period by $61.6 and $72.5, respectively. The year-to-date change in net income was driven by the $ 61.9 improved performance of Spire Missouri and the $8.7 increase from Spire Alabama, partly offset by the $6.9 loss attributable to Spire Tennessee and the $4.0 (after-tax) impairment relating to the divestiture of Spire Mississippi.
The increase in Gas Utility operating revenues was attributable to the following factors:
|
|
|
|
|
Spire Missouri Rate Case Implementation |
|
$ |
145.1 |
|
Spire Tennessee |
|
|
44.8 |
|
Spire Missouri and Spire Alabama – Off-system sales and capacity release |
|
|
19.2 |
|
Spire Alabama – Annual RSE update |
|
|
10.8 |
|
Spire Alabama – Cost Control Mechanism ("CCM") Benefit |
|
|
3.1 |
|
Spire Missouri – Infrastructure System Replacement Surcharge ("ISRS") |
|
|
6.8 |
|
Spire Alabama and Spire Missouri – Volumetric usage |
|
|
(34.4 |
) |
Spire Missouri and Spire Alabama – Lower PGA/GSA collections (gas cost recovery) |
|
|
(9.2 |
) |
Spire Alabama – Net change in customer refund provision |
|
|
(2.8 |
) |
All other factors |
|
|
9.7 |
|
Total Variation |
|
$ |
193.1 |
|
The primary driver of the current year increase in revenue was the $145.1 impact of the October 2025 Missouri rate case implementation, combined with the $44.8 increase that is attributable to Spire Tennessee operations. Current year revenue also benefited from higher off system sales of $19.2, current year ISRS surcharges of $6.8, and Spire Alabama’s favorable annual RSE update impact of $10.8. These favorable impacts more than offset the $34.4 negative impact of lower volume usage net of weather mitigation adjustments, the $9.2 reduction attributable to lower gas cost recoveries, combined with the $2.8 increase in Spire Alabama’s customer refund provision.
The year-over-year increase in Gas Utility contribution margin was attributable to the following factors:
|
|
|
|
|
Spire Missouri Rate Case Implementation |
|
$ |
145.1 |
|
Spire Tennessee |
|
|
31.1 |
|
Spire Alabama – Annual RSE update |
|
|
10.5 |
|
Spire Missouri and Spire Alabama – Off-system sales and capacity release |
|
|
7.5 |
|
Spire Missouri – Infrastructure System Replacement Surcharge ("ISRS") |
|
|
6.8 |
|
Spire Alabama – Cost Control Mechanism ("CCM") Benefit |
|
|
3.1 |
|
Spire Alabama and Spire Missouri – Volumetric usage |
|
|
(23.0 |
) |
Spire Alabama – Net change in customer refund provision |
|
|
(2.8 |
) |
All other factors |
|
|
1.8 |
|
Total Variation |
|
$ |
180.1 |
|
Contribution margin increased $180.1 versus the prior year. Contribution margin benefited from the $145.1 impact of the October 2025 Missouri rate case implementation, the $31.1 increase that is attributable to Spire Tennessee operations, and the $10.5 attributable to the Alabama RSE annual update, current year ISRS surcharges of $6.8, combined with $7.5 higher off system sales. These favorable impacts more than offset the $23.0 negative volumetric margin net of weather mitigation at Spire Missouri and Spire Alabama.
Reported operation and maintenance (“O&M”) expenses for the nine months ended June 30, 2026 were $24.6 higher than the prior year. Excluding the NSC Transfer impact, O&M expenses were $21.8 higher than the comparable prior year period, with $16.9 of the increase attributable to the inclusion of Spire Tennessee operations in the current year. Spire Missouri O&M were $8.0 higher than the prior year after removing the impact of the NSC transfer, driven by higher non-payroll operations expense and bad debt. Spire Alabama reported O&M was $1.0 lower than the prior year period, $2.8 lower after excluding the impact of the NSC transfer, driven by lower employee-related costs.
Depreciation and amortization expenses for the year-to-date ended June 30, 2026 were $41.1 higher than the same period in the prior year primarily driven by the $10.4 increase resulting from Spire Tennessee operations, rate changes at Spire Missouri and Spire Alabama, combined with continued infrastructure capital expenditures across all the Utilities.
Taxes, other than income taxes, increased $22.6, due to $5.8 higher gross receipts taxes resulting from higher revenues, combined with higher property tax expense due primarily to higher amortization levels of regulatory deferrals in Missouri along with continued infrastructure investments. The inclusion of Spire Tennessee operations accounted for $4.7 of the increase.
Interest expense increased $14.6, of which $9.0 was due to the inclusion of Spire Tennessee operations. While both Spire Missouri and Spire Alabama benefited from lower average short-term interest rates in the current year, the impact at Spire Missouri was more than offset by the favorable impact of higher average levels of long-term debt in the current year, resulting in an $6.3 interest expense increase for Spire Missouri.
Spire Missouri
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
Operating Income [GAAP] |
|
$ |
330.5 |
|
|
$ |
244.1 |
|
Operation and maintenance expenses |
|
|
236.8 |
|
|
|
228.1 |
|
Depreciation and amortization |
|
|
165.0 |
|
|
|
140.4 |
|
Taxes, other than income taxes |
|
|
141.3 |
|
|
|
123.7 |
|
Less: Gross receipts tax expense |
|
|
(78.3 |
) |
|
|
(73.3 |
) |
Contribution Margin [Non-GAAP] |
|
|
795.3 |
|
|
|
663.0 |
|
Natural gas costs |
|
|
629.9 |
|
|
|
622.9 |
|
Gross receipts tax expense |
|
|
78.3 |
|
|
|
73.3 |
|
Operating Revenues |
|
$ |
1,503.5 |
|
|
$ |
1,359.2 |
|
Net Income |
|
$ |
215.2 |
|
|
$ |
153.3 |
|
Operating revenues for the nine months ended June 30, 2026 were $144.3 higher than the comparable prior-year period. The increase was primarily the result of four drivers: $145.1 due to implementation of the most recent rate case, higher off-system sales of $19.0, $6.8 incremental ISRS revenues and $5.0 higher gross receipts tax. These favorable impacts were only partly offset by the $24.8 unfavorable volume impact (net of weather mitigation), and $7.1 lower gas cost recoveries.
Contribution margin for the nine months ended June 30, 2026 increased $132.3 from the same period in the prior year, primarily due to the $145.1 increase relating to implementation of the most recent rate case, combined with $6.8 incremental ISRS charges, and the $5.1 impact of higher off-system sales. These favorable impacts more than offset the unfavorable $24.8 weather-mitigated margin impact.
Degree days in Spire Missouri’s service areas during the nine months ended June 30, 2026 were 13.5% warmer than normal, and 5.8% warmer than the same period last year. Spire Missouri’s total system volume sold and transported were 1,306.2 million centum (Latin for “hundred”) cubic feet (CCF) for the current year, compared with 1,402.2 million CCF for the same period in the prior year. Total off-system volume sold and transported were 58.9 million CCF for the current-year, compared with 65.5 million CCF a year ago.
O&M expenses for the nine months ended June 30, 2026 increased $8.7 versus the corresponding prior-year period. Excluding the NSC Transfer impact, O&M expense increased $8.0. This increase reflects higher levels for non-payroll operations expense, insurance, and bad debt that were only partly offset by lower employee-related costs and administrative expenses.
Depreciation and amortization expenses increased $24.6 versus the prior-year period due to higher rates approved in the recent rate case, in addition to ongoing capital investments.
Taxes, other than income taxes increased $17.6, driven by higher pass-through gross receipts taxes and higher property taxes, due primarily to higher amortization levels of regulatory deferrals along with continued infrastructure investments.
Interest expense increased $6.3, reflecting higher average levels of long-term debt in the current year. The increase in the servicing costs for long-term debt were only partly mitigated by lower average levels of short-term debt and lower effective interest rates on short-term debt.
Resulting net income for the nine months ended June 30, 2026 increased $61.9 versus the nine months ended June 30, 2025.
Spire Alabama
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30, |
|
|
|
2026 |
|
|
2025 |
|
Operating Income [GAAP] |
|
$ |
152.2 |
|
|
$ |
142.7 |
|
Operation and maintenance expenses |
|
|
100.8 |
|
|
|
101.8 |
|
Depreciation and amortization |
|
|
59.8 |
|
|
|
53.5 |
|
Taxes, other than income taxes |
|
|
33.5 |
|
|
|
33.3 |
|
Less: Gross receipts tax expense |
|
|
(24.3 |
) |
|
|
(24.1 |
) |
Contribution Margin [Non-GAAP] |
|
|
322.0 |
|
|
|
307.2 |
|
Natural gas costs |
|
|
125.0 |
|
|
|
140.3 |
|
Gross receipts tax expense |
|
|
24.3 |
|
|
|
24.1 |
|
Operating Revenues |
|
$ |
471.3 |
|
|
$ |
471.6 |
|
Net Income |
|
$ |
98.9 |
|
|
$ |
90.2 |
|
Operating revenues for the nine months ended June 30, 2026 decreased $0.3 from the same period in the prior year. This decrease was attributable to unfavorable volume impacts of $9.6, and a $2.1 decrease in gas cost recoveries. These negative impacts more than offset the $10.8 increase resulting from the annual RSE update. Year-to-date CCM benefits of $3.1 were mostly offset by a $2.8 increase in the customer refund provision.
Contribution margin was $14.8 higher versus the prior-year comparable period, driven primarily by the favorable $10.5 annual RSE rate update, combined with $2.4 increase attributable to off-system sales and a $1.8 increase resulting from weather-mitigated volume impact. Year-to-date CCM benefits of $3.1 were mostly offset by a $2.8 increase in the customer refund provision.
As measured in degree days, temperatures in Spire Alabama’s service area during the nine months ended June 30, 2026, were 7.7% warmer than normal and 4.2% warmer than a year ago. Spire Alabama’s total system volume sold and transported were 764.5 million CCF for the nine months ended June 30, 2026, compared with 845.9 million CCF for the same period in the prior year. Total off-system volume sold and transported were 58.3 million CCF for the current-year period, compared with 58.5 million CCF off-system volume sold and transported in the prior year period.
Reported O&M expenses for the nine months ended June 30, 2026 decreased $1.0 versus the prior-year period. After excluding the impact of the NSC Transfer, O&M expenses in the current year quarter were $2.8 lower than the corresponding prior year period. This reduction was primarily driven by lower employee-related costs.
Depreciation and amortization expenses increased $6.3 versus the prior-year period due to rate changes and ongoing capital investments.
Interest expense for the current year decreased $0.5 versus the prior-year period, primarily the result of lower average long-term debt levels combined with lower short-term interest rates, which more than offset higher current year average short-term borrowings.
For the nine months ended June 30, 2026, resulting net income increased $8.7 versus the nine months ended June 30, 2025.
LIQUIDITY AND CAPITAL RESOURCES
Recent Cash Flows
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, |
|
Cash Flow Summary |
|
2026 |
|
|
2025 |
|
Net cash provided by operating activities |
|
$ |
613.6 |
|
|
$ |
582.9 |
|
Net cash used in investing activities |
|
|
(2,268.9 |
) |
|
|
(696.7 |
) |
Net cash provided by financing activities |
|
|
1,673.1 |
|
|
|
127.0 |
|
For the nine months ended June 30, 2026, net cash from operating activities increased $30.7 compared with the corresponding period of fiscal 2025. The key change was driven primarily by regulatory timing differences and fluctuations in working capital items, as discussed below in the Future Cash Requirements section.
For the nine months ended June 30, 2026, net cash used in investing activities increased by $1,572.2 compared with the same period in the prior year. The change was primarily attributable to the Piedmont Tennessee Transaction of $2,500.8 offset by $849.9 proceeds from the sale of Spire Marketing, Spire Storage and non-core equity interest. Total capital expenditures were $91.3 lower than last year, with a $6.4 spending increase in the Utilities, and approximately $90.6 decrease related to discontinued operations.
Lastly, for the nine months ended June 30, 2026, net cash provided by financing activities increased $1,546.1 compared with the nine months ended June 30, 2025. The increase was driven primarily by $3,322.4 of borrowings, including financing associated with the Piedmont Tennessee Transaction, issuance of $200.0 of junior subordinated notes, issuance of $400.0 of senior notes used to refinance existing debt, and an $800.0 delayed draw term loan. These increases were partially offset by $1,266.5 of debt repayments, including repayment of the $800.0 delayed draw term loan, and the redemption of $250.0 of preferred shares. Financing cash flows were also impacted by a $76.0 decrease in stock issuances and a $34.3 increase in financing costs compared with the prior-year period.
Future Cash Requirements
The Company’s short-term borrowing requirements typically peak during colder months when the Utilities borrow money to cover the lag between when they purchase natural gas and when their customers pay for that gas. Changes in the wholesale cost of natural gas (including cash payments for margin deposits associated with Spire Missouri’s use of natural gas derivative instruments), variations in the timing of collections of gas cost under the Utilities’ PGA clauses and GSA riders, the seasonality of accounts receivable balances, and the utilization of stored gas inventories cause short-term cash requirements to vary during the year and from year to year, and may cause significant variations in the Company’s cash provided by or used in operating activities.
Spire’s material cash requirements as of June 30, 2026, are related to the Piedmont Tennessee Transaction, capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations, and dividends. The Acquisition required financing of $2.50 billion.
On April 30, 2026, Spire completed the sale of its gas marketing business, Spire Marketing Inc., and received cash proceeds of approximately $212. The results of Spire Marketing have been classified as discontinued operations. The proceeds from this transaction increased the Company's liquidity and were used, together with proceeds from the sale of Spire Storage, to repay borrowings outstanding under the Company's DDTL Agreement incurred in connection with the Piedmont Tennessee Transaction.
On June 30, 2026, Spire completed the sale of its natural gas storage business, Spire Storage, for total consideration of approximately $657, consisting of approximately $607 payable in cash at closing, subject to customary purchase price adjustments, and $50 of deferred consideration payable on or before September 30, 2027. The results of Spire Storage have been classified as discontinued operations. Following receipt of the proceeds from the transaction, all outstanding borrowings under the DDTL Agreement were repaid and the DDTL Agreement was terminated.
Following the dispositions of Spire Marketing and Spire Storage, the Company does not retain a financial interest in either business and is not aware of any material contingent liabilities that remain with the Company as a result of these transactions. Accordingly, the Company does not expect the dispositions to have a material ongoing impact on its liquidity, financial condition, or results of operations.
For information about these resources, see Note 8, Financing. Excluding the acquisition and divestitures, there were no material changes outside the ordinary course of business from the future cash requirements discussed in the Company’s
Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Total Company capital expenditures are planned to be $797 for fiscal 2026.
Source of Funds
It is management’s view that the Company, Spire Missouri and Spire Alabama have adequate access to credit and capital markets and will have sufficient liquidity and capital resources, both internal and external, to meet anticipated requirements. Spire Missouri’s and Spire Alabama’s access to capital markets, including the commercial paper market, and their respective financing costs, may depend not only on current conditions in the credit and capital markets but also on the credit rating of the entity that is accessing the capital markets. Their debt is rated by two rating agencies: Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service (“Moody’s”). The debt ratings of the Company, Spire Missouri, Spire Alabama, and Spire Tennessee (shown in the following table) remain at investment grade with a stable outlook for Moody’s. S&P ratings also remain at investment grade with a negative outlook.
|
|
|
|
|
|
|
S&P |
|
Moody’s |
Spire Inc. senior unsecured long-term debt |
|
BBB |
|
Baa2 |
Spire Inc. junior subordinated notes |
|
BBB- |
|
Baa3 |
Spire Inc. short-term debt |
|
A-2 |
|
P-2 |
Spire Missouri senior secured long-term debt |
|
A |
|
A1 |
Spire Alabama senior unsecured long-term debt |
|
BBB+ |
|
A2 |
Spire Tennessee senior unsecured long-term debt |
|
- |
|
A3 |
Cash and Cash Equivalents
Bank deposits were used to support working capital needs of the business. Spire had no temporary cash investments as of June 30, 2026.
Short-term Debt
The Company’s short-term cash requirements can be met through the sale of up to $1,500.0 of commercial paper or through the use of Spire’s $1,500.0 revolving credit facility. For information about these resources, see Note 8, Financing, of the Notes to Financial Statements in Item 1 and “Interest Rate Risk” under “Market Risk” below.
As previously disclosed, in connection with the Piedmont Tennessee Acquisition, the Company entered into an $800.0 senior unsecured delayed draw term loan agreement. The Company fully drew the facility upon closing of the acquisition on March 31, 2026. During the quarter ended June 30, 2026, the Company used proceeds from the sales of Spire Marketing and Spire Storage to repay the $800.0 delayed draw term loan entered into in connection with the Piedmont Tennessee Transaction. The loan was terminated following repayment.
Long-term Debt and Equity
Factoring in the current portion of long-term debt, the Company’s long-term consolidated capitalization consisted of 37% equity at June 30, 2026 and 47% equity at September 30, 2025, respectively. As of June 30, 2026, Spire had outstanding principal of long-term debt totaling $6,043.9, of which $2,168.0 was issued by Spire Missouri, $715.0 was issued by Spire Alabama, and $3,160.9 was issued by Spire and other subsidiaries.
On October 23, 2025, Spire Missouri issued an aggregate principal amount of $200.0 of First Mortgage Bonds. The first tranche consisted of an aggregate principal amount of $150.0, bearing interest at 4.60% per annum and maturing on September 15, 2030. The second tranche consisted of an aggregate principal amount of $50.0, bears interest at 4.65% per annum and maturing on January 15, 2031. Interest is payable semi-annually on March 15 and September 15 of each year. The bonds are senior secured indebtedness of Spire Missouri and rank equally with all other existing and future senior secured indebtedness issued by Spire Missouri under its Mortgage and Deed of Trust. The bonds are secured by a first mortgage lien on substantially all the real properties of Spire Missouri, subject to limited exceptions. Spire Missouri used the proceeds for general corporate purposes.
Effective October 27, 2024, Spire Missouri was authorized by the MoPSC to issue conventional term loans, first mortgage bonds, unsecured debt, preferred stock and common stock in an aggregate amount not to exceed $850.0 any time from that date through December 31, 2027. Under this authorization, through October 23, 2025, Spire Missouri has issued $74.4 of common stock and $350.0 of first mortgage bonds. Approximately $426.0 remains available for issuance under this authorization. Spire Alabama has no standing authority to issue long-term debt and must petition the APSC for each planned issuance.
On November 24, 2025, Spire issued $900.0 of junior subordinated notes, consisting of two $450.0 series maturing in 2056. The Series A notes bear interest at 6.250% until June 1, 2031, and the Series B notes bear interest at 6.450% until June 1, 2036, after which rates reset every five years based on the five-year U.S. Treasury rate plus a stated spread, subject to minimum rates. Interest is payable semiannually beginning June 1, 2026. Spire may defer interest payments for up to 10 consecutive years, subject to restrictions on dividends and certain junior debt payments during any deferral period. The notes are redeemable at par under specified conditions and rank junior to Spire’s senior debt. Net proceeds, together with other financing sources, were used to fund the acquisition of Piedmont Tennessee operations. For more information about the junior subordinated notes, see Note 8, Financing.
On December 17, 2025, Spire Tennessee entered into a Master Note Purchase Agreement to issue $825.0 of senior unsecured notes in a private placement. In connection with the closing of the Piedmont Tennessee Transaction on March 31, 2026, Spire Tennessee issued the notes in multiple tranches with maturities from 2029 to 2038 and fixed interest rates ranging from 4.59% to 5.44%. Proceeds were used to fund the acquisition. The agreement includes customary covenants, including a Consolidated Capitalization Ratio not exceeding 70%, and provides for optional and mandatory prepayment under specified conditions. For more information about the senior unsecured notes, see Note 8, Financing.
On January 12, 2026, Spire issued $200.0 of 6.375% junior subordinated notes due 2086. Interest is payable semiannually, and the notes rank junior to all existing and future senior indebtedness. Net proceeds, together with other funds, were used to redeem all outstanding shares of Spire’s 5.90% Series A Cumulative Redeemable Perpetual Preferred Stock (aggregate $250.0 liquidation preference) or for other general corporate purposes. For more information about the junior subordinated notes, see Note 8, Financing.
On February 9, 2026, Spire Inc. issued $400.0 aggregate principal amount of 4.60% senior unsecured notes due September 1, 2031 (the “2031 Senior Notes”). Interest on the 2031 Senior Notes is payable semiannually beginning September 1, 2026, and the 2031 Senior Notes may be redeemed prior to August 1, 2031 at a make‑whole redemption price or, thereafter, at par, in each case plus accrued interest. The 2031 Senior Notes rank equally with the Company’s other unsecured and unsubordinated indebtedness. Proceeds from the issuance were used to repay $350.0 of the Company’s 5.30% Senior Notes due March 1, 2026, with remaining proceeds available to fund the pending acquisition of the Tennessee natural gas business of Piedmont or for general corporate purposes.
Under Spire’s “at-the-market” (“ATM”) equity distribution agreement and as authorized by its board of directors, the Company may offer and sell, from time to time, shares of its common stock (including shares of common stock that may be sold pursuant to forward sale agreements entered into in connection with the ATM equity distribution agreement). Settled sales under this ATM program are included in “Common stock issued” in the Consolidated Statements of Shareholders’ Equity. As of June 30, 2026, under the ATM program, Spire may sell additional shares with an aggregate offering price of up to $123.6 through January 2027.
For more information about the issuance of common stock under Spire’s ATM equity distribution agreement, see Note 6, Shareholders’ Equity, of the Notes to Financial Statements in Item 1.
Spire has a shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission (“SEC”) for the issuance and sale of up to 250,000 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 250,000 shares remaining available for issuance under this Form S-3, which expires on April 30, 2029. Spire and Spire Missouri also have a universal shelf registration statement on Form S-3 on file with the SEC for the issuance of various equity and debt securities, which expires on May 7, 2028.
ENVIRONMENTAL MATTERS
The Utilities and other Spire subsidiaries own and operate natural gas distribution, transmission and storage facilities, the operations of which are subject to various environmental laws, regulations, and interpretations. While environmental issues resulting from such operations arise in the ordinary course of business, such issues have not materially affected the Company’s, Spire Missouri’s, or Spire Alabama’s financial position and results of operations. As environmental laws, regulations, and interpretations change, however, the Company and the Utilities may be required to incur additional costs. For information relative to environmental matters, see Contingencies in Note 13 of the Notes to Financial Statements in Item 1.
REGULATORY MATTERS
For discussions of regulatory matters for Spire, Spire Missouri, and Spire Alabama, see Note 7, Regulatory Matters, of the Notes to Financial Statements in Item 1.
ACCOUNTING PRONOUNCEMENTS
The Company, Spire Missouri and Spire Alabama have evaluated or are in the process of evaluating the effects that recently issued accounting standards will have on the companies’ financial position or results of operations upon adoption.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources are based upon our financial statements, which have been prepared in accordance with GAAP, which requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting estimates used in the preparation of our financial statements are described in Item 7 of Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and include regulatory accounting, employee benefits and postretirement obligations, and income taxes. There were no significant changes to critical accounting estimates during the nine months ended June 30, 2026.
For discussion of other significant accounting policies, see Note 1 of the Notes to Financial Statements included in this Form 10-Q as well as Note 1 of the Notes to Financial Statements included in Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
MARKET RISK
There were no material changes in the Company’s commodity price risk or counterparty credit risk as of June 30, 2026, relative to the corresponding information provided in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Spire enters into cash flow and fair value hedges through the execution of interest rate swap contracts to manage exposure to adverse movements in interest rates, including variability in future interest payments and changes in the fair value of fixed-rate debt attributable to changes in benchmark interest rates. At June 30, 2026, the following swaps were outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Period Originated |
|
Contract
Hedge
Term
(Years) |
|
|
Notional
Amount |
|
|
Fixed
Interest
Rate |
|
|
Fiscal 2026
Mark-to-
Market Gain (Loss) |
|
|
Net Asset |
|
Q3 2023 |
|
|
10 |
|
|
$ |
25.0 |
|
|
|
3.0180 |
% |
|
$ |
2.0 |
|
|
$ |
0.4 |
|
Q1 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.4000 |
% |
|
|
1.3 |
|
|
|
0.5 |
|
Q1 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5350 |
% |
|
|
1.0 |
|
|
|
0.4 |
|
Q1 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.4500 |
% |
|
|
1.2 |
|
|
|
0.5 |
|
Q1 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5250 |
% |
|
|
1.0 |
|
|
|
0.4 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5410 |
% |
|
|
1.0 |
|
|
|
0.5 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5520 |
% |
|
|
1.0 |
|
|
|
0.6 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.4260 |
% |
|
|
1.2 |
|
|
|
0.6 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5770 |
% |
|
|
0.9 |
|
|
|
0.4 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.4500 |
% |
|
|
1.1 |
|
|
|
0.4 |
|
Q4 2024 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.3500 |
% |
|
|
1.3 |
|
|
|
0.4 |
|
Q3 2025 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.5795 |
% |
|
|
0.9 |
|
|
|
0.6 |
|
Q3 2025 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.6105 |
% |
|
|
0.9 |
|
|
|
0.6 |
|
Q3 2025 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.6570 |
% |
|
|
0.8 |
|
|
|
0.4 |
|
Q3 2025 |
|
|
10 |
|
|
|
25.0 |
|
|
|
3.7630 |
% |
|
|
0.7 |
|
|
|
0.2 |
|
|
|
|
|
|
$ |
375.0 |
|
|
|
|
|
$ |
16.3 |
|
|
$ |
6.9 |
|
In addition to the swaps in the table above, Spire has a hedge contract that was entered into in the third fiscal quarter of 2026. The MTM fair value of this hedge was ($2.6) as of June 30, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For this discussion, see Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk.
Item 4. Controls and Procedures
Spire
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Change in Internal Control over Financial Reporting
During the quarter ended June 30, 2026, the Company completed the acquisition of the Tennessee natural gas distribution business of Piedmont Natural Gas Company, Inc. (see Note 2 - Acquisitions). Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company. The Company is in the process of integrating Tennessee natural gas distribution business of Piedmont Natural Gas Company, Inc. and as a result of these integration activities, certain controls will be evaluated and may be changed.
Spire Missouri
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Spire Alabama
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.