spre20221231

spre20221231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number	Name of Registrant, Address of Principal Executive Offices and Telephone Number	State of Incorporation	I.R.S. Employer Identification Number

1-16681	Spire Inc. 700 Market Street St. Louis, MO 63101 314-342-0500	Missouri	74-2976504

1-1822	Spire Missouri Inc. 700 Market Street St. Louis, MO 63101 314-342-0500	Missouri	43-0368139

2-38960	Spire Alabama Inc. 605 Richard Arrington Blvd N Birmingham, AL 35203 205-326-8100	Alabama	63-0022000

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (only applicable for Spire Inc.):

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock $1.00 par value	SR	New York Stock Exchange LLC

Depositary Shares, each representing a 1/1,000^th interest in a share of 5.90% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $25.00 per share	SR.PRA	New York Stock Exchange LLC

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such report) and (2) has been subject to such filing requirements for the past 90 days.

Spire Inc.	Yes ☒	No ☐
Spire Missouri Inc.	Yes ☒	No ☐
Spire Alabama Inc.	Yes ☒	No ☐

Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Spire Inc.	Yes ☒	No ☐
Spire Missouri Inc.	Yes ☒	No ☐
Spire Alabama Inc.	Yes ☒	No ☐

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Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	Accelerated filer	Non- accelerated filer	Smaller reporting company	Emerging growth company
Spire Inc.	X
Spire Missouri Inc.			X
Spire Alabama Inc.			X

If an emerging growth company, indicate by check mark if each registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Spire Inc.		☐
Spire Missouri Inc.		☐
Spire Alabama Inc.		☐

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Spire Inc.	Yes ☐	No ☒
Spire Missouri Inc.	Yes ☐	No ☒
Spire Alabama Inc.	Yes ☐	No ☒

The number of shares outstanding of each registrant’s common stock as of January 27, 2023, was as follows:

Spire Inc.	Common Stock, par value $1.00 per share	52,546,143
Spire Missouri Inc.	Common Stock, par value $1.00 per share (all owned by Spire Inc.)	25,325
Spire Alabama Inc.	Common Stock, par value $0.01 per share (all owned by Spire Inc.)	1,972,052

Spire Missouri Inc. and Spire Alabama Inc. meet the conditions set forth in General Instructions H(1)(a) and (b) to Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instructions H(2) to Form 10-Q.

This combined Form 10-Q represents separate filings by Spire Inc., Spire Missouri Inc., and Spire Alabama Inc. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants, except that information relating to Spire Missouri Inc. and Spire Alabama Inc. are also attributed to Spire Inc.

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TABLE OF CONTENTS

		Page No.

GLOSSARY		2

PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Spire Inc.
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Shareholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Spire Missouri Inc.
	Condensed Statements of Comprehensive Income	11
	Condensed Balance Sheets	12
	Condensed Statements of Shareholder’s Equity	14
	Condensed Statements of Cash Flows	15
	Spire Alabama Inc.
	Condensed Statements of Income	16
	Condensed Balance Sheets	17
	Condensed Statements of Shareholder’s Equity	19
	Condensed Statements of Cash Flows	20
	Notes to Financial Statements
	Note 1. Summary of Significant Accounting Policies	21
	Note 2. Revenue	24
	Note 3. Earnings Per Common Share	25
	Note 4. Regulatory Matters	26
	Note 5. Financing	32
	Note 6. Fair Value of Financial Instruments	33
	Note 7. Fair Value Measurements	35
	Note 8. Pension Plans and Other Postretirement Benefits	38
	Note 9. Information by Operating Segment	41
	Note 10. Commitments and Contingencies	43
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4	Controls and Procedures	59

PART II. OTHER INFORMATION
Item 1	Legal Proceedings	60
Item 1A	Risk Factors	60
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3	Defaults upon Senior Securities	60
Item 4	Mine Safety Disclosures	60
Item 5	Other Information	61
Item 6	Exhibits	62

SIGNATURES		63

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GLOSSARY OF KEY TERMS AND ABBREVIATIONS

APSC	Alabama Public Service Commission	PGA	Purchased Gas Adjustment

ASC	Accounting Standards Codification	RSE	Rate Stabilization and Equalization

Company	Spire and its subsidiaries unless the context suggests otherwise	SEC	U.S. Securities and Exchange Commission

Degree days	The average of a day’s high and low temperature below 65, subtracted from 65, multiplied by the number of days impacted	Spire	Spire Inc.

FASB	Financial Accounting Standards Board	Spire Alabama	Spire Alabama Inc.

FERC	Federal Energy Regulatory Commission	Spire EnergySouth	Spire EnergySouth Inc., the parent of Spire Gulf and Spire Mississippi

GAAP	Accounting principles generally accepted in the United States of America	Spire Gulf	Spire Gulf Inc.

Gas Marketing	Segment including Spire Marketing, which provides natural gas marketing services	Spire Marketing	Spire Marketing Inc.

Gas Utility	Segment including the operations of the Utilities	Spire Mississippi	Spire Mississippi Inc.

GSA	Gas Supply Adjustment	Spire Missouri	Spire Missouri Inc.

ISRS	Infrastructure System Replacement Surcharge	Spire STL Pipeline	Spire STL Pipeline LLC, or the 65-mile FERC-regulated pipeline it constructed and operates to deliver natural gas into eastern Missouri

Midstream	Segment including Spire Storage and Spire STL Pipeline	Spire Storage	The physical natural gas storage operations of Spire Storage West LLC

MoPSC	Missouri Public Service Commission	U.S.	United States

MSPSC	Mississippi Public Service Commission	Utilities	Spire Missouri, Spire Alabama and the subsidiaries of Spire EnergySouth

O&M	Operation and maintenance expense

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PART I. FINANCIAL INFORMATION

The interim financial statements included herein have been prepared by three separate registrants — Spire Inc. (“Spire” or the “Company”), Spire Missouri Inc. (“Spire Missouri”) and Spire Alabama Inc. (“Spire Alabama”) — without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). These financial statements should be read in conjunction with the financial statements and the notes thereto included in the registrants’ combined Form 10-K for the fiscal year ended September 30, 2022.

The Financial Information in this Part I includes separate financial statements (i.e., statements of income and comprehensive income, balance sheets, statements of shareholders’ equity and statements of cash flows) for Spire, Spire Missouri and Spire Alabama. The Notes to Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations are also included and presented herein on a combined basis for Spire, Spire Missouri and Spire Alabama.

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Item 1. Financial Statements

SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	*Three Months Ended December 31,*
(In millions, except per share amounts)	*2022*		*2021*
Operating Revenues	$	814.0	$	555.4
Operating Expenses:
Natural gas		419.2		249.2
Operation and maintenance		132.1		116.4
Depreciation and amortization		62.1		56.9
Taxes, other than income taxes		50.4		37.6
Total Operating Expenses		663.8		460.1
Operating Income		150.2		95.3
Interest Expense, Net		43.6		28.6
Other Income, Net		6.0		7.4
Income Before Income Taxes		112.6		74.1
Income Tax Expense		21.6		18.4
Net Income		91.0		55.7
Provision for preferred dividends		3.7		3.7
Income allocated to participating securities		0.1		0.1
Net Income Available to Common Shareholders	$	87.2	$	51.9

Weighted Average Number of Common Shares Outstanding:
Basic		52.4		51.6
Diluted		52.6		51.7
Basic Earnings Per Common Share	$	1.66	$	1.01
Diluted Earnings Per Common Share	$	1.66	$	1.01

See the accompanying Notes to Financial Statements.

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SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	*Three Months Ended December 31,*
(In millions)	*2022*			*2021*
Net Income	$	91.0		$	55.7
Other Comprehensive Loss, Before Tax:
Cash flow hedging derivative instruments:
Net hedging loss arising during the period		(3.0	)		(4.8	)
Amounts reclassified into net income		(0.3	)		(0.3	)
Net loss on cash flow hedging derivative instruments		(3.3	)		(5.1	)
Net gain on defined benefit pension and other postretirement plans		0.1			0.1
Net unrealized loss on available for sale securities		—			(0.1	)
Other Comprehensive Loss, Before Tax		(3.2	)		(5.1	)
Income Tax Benefit Related to Items of Other Comprehensive Loss		(0.8	)		(1.2	)
Other Comprehensive Loss, Net of Tax		(2.4	)		(3.9	)
Comprehensive Income	$	88.6		$	51.8

See the accompanying Notes to Financial Statements.

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SPIRE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	*December 31,*			*September 30,*			*December 31,*
(Dollars in millions, except per share amounts)	*2022*			*2022*			*2021*
ASSETS
Utility Plant	$	7,769.4		$	7,664.9		$	7,329.2
Less: Accumulated depreciation and amortization		2,326.5			2,294.5			2,204.4
Net Utility Plant		5,442.9			5,370.4			5,124.8
Non-utility Property (net of accumulated depreciation and amortization of $55.6, $50.7 and $36.7 at December 31, 2022, September 30, 2022, and December 31, 2021, respectively)		508.9			491.4			474.2
Other Investments		93.5			87.8			90.4
Total Other Property and Investments		602.4			579.2			564.6
Current Assets:
Cash and cash equivalents		4.8			6.5			8.2
Accounts receivable:
Utility		479.4			210.8			476.2
Other		334.7			443.8			304.2
Allowance for credit losses		(34.5	)		(31.9	)		(31.4	)
Delayed customer billings		26.7			21.3			11.4
Inventories:
Natural gas		320.0			371.8			284.8
Propane gas		8.6			8.6			8.7
Materials and supplies		44.1			41.9			32.1
Regulatory assets		269.1			355.4			265.7
Prepayments		31.6			41.1			25.5
Other		145.2			122.7			49.9
Total Current Assets		1,629.7			1,592.0			1,435.3
Deferred Charges and Other Assets:
Goodwill		1,171.6			1,171.6			1,171.6
Regulatory assets		1,220.7			1,112.4			1,089.9
Other		260.4			258.1			264.3
Total Deferred Charges and Other Assets		2,652.7			2,542.1			2,525.8
Total Assets	$	10,327.7		$	10,083.7		$	9,650.5

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SPIRE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(UNAUDITED)

	*December 31,*		*September 30,*		*December 31,*
	*2022*		*2022*		*2021*
CAPITALIZATION AND LIABILITIES
Capitalization:
Preferred stock ($25.00 par value per share; 10.0 million depositary shares authorized, issued and outstanding at December 31, 2022, September 30, 2022, and December 31, 2021)	$	242.0	$	242.0	$	242.0
Common stock (par value $1.00 per share; 70.0 million shares authorized; 52.5 million, 52.5 million, and 51.7 million shares issued and outstanding at December 31, 2022, September 30, 2022, and December 31, 2021, respectively)		52.5		52.5		51.7
Paid-in capital		1,571.8		1,571.3		1,516.9
Retained earnings		953.0		905.5		859.5
Accumulated other comprehensive income (loss)		44.8		47.2		(0.3	)
Total Shareholders' Equity		2,864.1		2,818.5		2,669.8
Temporary equity		16.2		13.1		9.8
Long-term debt (less current portion)		3,156.3		2,958.5		3,206.8
Total Capitalization		6,036.6		5,790.1		5,886.4
Current Liabilities:
Current portion of long-term debt		256.6		281.2		31.2
Notes payable		1,227.0		1,037.5		846.0
Accounts payable		506.8		617.4		427.5
Advance customer billings		16.9		18.7		31.3
Wages and compensation accrued		30.6		50.2		29.9
Customer deposits		28.8		28.2		29.4
Taxes accrued		57.6		90.1		47.2
Regulatory liabilities		3.7		3.7		4.1
Other		276.7		226.6		274.1
Total Current Liabilities		2,404.7		2,353.6		1,720.7
Deferred Credits and Other Liabilities:
Deferred income taxes		699.4		675.1		615.6
Pension and postretirement benefit costs		159.3		163.0		222.5
Asset retirement obligations		526.2		520.9		524.8
Regulatory liabilities		344.9		418.2		531.8
Other		156.6		162.8		148.7
Total Deferred Credits and Other Liabilities		1,886.4		1,940.0		2,043.4
Commitments and Contingencies (Note 10)
Total Capitalization and Liabilities	$	10,327.7	$	10,083.7	$	9,650.5

See the accompanying Notes to Financial Statements.

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SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

	*Common Stock*					*Preferred*		*Paid-in*			*Retained*
(Dollars in millions)	*Shares*			*Par*		*Stock*		*Capital*			*Earnings*			AOCI*			*Total*
Three Months Ended December 31, 2022:
Balance at September 30, 2022		52,494,543		$	52.5	$	242.0	$	1,571.3		$	905.5		$	47.2		$	2,818.5
Net income		—			—		—		—			91.0			—			91.0
Dividend reinvestment plan		5,700			—		—		0.4			—			—			0.4
Stock-based compensation costs		—			—		—		1.4			—			—			1.4
Stock issued under stock-based compensation plans		58,678			—		—		—			—			—			—
Employees’ tax withholding for stock-based compensation		(17,225	)		—		—		(1.3	)		—			—			(1.3	)
Temporary equity adjustment to redemption value		—			—		—		—			(1.7	)		—			(1.7	)
Dividends declared:
Common stock ($0.72 per share)		—			—		—		—			(38.1	)		—			(38.1	)
Preferred stock ($0.36875 per depositary share)		—			—		—		—			(3.7	)		—			(3.7	)
Other comprehensive loss, net of tax		—			—		—		—			—			(2.4	)		(2.4	)
Balance at December 31, 2022		52,541,696		$	52.5	$	242.0	$	1,571.8		$	953.0		$	44.8		$	2,864.1

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SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)

(UNAUDITED)

	*Common Stock*					*Preferred*		*Paid-in*			*Retained*
	*Shares*			*Par*		*Stock*		*Capital*			*Earnings*			AOCI*			*Total*
Three Months Ended December 31, 2021:
Balance at September 30, 2021		51,684,883			51.7		242.0		1,517.9			843.0			3.6			2,658.2
Net income		—			—		—		—			55.7			—			55.7
Dividend reinvestment plan		6,233			—		—		0.4			—			—			0.4
Stock-based compensation costs		—			—		—		0.3			—			—			0.3
Stock issued under stock-based compensation plans		77,976			—		—		—			—			—			—
Employees’ tax withholding for stock-based compensation		(26,611	)		—		—		(1.7	)		—			—			(1.7	)
Temporary equity adjustment to redemption value		—			—		—		—			0.1			—			0.1
Dividends declared:
Common stock ($0.685 per share)		—			—		—		—			(35.6	)		—			(35.6	)
Preferred stock ($0.36875 per depositary share)		—			—		—		—			(3.7	)		—			(3.7	)
Other comprehensive loss, net of tax		—			—		—		—			—			(3.9	)		(3.9	)
Balance at December 31, 2021		51,742,481		$	51.7	$	242.0	$	1,516.9		$	859.5		$	(0.3	)	$	2,669.8

* Accumulated other comprehensive income (loss)

See the accompanying Notes to Financial Statements.

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SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	*Three Months Ended December 31,*
(In millions)	*2022*			*2021*
Operating Activities:
Net Income	$	91.0		$	55.7
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		62.1			56.9
Deferred income taxes and investment tax credits		21.6			18.4
Changes in assets and liabilities:
Accounts receivable		(156.9	)		(152.8	)
Inventories		49.7			(20.5	)
Regulatory assets and liabilities		(90.1	)		(187.3	)
Accounts payable		(96.7	)		42.9
Delayed/advance customer billings, net		(7.2	)		(2.9	)
Taxes accrued		(32.1	)		(31.4	)
Other assets and liabilities		(15.6	)		(9.6	)
Other		3.4			0.7
Net cash used in operating activities		(170.8	)		(229.9	)
Investing Activities:
Capital expenditures		(154.8	)		(145.7	)
Other		3.1			2.6
Net cash used in investing activities		(151.7	)		(143.1	)
Financing Activities:
Issuance of long-term debt		205.0			300.0
Repayment of long-term debt		(31.2	)		(55.8	)
Issuance of short-term debt, net		189.5			174.0
Issuance of common stock		0.4			0.4
Dividends paid on common stock		(36.3	)		(34.6	)
Dividends paid on preferred stock		(3.7	)		(3.7	)
Other		(2.7	)		(3.4	)
Net cash provided by financing activities		321.0			376.9
Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash		(1.5	)		3.9
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		20.5			11.3
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	19.0		$	15.2

Supplemental disclosure of cash paid for:
Interest, net of amounts capitalized	$	(36.9	)	$	(23.3	)
Income taxes		(0.3	)		(0.2	)

See the accompanying Notes to Financial Statements.

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SPIRE MISSOURI INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	*Three Months Ended December 31,*
(In millions)	*2022*		*2021*
Operating Revenues	$	541.2	$	347.9
Operating Expenses:
Natural gas		316.7		156.3
Operation and maintenance		77.1		66.3
Depreciation and amortization		38.6		34.2
Taxes, other than income taxes		36.4		25.7
Total Operating Expenses		468.8		282.5
Operating Income		72.4		65.4
Interest Expense, Net		22.0		14.5
Other Income, Net		5.0		5.9
Income Before Income Taxes		55.4		56.8
Income Tax Expense		8.1		11.5
Net Income		47.3		45.3
Other Comprehensive Income, Net of Tax		0.1		0.1
Comprehensive Income	$	47.4	$	45.4

See the accompanying Notes to Financial Statements.

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SPIRE MISSOURI INC.

CONDENSED BALANCE SHEETS

(UNAUDITED)

	*December 31,*			*September 30,*			*December 31,*
(Dollars in millions, except per share amounts)	*2022*			*2022*			*2021*
ASSETS
Utility Plant	$	4,632.6		$	4,550.4		$	4,347.8
Less: Accumulated depreciation and amortization		1,003.4			982.1			927.4
Net Utility Plant		3,629.2			3,568.3			3,420.4
Other Property and Investments		66.5			58.9			68.9
Current Assets:
Accounts receivable:
Utility		357.2			131.5			377.4
Associated companies		5.8			3.7			3.7
Other		28.6			44.5			36.3
Allowance for credit losses		(28.2	)		(24.9	)		(23.8	)
Delayed customer billings		21.5			16.1			4.7
Inventories:
Natural gas		189.9			215.3			186.6
Propane gas		8.6			8.6			8.7
Materials and supplies		23.0			22.0			16.2
Regulatory assets		191.2			288.1			236.9
Prepayments		15.8			23.3			18.4
Total Current Assets		813.4			728.2			865.1
Deferred Charges and Other Assets:
Goodwill		210.2			210.2			210.2
Regulatory assets		634.7			547.6			560.5
Other		106.0			105.0			126.2
Total Deferred Charges and Other Assets		950.9			862.8			896.9
Total Assets	$	5,460.0		$	5,218.2		$	5,251.3

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SPIRE MISSOURI INC.

CONDENSED BALANCE SHEETS (Continued)

(UNAUDITED)

	*December 31,*			*September 30,*			*December 31,*
	*2022*			*2022*			*2021*
CAPITALIZATION AND LIABILITIES
Capitalization:
Paid-in capital and common stock (par value $1.00 per share; 50.0 million shares authorized; 25,325, 25,325, and 24,577 shares issued and outstanding at December 31, 2022, September 30, 2022, and December 31, 2021, respectively)	$	816.2		$	816.2		$	765.1
Retained earnings		979.2			931.9			862.3
Accumulated other comprehensive loss		(2.6	)		(2.7	)		(4.1	)
Total Shareholder's Equity		1,792.8			1,745.4			1,623.3
Long-term debt (less current portion)		1,388.1			1,387.7			1,637.0
Total Capitalization		3,180.9			3,133.1			3,260.3
Current Liabilities:
Current portion of long-term debt		250.0			250.0			—
Notes payable		—			—			250.0
Notes payable – associated companies		651.2			445.3			180.4
Accounts payable		166.6			119.0			117.0
Accounts payable – associated companies		20.1			13.3			11.6
Advance customer billings		5.3			7.0			20.0
Wages and compensation accrued		21.5			33.8			21.0
Customer deposits		6.3			6.5			8.0
Taxes accrued		24.3			50.4			15.4
Regulatory liabilities		—			—			0.2
Other		92.9			45.6			89.2
Total Current Liabilities		1,238.2			970.9			712.8
Deferred Credits and Other Liabilities:
Deferred income taxes		512.4			500.1			477.5
Pension and postretirement benefit costs		101.9			115.5			147.9
Asset retirement obligations		111.7			110.6			144.8
Regulatory liabilities		259.0			331.8			447.2
Other		55.9			56.2			60.8
Total Deferred Credits and Other Liabilities		1,040.9			1,114.2			1,278.2
Commitments and Contingencies (Note 10)
Total Capitalization and Liabilities	$	5,460.0		$	5,218.2		$	5,251.3

See the accompanying Notes to Financial Statements.

Table of Contents

SPIRE MISSOURI INC.

CONDENSED STATEMENTS OF SHAREHOLDER’S EQUITY

(UNAUDITED)

Common Stock

Paid-in

Retained

(Dollars in millions)

Shares

Par

Capital

Earnings

AOCI*