ST. LOUIS, Aug. 2, 2017 /PRNewswire/ -- Spire Inc.
(NYSE: SR) today reported operating results for its fiscal 2017
third quarter ended June 30, 2017.
Highlights include:
- Third quarter fiscal 2017 diluted earnings per share of
$0.45, compared to $0.24 in fiscal 2016
- Net economic earnings* per share of $0.44 up from prior year results of $0.33
- As planned, our gas companies are transitioning to Spire in
September
"We delivered strong performance across the company in our third
quarter, reflecting growth of our gas companies serving 1.7 million
customers across Alabama,
Mississippi and Missouri. We are continuing to increase our
investment in both infrastructure upgrades and in technology that
together enhance the service to our customers while keeping costs
low," said Suzanne Sitherwood,
president and chief executive officer of Spire. "At the same time,
we are transitioning all of our gas companies to Spire, as we work
to build a better natural gas company - one that manages costs
efficiently, uses technology to make it easier for our customers to
connect with us, and supports the communities that we serve."
Third Quarter
Results
|
Three months ended
June 30,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
23.3
|
|
|
$
|
18.0
|
|
|
$
|
0.48
|
|
|
$
|
0.41
|
|
|
Gas
Marketing
|
2.3
|
|
|
1.8
|
|
|
0.05
|
|
|
0.04
|
|
|
Other
|
(4.0)
|
|
|
(5.2)
|
|
|
(0.09)
|
|
|
(0.12)
|
|
|
|
Total
|
$
|
21.6
|
|
|
$
|
14.6
|
|
|
$
|
0.44
|
|
|
$
|
0.33
|
|
|
Acquisition-related
costs, pre-tax
|
(1.9)
|
|
|
(1.8)
|
|
|
(0.04)
|
|
|
(0.04)
|
|
|
Fair value
adjustments, pre-tax
|
2.2
|
|
|
(4.5)
|
|
|
0.05
|
|
|
(0.10)
|
|
|
Income tax effect of
adjustments
|
(0.2)
|
|
|
2.4
|
|
|
—
|
|
|
0.06
|
|
|
Increase in
shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01)
|
|
Net
Income
|
$
|
21.7
|
|
|
$
|
10.7
|
|
|
$
|
0.45
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding in Millions
|
|
|
|
|
48.2
|
|
|
44.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
For the three months ended June 30,
2017, the third quarter of our fiscal year, we reported
consolidated net income of $21.7
million (or $0.45 per diluted
share) compared to $10.7 million (or
$0.24 per diluted share) in the prior
year period. Net economic earnings (NEE) for the third quarter of
fiscal 2017 were $21.6 million (or
$0.44 per share), up from
$14.6 million (or $0.33 per share) last year, reflecting higher
earnings in both Gas Utility and Gas Marketing segments as well as
lower corporate costs.
NEE excludes from net income the effect of unrealized gains and
losses on energy-related derivatives. It also excludes the impacts
of acquisition, divestiture and restructuring activities in the
fiscal year in which they occur, including expenses, financing
impacts and operating results in fiscal 2016 associated with the
acquisition of EnergySouth (Mobile Gas and Willmut Gas) as well as
overall integration activities.
Per share results were impacted by an 8 percent increase in
average shares outstanding reflecting equity issuance in
May 2016 and April 2017 in connection with the financing of
the EnergySouth acquisition, and maturity of equity units. See
"Balance Sheet and Cash Flows" later in this release for
details.
Gas Utility
The Gas Utility segment includes the regulated gas distribution
operations of our five gas utilities across Alabama, Mississippi and Missouri. Third quarter net income was
$23.0 million for fiscal 2017, up
from $17.9 million a year ago. NEE
for the segment increased to $23.3
million from $18.0 million in
the prior year, driven by organic growth and higher investments
across our utilities.
Contribution margin increased by $23.7
million with $12.6 million due
to the addition of EnergySouth. Growth in our Missouri and Alabama utilities reflects a $5.0 million lower regulatory adjustment to
revenues for Alagasco, $4.0 million
higher Infrastructure System Replacement Surcharge (ISRS) revenues
for the Missouri Utilities, and modest customer growth.
Operation and maintenance (O&M) expenses of $100.8 million for the quarter were up
$9.0 million, reflecting the addition
of EnergySouth ($7.8 million) and an
increase at the Missouri Utilities partially offset by lower
O&M expenses for Alagasco. Depreciation and amortization
expenses increased by $4.2 million
from last year, with $2.6 million
from the addition of EnergySouth and the remainder reflecting
higher capital investment including infrastructure and technology
upgrades. Those investments and the addition of EnergySouth also
drove taxes other than income ($1.1
million higher) and gross receipts taxes ($2.0 million higher).
Gas Marketing
The Gas Marketing segment includes the results of Spire
Marketing, which provides natural gas marketing and related
services on a non-regulated basis across the country, with a core
operating footprint in the central U.S. For the third quarter of
fiscal 2017, Gas Marketing reported net income of $3.7 million compared to a net loss of
$1.0 million in the prior-year
period. Removing fair value adjustments in both periods, third
quarter NEE was $2.3 million in
fiscal 2017, up from $1.8 million in
the prior year, reflecting increased spreads and asset optimization
in the current-year quarter.
Other
Other non-utility operations and corporate costs were
$5.0 million in the third quarter of
2017 compared to $6.2 million in the
year-ago period. On an NEE basis, third quarter costs were
$4.0 million in 2017, down from
$5.2 million a year ago. Interest
expense associated with acquisition-related debt constitutes a
significant portion of these costs, and for the quarter, higher
interest costs were more than offset by lower income tax
expense.
Year-to-Date
Results
|
Nine Months Ended
June 30,
|
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Economic
Earnings (Loss) by Segment
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
187.3
|
|
|
$
|
170.5
|
|
|
$
|
4.02
|
|
|
$
|
3.91
|
|
Gas
Marketing
|
3.7
|
|
|
4.5
|
|
|
0.08
|
|
|
0.10
|
|
Other
|
(12.9)
|
|
|
(11.8)
|
|
|
(0.28)
|
|
|
(0.27)
|
|
|
|
Total
|
$
|
178.1
|
|
|
$
|
163.2
|
|
|
$
|
3.82
|
|
|
$
|
3.74
|
|
|
Acquisition-related
costs, pre-tax
|
(2.1)
|
|
|
(5.1)
|
|
|
(0.04)
|
|
|
(0.12)
|
|
|
Fair value
adjustments, pre-tax
|
(3.0)
|
|
|
(2.6)
|
|
|
(0.07)
|
|
|
(0.06)
|
|
|
Income tax effect of
adjustments
|
1.9
|
|
|
2.9
|
|
|
0.04
|
|
|
0.07
|
|
|
Increase in
shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.03)
|
Net
Income
|
$
|
174.9
|
|
|
$
|
158.4
|
|
|
$
|
3.75
|
|
|
$
|
3.60
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding in Millions
|
|
|
|
|
46.6
|
|
|
43.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the first nine months of fiscal 2017, we reported
consolidated net income of $174.9
million (or $3.75 per diluted
share) compared to $158.4 million (or
$3.60 per diluted share) for the
prior year. NEE for the nine months ended June 30, 2017 was $178.1
million (or $3.82 per share)
up from $163.2 million (or
$3.74 per share) a year ago. The
increase in earnings reflects higher Gas Utility results driven by
the addition of EnergySouth and overall growth in Missouri and Alabama, partially offset by slightly lower
Gas Marketing earnings and modestly higher corporate costs. Per
share results were impacted by a 6.4 percent increase in shares
outstanding due to the
issuance of shares in May 2016 and April
2017 as noted earlier.
Gas Utility
For the first nine months of fiscal 2017, the Gas Utility
segment reported net income of $187.0
million compared to $169.6
million in the prior year. Segment NEE for the first nine
months was $187.3 million in fiscal
2017, up $16.8 million or 9.9 percent
from a year ago, reflecting the addition of EnergySouth in the
current year, as well as improved results from the Missouri
Utilities and Alagasco despite impacts from milder weather.
Year-to-date segment contribution margin increased by
$73.3 million, including $59.5 million from the addition of EnergySouth.
In addition, the higher contribution margin reflects a $10.8 million increase in ISRS revenues at the
Missouri Utilities and $10.8 million
in lower regulatory adjustments to revenues and higher benefit
sharing under the Cost Containment Mechanism in Alabama. These positive factors were partially
offset by a $10.3 million impact from
lower consumption and demand due to warmer winter temperatures
compared to last year. O&M expenses increased by $20.9 million, reflecting the addition of
EnergySouth ($26.9 million).
Excluding EnergySouth, O&M expenses were lower by $6.0 million largely due to the weather
during the heating season being warmer compared to last year, which
resulted in lower employee-related costs across our other
utilities. Depreciation and amortization rose by $12.5 million with $7.9
million attributable to EnergySouth and the remainder
reflecting increased capital investment at the Missouri Utilities
and Alagasco over the last year.
Gas Marketing
The Gas Marketing segment reported fiscal year-to-date net
income of $1.9 million compared to
net income of $2.8 million a year
ago. Excluding adverse mark-to-market and fair value adjustments,
NEE was $3.7 million, down from
$4.5 million in the prior year. The
earnings decrease reflects a lower contribution margin primarily
due to lower storage optimization.
Other
Other non-utility operations and corporate costs in the first
nine months were $14.0 million in
both fiscal 2017 and 2016. On an NEE basis, year-to-date costs were
$12.9 million up from $11.8 million in the prior-year period. A
significant portion of these costs are related to interest expense
which increased from the prior year principally due to increased
costs on EnergySouth debt.
Balance Sheets and Cash Flows
We continue to maintain a strong capital structure with ample
liquidity. Since the beginning of the calendar year, Spire
completed a series of planned debt and equity transactions tied in large part to the Alagasco
acquisition financing originally raised in 2014, especially the
maturity of $250 million in floating
rate notes and the conversion of $143.8
million in equity units. The net result of those
transactions was to secure a net $142.0
million in equity proceeds and decrease total long-term debt
(including current portions) by $143.8
million. The equity component of our long-term
capitalization was 51.3 percent at June 30,
2017, compared to 49.8 percent at September 30, 2016.
In addition, Laclede Gas has committed to a private placement of
$170 million of first mortgage bonds
that will fund by September 15, 2017,
the proceeds of which are expected to be used to pay down
short-term debt.
As noted earlier in this release, the average number of
outstanding shares for the quarter ended June 30, 2017 has increased to 48.2 million
shares from 44.6 million shares in the prior year. The increase was
primarily due to the following two issuances:
- On April 3, 2017, Spire issued
approximately 2.5 million shares of common stock upon the
conversion of the equity units noted above.
- In May 2016, Spire issued
approximately 2.2 million shares to help fund the acquisition of
EnergySouth.
Short-term borrowings outstanding at June
30, 2017 were $450.7 million
compared to $97.6 million a year ago,
with balances in each period reflecting the timing of capital
raises referenced above. In 2017, short-term balances are
anticipated to decrease with the proceeds of the $170 million Laclede Gas private placement. Prior
year short-term debt balances benefited from approximately
$133 million in equity net proceeds
from the common share issuance related to the EnergySouth
acquisition. Taking into account these two financings, pro forma
short-term debt balances would be approximately $281 million at June 30,
2017 and $231 million a year
earlier, with the year-over-year difference reflecting growth in
our scale and increased investment activity largely in our gas
utilities.
Net cash provided by operating activities was $320.7 million for the nine months ended
June 30, 2017, compared to
$356.9 million for the first nine
months of 2016. The modest decrease is primarily due to changes in
working capital largely driven by the relative weather conditions
and gas prices during the periods.
Capital expenditures for the first nine months of our fiscal
year were $298.6 million in 2017, up
from $195.3 million in the prior year
with approximately $11 million of the
increase driven by the addition of EnergySouth. Capital spend for
the rest of our utilities was up nearly $75
million, or more than 38 percent, reflecting increased
infrastructure upgrades as well as investment to support customer
growth and new business development.
For additional details on Spire's results for the third quarter
and first nine months of fiscal 2017, please see the accompanying
unaudited Condensed Consolidated Statements of Income, unaudited
Condensed Consolidated Balance Sheets, and unaudited Condensed
Consolidated Statements of Cash Flows.
Transitioning our Gas Companies to Spire
Over the last several years, we have grown and transformed
ourselves by executing on our growth strategy including organically
growing our company and by successfully acquiring and integrating
several gas companies. In April 2016,
we changed the name of our parent company to Spire Inc. to better
reflect the company we have become.
As we continue the process of bringing our companies together,
we are also transitioning each of our five gas utilities to Spire.
Communicating this transition to our employees, customers and
communities is already underway, and we expect the transition to be
largely completed by the end of September.
This transition is more than changing a name. It's about
fulfilling our promise to bring people and energy together in ways
that enrich lives and add value for our shareholders. It's about
building a better natural gas company in three important ways:
- Service: Thanks to new technology and options like a
mobile-friendly website, it's easier for customers to get in touch
with us to manage their account on the go.
- Savings: As a bigger company, we can manage costs more
efficiently to keep customer bills low.
- Support: We care about supporting and making a difference in
the communities we serve.
Regulatory Update
Missouri ISRS
On April 26, 2017, the Missouri
Public Service Commission (MoPSC) approved additional ISRS revenue
in the amount of $3 million each for
Laclede Gas and MGE, effective June 1,
2017. The additional amounts bring the annual run rate to
$49 million. ISRS allows for more
timely regulatory recovery of investments made by our Missouri utilities to improve the integrity
and safety of their distribution systems.
Missouri Rate Cases
In April, Laclede Gas and MGE each filed with the MoPSC a
general rate case, requesting proposed rate changes. These requests
were the first to be made by our Missouri utilities in approximately four
years.
Laclede Gas' request represents an incremental rate increase of
$25.5 million, which is net of
$32.6 million that is currently being
recovered through ISRS, and MGE's request represents a $34.0 million incremental increase, net of
$16.4 million in ISRS recovery.
The regulatory process in Missouri provides the MoPSC up to 11 months to
consider these filings, meaning new rates would go into effect by
March 11, 2018. The published
procedural schedule includes a period of discovery, which is
ongoing now, during which we are responding to information requests
from the MoPSC Staff and other parties as they prepare to file
their testimony in September. The schedule also calls for public
hearings in the Fall and formal hearings in December 2017.
Spire STL Pipeline
On January 26, 2017, we filed a
certificate application with the Federal Energy Regulatory
Commission (FERC) seeking approval for our Spire STL Pipeline, a
65-mile natural gas supply pipeline that will enhance reliability
and the diversity of our physical transport portfolio while
providing access to lower-cost shale gas from the
Marcellus/Utica producing regions.
Under the terms of a precedent agreement with Laclede Gas, executed
on January 25, 2017, Laclede Gas will
be a foundation shipper with a contractual commitment of 350 MMcf/d
out of the total capacity of 400 MMcf/d.
On April 21, 2017, we filed an
amended certificate application to adjust the preferred route for
the pipeline to include a new six-mile segment rather than
refurbishment of an existing line. The change offers a number of
benefits including eliminating potential supply disruption risk for
Laclede Gas, eliminating uncertainty regarding upgrade costs and
reducing long-term integrity management costs.
We continue to work through the broader FERC process to secure
approval to construct the project. We have largely completed the
required environmental assessments and we are well underway in
obtaining the required land rights. Preparations for constructing
the project are also well underway. Pipe material has been procured
and construction bids are being evaluated and finalized. Our
schedule reflects an expected fiscal 2019 in-service date, and
based on that schedule, the estimated project cost remains
$190 million-$210 million.
Dividends
The Spire board of directors declared a quarterly common stock
dividend of $0.525 per share, payable
October 3, 2017, to shareholders of
record on September 11, 2017. We have
continuously paid a cash dividend since 1946, with 2017 marking the
14th consecutive year of increasing dividends on an annualized
basis.
Earnings Guidance and Outlook
For fiscal 2017, our NEE guidance range continues to be
$3.50-$3.60 per fully diluted share.
Given our year-to-date results, we believe our full-year earnings
will be in the upper half of that range.
Based on our year-to-date spend, our capital expenditures
forecast for fiscal 2017 remains approximately $445 million, with investment in our gas
utilities of approximately $420
million. Our five-year capital spend outlook for the fiscal
years 2017-2021 remains approximately $2.3
billion, with 86 percent of that spend recovered with
minimal regulatory lag or reflected in earnings.
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss
its fiscal 2017 third quarter financial results. To access the
call, please dial the applicable number approximately 5-10 minutes
prior to the start time.
Date and
Time:
|
Wednesday, August
2
|
|
|
8 a.m. CT (9 a.m.
ET)
|
|
|
|
|
|
Phone
Numbers:
|
U.S. and
Canada:
|
844-824-3832
|
|
|
International:
|
412-317-5142
|
|
The call will also be webcast in a listen-only format for the
media and general public. The webcast can be accessed at
SpireEnergy.com under the Investors tab. A replay of the call will
be available from 10 a.m. CT
(11 a.m. ET) on August 2 to September 2 by dialing 877-344-7529
(U.S.), 855-669-9658 (Canada), or
412-317-0088 (international). The replay access code is 10110718. A
replay of the webcast will be available at SpireEnergy.com.
About Spire
At Spire Inc. (NYSE: SR) we believe energy exists to help make
people's lives better. It's a simple idea, but one that's at the
heart of our company. Every day we serve 1.7 million customers
making us the fifth largest publicly traded natural gas company in
the country. We help families and business owners fuel their daily
lives through our gas utilities serving Alabama, Mississippi and Missouri. Our non-utility operations include
Spire Marketing which provides natural gas marketing and related
services. We are committed to transforming our business and
pursuing growth through 1) growing organically, 2) acquiring and
integrating, 3) investing in infrastructure, and 4) innovation and
technology. Learn more at SpireEnergy.com.
Cautionary Statements on Forward-Looking Information and
Non-GAAP Measures
This news release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Spire's future operating results may be affected by
various uncertainties and risk factors, many of which are beyond
the Company's control, including weather conditions, economic
factors, the competitive environment, governmental and regulatory
policy and action, and risks associated with recent and pending
acquisitions. For a more complete description of these
uncertainties and risk factors, see the Company's Form 10-Q for the
quarter ended June 30, 2017 to be
filed with the Securities and Exchange Commission later today.
This news release includes the non-GAAP financial measures of
"net economic earnings," "net economic earnings per share," and
"contribution margin." Management also uses these non-GAAP measures
internally when evaluating the Company's performance and results of
operations. Net economic earnings exclude from net income the
after-tax impacts of fair value accounting and timing adjustments
associated with energy-related transactions. These adjustments,
which primarily impact the Gas Marketing segment, include net
unrealized gains and losses on energy-related derivatives resulting
from the current changes in the fair value of financial and
physical transactions prior to their completion and settlement,
lower of cost or market inventory adjustments, and realized gains
and losses on economic hedges prior to the sale of the physical
commodity. In calculating net economic earnings, management also
excludes from net income the after-tax impacts related to
acquisition, divestiture, and restructuring activities, including
costs related to acquisitions and integration. Management believes
that excluding these items provides a useful representation of the
economic impact of actual settled transactions and overall results
of ongoing operations. Contribution margin adjusts revenues to
remove the costs that are directly passed on to customers and
collected through revenues, which are the wholesale cost of natural
gas and propane and gross receipts taxes. These internal non-GAAP
operating metrics should not be considered as an alternative to, or
more meaningful than, GAAP measures such as operating income, net
income, or earnings per share.
Investor Contact:
Scott W. Dudley Jr.
314-342-0878
Scott.Dudley@SpireEnergy.com
Media Contact:
Jessica B. Willingham
314-342-3300
Jessica.Willingham@SpireEnergy.com
Condensed
Consolidated Statements of Income - Unaudited
|
|
(In Millions,
except per share amounts)
|
Three months
ended
June 30,
|
|
Nine months
ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
305.1
|
|
|
$
|
253.2
|
|
|
$
|
1,419.1
|
|
|
$
|
1,263.5
|
|
|
Gas Marketing and
other
|
18.4
|
|
|
(3.9)
|
|
|
62.9
|
|
|
(5.5)
|
|
|
Total Operating
Revenues
|
323.5
|
|
|
249.3
|
|
|
1,482.0
|
|
|
1,258.0
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
|
|
|
|
|
|
|
|
Natural and
propane gas
|
76.7
|
|
|
54.1
|
|
|
524.8
|
|
|
463.7
|
|
|
Operation and
maintenance
|
100.8
|
|
|
91.8
|
|
|
298.6
|
|
|
277.7
|
|
|
Depreciation
and amortization
|
38.4
|
|
|
34.2
|
|
|
114.0
|
|
|
101.5
|
|
|
Taxes, other
than income taxes
|
30.5
|
|
|
27.4
|
|
|
112.2
|
|
|
99.5
|
|
|
Total
Gas Utility Operating Expenses
|
246.4
|
|
|
207.5
|
|
|
1,049.6
|
|
|
942.4
|
|
|
Gas Marketing and
other
|
26.8
|
|
|
6.5
|
|
|
112.6
|
|
|
25.6
|
|
|
Total
Operating Expenses
|
273.2
|
|
|
214.0
|
|
|
1,162.2
|
|
|
968.0
|
|
Operating
Income
|
50.3
|
|
|
35.3
|
|
|
319.8
|
|
|
290.0
|
|
Other
Income
|
1.5
|
|
|
1.6
|
|
|
5.6
|
|
|
3.8
|
|
Interest
Charges:
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
19.0
|
|
|
16.6
|
|
|
57.3
|
|
|
50.2
|
|
|
Other interest
charges
|
2.4
|
|
|
2.8
|
|
|
8.9
|
|
|
7.5
|
|
|
Total Interest
Charges
|
21.4
|
|
|
19.4
|
|
|
66.2
|
|
|
57.7
|
|
Income Before Income
Taxes
|
30.4
|
|
|
17.5
|
|
|
259.2
|
|
|
236.1
|
|
Income Tax
Expense
|
8.7
|
|
|
6.8
|
|
|
84.3
|
|
|
77.7
|
|
Net Income
|
$
|
21.7
|
|
|
$
|
10.7
|
|
|
$
|
174.9
|
|
|
$
|
158.4
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
48.1
|
|
|
44.4
|
|
|
46.4
|
|
|
43.6
|
|
|
Diluted
|
48.2
|
|
|
44.6
|
|
|
46.6
|
|
|
43.8
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share of Common Stock
|
$
|
0.45
|
|
|
$
|
0.24
|
|
|
$
|
3.76
|
|
|
$
|
3.62
|
|
Diluted Earnings Per
Share of Common Stock
|
$
|
0.45
|
|
|
$
|
0.24
|
|
|
$
|
3.75
|
|
|
$
|
3.60
|
|
Dividends Declared
Per Share of Common Stock
|
$
|
0.53
|
|
|
$
|
0.49
|
|
|
$
|
1.58
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets - Unaudited
|
|
(In
Millions)
|
June
30,
|
|
September
30,
|
|
June
30,
|
|
2017
|
|
2016
|
|
2016
|
ASSETS
|
|
|
|
|
|
Utility
Plant
|
$
|
5,071.4
|
|
|
$
|
4,793.6
|
|
|
$
|
4,339.5
|
|
Less:
Accumulated depreciation and amortization
|
1,609.6
|
|
|
1,506.4
|
|
|
1,311.5
|
|
Net Utility
Plant
|
3,461.8
|
|
|
3,287.2
|
|
|
3,028.0
|
|
Non-utility
Property
|
39.9
|
|
|
13.7
|
|
|
13.8
|
|
Goodwill
|
1,163.9
|
|
|
1,164.9
|
|
|
946.0
|
|
Other
Investments
|
63.8
|
|
|
62.1
|
|
|
62.4
|
|
Other Property and
Investments
|
1,267.6
|
|
|
1,240.7
|
|
|
1,022.2
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
8.3
|
|
|
5.2
|
|
|
4.9
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
248.2
|
|
|
220.7
|
|
|
195.6
|
|
Delayed customer
billings
|
7.0
|
|
|
1.6
|
|
|
3.5
|
|
Inventories
|
174.8
|
|
|
202.3
|
|
|
143.9
|
|
Other
|
190.8
|
|
|
139.8
|
|
|
105.5
|
|
Total
Current Assets
|
629.1
|
|
|
569.6
|
|
|
453.4
|
|
Regulatory Assets and
Other Deferred Charges
|
939.7
|
|
|
966.9
|
|
|
795.4
|
|
Total
Assets
|
$
|
6,298.2
|
|
|
$
|
6,064.4
|
|
|
$
|
5,299.0
|
|
|
|
|
|
|
|
CAPITALIZATION AND
LIABILITIES
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
Common stock and
paid-in capital
|
$
|
1,371.9
|
|
|
$
|
1,221.5
|
|
|
$
|
1,219.1
|
|
Retained
earnings
|
653.1
|
|
|
550.9
|
|
|
588.6
|
|
Accumulated other
comprehensive income (loss)
|
3.2
|
|
|
(4.2)
|
|
|
(5.3)
|
|
Total
Common Stock Equity
|
2,028.2
|
|
|
1,768.2
|
|
|
1,802.4
|
|
Long-term
debt
|
1,925.3
|
|
|
1,820.7
|
|
|
1,839.8
|
|
Total
Capitalization
|
3,953.5
|
|
|
3,588.9
|
|
|
3,642.2
|
|
Current
Liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
—
|
|
|
250.0
|
|
|
—
|
|
Notes
payable
|
450.7
|
|
|
398.7
|
|
|
97.6
|
|
Accounts
payable
|
206.4
|
|
|
210.9
|
|
|
135.8
|
|
Advance customer
billings
|
15.9
|
|
|
70.2
|
|
|
53.0
|
|
Accrued liabilities
and other
|
236.8
|
|
|
231.5
|
|
|
205.4
|
|
Total
Current Liabilities
|
909.8
|
|
|
1,161.3
|
|
|
491.8
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
|
|
Deferred income
taxes
|
705.3
|
|
|
607.3
|
|
|
574.1
|
|
Pension and
postretirement benefit costs
|
300.4
|
|
|
303.7
|
|
|
246.9
|
|
Asset retirement
obligations
|
214.7
|
|
|
206.4
|
|
|
164.6
|
|
Regulatory
liabilities
|
139.8
|
|
|
130.7
|
|
|
105.7
|
|
Other
|
74.7
|
|
|
66.1
|
|
|
73.7
|
|
Total
Deferred Credits and Other Liabilities
|
1,434.9
|
|
|
1,314.2
|
|
|
1,165.0
|
|
Total Capitalization
and Liabilities
|
$
|
6,298.2
|
|
|
$
|
6,064.4
|
|
|
$
|
5,299.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows - Unaudited
|
|
(In
Millions)
|
Nine months ended
June 30,
|
|
2017
|
|
2016
|
Operating
Activities:
|
|
|
|
Net Income
|
$
|
174.9
|
|
|
$
|
158.4
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, and accretion
|
114.4
|
|
|
102.0
|
|
Deferred income taxes
and investment tax credits
|
84.1
|
|
|
77.7
|
|
Changes in assets and
liabilities
|
(57.2)
|
|
|
18.9
|
|
Other
|
4.5
|
|
|
(0.1)
|
|
Net cash provided by
operating activities
|
320.7
|
|
|
356.9
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(298.6)
|
|
|
(195.3)
|
|
Acquisition
activity
|
3.8
|
|
|
—
|
|
Other
|
1.1
|
|
|
(1.5)
|
|
Net cash used in
investing activities
|
(293.7)
|
|
|
(196.8)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
Repayment of long-term
debt
|
(393.8)
|
|
|
(80.0)
|
|
Issuance of long-term
debt
|
250.0
|
|
|
80.0
|
|
Issuance (repayment)
of short-term debt - net
|
52.0
|
|
|
(240.4)
|
|
Issuance of common
stock
|
146.4
|
|
|
136.1
|
|
Dividends
paid
|
(70.9)
|
|
|
(62.9)
|
|
Other
|
(7.6)
|
|
|
(1.8)
|
|
Net cash used in
financing activities
|
(23.9)
|
|
|
(169.0)
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
3.1
|
|
|
(8.9)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
5.2
|
|
|
13.8
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
8.3
|
|
|
$
|
4.9
|
|
|
|
|
|
Net Economic Earnings
and Reconciliation to GAAP - Quarter
|
|
(In Millions,
except per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per Diluted
Share (2)
|
Three Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
23.0
|
|
|
$
|
3.7
|
|
|
$
|
(5.0)
|
|
|
$
|
21.7
|
|
|
$
|
0.45
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss
(gain) on energy-related derivatives
|
0.1
|
|
|
(2.3)
|
|
|
—
|
|
|
(2.2)
|
|
|
(0.05)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.2
|
|
|
—
|
|
|
1.7
|
|
|
1.9
|
|
|
0.04
|
|
|
|
Income tax effect of
adjustments (1)
|
—
|
|
|
0.9
|
|
|
(0.7)
|
|
|
0.2
|
|
|
—
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
23.3
|
|
|
$
|
2.3
|
|
|
$
|
(4.0)
|
|
|
$
|
21.6
|
|
|
$
|
0.44
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
0.48
|
|
|
$
|
0.08
|
|
|
$
|
(0.11)
|
|
|
$
|
0.45
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
0.48
|
|
|
$
|
0.05
|
|
|
$
|
(0.09)
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
17.9
|
|
|
$
|
(1.0)
|
|
|
$
|
(6.2)
|
|
|
$
|
10.7
|
|
|
$
|
0.24
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
—
|
|
|
4.9
|
|
|
—
|
|
|
4.9
|
|
|
0.11
|
|
|
|
|
Lower of cost or
market inventory adjustments
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.01)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.2
|
|
|
—
|
|
|
1.6
|
|
|
1.8
|
|
|
0.04
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.1)
|
|
|
(1.7)
|
|
|
(0.6)
|
|
|
(2.4)
|
|
|
(0.06)
|
|
|
|
|
Weighted Average
Shares Adjustment (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
18.0
|
|
|
$
|
1.8
|
|
|
$
|
(5.2)
|
|
|
$
|
14.6
|
|
|
$
|
0.33
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
0.40
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.14)
|
|
|
$
|
0.24
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
0.41
|
|
|
$
|
0.04
|
|
|
$
|
(0.12)
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income taxes are
calculated by applying federal, state, and local income tax rates
applicable to ordinary income to the amounts of the pre-tax
reconciling items.
|
|
(2) Fiscal 2016 net
economic earnings per share exclude the impact of the May 2016
equity issuance to fund a portion of the acquisition of Mobile Gas
and Willmut Gas. The weighted average diluted shares used in the
net economic earnings per share calculation for the three months
ended June 30, 2016 was 43.5 million compared to 44.6 million in
the GAAP diluted EPS calculation. Fiscal 2017 net economic earnings
per share is calculated by replacing consolidated net income with
consolidated net economic earnings in the GAAP diluted EPS
calculation.
|
|
Note: EPS amounts by
segment represent contributions to Spire's consolidated
EPS.
|
Net Economic Earnings
and Reconciliation to GAAP - Year-to-Date
|
|
(In Millions,
except per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per Diluted
Share (2)
|
Nine Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
187.0
|
|
|
$
|
1.9
|
|
|
$
|
(14.0)
|
|
|
$
|
174.9
|
|
|
$
|
3.75
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on
energy-related derivatives
|
0.1
|
|
|
3.1
|
|
|
—
|
|
|
3.2
|
|
|
0.07
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.2)
|
|
|
—
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
0.3
|
|
|
—
|
|
|
1.8
|
|
|
2.1
|
|
|
0.04
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.1)
|
|
|
(1.1)
|
|
|
(0.7)
|
|
|
(1.9)
|
|
|
(0.04)
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
187.3
|
|
|
$
|
3.7
|
|
|
$
|
(12.9)
|
|
|
$
|
178.1
|
|
|
$
|
3.82
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
4.01
|
|
|
$
|
0.04
|
|
|
$
|
(0.30)
|
|
|
$
|
3.75
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
4.02
|
|
|
$
|
0.08
|
|
|
$
|
(0.28)
|
|
|
$
|
3.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
(GAAP)
|
$
|
169.6
|
|
|
$
|
2.8
|
|
|
$
|
(14.0)
|
|
|
$
|
158.4
|
|
|
$
|
3.60
|
|
|
|
Adjustments,
pre-tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (gain)
loss on energy-related derivatives
|
(0.1)
|
|
|
3.0
|
|
|
—
|
|
|
2.9
|
|
|
0.07
|
|
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
0.01
|
|
|
|
|
Realized gain on
economic hedges prior to the sale of the physical
commodity
|
—
|
|
|
(0.9)
|
|
|
—
|
|
|
(0.9)
|
|
|
(0.02)
|
|
|
|
|
Acquisition,
divestiture and restructuring activities
|
1.6
|
|
|
—
|
|
|
3.5
|
|
|
5.1
|
|
|
0.12
|
|
|
|
Income tax effect of
adjustments (1)
|
(0.6)
|
|
|
(1.0)
|
|
|
(1.3)
|
|
|
(2.9)
|
|
|
(0.07)
|
|
|
|
Weighted average
shares adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
170.5
|
|
|
$
|
4.5
|
|
|
$
|
(11.8)
|
|
|
$
|
163.2
|
|
|
$
|
3.74
|
|
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.86
|
|
|
$
|
0.06
|
|
|
$
|
(0.32)
|
|
|
$
|
3.60
|
|
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.91
|
|
|
$
|
0.10
|
|
|
$
|
(0.27)
|
|
|
$
|
3.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income taxes are
calculated by applying federal, state, and local income tax rates
applicable to ordinary income to the amounts of the pre-tax
reconciling items.
|
|
(2) Fiscal 2016 net
economic earnings per share exclude the impact of the May 2016
equity issuance to fund a portion of the acquisition of Mobile Gas
and Willmut Gas. The weighted average diluted shares used in the
net economic earnings per share calculation for the nine months
ended June 30, 2016 was 43.5 million compared to 43.8 million in
the GAAP diluted EPS calculation. Fiscal 2017 net economic earnings
per share is calculated by replacing consolidated net income with
consolidated net economic earnings in the GAAP diluted EPS
calculation.
|
|
Note: EPS amounts by
segment represent contributions to Spire's consolidated
EPS.
|
Contribution Margin
and Reconciliation to GAAP
|
|
(In
Millions)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
Three Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
47.1
|
|
|
$
|
5.9
|
|
|
$
|
(2.7)
|
|
|
$
|
—
|
|
|
$
|
50.3
|
|
|
Operation and
maintenance expenses
|
101.9
|
|
|
1.5
|
|
|
4.5
|
|
|
(1.3)
|
|
|
106.6
|
|
|
Depreciation and
amortization
|
38.4
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
38.6
|
|
|
Taxes, other than
income taxes
|
30.5
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
30.7
|
|
|
Less: Gross receipts
tax expense
|
(17.3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.3)
|
|
|
Contribution
Margin (Non-GAAP)
|
200.6
|
|
|
7.6
|
|
|
2.0
|
|
|
(1.3)
|
|
|
208.9
|
|
|
Natural and propane
gas costs
|
88.7
|
|
|
10.3
|
|
|
0.1
|
|
|
(1.8)
|
|
|
97.3
|
|
|
Gross receipts tax
expense
|
17.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.3
|
|
|
Operating
Revenues
|
$
|
306.6
|
|
|
$
|
17.9
|
|
|
$
|
2.1
|
|
|
$
|
(3.1)
|
|
|
$
|
323.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
38.7
|
|
|
$
|
(1.6)
|
|
|
$
|
(1.8)
|
|
|
$
|
—
|
|
|
$
|
35.3
|
|
|
Operation and
maintenance expenses
|
91.9
|
|
|
1.1
|
|
|
2.6
|
|
|
(0.3)
|
|
|
95.3
|
|
|
Depreciation and
amortization
|
34.2
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
34.4
|
|
|
Taxes, other than
income taxes
|
27.4
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
27.6
|
|
|
Less: Gross receipts
tax expense
|
(15.3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.3)
|
|
|
Contribution
Margin (Non-GAAP)
|
176.9
|
|
|
(0.2)
|
|
|
0.9
|
|
|
(0.3)
|
|
|
177.3
|
|
|
Natural and propane
gas costs
|
61.1
|
|
|
2.5
|
|
|
—
|
|
|
(6.9)
|
|
|
56.7
|
|
|
Gross receipts tax
expense
|
15.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.3
|
|
|
Operating
Revenues
|
$
|
253.3
|
|
|
$
|
2.3
|
|
|
$
|
0.9
|
|
|
$
|
(7.2)
|
|
|
$
|
249.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
320.3
|
|
|
$
|
2.9
|
|
|
$
|
(3.4)
|
|
|
$
|
—
|
|
|
$
|
319.8
|
|
|
Operation and
maintenance expenses
|
301.7
|
|
|
4.4
|
|
|
8.4
|
|
|
(3.9)
|
|
|
310.6
|
|
|
Depreciation and
amortization
|
114.0
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
114.4
|
|
|
Taxes, other than
income taxes
|
112.2
|
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
112.7
|
|
|
Less: Gross receipts
tax expense
|
(70.4)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(70.5)
|
|
|
Contribution
Margin (Non-GAAP)
|
777.8
|
|
|
7.6
|
|
|
5.5
|
|
|
(3.9)
|
|
|
787.0
|
|
|
Natural and propane
gas costs
|
578.8
|
|
|
54.1
|
|
|
0.2
|
|
|
(8.6)
|
|
|
624.5
|
|
|
Gross receipts tax
expense
|
70.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
70.5
|
|
|
Operating
Revenues
|
$
|
1,427.0
|
|
|
$
|
61.8
|
|
|
$
|
5.7
|
|
|
$
|
(12.5)
|
|
|
$
|
1,482.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) (GAAP)
|
$
|
290.1
|
|
|
$
|
4.7
|
|
|
$
|
(4.8)
|
|
|
$
|
—
|
|
|
$
|
290.0
|
|
|
Operation and
maintenance expenses
|
278.4
|
|
|
4.1
|
|
|
7.1
|
|
|
(0.9)
|
|
|
288.7
|
|
|
Depreciation and
amortization
|
101.5
|
|
|
0.1
|
|
|
0.4
|
|
|
—
|
|
|
102.0
|
|
|
Taxes, other than
income taxes
|
99.5
|
|
|
0.3
|
|
|
(0.1)
|
|
|
—
|
|
|
99.7
|
|
|
Less: Gross receipts
tax expense
|
(65.0)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
(65.1)
|
|
|
Contribution
Margin (Non-GAAP)
|
704.5
|
|
|
9.1
|
|
|
2.6
|
|
|
(0.9)
|
|
|
715.3
|
|
|
Natural and propane
gas costs
|
496.0
|
|
|
13.9
|
|
|
—
|
|
|
(32.3)
|
|
|
477.6
|
|
|
Gross receipts tax
expense
|
65.0
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
65.1
|
|
|
Operating
Revenues
|
$
|
1,265.5
|
|
|
$
|
23.1
|
|
|
$
|
2.6
|
|
|
$
|
(33.2)
|
|
|
$
|
1,258.0
|
|
View original
content:http://www.prnewswire.com/news-releases/spire-reports-third-quarter-results-300497993.html
SOURCE Spire Inc.