SPIRE INC [SR] Filings

10-Q 1 sr-10q_20220331.htm 10-Q sr-10q_20220331.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 March 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 ☐

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 May 1, 2022, was as follows:

Spire Inc.	Common Stock, par value $1.00 per share	52,121,977
Spire Missouri Inc.	Common Stock, par value $1.00 per share (all owned by Spire Inc.)	24,929
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.

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	31
		Note 6. Fair Value of Financial Instruments	33
		Note 7. Fair Value Measurements	34
		Note 8. Pension Plans and Other Postretirement Benefits	37
		Note 9. Information by Operating Segment	40
		Note 10. Commitments and Contingencies	42
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		45
Item 3	Quantitative and Qualitative Disclosures About Market Risk		63
Item 4	Controls and Procedures		63

PART II. OTHER INFORMATION
Item 1	Legal Proceedings		64
Item 1A	Risk Factors		64
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		64
Item 3	Defaults upon Senior Securities		64
Item 4	Mine Safety Disclosures		64
Item 5	Other Information		64
Item 6	Exhibits		65

SIGNATURES			66

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
MoPSC	Missouri Public Service Commission	Spire Storage	The physical natural gas storage operations of Spire Storage West LLC
MSPSC	Mississippi Public Service Commission	U.S.	United States
O&M	Operation and maintenance expense	Utilities	Spire Missouri, Spire Alabama and the subsidiaries of Spire EnergySouth

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, 2021.

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.

Item 1. Financial Statements

SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended March 31,					Six Months Ended March 31,
(In millions, except per share amounts)	2022			2021		2022		2021
Operating Revenues	$	880.9		$	1,104.9	$	1,436.3	$	1,617.5
Operating Expenses:
Natural gas		392.0			619.1		641.2		800.3
Operation and maintenance		113.2			119.0		229.6		230.6
Depreciation and amortization		58.9			51.5		115.8		102.3
Taxes, other than income taxes		71.6			57.9		109.2		94.0
Total Operating Expenses		635.7			847.5		1,095.8		1,227.2
Operating Income		245.2			257.4		340.5		390.3
Interest Expense, Net		27.5			25.8		56.1		51.5
Other (Expense) Income, Net		(3.4	)		1.8		4.0		6.1
Income Before Income Taxes		214.3			233.4		288.4		344.9
Income Tax Expense		40.7			46.0		59.1		68.6
Net Income		173.6			187.4		229.3		276.3
Provision for preferred dividends		3.7			3.7		7.4		7.4
Income allocated to participating securities		0.2			0.3		0.3		0.4
Net Income Available to Common Shareholders	$	169.7		$	183.4	$	221.6	$	268.5

Weighted Average Number of Common Shares Outstanding:
Basic		51.8			51.6		51.7		51.6
Diluted		51.9			51.7		51.8		51.7
Basic Earnings Per Common Share	$	3.27		$	3.56	$	4.28	$	5.21
Diluted Earnings Per Common Share	$	3.27		$	3.55	$	4.28	$	5.20

See the accompanying Notes to Financial Statements.

SPIRE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended March 31,						Six Months Ended March 31,
(In millions)	2022			2021			2022			2021
Net Income	$	173.6		$	187.4		$	229.3		$	276.3
Other Comprehensive Income, Before Tax:
Cash flow hedging derivative instruments:
Net hedging gain arising during the period		18.7			43.5			13.9			60.7
Amounts reclassified into net income		(0.4	)		(0.4	)		(0.7	)		(0.7	)
Net gain on cash flow hedging derivative instruments		18.3			43.1			13.2			60.0
Net gain on defined benefit pension and other postretirement plans		0.1			0.2			0.2			0.2
Net unrealized loss on available for sale securities		(0.1	)		(0.1	)		(0.2	)		(0.1	)
Other Comprehensive Income, Before Tax		18.3			43.2			13.2			60.1
Income Tax Expense Related to Items of Other Comprehensive Income		4.3			9.8			3.1			13.6
Other Comprehensive Income, Net of Tax		14.0			33.4			10.1			46.5
Comprehensive Income	$	187.6		$	220.8		$	239.4		$	322.8

See the accompanying Notes to Financial Statements.

SPIRE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31,			September 30,			March 31,
(Dollars in millions, except per share amounts)	2022			2021			2021
ASSETS
Utility Plant	$	7,443.7		$	7,225.0		$	6,974.3
Less: Accumulated depreciation and amortization		2,241.9			2,169.3			2,145.1
Net Utility Plant		5,201.8			5,055.7			4,829.2
Non-utility Property (net of accumulated depreciation and amortization of $41.3, $32.1 and $25.4 at March 31, 2022, September 30, 2021, and March 31, 2021, respectively)		475.8			471.1			457.0
Other Investments		89.0			83.1			76.4
Total Other Property and Investments		564.8			554.2			533.4
Current Assets:
Cash and cash equivalents		8.3			4.3			104.0
Accounts receivable:
Utility		389.2			338.4			447.7
Other		245.4			288.2			182.3
Allowance for credit losses		(35.1	)		(30.3	)		(34.4	)
Delayed customer billings		54.7			9.2			20.7
Inventories:
Natural gas		125.0			267.7			143.0
Propane gas		8.6			8.7			8.7
Materials and supplies		34.7			28.6			28.3
Regulatory assets		164.0			306.5			60.4
Prepayments		26.6			29.0			29.4
Other		67.9			66.2			49.9
Total Current Assets		1,089.3			1,316.5			1,040.0
Deferred Charges and Other Assets:
Goodwill		1,171.6			1,171.6

SPIRE INC [SR] Filings
SPIRE INC [SRCU] Filings
SPIRE INC [SR-PA] Filings
10-Q	[2022-05-06]
10-Q	[2022-02-02]
10-K	[2021-11-22]
10-Q	[2021-08-05]
10-Q	[2021-05-07]
10-Q	[2021-02-04]
10-K	[2020-11-18]
10-Q	[2020-08-05]
10-Q	[2020-05-08]
10-Q	[2020-02-05]
10-K	[2019-11-26]
10-Q	[2019-07-30]
10-Q	[2019-05-01]
10-Q	[2019-02-06]
10-K	[2018-11-15]
10-Q	[2018-08-03]
10-Q	[2018-05-02]
10-Q	[2018-02-01]
10-K	[2017-11-15]
10-Q	[2017-08-02]
10-Q	[2017-05-03]
10-Q	[2017-02-01]
10-K	[2016-11-15]
10-Q	[2016-08-03]
10-Q	[2016-05-04]
10-Q	[2016-02-03]
10-K	[2015-11-24]
10-Q	[2015-08-05]
10-Q	[2015-05-06]
10-Q	[2015-02-04]
10-K	[2014-11-25]
10-Q	[2014-08-07]
10-Q	[2014-04-29]
10-Q	[2014-02-04]
10-K	[2013-11-26]
10-Q	[2013-07-30]
10-Q	[2013-04-30]
10-Q	[2013-02-05]
10-K	[2012-11-19]
10-Q	[2012-07-27]
10-Q	[2012-04-27]
10-Q	[2012-01-27]

SPIRE INC [SR] Filings

SPIRE INC [SRCU] Filings

SPIRE INC [SR-PA] Filings