Spire Reports FY23 First Quarter Results
Spire Inc. (NYSE: SR) reported strong first-quarter results for fiscal 2023, with net income increasing to $91.0 million ($1.66 per diluted share) from $55.7 million ($1.01 per share) a year prior. Net economic earnings rose to $85.1 million ($1.55 per share), driven by robust performance in its Gas Marketing segment. The company raised its fiscal 2023 earnings guidance by $0.10 to $4.15–$4.35 per share. While the Gas Utility segment faced a decline in net economic earnings due to regulatory timing and higher costs, overall capital expenditures grew slightly to $154.8 million. The board declared a quarterly dividend of $0.72 per share, marking 20 years of consecutive annual increases.
- Net income improved to $91.0 million ($1.66 per share) from $55.7 million ($1.01 per share) year-over-year.
- Net economic earnings increased to $85.1 million ($1.55 per share), up from $62.6 million ($1.14 per share).
- Fiscal 2023 net economic earnings guidance raised to $4.15–$4.35 per share, up by $0.10.
- Capital expenditures for Q1 slightly increased to $154.8 million from $145.7 million.
- Board declared a quarterly dividend of $0.72 per share, continuing a 20-year streak of annual increases.
- Gas Utility segment reported a decline in net economic earnings to $62.9 million, down from $67.2 million due to higher costs and regulatory timing.
- Operation and maintenance expenses rose by $12.6 million, reflecting increased general overhead and bad debt expenses.
ST. LOUIS, Feb. 1, 2023 /PRNewswire/ -- Spire Inc. (NYSE: SR) today reported results for its fiscal 2023 first quarter ended December 31. Highlights include:
- Net income of
$91.0 million ($1.66 per diluted share) compared to net income of$55.7 million , or$1.01 per share in the prior year - Net economic earnings* of
$85.1 million , or$1.55 per share, up from$62.6 million , or$1.14 per share a year ago, due to strong Gas Marketing results - Fiscal 2023 net economic earnings guidance raised
$0.10 to$4 .15–$4.35 per share
"The core focus for our utilities is ensuring safe and reliable service to the homes and business that rely on Spire, especially during the winter," said Suzanne Sitherwood, president and chief executive officer of Spire. "We understand the significant impact that higher natural gas prices are having on our customer bills and that's why we are committed to managing our operating expenses and minimizing commodity costs while enhancing financial assistance programs for our customers most impacted during these challenging financial times. When looking at our consolidated earnings, we posted strong first quarter earnings as our gas marketing business was able to capitalize on very favorable market conditions."
First Quarter Results | Three Months Ended December 31, | |||||||||||||||
(Millions) | (Per Diluted Common Share) | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Economic Earnings (Loss)* by Segment | ||||||||||||||||
Gas Utility | $ | 62.9 | $ | 67.2 | ||||||||||||
Gas Marketing | 25.7 | 0.5 | ||||||||||||||
Midstream | 3.8 | 2.5 | ||||||||||||||
Other | (7.3) | (7.6) | ||||||||||||||
Total | $ | 85.1 | $ | 62.6 | $ | 1.55 | $ | 1.14 | ||||||||
Fair value and timing adjustments, pre-tax | 7.8 | (3.7) | 0.15 | (0.07) | ||||||||||||
Income tax adjustments | (1.9) | (3.2) | (0.04) | (0.06) | ||||||||||||
Net Income | $ | 91.0 | $ | 55.7 | $ | 1.66 | $ | 1.01 | ||||||||
Weighted Average Diluted Shares Outstanding | 52.6 | 51.7 | ||||||||||||||
*Non-GAAP, see "Net Economic Earnings and Reconciliation to GAAP." |
For the quarter ended December 31, 2022, we reported consolidated net income of
Gas Utility
The Gas Utility segment includes the regulated distribution operations of our five gas utilities across Alabama, Mississippi and Missouri. For the first quarter of fiscal 2023, Gas Utility reported NEE of
Contribution margin increased
Operation and maintenance (O&M) expenses of
Depreciation and amortization expense increased by
Gas Marketing
The Gas Marketing segment includes the results of Spire Marketing, which provides natural gas marketing services throughout the United States. NEE, which excludes mark-to-market and other fair value adjustments, was
Midstream
NEE for midstream operations, which include Spire STL Pipeline and Spire Storage, totaled
Other
Corporate costs, primarily interest expense on corporate borrowings, on a NEE basis totaled
Regulatory Update
Missouri
As previously reported, Spire Missouri was granted a
As part of the rate order, Spire Missouri was allowed to expand eligibility and increase funding for various customer assistance programs and to provide greater support for more customers in need.
On December 27, 2022, Spire Missouri filed with the MoPSC a request for
Alabama
In October 2022, Spire Alabama and Spire Gulf submitted their annual rate filings with the Alabama Public Service Commission (APSC), presenting the utilities' budgets for the 2023 fiscal year. The APSC approved new rates for Spire Alabama and Spire Gulf effective January 1, 2023.
Gas Cost Recovery
Spire's utilities purchase the natural gas to be delivered to its customers and typically defers the recovery of this expense thereby lessening the immediate impact on customer bills. Spire Missouri filed Purchase Gas Adjustment changes to its tariff which were approved and became effective November 29, 2022 and January 19, 2023. Similarly, Spire Alabama received adjustments to its Gas Supply Adjustment rider on December 1, 2022 and January 1, 2023. As a result, we anticipate these deferred gas balances to be recovered over the next 12-18 months.
Spire STL Pipeline
Spire STL Pipeline was issued a new permanent operating certificate in December 2022 by the Federal Energy Regulatory Commission (FERC), following completion of a court-ordered remand. As part of the remand, FERC issued a positive Environmental Impact Statement on Spire STL Pipeline in October 2022.
Balance Sheets and Cash Flow
For the first quarter of fiscal 2023, we maintained a balanced capital structure and ample liquidity. Short-term borrowings outstanding at December 31, 2022, were
Net cash used in operating activities was
Capital expenditures for the first quarter of fiscal 2023 were
For additional details on Spire's results for the first quarter of fiscal 2023, please see the accompanying unaudited Condensed Consolidated Statements of Income, Balance Sheets, and Statements of Cash Flows.
Guidance and Outlook
We remain confident in our long-term ability to grow NEE per share 5–
Reflecting the outperformance of Spire Marketing in the first quarter, we are raising our fiscal 2023 NEE per share guidance by
Our targeted capital investment for the 10-year period through fiscal 2032 remains
Dividends
The Spire board of directors has declared a quarterly common stock dividend of
The board also declared the regular quarterly dividend of
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss its fiscal 2023 first quarter financial results. To access the call, please dial the applicable number approximately 5-10 minutes in advance.
Date and Time: | Wednesday, February 1 | ||
8 a.m. CT (9 a.m. ET) | |||
Phone Numbers: | U.S. and Canada: | 844-824-3832 | |
International: | 412-317-5142 | ||
The webcast can be accessed at Investors.SpireEnergy.com under Events & presentations. A replay of the call will be available at 10 a.m. CT (11 a.m. ET) on February 1 until March 1, 2023, by dialing 877-344-7529 (U.S.), 855-669-9658 (Canada), or 412-317-0088 (international). The replay access code is 9462673.
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 homes and businesses making us one of the largest publicly traded natural gas company in the country. We help families and business owners fuel their daily lives through our gas utilities serving Alabama, Mississippi and Missouri. Our natural gas-related businesses include Spire Marketing, Spire STL Pipeline and Spire Storage. We are committed to transforming our business through growing organically, investing in infrastructure, and advancing through innovation. Learn more at SpireEnergy.com.
Forward-Looking Information and Non-GAAP Measures
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Spire's future operating results may be affected by various uncertainties and risk factors, many of which are beyond the Company's control, including weather conditions, economic factors, the competitive environment, governmental and regulatory policy and action, and risks associated with acquisitions. More complete descriptions and listings of these uncertainties and risk factors can be found in the Company's annual (Form 10-K) filing with the Securities and Exchange Commission.
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, as applicable, the impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities and the largely non-cash impacts of impairments and other non-recurring or unusual items such as certain regulatory, legislative, or GAAP standard-setting actions. The fair value and timing adjustments, which primarily impact the Gas Marketing segment, include net unrealized gains and losses on energy-related derivatives resulting from the current changes in the fair value of financial and physical transactions prior to their completion and settlement, lower of cost or market inventory adjustments, and realized gains and losses on economic hedges prior to the sale of the physical commodity. Management believes that excluding these items provides a useful representation of the economic impact of actual settled transactions and overall results of ongoing operations. Contribution margin adjusts revenues to remove the costs that are directly passed on to customers and collected through revenues, which are the wholesale cost of natural gas and gross receipts taxes. These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than, GAAP measures such as operating income, net income, or earnings per share.
Condensed Consolidated Statements of Income – Unaudited | ||||||||
(In Millions, except per share amounts) | Three Months Ended December 31, | |||||||
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 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 | ||||
Dividends Declared Per Common Share | $ | 0.72 | $ | 0.685 | ||||
Condensed Consolidated Balance Sheets – Unaudited | ||||||||||||
(In Millions) | December 31, | September 30, | December 31, | |||||||||
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 | 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, net | 779.6 | 622.7 | 749.0 | |||||||||
Inventories | 372.7 | 422.3 | 325.6 | |||||||||
Other | 472.6 | 540.5 | 352.5 | |||||||||
Total Current Assets | 1,629.7 | 1,592.0 | 1,435.3 | |||||||||
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 | ||||||
CAPITALIZATION AND LIABILITIES | ||||||||||||
Capitalization: | ||||||||||||
Preferred stock | $ | 242.0 | $ | 242.0 | $ | 242.0 | ||||||
Common stock and paid-in capital | 1,624.3 | 1,623.8 | 1,568.6 | |||||||||
Retained earnings | 953.0 | 905.5 | 859.5 | |||||||||
Accumulated other comprehensive income | 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 | |||||||||
Accrued liabilities and other | 414.3 | 417.5 | 416.0 | |||||||||
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 | |||||||||
Total Capitalization and Liabilities | $ | 10,327.7 | $ | 10,083.7 | $ | 9,650.5 | ||||||
Condensed Consolidated Statements of Cash Flows – Unaudited | ||||||||
(In Millions) | Three Months Ended December 31, | |||||||
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 | (348.9) | (361.6) | ||||||
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 (repayment) 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 | ||||
Net Economic Earnings and Reconciliation to GAAP | ||||||||||||||||||||||||
(In Millions, except per share amounts) | Gas Utility | Gas | Midstream | Other | Total | Per Diluted | ||||||||||||||||||
Three Months Ended December 31, 2022 | ||||||||||||||||||||||||
Net Income (Loss) [GAAP] | $ | 62.9 | $ | 31.6 | $ | 3.8 | $ | (7.3) | $ | 91.0 | $ | 1.66 | ||||||||||||
Adjustments, pre-tax: | ||||||||||||||||||||||||
Fair value and timing adjustments | — | (7.8) | — | — | (7.8) | (0.15) | ||||||||||||||||||
Income tax adjustments (1) | — | 1.9 | — | — | 1.9 | 0.04 | ||||||||||||||||||
Net Economic Earnings (Loss) [Non-GAAP] | $ | 62.9 | $ | 25.7 | $ | 3.8 | $ | (7.3) | $ | 85.1 | $ | 1.55 | ||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||||||
Net Income (Loss) [GAAP] | $ | 63.1 | $ | (2.3) | $ | 2.5 | $ | (7.6) | $ | 55.7 | $ | 1.01 | ||||||||||||
Adjustments, pre-tax: | ||||||||||||||||||||||||
Fair value and timing adjustments | — | 3.7 | — | — | 3.7 | 0.07 | ||||||||||||||||||
Income tax adjustments (1) | 4.1 | (0.9) | — | — | 3.2 | 0.06 | ||||||||||||||||||
Net Economic Earnings (Loss) [Non-GAAP] | $ | 67.2 | $ | 0.5 | $ | 2.5 | $ | (7.6) | $ | 62.6 | $ | 1.14 | ||||||||||||
(1) 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, and for the three months ended December 31, 2021, include a Spire Missouri regulatory adjustment. |
(2) Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation, which includes reductions for cumulative preferred dividends and participating shares. |
Contribution Margin and Reconciliation to GAAP | ||||||||||||||||||||||||
(In Millions) | Gas Utility | Gas | Midstream | Other | Eliminations | Consolidated | ||||||||||||||||||
Three Months Ended December 31, 2022 | ||||||||||||||||||||||||
Operating Income (Loss) [GAAP] | $ | 101.9 | $ | 41.4 | $ | 7.1 | $ | (0.2) | $ | — | $ | 150.2 | ||||||||||||
Operation and maintenance expenses | 119.9 | 6.3 | 5.8 | 4.0 | (3.9) | 132.1 | ||||||||||||||||||
Depreciation and amortization | 59.7 | 0.3 | 1.9 | 0.2 | — | 62.1 | ||||||||||||||||||
Taxes, other than income taxes | 49.9 | 0.1 | 0.4 | — | — | 50.4 | ||||||||||||||||||
Less: Gross receipts tax expense | (30.4) | — | — | — | — | (30.4) | ||||||||||||||||||
Contribution Margin [Non-GAAP] | 301.0 | 48.1 | 15.2 | 4.0 | (3.9) | 364.4 | ||||||||||||||||||
Natural gas costs | 401.6 | 26.0 | — | — | (8.4) | 419.2 | ||||||||||||||||||
Gross receipts tax expense | 30.4 | — | — | — | — | 30.4 | ||||||||||||||||||
Operating Revenues | $ | 733.0 | $ | 74.1 | $ | 15.2 | $ | 4.0 | $ | (12.3) | $ | 814.0 | ||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||||||
Operating Income (Loss) [GAAP] | $ | 94.4 | $ | (3.1) | $ | 4.6 | $ | (0.6) | $ | — | $ | 95.3 | ||||||||||||
Operation and maintenance expenses | 107.3 | 2.7 | 5.8 | 4.2 | (3.6) | 116.4 | ||||||||||||||||||
Depreciation and amortization | 54.6 | 0.3 | 1.9 | 0.1 | — | 56.9 | ||||||||||||||||||
Taxes, other than income taxes | 37.0 | — | 0.6 | — | — | 37.6 | ||||||||||||||||||
Less: Gross receipts tax expense | (21.7) | (0.2) | — | — | — | (21.9) | ||||||||||||||||||
Contribution Margin [Non-GAAP] | 271.6 | (0.3) | 12.9 | 3.7 | (3.6) | 284.3 | ||||||||||||||||||
Natural gas costs | 210.2 | 48.0 | — | — | (9.0) | 249.2 | ||||||||||||||||||
Gross receipts tax expense | 21.7 | 0.2 | — | — | — | 21.9 | ||||||||||||||||||
Operating Revenues | $ | 503.5 | $ | 47.9 | $ | 12.9 | $ | 3.7 | $ | (12.6) | $ | 555.4 | ||||||||||||
Investor Contact:
Scott W. Dudley Jr.
314-342-0878
Scott.Dudley@SpireEnergy.com
Media Contact:
Jessica B. Willingham
314-342-3300
Jessica.Willingham@SpireEnergy.com
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SOURCE Spire Inc.
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