Spire Inc. Q4 FY2025 earnings call

• Pending acquisition of Piedmont Natural Gas Tennessee business from Duke is on track to close in 2026, with progress made on regulatory approvals like FERC and pending Tennessee Public Utility Commission approval.
• Introduced Steve Greenlee as new Executive Vice President and Chief Operating Officer with over 25 years of utility operations experience.
• Fiscal 2025 adjusted EPS was $4.44, up 7.5% from fiscal 2024, with $922 million invested in infrastructure, 90% at utilities.
• Positive settlement in Missouri rate case with new rates effective October; Alabama in RSE rate setting process. Missouri new legislation establishes future test year for rate setting.
• Long-term adjusted EPS growth guidance 5%-7%, ten-year capital plan $11.2 billion, dividend increased 5.1% to $3.30 per share.

In fiscal 2025, gas utilities earned $231 million, up almost 5% from the prior year. Midstream delivered earnings of $56 million, up nearly $23 million. Gas Marketing earned $26 million, an increase of $2.5 million. Other corporate costs were $38 million, nearly $8 million higher than the prior year. Gas utilities' earnings were partially offset by slightly lower usage in Alabama, higher O&M, and depreciation expense. Midstream's earnings were driven by additional capacity and asset optimization at Spire Storage, partially offset by higher operating costs. Gas Marketing's earnings were well-positioned to create value but partially offset by higher storage and transportation fees.

• Fiscal 2026 adjusted EPS guidance range: $5.25 to $5.45, excluding pending Piedmont acquisition results and including full year earnings from natural gas storage facilities.
• Fiscal 2027 adjusted EPS guidance range: $5.65 to $5.85, reflecting full year earnings from Piedmont acquisition and excluding storage earnings due to expected sale.
• Long-term adjusted EPS growth target 5%-7% anchored on fiscal 2027 midpoint $5.75.
• Ten-year capital plan $11.2 billion, five-year investment plan $4.8 billion from fiscal 2026-2030.

• Uncertainties in regulatory outcomes across jurisdictions that could impact earnings.
• Potential effects of the storage asset sale evaluation on financials and balance sheet.
• Market conditions and inflation affecting operating costs and customer affordability.

Q: Could you give more details on the long-term growth rate and earned ROEs?

A: Scott discussed earned returns in utilities, particularly in Missouri where there's a step up from rate case, and how marketing/midstream fit into the growth guide.

Q: Any update on financing mix and timing for the acquisition of Piedmont Natural Gas Tennessee business?

A: Adam mentioned a balanced mix of debt, equity, and hybrid securities, with evaluation of storage asset sale ongoing and targeting calendar year-end for conclusion.

Q: What about O&M assumptions going forward and integration planning?

A: Scott stated O&M is targeted to be below inflation, and integration planning is in early stages with focus on best practices from both organizations.

Q: Could 2028 fall outside the 5%-7% growth range?

A: Scott and Adam discussed that future test year rate making in Missouri will impact, but current guidance is based on current knowledge with expected improvement.

Q: Reminder on midstream split and impact of storage sale on balance sheet?

A: Scott said midstream is roughly one-third pipeline and two-thirds storage, and impact of storage sale on balance sheet is too early to comment before evaluation conclusion.

Q: Dividend payout ratios and equity needs for long-term capital?

A: Adam said dividend is expected to grow at earnings growth rate, targeting common payout ratio 55%-65%, and equity needs are minimal, $0-$50 million per year.