0001193125-26-208452
SEC filingGas Utility net income rose $36.6M driven by Missouri rate case and higher margins, partially offset by acquisition costs and warmer weather.
For the three months ended March 31, 2026, Spire reported net income of $282.2M, up from $209.3M in the prior-year quarter. Net income from continuing operations was $217.6M, a 15% increase from $189.3M. The improvement was primarily driven by the Gas Utility segment, where operating income rose $53.1M to $325.1M. Consolidated operating revenues increased $43.6M to $1,020.0M, reflecting a $44.7M increase in Gas Utility revenues partially offset by lower other revenues. Contribution margin, a non-GAAP measure, increased $69.8M to $568.4M, with Gas Utility contribution margin up $70.4M. Earnings per diluted share (GAAP) were $4.60, compared to $3.51 in the prior year; adjusted EPS was $3.76 vs $3.17.
Key drivers included the $78.4M impact of the October 2025 Missouri rate case implementation, which boosted both revenue and contribution margin. Warmer-than-normal weather negatively affected volumetric usage and margin: degree days in Missouri were 13.6% warmer than a year ago, reducing weather-mitigated margin by $12.5M. Higher off-system sales contributed $4.0M to contribution margin. Interest expense increased $17.3M due to higher long-term debt levels and rates associated with financing the Piedmont Tennessee acquisition, partially offset by lower short-term rates.
Spire's Gas Utility segment (the sole reportable segment) reported net income of $231.8M, up $36.6M. Within the segment, Spire Missouri net income rose $37.3M to $150.2M, driven by the rate case and higher off-system sales despite warmer weather. Revenue increased $66.7M to $738.3M, and contribution margin rose $68.6M to $362.9M. Spire Alabama net income increased $2.0M to $72.0M, with contribution margin up $1.5M to $160.9M, helped by the annual RSE update partially offset by a higher customer refund provision and lower volumes. The segment also recorded a $3.0M after-tax goodwill impairment related to the pending sale of Spire Mississippi.
Other activities (corporate and eliminations) reported a loss of $14.2M, compared to a $5.9M loss in the prior year, driven by $30.8M of acquisition costs partially offset by a $28.9M gain on the sale of a non-core equity interest.
Management highlighted several strategic transactions that will reshape the company. The $2.5B acquisition of Piedmont Natural Gas Tennessee closed on March 31, 2026, adding over 200,000 customers and expanding Spire's regulated footprint. Subsequently, agreements to sell Spire Marketing ($212M), Spire Storage ($650M expected consideration), and Spire Mississippi ($75M) were announced, with proceeds expected to reduce acquisition-related debt. For fiscal 2026, total capital expenditures are planned at $797M. The company maintains investment-grade credit ratings but S&P has a negative outlook. No specific earnings guidance was provided, but the MD&A indicates management expects adequate liquidity and capital resources to meet obligations.
As of March 31, 2026, Spire reported cash and cash equivalents of $49.5M, up from $5.7M at September 30, 2025, driven by acquisition financing. Total debt (including current portion) stood at $6,000.1M, a significant increase from $3,856.9M at fiscal year-end 2025, primarily due to the issuance of $2,497.1M in long-term debt and $800.0M drawn under a delayed draw term loan to fund the Piedmont Tennessee acquisition. Shareholders' equity was $3,417.8M, compared to $3,389.4M at September 30, 2025, boosted by net income partially offset by preferred stock redemption. Inventory totaled $182.1M, comprising natural gas ($126.6M), propane ($8.6M), and materials/supplies ($46.9M).
The notes did not disclose a separate schedule of purchase commitments or contractual obligations. However, significant commitments include the $2.5B acquisition consideration (paid in cash on March 31, 2026) and related financing arrangements. The company has a $1.5B revolving credit facility (undrawn as of March 31, 2026) and a $1.5B commercial paper program, with $1,155.0M outstanding. Additionally, Spire Tennessee has $825.0M in senior notes issued. Regulatory obligations are reflected in $818.6M of regulatory liabilities.
Spire's capital allocation activities include:
The company operates through a single reportable segment: Gas Utility, which contributed $1,014.9M of the $1,020.0M consolidated operating revenues in the three months ended March 31, 2026. Within Gas Utility, residential customers generated $690.7M (68%), commercial/industrial $227.4M (22%), transportation $40.2M (4%), and off-system/incentive $30.7M (3%). Changes in alternative revenue programs added $22.2M. The 'Other' segment (non-utility) contributed $19.8M in revenues, primarily from marketing and storage activities now held for sale. Geographic mix includes Missouri (Spire Missouri: $738.3M revenues), Alabama (Spire Alabama: $230.6M), and Tennessee (acquired March 31, 2026, not yet reflected in operations). The company is repositioning to focus on regulated gas utilities, with planned divestitures of Spire Marketing, Spire Storage, and Spire Mississippi.
Net income for the six months ended March 31, 2026 was $377.2M, while operating cash flow (CFO) was $491.4M, resulting in a CFO-to-net-income ratio of 1.30, indicating strong cash generation. The primary non-cash adjustments were depreciation and amortization ($169.1M) and deferred taxes ($96.6M). Working capital changes, particularly a decrease in accounts receivable ($132.9M improvement vs. an increase last year) and inventory reductions, contributed positively.
Capex Intensity: Capital expenditures of $395.0M represented 80.4% of CFO, down from 105.6% in the prior year (where CFO of $453.8M barely covered capex of $479.2M). The lower capex intensity improved free cash flow (implicitly positive).
Capital Returns: Dividends paid totaled $103.5M ($96.1M common + $7.4M preferred), representing 21.1% of CFO. No share repurchases were reported.
Anomalies and Notable Items: The investing section shows a large business acquisition outflow of $2,500.8M, financed primarily by debt issuances ($2,497.1M long-term debt and $800.0M delayed draw term loan). This significantly distorted the net investing and financing cash flows. Excluding the acquisition, core investing activities (capex and other) were a net outflow of $365.5M, while core financing (excluding debt issuance for acquisition) showed net outflows for debt repayment, preferred redemption, and dividends. The acquisition also led to a one-time preferred share redemption of $242.0M plus $8.0M redemption cost. Overall, the underlying cash generation from operations remained solid, covering capex and dividends.