SR — Spire Inc.

Summary of Spire Inc. Q3 2026 Earnings Call

1. Key Financial Results and Metrics:

• Adjusted loss of $15 million, or $0.26 per share, improved from a loss of $13 million, or $0.29 per share, in the prior year.
• Gas Utilities segment reported an adjusted loss of $3 million, an improvement from a $10 million loss year-over-year, driven by new rates in Missouri and Alabama.
• Earnings from discontinued operations were $253.8 million, including an after-tax gain on sale of $254.6 million.
• Operating and maintenance (O&M) expenses increased by approximately $4 million, primarily due to higher bad debt expense.
• Full-year capital expenditures expected to be around $800 million, consistent with a 10-year capital plan of $11.2 billion.

2. Strategic Updates and Business Highlights:

• Completed divestitures of non-core businesses (Spire Marketing and Spire Storage), transitioning to a fully regulated company.
• Integration of Spire Tennessee is progressing well, with key milestones on track for fiscal 2027.
• Regulatory progress noted in Alabama and Missouri, with upcoming hearings for rate stabilization mechanisms and a settlement reached in Missouri's accounting authority order proceeding.
• Focus remains on operational excellence, affordability, and disciplined capital management.

3. Forward Guidance and Outlook:

• Reaffirmed fiscal 2026 adjusted EPS guidance of $3.90 to $4.10 per share and fiscal 2027 guidance of $5.40 to $5.60 per share.
• Long-term adjusted EPS growth target remains at 5% to 7%, supported by a rate base growth of approximately 7% and a disciplined capital investment strategy.
• Anticipated improvement in credit metrics with a target of 14% to 15% funds from operations (FFO) to debt ratio by the end of 2028.

4. Bad News, Challenges, or Points of Concern:

• O&M expenses are rising, particularly due to bad debt, which could impact profitability.
• The company is navigating a transition year for credit metrics due to recent acquisitions and divestitures.
• Regulatory risks remain, particularly in Alabama and Missouri, where outcomes of rate cases and mechanisms could affect future earnings stability.
• The need for a durable solution to weather normalization and usage variability in Missouri remains a challenge.

5. Notable Q&A Insights:

• Management discussed the rationale behind higher allowed ROE requests in Alabama, emphasizing the need for rates to align with regional averages.
• The settlement in Missouri regarding the accounting authority order is seen as a step towards stabilizing revenue recovery but does not quantify lost margins from lower weather-related usage.
• Future capital allocation will focus on managing affordability rather than pulling forward capital expenditures.
• The upcoming rate case in Missouri is expected to enhance revenue recovery and align rates with ongoing investments, with a focus on decoupling mechanisms to address variability in customer usage.

Overall, Spire Inc. is positioning itself for long-term growth through strategic divestitures and regulatory engagements while facing challenges related to rising expenses and regulatory outcomes.