Spire Inc. · NYSE:SR
Spire — Q4 2023 Earnings Presentation
22 slides from Spire's earnings presentation, Nov 16, 2023
Slide 1: Delivering essential energy
Delivering essential energy November 16, 2023
Slide 2: Participants on today's call
Participants on today’s call Steven L. Lindsey Steven P. Rasche President and Executive Vice President Chief Executive Officer and Chief Financial Officer 2 Spire | Year-end fiscal 2023 update
Slide 3: Our future is bright
Our future is bright • Building on the strong foundation created over the last decade • Positioned to successfully deliver on our long-term growth strategy – Robust 10-year capital investment plan centered on utility infrastructure upgrades and new business – Remain focused on execution, operational
Slide 4: Delivering earnings growth
Delivering earnings growth • FY23 net economic earnings per share Capital expenditures (Millions) of $4.05 $765 • Long-term earnings per share growth $663 105 target 5-7%1 $552 73 24 2 • FY24 earnings expected to be $4.25-$4.45 528 590 660 • FY23 capital expenditures of $663M – Gas utility investmen
Slide 5: Growing our dividend
Growing our dividend Annualized dividend per share $3.021 $2.88 $2.74 $2.60 $2.49 $2.37 2019 2020 2021 2022 2023 2024 • 2024 annualized dividend increased 4.9% to $3.02 per share • Supported by long-term 5-7% earnings growth • 2024 marks 21 consecutive years of increases; 79 years of continuous paym
Slide 6: FY23 net economic earnings
FY23 net economic earnings Per diluted Millions common share Twelve months ended September 30, 2023 2022 2023 2022 Net Income [GAAP] $ 217.5 $ 220.8 $ 3.85 $ 3.95 Fair value and timing adjustments, pre-tax 11.4 (11.4) 0.21 (0.22) Acquisition activities, pre-tax 2.5 ⎯ 0.05 ⎯ Income tax effect of adju
Slide 7: FY23 revenues and margins
FY23 revenues and margins (Millions) As reported Twelve months ended September 30, 2023 2022 Variances Operating Revenues Gas Utility $ 2,456.9 $ 1,946.1 $ 510.8 Recovery of higher commodity costs and new rates Gas Marketing 179.1 234.9 (55.8) Lower average commodity costs and business mix Midstream
Slide 8: Key FY23 variances
Key FY23 variances (Millions) As reported Pension Twelve months ended September 30, 2023 2022 reclass Net variance Operation and Maintenance Gas Utility $ 461.8 $ 413.3 $ (9.1) Missouri overheads1 (24.0) ― ― Deferred in 2022 and expensed in 2023 Bad debt expense (16.6) (11.6) ― ($5.0M), reflecting h
Slide 9: Outlook
Outlook • FY24 NEEPS expected to be in the Capital expenditures forecast ~$7.2B (Millions) range of $4.25-$4.45 $795 $765 $755 $775 $720 $740 • Long-term NEEPS growth beyond 105 $680 $700 $655 $660 2024 targeted at 5%-7% – Using the midpoint of FY24 guidance 730 745 765 785 660 670 690 710 of $4.35
Slide 10: FY24 outlook by business unit
FY24 outlook by business unit Gas Utilities • New rates; return to normal weather and margins NEE by business unit – Full year of MO base rates (eff. Dec. 26, 2022) FY23 FY24 – Incremental MO ISRS1 revenues (Millions) actual target – New AL rates anticipated ~Dec. 1, 2023 Gas Utility $200 $230 - $24
Slide 11: Financing
Financing Equity forecast (Millions) • Equity $50-100 – ~80% of FY24 equity locked in 1 • $112.5M settlement of forward sales 2 • $175M Equity Units conversion $287.5 – Minimal equity needs beyond FY24 $0-50 $0-50 • Debt FY24 FY25 FY26 – FY24 Spire Inc. debt Common and hybrid equity locked in ATM •
Slide 12: Looking ahead
Looking ahead • Positioned to successfully deliver on long-term growth strategy • Remain focused on execution, efficiencies and operational excellence • Long-term NEEPS growth target 5-7% • 10-year capital expenditure target of $7.2B 12 Spire | Year-end fiscal 2023 update
Slide 13: Appendix
Appendix 13 Spire | Year-end fiscal 2023 update
Slide 14: Forward-looking statements and use of non-GAAP measures
Forward-looking statements and use of non-GAAP measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements in this presentation speak only as of today, and we assume no duty to update them.
Slide 15: Financing outlook and credit ratings
Financing outlook and credit ratings 1 Debt maturities Interest rate sensitivity 2 (Millions) Estimated EPS impact of 50bps change across the curve $350 $35 3.21% 2024 2025 2026 $300 $0.00 $0.05 – $0.07 $0.06 – $0.08 $250 $175 $200 Remarketed $300 Notes $150 Floating Credit ratings rate $100 $130 $1
Slide 16: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Customers1 430,100 84,200 18,400 1,199,900 Pipeline miles ~24,400 ~4,200 ~1,200 ~31,400 Rate base (Millions) $6782 $1272 $473 $3,4134 Return on equity 9.70%5 9.95%6 9.83% Equity capit
Slide 17: Q4 FY23 net economic earnings
Q4 FY23 net economic earnings Per diluted Millions common share2 Three months ended September 30, 2023 2022 2023 2022 Net Loss [GAAP] $ (31.1) $ (7.1) $ (0.66) $ (0.20) Fair value and timing adjustments, pre-tax (10.8) (32.3) (0.20) (0.61) Acquisition activities, pre-tax 2.0 ― 0.04 ― Income tax effe
Slide 18: Key Q4 FY23 variances
Key Q4 FY23 variances (Millions) As reported Pension Three months ended September 30, 2023 2022 reclass Net variance Operating Revenues $ 310.4 $ 314.2 $ ― $ (3.8) 1 Contribution Margin Gas Utility $ 176.4 $ 156.9 $ ― $ 19.5 Increase in new rates for Spire MO and AL; MO ISRS revenues Gas Marketing 1
Slide 19: Q4 FY23 NEE reconciliation to GAAP
Q4 FY23 NEE reconciliation to GAAP Gas Gas Per diluted 2 (Millions, except per share amounts) Utility Marketing Midstream Other Total common share Three months ended September 30, 2023 Net (Loss) Income [GAAP] $ (33.5) $ 10.2 $ 0.9 $ (8.7) $ (31.1) $ (0.66) Adjustments, pre-tax: Fair value and timin
Slide 20: Q4 FY23 contribution margin reconciliation to GAAP
Q4 FY23 contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Midstream Other Eliminations Consolidated Three months ended September 30, 2023 Operating (Loss) Income [GAAP] $ (16.3) $ 12.6 $ 3.2 $ (3.4) $ ― $ (3.9) Operation and maintenance 110.9 3.2 10.4 7.5 (4.1) 127.9 De
Slide 21: FY23 NEE reconciliation to GAAP
FY23 NEE reconciliation to GAAP Gas Gas Per diluted 2 (Millions, except per share amounts) Utility Marketing Midstream Other Total common share Twelve months ended September 30, 2023 Net Income (Loss) [GAAP] $ 200.5 $ 39.1 $ 12.0 $ (34.1) $ 217.5 $ 3.85 Adjustments, pre-tax: Fair value and timing ad
Slide 22: FY23 contribution margin reconciliation to GAAP
FY23 contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Midstream Other Eliminations Consolidated Twelve months ended September 30, 2023 Operating Income (Loss) [GAAP] $ 350.8 $ 49.3 $ 24.3 $ (5.8) $ ― $ 418.6 Operation and maintenance 461.8 19.4 30.5 21.9 (16.0) 517.6 D