Spire Inc. · NYSE:SR
Spire — Q3 2023 Earnings Presentation
18 slides from Spire's earnings presentation, Aug 2, 2023
Slide 1: Delivering essential energy
Delivering essential energy Third quarter fiscal 2023 update August 2, 2023
Slide 2: Participants on today's call
Participants on today’s call Suzanne Sitherwood Steven L. Lindsey Steven P. Rasche President and Executive Vice President Executive Vice President Chief Executive Officer and Chief Operating Officer and Chief Financial Officer 2 Spire | Third quarter fiscal 2023 update
Slide 3: Our future is bright
Our future is bright • Q3 results impacted by lower utility margins and higher costs • We’re continuing to invest in growth – Utility infrastructure upgrades, innovation – Supporting the industry’s bright future • Executing on our Midstream strategy – Centered around highly-contracted assets – Utili
Slide 4: Gas Utilities
Gas Utilities • Solid safety, customer service, reliability and overall performance • Financial results benefitting from new rates, offset by the headwinds of – Mild weather • 18% warmer than normal weather • Partially effective weather mitigation in Alabama – Higher interest costs • Our focus for r
Slide 5: Midstream
Midstream • Spire Storage – Expansion of Spire Storage West remains on track – Spire Salt Plains integration ongoing • MoGas/Omega acquisition – Planned acquisition of pipeline and attached LDC for $175M – Closing expected around calendar year end • Spire STL Pipeline – Continues strong, reliable op
Slide 6: Capital investment
Capital investment Capital expenditures (Millions) • YTD FY23 capex totaled $483M $483 43 driven by gas utility investment $403 12 – Gas Utility spend up 12.5% – More than $300M for infrastructure 440 391 upgrades and new business • 10-year capex plan remains $7.0B • FY23 target remains $700M 9 mos.
Slide 7: Q3 FY23 net economic earnings
Q3 FY23 net economic earnings Per diluted Millions common share Three months ended June 30, 2023 2022 2023 2022 Net Income [GAAP] $ (21.6) $ (1.4) $ (0.48) $ (0.10) Fair value and timing adjustments, pre-tax 3.4 7.3 0.06 0.14 Acquisition activities, pre-tax 0.5 ⎯ 0.01 ⎯ 1 Income tax adjustments (0.9
Slide 8: Contribution margins
Contribution margins (Millions) As reported NEE Net Three Months ended June 30, 2023 2022 adjustments2 variance Operating revenues $ 418.5 $ 448.0 $ (0.8) $ (30.3) Natural gas costs 169.8 203.3 5.8 (27.7) Gross receipt taxes 26.0 23.3 ― 2.7 1 Contribution Margin $ 222.7 $ 221.4 $ (6.6) $ (5.3) Gas U
Slide 9: Key quarterly variances
Key quarterly variances (Millions) As reported Pension NEE Net Three Months ended June 30, 2023 2022 reclass adjustments1 variance Operation and Maintenance $ 111.7 $ 95.0 $ (8.3) $ ― $ 8.4 $6M Missouri overheads expensed in 2023 but deferred in Gas Utility 2022; higher non-payroll operating expense
Slide 10: Cash flow and ST debt
Cash flow and ST debt 1 Increasing EBITDA (Millions) • YTD cash flow up 15% from last year $600 • Short term debt at the Gas Utilities $400 lower by $49M, reflecting $631 $547 – Deferred gas costs recovery $200 – Spire MO $200M term loan repayment – Offset by injections for Winter ’23-’24 $0 9 mos.
Slide 11: Outlook
Outlook • Re-affirming LT growth expectations FY23 NEE target by segment (Millions) – NEEPS1 5-7% Gas Utility $205 − $215 – Rate base 7-8% Gas Marketing 43 − 48 • FY23 NEEPS target range lowered to Midstream 10 − 12 $4.15-$4.25; Gas Utility NEE (-$5M) Corporate & Other (25) − (30) • Positioned well
Slide 12: Natural gas is a vital part of an affordable and sustainable energy future.
Natural gas is a vital part of an affordable and sustainable energy future. As an essential energy provider, we’ll keep stepping forward, deepening relationships with our customers and innovating for a better tomorrow. 12 Spire | Third quarter fiscal 2023 update
Slide 13: Appendix
Appendix 13 Spire | Third quarter 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: Dividend per share
Growing our dividend Annualized common stock dividend per share Dividend yield 4.3%1 $2.882 $2.74 $2.60 Dividend per share $2.49 $2.37 $2.25 2018 2019 2020 2021 2022 2023 • Annualized 2023 common stock dividend increased 5.1% to $2.88 per share • Supported by long-term earnings growth • 2023 marks 2
Slide 16: Net economic earnings reconciliation to GAAP
Net economic earnings reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Midstream Other Total common share2 Three months ended June 30, 2023 Net (Loss) Income [GAAP] $ (12.4) $ (4.9) $ 3.1 $ (7.4) $ (21.6) $ (0.48) Adjustments, pre-tax: Fair value and
Slide 17: Contribution margin reconciliation to GAAP
Contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Midstream Other Eliminations Consolidated Three months ended June 30, 2023 Operating Income (Loss) [GAAP] $ 13.9 $ (7.1) $ 6.5 $ (1.3) $ ⎯ $ 12.0 Operation and maintenance 111.7 4.2 8.1 5.5 (4.0) 125.5 Depreciation and a
Slide 18: EBITDA reconciliation to GAAP
EBITDA1 reconciliation to GAAP Nine Months Ended June 30, (Millions) 2023 2022 Net Income [GAAP] $ 248.6 $ 227.9 Add back: Acquisitions activity 0.5 ― Interest charges 137.5 85.4 Income tax expense 55.7 57.0 Depreciation and amortization 189.0 176.2 Adjusted EBITDA [non-GAAP] $ 631.3 $ 546.5 1EBITDA