SR — Spire Inc.

Summary of Spire's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Adjusted EPS: $4.44, a 7.5% increase from $4.13 in fiscal 2024.
• Total Earnings: $275.5 million for fiscal 2025, compared to $247.4 million in the previous year.
• Fourth Quarter Performance: Adjusted loss of $24 million or $0.47 per share, attributed to seasonality and higher utility O&M expenses.
• Capital Investments: $922 million in fiscal 2025, with 90% allocated to utilities.
• Dividend Increase: 5.1% increase approved, raising the annualized rate to $3.30 per share.

2. Strategic Updates and Business Highlights

• Acquisition: Pending acquisition of Piedmont Natural Gas Tennessee from Duke is on track to close in 2026; Hart-Scott-Rodino review completed and awaiting Tennessee Public Utility Commission approval.
• Regulatory Developments: Positive settlement in Missouri rate case effective October; ongoing rate stabilization process in Alabama.
• Leadership Changes: Appointment of Steve Greenlee as Executive Vice President and COO, enhancing operational leadership.
• Infrastructure Focus: Commitment to safety and reliability with 70% of capital investments aimed at upgrading distribution infrastructure.

3. Forward Guidance and Outlook

• Fiscal 2026 Adjusted EPS Guidance: Expected range of $5.25 to $5.45, excluding the Piedmont acquisition but including a full year of earnings from gas storage facilities.
• Fiscal 2027 Guidance: Projected adjusted EPS of $5.65 to $5.85, incorporating a full year of earnings from Piedmont and excluding earnings from Spire Storage due to expected asset sale.
• Long-term Growth Target: Adjusted EPS growth of 5% to 7%, supported by rate base growth in Missouri (7%) and Tennessee (7.5%).

4. Bad News, Challenges, or Points of Concern

• Fourth Quarter Loss: The adjusted loss in Q4 indicates potential operational challenges, particularly with O&M expenses exceeding expectations.
• Higher O&M Expenses: Increased operating and maintenance costs are a concern, although targeted to grow below inflation.
• Regulatory Risks: Future test year rate adjustments in Missouri could lead to uncertainties in earnings if not managed effectively.
• Integration Risks: The integration of Piedmont and the management of O&M costs during this transition could pose challenges.

5. Notable Q&A Insights

• Return on Equity (ROE): Management expects improvements in earned ROEs, particularly in Missouri, as they approach allowed returns.
• Financing Strategy: Minimal common equity issuance anticipated; focus on a balanced mix of debt and equity financing.
• O&M Cost Management: Commitment to keeping O&M expenses below inflation, leveraging best practices from both Spire and Piedmont.
• Storage Asset Sale: Strong interest in the potential sale of gas storage assets, with an announcement expected by year-end.
• Dividend Payout Ratios: Expected to grow in line with earnings growth, targeting a payout ratio of 55% to 65%.

Overall, Spire demonstrated solid financial performance in fiscal 2025 with strategic initiatives aimed at long-term growth, despite facing challenges related to operational costs and regulatory changes.