Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026, for Spire Inc. and its subsidiaries, Spire Missouri Inc. and Spire Alabama Inc. Spire is a regulated energy company primarily engaged in natural gas distribution. The reporting period was defined by significant strategic restructuring: the completion of the $2.5 billion acquisition of Piedmont Natural Gas's Tennessee business (now Spire Tennessee) on March 31, 2026, and the classification of Spire Marketing and Spire Storage as discontinued operations following agreements to sell them. Consequently, the Company now reports a single segment: Gas Utility.
Key Financial Metrics (Six Months Ended March 31, 2026)
| Metric | 2026 (YTD) | 2025 (YTD) | Variance |
|---|---|---|---|
| Operating Revenues | $1,718.7 million | $1,594.4 million | +$124.3 million |
| Net Income | $377.2 million | $290.6 million | +$86.6 million |
| Net Income from Continuing Ops | $305.4 million | $261.4 million | +$44.0 million |
| Net Income from Discontinued Ops | $71.8 million | $29.2 million | +$42.6 million |
| Diluted EPS (Total) | $6.14 | $4.86 | +$1.28 |
| Operating Cash Flow | $491.4 million | $453.8 million | +$37.6 million |
| Capital Expenditures | $395.0 million | $479.2 million | -$84.2 million |
| Total Debt (Long-term + Current) | $6,296.5 million | $3,856.9 million | +$2,439.6 million |
| Cash and Equivalents | $49.5 million | $15.2 million | +$34.3 million |
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased 7.8% year-over-year, driven primarily by the implementation of a new rate case in Missouri ($132.6 million impact) and higher off-system sales. This offset lower volumetric usage due to warmer weather.
- Profitability: Net income increased 29.8%. Continuing operations net income rose due to utility performance, while discontinued operations (Spire Marketing and Storage) contributed significantly higher earnings ($71.8 million vs. $29.2 million).
- Balance Sheet Expansion: Total assets increased from $11.3 billion to $14.7 billion, reflecting the addition of Spire Tennessee assets. Long-term debt increased significantly to finance the acquisition, offset by the redemption of $242.0 million in preferred stock.
- One-Time Items: The period included a $3.9 million goodwill impairment related to Spire Mississippi (classified as held for sale) and an $8.0 million cost associated with the redemption of Series A Preferred Stock.
Guidance, Outlook, and Risks
- Divestitures: Spire completed the sale of Spire Marketing for $212.0 million in April 2026. Agreements are in place to sell Spire Storage (expected consideration ~$650.0 million) and Spire Mississippi ($75.0 million). Proceeds are intended to repay acquisition-related debt.
- Regulatory Environment: Spire Missouri received approval for a base rate increase effective October 2025. Spire Alabama operates under a Rate Stabilization and Equalization (RSE) mechanism, with a rate reduction of $2.9 million scheduled for June 2026 due to returns exceeding the allowed range.
- Liquidity: The Company maintains investment-grade credit ratings. Liquidity is supported by operating cash flows, a $1.5 billion revolving credit facility, and a commercial paper program. The Company expects to have sufficient resources to meet obligations despite the increased debt load from the Tennessee acquisition.
- Risks: Key risks include the satisfaction of closing conditions for pending divestitures, volatility in natural gas prices, weather conditions affecting demand, and regulatory decisions regarding rate recovery and environmental liabilities (specifically former manufactured gas plant sites).
Investor Verification Checklist
- Acquisition Integration: Verify the progress of integrating Spire Tennessee and the realization of projected synergies and accretive earnings.
- Divestiture Closing: Monitor the regulatory approval status and closing dates for the Spire Storage and Spire Mississippi sales to confirm debt reduction timelines.
- Debt Servicing: Assess the impact of increased interest expense on future cash flows given the $2.5 billion in new debt incurred for the Tennessee acquisition.
- Weather Sensitivity: Review degree day data and volumetric usage trends, as warmer weather in Missouri and Alabama negatively impacted revenue and contribution margin in the current period.
- Regulatory Filings: Track the outcome of Spire Missouri's application for an Accounting Authority Order (AAO) regarding under-recovered revenues due to usage declines.