Business Context and Reporting Period
Company: Spire Inc. (including subsidiaries Spire Missouri Inc. and Spire Alabama Inc.)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended December 31, 2025 (Fiscal Q1 2026)
Business Overview: Spire operates three reportable segments: Gas Utility (regulated distribution in Missouri, Alabama, Mississippi, and Gulf Coast), Gas Marketing (non-regulated marketing), and Midstream (storage and transportation). The Company is a large accelerated filer.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Operating Revenues | $762.2 | $669.1 |
| Operating Income | $173.5 | $148.8 |
| Net Income | $95.0 | $81.3 |
| Net Income Available to Common Shareholders | $91.2 | $77.5 |
| Diluted EPS | $1.54 | $1.34 |
| Adjusted Earnings (Non-GAAP) | $108.4 | $81.1 |
| Operating Cash Flow | $81.0 | $81.1 |
| Capital Expenditures | $202.8 | $260.6 |
| Total Debt (Long-term + Current) | $5,425.6 | $4,198.2 |
| Shareholders' Equity | $3,432.7 | $3,308.9 |
Note: Total Debt calculated as Long-term debt ($4,449.4M) + Current portion of long-term debt ($488.1M) + Notes payable ($412.0M) for Q1 2026. Q1 2025 Total Debt calculated as Long-term debt ($3,697.7M) + Current portion ($42.5M) + Notes payable ($1,158.0M).
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased $93.1 million (13.9%) year-over-year. The primary driver was the Gas Utility segment, which saw a $79.8 million increase due to the implementation of a new rate case in Missouri ($46.4M), increased volumetric usage in Alabama ($11.0M), and higher off-system sales.
- Profitability: Net income increased $13.7 million (16.9%). Adjusted earnings increased $27.3 million (33.7%), driven by utility rate increases and favorable weather impacts in Alabama, partially offset by acquisition-related costs.
- Debt Structure: Long-term debt increased significantly due to the issuance of $900.0 million in junior subordinated notes in November 2025 to fund the pending Piedmont Tennessee acquisition. Conversely, short-term notes payable decreased by approximately $905.0 million as the Company reduced reliance on commercial paper.
- Interest Expense: Net interest expense increased $12.4 million, reflecting higher average levels of long-term debt, partially mitigated by lower short-term interest rates.
Guidance, Outlook, and Material Events
- Pending Acquisition: Spire is proceeding with the acquisition of Piedmont Natural Gas' Tennessee business for $2.48 billion. Financing includes $900.0M in junior subordinated notes, $825.0M in senior notes to be issued by Spire Tennessee, and a $725.0M bridge facility. Closing is expected in Q1 2026.
- Divestiture: On January 1, 2026, Spire sold a non-core equity interest for approximately $30.0 million, expecting to recognize a pre-tax gain in Q2 2026.
- Preferred Stock Redemption: Spire issued $200.0 million of 6.375% Junior Subordinated Notes on January 12, 2026, intending to use proceeds to redeem all outstanding 5.90% Series A Preferred Stock in Q2 2026.
- Regulatory Matters:
- Spire Missouri: Implemented a base rate increase effective October 24, 2025, resulting in a net increase of $137.4 million. Filed a new Infrastructure System Replacement Surcharge (ISRS) case in November 2025.
- Spire Alabama: Implemented an annual Rate Stabilization and Equalization (RSE) rate increase effective December 1, 2025, adding $12.9 million in annual revenue.
- Risks: Key risks include volatility in natural gas prices, regulatory decisions on rate cases and cost recovery, environmental liabilities related to former manufactured gas plants (MGP), and the successful closing and integration of the Tennessee acquisition.
Investor Verification Checklist
- Acquisition Financing: Verify the closing status of the $2.48 billion Piedmont Tennessee Transaction and the drawdown of the $725.0 million bridge facility.
- Debt Covenants: Confirm compliance with the 70% debt-to-capitalization covenant following the recent debt issuances and the pending acquisition.
- Preferred Stock Redemption: Monitor the execution of the redemption of the 5.90% Series A Preferred Stock using proceeds from the January 2026 note issuance.
- Regulatory Approvals: Track the status of the Tennessee Public Utility Commission (TPUC) approval required for the acquisition closing.
- Environmental Liabilities: Review updates on MGP site remediation costs, particularly regarding the EPA's involvement with Spire Missouri's Station B site and Spire Alabama's 35th Avenue Superfund Site.