Spire Inc. Aktie

Good day, and welcome to the Spire Inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Megan McPhail, Managing Director, Investor Relations. Please go ahead, ma'am.

Good morning, and welcome to Spire's Fiscal 2026 Second Quarter Earnings Call. We issued an earnings news release this morning, and you may access it on our website at spireenergy.com under Newsroom. There is a slide presentation that accompanies our webcast, which can be downloaded from our website. Before we begin, let me cover our safe harbor statement and use of non-GAAP earnings measures.

Today's call, including responses to questions, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements include, among others, statements regarding our expectations, plans and objectives for future performance, future operating results, earnings guidance, capital investment plans and the expected timing and benefits of and risks associated with acquisitions, dispositions and related integration and transition activities, including the acquisition of the Piedmont Natural Gas Tennessee business, the sale of Spire Marketing and the announced sales of Spire Storage and Spire Mississippi.

Our forward-looking statements on today's call speak only as of today, and we assume no duty to update them unless required by law. Although our forward-looking statements are based on estimates and assumptions that we believe are reasonable, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC.

In our comments, we will be discussing non-GAAP measures used by management when evaluating our performance and results of operations. I want to highlight that our results and guidance discussed today are presented on a continuing operations basis. This reflects the classification of Spire Marketing and Spire Storage as discontinued operations and is intended to provide a view of the earnings profile of the business going forward.

As a part of this change, we are no longer presenting separate midstream or gas marketing segments and results or segment earnings guidance. The MoGas Pipeline, which was previously reported in the Midstream segment is now included in Corporate and other. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and slide presentation.

On the call today is Scott Doyle, President and Chief Executive Officer; and Adam Woodard, Executive Vice President and Chief Financial Officer.

With that, I'll turn the call over to Scott Doyle. Scott?

Good morning, and thank you for joining us. This has been an exciting and transformative period for our company. Since announcing the acquisition of Piedmont Tennessee on July 29, 2025, we have successfully closed that transaction and taken decisive steps to further strengthen our portfolio. The announced agreements to sell Spire Storage and Spire Mississippi, along with the sale of Spire Marketing, have enabled us to fund the Tennessee acquisition without the need for external equity, while also sharpening our strategic focus on our regulated gas utility businesses.

Together, these actions enhance the quality and the visibility of our earnings, improve our overall risk profile and position the company for more consistent long-term value creation. I want to take a moment to thank our colleagues at Spire Marketing for their professionalism, dedication and meaningful contribution over many years. Their work supported our customers, strengthened the organization and helped to position the company for success in the future.

Turning now to performance for the quarter on Slide 4. On a continuing basis, we delivered second quarter adjusted earnings per share of $3.76 compared to $3.17 in the prior year. Underpinning that result is what we focus on every day, safe, reliable natural gas delivery, along with continued disciplined cost management and customer affordability.

On the regulatory front, we received approval from the Missouri Public Service Commission for a $16.5 million increase in our Infrastructure System Replacement Surcharge or ISRS request. Rates were effective in March and are supporting cash flow and recovery on infrastructure investment. In addition, in March, we filed an accounting authority order or AAO with the Missouri PSC related to the impact of lower weather-driven usage we experienced during the winter months. Adam will touch on our proactive approach to addressing these extraordinary conditions in a moment.

Looking ahead, we're providing a fiscal 2026 adjusted EPS guidance range on a continuing operations basis of $3.90 to $4.10 per share. At the same time, we are reaffirming fiscal 2027 adjusted EPS guidance, which includes results from Spire Tennessee, our 5% to 7% long-term growth target and our $11.2 billion 10-year capital plan, which underscores the durability of our strategy and the strength of our regulated growth platform.

Slide 5 highlights our strategic approach, concentrating the company around our core regulated gas utility businesses. Today, our business profile is centered on regulated gas utilities in our FERC-regulated pipeline, with growth driven by disciplined capital investments. With the sales of our noncore activities, including Marketing and Storage, we have removed market-based earnings exposure from our growth profile. As a result, the company's earnings profile has become more straightforward and more predictable with improved long-term earnings visibility. Looking ahead, long-term growth is anchored in our regulated utilities supported by rate base growth and constructive regulatory mechanisms.

Moving to Slide 6. Building on our key messages and new business profile, I want to take a moment to walk through our 2026 business priorities, which reflect the recent actions we've taken and how we're managing the business going forward.

First, operational excellence remains core to our strategy. We continue to focus on the safe and reliable delivery of natural gas, disciplined deployment and recovery of capital across our regulated utilities and maintaining a strong emphasis on customer affordability through effective cost management. From a regulatory perspective, we remain focused on achieving constructive outcomes across our jurisdictions, while continuing to advance the regulatory path forward in Missouri, including preparation for a future test year rate case filing later this year.

Financially, our priority is to deliver adjusted earnings within our fiscal 2026 guidance range from continuing operations, while maintaining balance sheet strength and a disciplined approach to financing.

Finally, from a strategic transactions and integration standpoint, we are executing against our priorities, successfully integrating Spire Tennessee, divesting noncore assets and maintaining our focus on regulated utility growth, reliability, customer affordability and long-term shareholder value. Together, these priorities support a simpler, more concentrated business mix with improved earnings visibility and a strong foundation for long-term growth.

Turning now to Slide 7 for an update on the Tennessee acquisition. We completed the transaction on March 31, marking an important milestone for Spire. The approval process with the Tennessee Public Utility Commission took just 6 months from filing, highlighting the constructive and efficient regulatory environment with continuity of rates and a clear framework that supports disciplined investment and long-term planning.

With this acquisition, we've added Spire Tennessee to our portfolio as a leading regulated natural gas utility in one of the fastest-growing markets in the country. Spire Tennessee is now serving more than 200,000 customers across the Greater Nashville area and surrounding counties.

From a financing standpoint, the transaction is now fully funded without the need to issue common equity. The balanced financing mix includes $900 million of junior subordinated notes, $825 million of Spire Tennessee senior notes and proceeds from our recently announced asset sales. To bridge financing until the closing of the asset sales, we entered into an $800 million term loan to be paid as funds are received.

Integration is also progressing smoothly. More than 200 employees transitioned to Spire at close, and we have an 18-month transition services agreement in place to support a seamless handoff. Our teams are already working closely together to align systems, processes and safety practices. Overall, we're very pleased with the execution around this transaction from financing to close to early integration, and we believe it positions Spire well for long-term value creation.

Moving to Slide 8. The sales of our Marketing, Storage and Mississippi businesses are deliberate actions to better align the company with where we see the strongest long-term value and the most consistent earnings profile. We reached agreements with strong buyers for each of these businesses. The sale of Marketing to Boardwalk Pipelines was completed on April 30, just 1 month after announcement, and the transactions to sell Storage and Spire Mississippi are expected to close in the coming months.

From a capital standpoint, these sales generate meaningful cash proceeds, providing flexibility to fund the Tennessee acquisition and continue investing in our regulated infrastructure. More importantly, from a strategic perspective, these actions further concentrate Spire to regulated natural gas utilities where we have scale in each state. This improves our business risk profile and enhances earnings visibility while allowing management to stay focused on operating excellence, customer service and disciplined growth.

When these transactions are complete, Spire's business portfolio will be fully regulated, positioning us well going forward and directly supporting our long-term strategy of investing in infrastructure, customer affordability and delivering steady, predictable value for shareholders.

Overall, we delivered solid second quarter results from our continuing operations, advanced our portfolio simplification strategy and remain focused on executing in our regulated gas utilities. While lower weather-related usage in Missouri weighed on the results, our underlying performance and long-term growth outlook remain intact.

With that, I'll turn the call over to Adam to walk through the financial results and our updated guidance in more detail.

Thanks, Scott, and good morning, everyone. I will begin with our quarterly results, which are presented on Slide 9. With Marketing and Storage now classified as discontinued operations, the results we're presenting today provide a more straightforward and transparent view of our overall operations and the key factors driving performance.

For the second quarter, we reported adjusted earnings of $224 million or $3.76 per share compared to $189 million or $3.17 per share a year ago. Gas utility earnings totaled $235 million, an increase of over 20% or $40 million compared to the prior year, driven primarily by the implementation of new rates in Missouri and Alabama.

Importantly, this increase reflects recovery of earnings on approximately $1 billion of incremental Spire Missouri rate base placed in service since rates were last updated. Favorable run rate operations and maintenance expense performance also contributed to earnings growth. These benefits were partially offset by the impact of Spire Alabama customer refund provisions under the RSE framework, which included a reversal of a provision in 2025 and a refund provision in 2026.

Lower customer usage in Missouri, net of weather mitigation further offset earnings relative to the prior year, with current year usage also coming in significantly below our expectations. Earnings were additionally impacted by higher depreciation expense and taxes other than income taxes, a portion of which is recovered through new Missouri rates as amortization schedules were updated. Interest expense was modestly higher in the current year, primarily reflecting higher long-term debt balances.

And finally, other activities reported an adjusted loss of $11 million, approximately $5 million higher than the prior year, reflecting higher corporate costs and higher interest expense in the current year.

Turning to Slide 10. Let me walk you through the weather-driven usage impacts we've seen in Missouri so far in fiscal 2026 and how we're managing through them. Customer usage was materially below historical patterns and below the assumptions embedded in Missouri's weather normalization mechanism, driven by an unusually mild and uneven winter.

Missouri heating degree days were 11.5% below normal through the first half of 2026 with residential usage per heating degree day during the winter heating season being 7% below 2024, which is the historical test year used to establish current billing determinants. The specific customer usage pattern we experienced was not fully mitigated by the weather normalization mechanism and the lower-than-expected usage resulted in a margin shortfall versus our year-to-date expectations.

In addition, Missouri rate design has shifted a greater portion of margin into the winter heating season, increasing sensitivity to weather and usage. We have been proactive on the regulatory front. In March, we filed an application for an accounting authority order with the Missouri Public Service Commission, seeking recovery of the volumetric margin shortfall caused by this extraordinary weather pattern. This dynamic is the primary driver of the reduction in our full year gas utility guidance. The margin impact is mechanical and weather-driven, and it does not reflect any change in strategy or in the regulatory framework that continues to support our long-term growth plan.

We are confident that parties understand the significance of this shortfall and look forward to working with the commission and other key stakeholders on a constructive solution.

Turning to Slide 11. Today, we are reaffirming our long-term 5% to 7% adjusted EPS growth target, anchoring to the original 2027 guidance midpoint of $5.75. This outlook continues to be supported by strong rate base growth in Missouri and Tennessee, steady regulated equity growth in Alabama and Gulf and execution of our 10-year $11.2 billion capital plan.

Focusing on near-term guidance, our 2026 adjusted EPS range from continuing operations is now $3.90 per share to $4.10 per share. This excludes earnings related to Marketing and Storage and consistent with our previous guidance also excludes any results from Spire Tennessee for the year. We are updating our adjusted earnings targets for the Gas Utility segment and other to reflect first half results and expectations for the rest of the year.

We are lowering the gas utility range to $275 million to $295 million, primarily due to the impact of lower usage and weather-related margin headwinds. We do not expect the year-to-date impact to change materially through the balance of the year due to the volumetric nature of our earnings.

The Corporate and other loss is expected to be in the range of $40 million to $46 million. That range includes earnings contributions for the MoGas Pipeline and also reflects higher-than-anticipated interest expense due to the timing of financings as well as allocated costs that remained following the divestitures.

The rate design changes and updated amortization schedules implemented in the last Missouri rate case have shifted the intra-year earnings profile. While it's not our practice to provide quarterly guidance, we have outlined our expected earnings per share distribution for the remainder of the year on Slide 11 to assist in quarterly modeling.

Looking ahead to 2027, we are reaffirming our adjusted EPS range of $5.40 per share to $5.60 per share. This outlook reflects a full year of expected earnings from Spire Tennessee and excludes earnings from Storage, Marketing and Mississippi. Overall, our earnings outlook remains firmly anchored by capital investment, constructive regulatory jurisdictions and a regulated business profile.

Moving to Slide 12. In the first half of the year, we invested $386 million in capital expenditures driven by system upgrades, infrastructure modernization and new business connections at the gas utilities. Year-over-year, CapEx spending declined primarily due to the completion of the advanced meter upgrade program in Eastern Missouri. We expect full year 2026 capital expenditures of $797 million across our utilities, consistent with our 10-year $11.2 billion capital plan.

These investments support rate base growth of 7% in Missouri and 7.5% in Tennessee with 6% regulated equity growth in Alabama and Gulf. This disciplined long-term investment strategy underpins our confidence in delivering 5% to 7% adjusted EPS growth over time.

On Slide 13, we provided an update to our financing plan, which is largely consistent with what we've previously outlined. In February, we issued $400 million of Spire Inc. senior notes, with proceeds used to refinance notes that mature on March 1 and to support our ongoing general corporate needs.

Importantly, following the recently announced divestitures and the resulting reduction in business risk, we have lowered our FFO to debt target to 14% to 15%. This adjustment better aligns our targets with the company's more focused regulated business profile, and we expect to achieve this over the next few years.

That concludes our prepared remarks. We'll now take your questions.

[Operator Instructions] The first question will come from David Arcaro with Morgan Stanley.

This is Alex Zimmermann on for Dave. So starting with the weather normalization, what are your latest thoughts on your strategy to improve the weather normalization mechanism in Missouri? And is this something you'll consider addressing the next rate case?

Yes. This is Scott. Sure. A couple of things. As we -- comments that we made on the script indicated that we filed an accounting authority order with the commission. A procedural schedule has been put in place with the hearing scheduled for September 9. We do believe that the commission does see this as an important issue and one that is -- that we're spending time having dialogue and providing information to them as we've experienced the weather that we did.

In the next rate case, there's also an opportunity to address it as well. And so for us, we're taking a look at the timing of the rate case. Our initial plan is to file in the fall around November, but we'll look at that timing depending on how we are able to work through this process with the commission.

Got it. No, very clear. And then shifting to dividends. Now that you have the funding of the Tennessee acquisition addressed and higher cash flow visibility from the regulated business, how are you thinking about the dividend trajectory going forward? And where do you see the optimal payout ratio for the company?

Yes. This is Adam. We would really remain unchanged there. Our payout ratio, as we've said in the past, in the, kind of, the typical 55% to 65% area, and we would expect the dividend to grow along with earnings.

The next question will come from Alex Kania with BTIG.

First question, maybe just as a kind of follow-up on the accounting -- the accounting request. So just want to make sure I kind of understand the mechanics a little bit of what you'd be looking for. I mean, obviously, given the procedural schedule, it looks like it obviously would be tough to kind of have it, have the sizable impact just on the earnings for this fiscal year. But I just want to think about, is it just the question of just recovering over time the -- effectively the cash that represented the lost margin? Or would it have a subsequent earnings impact in future years if the outcome does go as you request it?

And the second question just might end up being just if you could talk a little bit about post divestitures of the Storage and Marketing business in particular, just how do you think about the underlying cadence of growth that's possible here? I know I believe that in the past, the Marketing and Storage were seen as kind of relatively low growth. Now shifting to the kind of fully regulated footprint, if you think that there's kind of an opportunity for enhanced growth.

Yes, sure, Alex. Adam and I'll collectively answer the questions here. Maybe just the mechanics of the AAO. Traditionally, the AAO sets up a regulatory asset for future recovery. It's how they traditionally work. And so we'll want to work with the commission through this process and work towards a constructive outcome associated with it.

With regard to the divestitures, maybe just our -- kind of our growth profile going forward, a lot of -- maybe when you looked at how we invested in Storage in the past, those were step-up opportunities as we made capital investments and then were able to pull that into earnings over longer periods of time. With those divestitures and now the concentration of the portfolio into utilities, we have a more normal growth trajectory that's centered on that 5% to 7% earnings profile.

And so Adam, I don't know if you want to comment any more clearly about that.

No, it's really -- we'll be looking to make it very rate base driven and recovery driven from there. So as we've talked about, the relatively linear path in each of our jurisdictions on a go-forward basis should create a pretty predictable growth trajectory.

[Operator Instructions] The next question will come from Paul Fremont with Ladenburg.

I guess my first question really has to do with the fact that we thought weather normalization was dealt with in the last GRC. So what exactly in terms of the changes that you made, what didn't work?

Yes. Paul, good question. No, we very directly worked on weather normalization in the last case. What we saw in this particular winter weather was really a decoupling of usage from the HDDs that underpin -- or the HDD assumptions -- or the usage assumptions, I'm sorry, that underpin the weather normalization adjustment.

And so as a result, because that was extraordinary, that's what we -- why we filed the AAO in particular, we saw the greatest breakage taking place in January, where our usage was actually 28% lower than what our base year that's used to set up the weather normalization adjustment.

So those are the reasons why we've put this back in front of the commission is to both have a dialogue about it and quantify it and work towards a constructive solution.

So I mean, is it possible, do you believe, to get a weather normalization that is essentially just reflective of whatever change in usage actually occurs? And is that going to be, sort of, your goal on a go-forward basis?

Yes. The simple answer is yes. I'll let Adam maybe comment a little more specifically.

No, absolutely. That's the goal, Paul. And yes, it's frustrating for us as well. As Scott mentioned, the usage set in the last GRC that went into effect in last October was based off of 2024. We saw a very high correlation in the usage per HDD averages going into '24 and off the '24 numbers and felt secure with that. And as Scott mentioned, usage per HDD came down quite a bit over those two years.

And then I guess, what led to your decision to sell Mississippi? Clearly, it wasn't in any of your original plans that you shared with investors. So can you just give us an idea of why sort of last minute you announced the sale of the Mississippi subsidiary?

Yes. Sure, Paul. No, this was something we've been in dialogue with Delta for quite some time leading up to the sale. As you know, the business that we have in Mississippi is subscale, 18,000 customers. There's quite a bit of capital investment that needs to take place and the capacity of those -- of that customer base to support that investment can be challenged from time to time. By them folding into a larger utility within the state allows them to spread some of those costs over a broader base.

And so as a result, Delta was a natural owner for them and worked to a very good outcome there. We still have to get approval. That's going to take a while this year as we go through the regulatory process, but believe this is a benefit both to our customers and to Delta Utilities as well. So look forward to bringing that to a conclusion later this year.

And then last question for me. The time line for getting a decision in your AAO filing. And if the decision is favorable, how would you treat -- would the earnings impact be for this year? Or would it be treated as nonoperating?

Great question, Paul. It really depends on, one, the timing of that -- of an order. Obviously, we're getting -- as of 9/30 year-end, we're getting a little bit closer to the year-end. But also the wording of that order is -- would have an impact on that as well.

So it's something that we'll look at both of those elements as we think about what we would recognize in earnings.

So I guess simple question, if they were to agree to setting up a regulatory asset before your year-end, should we assume that, that could result in an adjustment in your guidance for '26?

It really depends on what the wording of that AAO is, Paul. It's -- there's a lot of things that dictate what that -- what our decision tree would look like on that.

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Doyle for any closing remarks.

Yes. Thank you again, everyone, for joining us this morning. We look forward to seeing many of you at the upcoming AGA Financial Conference late this month. Everyone, have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to Spire's First Quarter Fiscal 2026 earnings conference call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over Megan McPhail, Managing Director, Investor Relations. Please go ahead.

Good morning, and welcome to Spire's Fiscal 2026 First Quarter Earnings Call. We issued an earnings news release this morning, and you may access it on our website at spireenergy.com under Newsroom. There's a slide presentation that accompanies our webcast, which can be downloaded from our website. .

Before we begin, let me cover our safe harbor statement and use of non-GAAP earnings measures. Today's call, including responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different from those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC.

In our comments, we will be discussing non-GAAP measures used by management when evaluating our performance and results of operations. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and slide presentation.

On the call today is Scott Doyle, President and CEO; and Adam Woodard, Executive Vice President and CFO. With that, I will turn the call over to Scott Doyle. Scott?

Good morning, and thank you for joining us. As we begin our fiscal first quarter update, I want to recognize and appreciate the hard work of our employees across every part of our organization during winter storm firm. The recent weather event was an opportunity for us to serve our customers when they need us most, and I'm very proud of how we responded with extreme weather impacting all our service territories, our team collaborated closely, making sure homes and businesses stayed safe and warm.

According to the American Gas Association, Winter storm firm led to some of the highest demand of natural gas in our nation's history. In fact, at the height of the storm, just our Spire utilities delivered natural gas equivalent to 31 gigawatts of electric generation capacity at a much lower cost to customers. Despite extreme conditions, natural gas once again distinguished itself, underscoring that direct use of natural gas remains the most reliable and affordable way to heat your home.

This morning, we announced adjusted earnings of $1.77 per share, up from $1.34 per share a year ago. The strong year-over-year improvement reflects solid execution in our gas utility business, supported by new rates across all of the utilities. Our marketing and midstream segments also delivered meaningful contributions. Just as we've discussed on prior calls, cost management and customer affordability remains central to our strategy. We continue to pursue efficiencies while investing in system improvements and safety, ensuring we maintain the reliability our customers expect.

On the regulatory front, we are executing on our goal to achieve constructive outcomes in all jurisdictions. New Missouri rates became effective in October and in November, we filed a request for a $30.3 million revenue increase under the infrastructure system replacement surcharge with rates expected to be effective no later than May. Spire Alabama and Spire Gulf rates under the rate stabilization and equalization mechanism were updated in December, supporting our continued system investment.

Looking ahead, we are reaffirming our 2026 adjusted EPS guidance of $5.25 to $5.45 per share, our 2027 adjusted EPS guidance of $5.65 to $5.85 per share and our long-term 5% to 7% adjusted EPS growth target. These targets underscore our confidence in the strength of our portfolio and our disciplined approach to capital deployment. Our 10-year capital plan remains at $11.2 billion, with the majority targeted toward utility investments.

Finally, we remain on track to close the acquisition of the Piedmont Tennessee business in calendar quarter 1, 2026, a transaction that strengthens our regulated growth profile. We remain committed to delivering on our financial and operational goals as we execute our strategy to grow organically, invest in infrastructure and drive continuous improvement.

Turning now to Page 5 for an update on the Tennessee acquisition. We continue to make progress toward closing. The Hart-Scott-Rodino review is complete and approval from the Tennessee Public Utility Commission remains pending. Our financing plan is aligned with maintaining our current credit ratings and includes a balanced mix of debt, equity and hybrid securities. In November, we issued $900 million of Junior Subordinated Notes of Spire Inc. Following this, in December, we entered into a Master Note purchase agreement for $825 million of Spire Tennessee Senior Notes, which will fund at closing. We continue to expect minimal common equity needs.

As we've discussed on previous earnings calls, our evaluation of the potential sale of our natural gas storage assets is ongoing. The time line for an announcement has extended beyond our initial expectations, reflecting our objective to achieve the right value for each of the assets. We are focused on simplifying our portfolio and expect to provide an update later this quarter ahead of the acquisition close.

Operationally, our integration planning is well underway, supported by an 18-month transition services agreement designed to ensure seamless continuity for both customers and employees.

Moving to Page 6. In the quarter, we invested $230 million in capital expenditures with the majority directed to our gas utility operations, including system upgrades, infrastructure modernization and new business connections. These investments are already delivering value as reflected in the strong operational performance and reliability of the system through a quarter marked by weather swings from unseasonably warm to well below average temperatures.

CapEx was lower year-over-year, driven by the near completion of the advanced meter upgrades in the St. Louis region and the wrap-up of our storage expansion project. We continue to expect 2026 CapEx of $809 million, supported by our 10-year $11.2 billion capital plan. These investments directly support rate base growth of roughly 7% in Missouri and 7.5% in Tennessee and 6% regulated equity growth in Alabama and Gulf. This consistent and disciplined investment strategy underpins our confidence in achieving long-term 5% to 7% adjusted EPS growth.

I'll now turn the call over to Adam for a financial review and update on guidance and outlook. Adam?

Thanks, Scott, and good morning, everyone. I'll begin with our quarterly results, which are detailed on Pages 7 and 8 of our presentation. For the first quarter, we reported adjusted earnings of $108 million or $1.77 per share compared to $81 million or $1.34 per share a year ago.

Breaking down earnings by business segment. Gas Utilities earned $104 million, up over 33% or $26 million from last year, driven by the new rates in Missouri and higher margin under the RIC in Alabama. These benefits were partially offset by the lower Riley metric margin in both Missouri and Alabama, along with higher O&M, depreciation and interest expense. Gas Marketing earned $4.5 million, an increase of $2.3 million due to increased portfolio optimization opportunities. Midstream delivered earnings of $12.7 million, up almost $1 million from last year, driven by additional capacity at Spire Storage, partially offset by higher depreciation and interest expense.

And finally, other corporate costs were adjusted or an adjusted loss of $12.7 million, approximately $2 million higher than the prior year. This reflects higher corporate costs and slightly higher interest expense in the current year.

Turning now to our growth outlook on Page 9. As Scott mentioned, we are reaffirming our 5% to 7% long-term adjusted EPS growth target, supported by strong rate base growth across Missouri and Tennessee, study regulated equity growth in Alabama and Gulf and our 10-year $11.2 billion CapEx plan. We remain committed to executing on our strategy and are affirming our 2026 adjusted earnings guidance range of $5.25 to $5.45 per share. As a reminder, this range excludes the results of the pending acquisition of the Piedmont Tennessee business and includes a full year of earnings related to our natural gas storage facilities.

We are also affirming our 2027 adjusted earnings guidance range of $5.65 to $5.85 per share, which reflects a full year of expected earnings contribution the Piedmont Tennessee business and excludes earnings from Spire Storage. The adjusted earnings range for Corporate and Other has been updated to a range of negative $40 million to negative $4 million, lowering the midpoint $9 million to reflect the interest expense related to the incremental debt to redeem the Spire Inc. preferred stock.

Fiscal 2026 preferred dividends impacting EPS are expected to be lower by $9 million. I would like to note that our merger of the STL and MoGas Pipeline was completed January 1, 2026. It will operate as the Spire-MoGas Pipeline.

Moving now to Slide 10 for an update on our base business financing plan, excluding Tennessee. We expect equity needs of $0 million to $50 million per year, and we'll continue to rely on long-term debt to support refinancing and capital requirements. Our recent base business financing activity includes $200 million of first mortgage bonds issued at Spire Missouri in October of 2025 and $200 million of 6 3/8% junior subordinated notes issued in January 2026. We intend to use the proceeds from these JSMs along with other funds to redeem all outstanding shares of Spire Inc.'s preferred stock.

Our projected long-term debt issuances for 2026 has increased by $250 million driven by the decision to redeem the preferred shares. As always, we remain focused on maintaining our balance sheet strength and flexibility. We continue to target FFO to debt of 15% to 16%.

With that, let me turn it back over to you, Scott.

Thanks, Adam. To close, our business priorities for the year remain consistent with our commentary over the past several quarters. safely and reliably deliver natural gas service, execute our capital plan efficiently and recover capital in a timely manner, maintain a strong focus on customer affordability through disciplined cost management, achieve constructive regulatory outcomes, including preparing for a future test year Missouri rate case and successfully financing and closing the Tennessee acquisition while ensuring a seamless integration. .

Thank you for joining us today. We appreciate your continued support, and we are now ready to take your questions.

[Operator Instructions]

The first question comes from Gabe Moreen with Mizuho.

If I can start off in terms of some of the volatility we've seen here in gas markets in January. Scott, you mentioned how well the utilities performed operationally. But can you talk about maybe how marketing was positioned during the month and whether it might have been able to capture some of that volatility?

Gabe, yes. As we mentioned, I feel really good about how all of our systems performed across the enterprise during the month. It's a little early to describe them quantitatively at this time. So -- but one thing we do know, we met all of our customer obligations. The market itself performed very well, both from the supply side but even just the way the markets work during those times. Everything was fluid and liquid during that time. So we felt good about how that event took place. So I look forward to talking more about that on the second quarter call.

Got it, Scott. And I know you said you want to talk about things too much quantitatively, but can you also just talk about how your utilities hedging strategy may or played out in terms of protecting customers from some of the volatility and whether you're satisfied with how that worked out as well?

Yes. Simple answer is, yes, satisfied. As you know, on our utility purchasing strategy, particularly in both Missouri and Alabama, we have the ability to operate effectively our own AMA for the utilities and those performed as expected during this time. So our customers were protected and benefited from that activity.

The next question comes from David Arcaro with Morgan Stanley. .

I was wondering if you could give maybe a little bit more color on the storage asset sales process. I guess, any feedback that you got from the market on interest and appetite for those assets? Could you maybe lay out the timing and how that might line up? Like could this go a full transaction get done before the close? Or kind of how -- what are the backup plans there?

Yes. Sure, David. As we mentioned in our prepared remarks, the evaluation process has gone a little longer than we initially anticipated. What -- our focus remains, making sure we get the right value for each of the assets. Maybe just a comment about the assets themselves. Coming out of January, in particular, from an operational perspective, they performed very well, met all of our customer obligations still have demand for those services, for those assets on a going-forward basis. So feel good about that.

I feel good about the process, how it's unfolding at this time, but just making sure we're spending the time looking at the opportunities that are in front of us. And our focus continues to remain on prioritizing the utilities and simplifying our portfolio as we go through this process. I'll let Adam maybe comment a little bit more on timing and maybe from a financing standpoint. Adam?

Yes. David, it's Adam. We do expect to make an announcement on the storage evaluation a little bit later this quarter. To your point, as far as whether something is transacted prior to the close of Tennessee, we do are fully covered with bridge loan. And if we needed to tap that for a short period of time, that we would be able to do that. But we we are committed to making announcement here later this quarter prior to the close of Tennessee.

Yes. Got it. And just was it response to, was it harder to find interest or sell the assets together or were valuations different from what you had expected going into that process?

No, Yes, David. We've had very good interest in them. Again, these assets can be looked at in combination or they can be looked at separately. And so what we're wanting to do is make sure that full process plays out.

Got it. Okay. That is helpful. then maybe a separate topic. I was just wondering if you could touch on maybe more broadly, economic development efforts. Are you seeing opportunities for large loads or large generation facilities coming into your service territories, anything on the larger side that would boost growth in the pipeline? .

Yes, sure, David, on the -- particularly on large loads as it relates to the pipeline, the opportunity there for us is to serve generation needs, either as they convert coal to gas or as new gas flats come online. We're active in talking to different parties, but don't have anything to announce. We'll announce when the time is right. .

The next question comes from Julien Dumoulin-Smith with Jefferies.

This is Barton, on for Julien. Congrats on the solid quarter. appreciate the color on the storage transaction and marketing segment. And maybe just a quick follow-up. Just how should we think about the timing for equity issuance related to the Tennessee acquisition? .

Yes. So Spark, maybe to walk through kind of where we're at here where we've come from and where we're at now and then expectations around that. So in November raised $900 million of the JSN market and then followed that up with $825 million for the operating company -- Spire Tennessee operating company. That leaves, give or take, about $750 million to either raise or recycle through -- from potential sale of businesses. We're looking to get that announcement made on what that looks like. That would that would indicate something. If we weren't needing to go to the equity market, that would be some time after the next call in May or June.

The next question comes from Ross Fowler with Bank of America. .

Take it a step back, bigger picture question. Obviously, we're on track to close Tennessee by the end of the first quarter. or I mean, excuse me, we're on track to get a storage asset sale announced by the end of the first quarter, you're moving to Tennessee close pending approval of Tennessee Commission. So once we get through both of those things, how do you -- you talked about prioritizing utilities, simplifying the business model. How do you think about your scale of the company post those 2 transactions should they be executed and completed? And how do you think about strategically how you would think about adding utility to that portfolio or other things you could take out of the portfolio? Just general thoughts around it.

Yes. Thanks, Ross. Our primary focus right now is closing the transaction and integrating Tennessee and making sure that we have a seamless transition for customers there. And so our plate is really full right now with regard to executing on that priority. And so that we want to keep that a priority. So at this time, that's what we're focused on is doing that.

From a scale perspective, this has some benefit for customers ultimately because we'll be able to spread our shared services costs over a bigger base is what we'll do as well. So that scale benefit is a benefit for our customers and for the company as well. But that's what we're focused on right now is executing on our plan.

And then how do you -- you mentioned the integration of Tennessee post close. How do you think about there's probably system stuff, you have to do operational stuff you have to do? I mean it's not contiguous, but there's still all of that sort of back office, if you have to do, as you mentioned, shared services. How do you think about the time line of on a piece of paper, it never looks like a lot over to imagine it going to work. How do you think about the time line of getting that much in getting through that integration?

Yes. I know the 100-plus people on our side that are working on that, really appreciate that comment, Ross, as to the amount of effort they required as well. So a lot of work takes place post close. As you know, we do have integration teams working very closely with Duke, both on the separation of the assets but also on the continued operation of them is we'll have transition services for a period of 18 months.

So our job will be to work to make sure that both for employees and customers as we transition those services and bring them to the Spire umbrella of serving them, that we do that in a way that is methodical, but also brings value to the organization as well. And so when we do that, a lot of plans have been put in place. And once we close, we'll be doing the really hard work of pulling this off. The good news is this is a company -- Spire is a company that has a long history of doing this and has a lot of well-developed muscles regarding this, and I feel very confident in our ability to do this.

The next question comes from Paul Fremont with Ladenburg.

Congratulations on a strong quarter. I guess my first question relates to storage. I guess in the past, you guys -- you've expressed optimism of being able to complete the review with the sale. Do you still have that optimism at this point in time that at the end of the month, you can achieve a sale or at the end of the quarter, I mean?

Yes, Paul, this is Scott. Yes, look, we've had strong interest in these assets. And as I've mentioned earlier, our desire at this time is to make sure that we're getting good value for both or each. And so that's what's causing the process to perhaps go a little longer than we had anticipated initially but feel good about where we are in the stage of the process at this time.

Great. And then when I look at all the financing that you've done, it seems like you've been able to achieve some very reasonable rates, and you've gone sort of beyond in terms of potentially achieving savings from the retirement of preferred. Does that compare favorably to the assumptions that you put out when you gave guidance on the fourth quarter call?

Paul, it's Adam. It's a good question. I would say that we were contemplating the redemption of the preferred in that guidance. So that's -- it's not additive to it. And I think so far in the acquisition financing, it's -- we're relatively close to what our expectations were. Good questions.

[Operator Instructions]

The next question comes from Bill Appicelli with UBS. .

Hi, good morning. just a question on the -- clarifying that preferred impact because you guys do show the corporate and other signed line item getting impacted by about $9 million, but then there's a direct one-to-one offset, right, on the the preferred dividend impact, which you don't actually quantify in the guidance. But -- so net-net, EPS is unchanged, right? So even though the cumulative looks like the earnings, if you add the buckets up gets worse, but there's an offset that's not actually shown. Is that the way to think about it? .

That's right. So I think you've followed it. .

Okay. And then can you just remind us on the regulatory strategy or calendar from here, particularly as it relates to Missouri? Just as a -- walk us through sort of the time line of when the next case would be filed and new rates under the new legislation? .

Yes. Bill. On the rate case timing, it will -- the way we have at least anticipated right now is we follow the pattern of our prior case, which is we'd file it after fiscal year-end before Thanksgiving. So look at the October, November time frame of this year. And then the time frame of the rate case for prosecution would follow most likely the same amount of time it took for this last rate case.

And as we talk to a lot of folks, it's a case of first impression with being the first future test year that we would be filing. So we'd want to work through those details with the commission as we go through this process as well. But that's what we're looking forward to later this year. And work is already underway in dialogue with commission staff and others as we prepare to file that -- the package under the conditions that they like for us to file it.

This concludes the question-and-answer session. I would like to turn the conference back over to Megan McPhail for any closing remarks. Please go ahead. .

Thank you for joining us on the call today. We look forward to seeing many of you at conferences in the coming weeks. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to Spire's Fiscal 2025 Year-end Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Megan McPhail, Managing Director, Investor Relations. Please go ahead.

Good morning, and welcome to Spire's Fiscal 2025 Year-End Earnings Call.

On the call with me today is Scott Doyle, President and CEO; and Adam Woodard, Executive Vice President and CFO.

We issued an earnings news release this morning, and you may access it on our website at spireenergy.com under Newsroom. There is a slide presentation that accompanies our webcast, which can be downloaded from our website under Investors and then Events and Presentations.

Before we begin, let me cover our safe harbor statement and use of non-GAAP earnings measures. Today's call, including responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC.

In our comments, we will be discussing non-GAAP measures used by management when evaluating our performance and results of operations. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and slide presentation.

Now here is Scott, who will start on Page 4 of the presentation.

Thanks, Megan, and good morning, everyone. Thank you for joining us for Spire's year-end fiscal 2025 update. We appreciate your continued interest and support as we review our financial results, discuss recent developments and share our outlook for 2026 and beyond.

I'm incredibly proud of what we accomplished during the year to advance our strategic goals, both operationally and financially. We made significant progress towards setting Spire up for long-term success. This includes the pending acquisition of the Piedmont Natural Gas Tennessee business from Duke, which I'll provide an update on in a moment. We had a great year, and none of this would be possible without our 3,500 dedicated employees. I want to thank them for everything they do to our -- for our customers and the communities we serve. The commitment and hard work of our employees are the heart of these strong results and the opportunities ahead.

We're continuing to build a strong leadership team, and I'm delighted to welcome Steve Greenley as our new Executive Vice President and Chief Operating Officer. Steve has over 25 years of utility operations experience and will oversee our gas utilities in addition to our Midstream segment. We're excited about the expertise and collaborative leadership style Steve adds to our team. I'm confident that he will play a key role as we continue to advance our strategy.

Turning now to our fiscal 2025 results. Adjusted EPS came in at $4.44, up 7.5% from $4.13 in fiscal 2024, reflecting growth across all segments, driven by infrastructure investments. In fiscal 2025, we invested $922 million with close to 90% being spent at the utilities, enhancing the reliability and safety of our systems for our customers.

On the regulatory front, we are pleased to reach a positive settlement and outcome in the Missouri rate case and new rates were effective in October. In Alabama, we are currently in the rate stabilization and equalization or RSE rate setting process and are working closely with the key stakeholders to update rates. We remain focused on achieving consistent and constructive regulatory outcomes in all of our jurisdictions, leading to a more sustainable financial performance trajectory.

Despite significant critical investments in our systems, customer rate increases, the past several years in both Missouri and Alabama, have been in line with the rate of inflation, reinforcing our commitment to affordability. Natural gas remains the most affordable energy source for heating, water heating and cooking. Across our service territories, electricity is 2 to 3x more expensive than natural gas. In Missouri, new legislation passed establishing a future test year is the rate setting model. This legislation is the result of collaboration among numerous stakeholders across the state. The new forward-looking approach will allow natural gas and water utilities to set rates based on projected costs rather than historical expenses, enabling prudent planning, attractive investments in energy infrastructure and fueling economic growth statewide.

The bill's passage marks a major milestone and we're grateful for the partnership that helps strengthen Missouri's regulatory framework for both utilities and their customers.

This morning, we issued fiscal 2026 adjusted EPS guidance in the range of $5.25 to $5.45. This range excludes the results of the pending acquisition of the Piedmont Tennessee business and includes a full year of earnings related to our natural gas storage facilities. Today, we are also providing fiscal 2027 adjusted earnings per share guidance of $5.65 to $5.85 which reflects a full year of expected earnings contribution from the Piedmont Tennessee business and excludes earnings from Spire Storage due to the expected sale of the assets.

Our long-term adjusted EPS growth guidance is 5% to 7% using the fiscal 2027 guidance midpoint of $5.75 as a base. Our 10-year capital plan, including expected capital needs in Tennessee, totals $11.2 billion.

Demonstrating confidence in the long-term fundamentals of our business, I am pleased to say that the Spire Board of Directors approved a dividend increase of 5.1%, bringing the annualized rate to $3.30 per share. Spire has continuously paid a cash dividend since 1946 and 2026 will mark the 23rd consecutive year that the dividend has increased.

As you can see on Slide 5, we checked all of the boxes on our fiscal 2025 key business priorities and more. It was a year of strong execution, and we are committed to delivering strong results in fiscal 2026 and beyond. With a solid foundation, we're confident in our ability to deliver sustainable value for our customers, communities and shareholders in the years ahead.

Let's turn now to Slide 6 for an update on our pending acquisition of the Piedmont Tennessee business, which remains on track to close in the first quarter of calendar 2026. We completed the Hart-Scott-Rodino review in September, marking an important milestone in the approval process, and we recently received approval from FERC for the transfer of Piedmont Tennessee's gas supply contracts. Tennessee Public Utility Commission approval is pending, and we continue to work closely with the commission.

Turning to our financing plan. We are pursuing a permanent capital structure that is consistent with Spire's current credit ratings. Our approach remains largely the same and includes a balanced mix of debt, equity and hybrid securities, ensuring we maintain financial flexibility and strength. We expect a minimal amount of Spire common shares to be issued as a percentage of total financing, and we have launched a process evaluating the sale of our gas storage facilities as potential sources of funds. We're targeting calendar year-end for the completion of this evaluation process.

Transition planning for the acquisition is well underway. A seamless transition for both customers and employees is our top priority. We're led by an experienced integration team and have an 18-month transition service agreement to provide continuity and support once closed. We are making solid progress on all fronts: regulatory, financial and operational. We are excited about the opportunities this acquisition brings and are committed to delivering value to our customers, employees and shareholders as we move forward.

Turning to Slide 7. With the addition of Tennessee, Spire will operate across states with constructive regulatory frameworks and minimal regulatory lag. This strengthens our ability to deliver consistent and balanced growth across our utility businesses, improving diversification and stability of earnings. Importantly, each jurisdiction is supported by recovery mechanisms that encourage investment in critical infrastructure. Looking ahead, by fiscal year 2030, we expect our total rate base and capitalization to grow to $10.7 billion from an estimated $8.2 billion at the end of fiscal 2026 driven by our robust capital plan.

Our long-term adjusted EPS growth target is supported by compound annual rate base growth in Missouri of about 7% and compound annual growth in Tennessee of approximately 7.5%. We also expect 6% regulated equity growth in Alabama and Gulf. As a reminder, under the RSE mechanism in Alabama, we earn on regulated common equity rather than rate base, which is expected to outpace the total capitalization growth rate.

I'll now turn the call over to Adam for a financial review and update on guidance and outlook. Adam?

Thanks, Scott, and good morning, everyone. Let's review our fiscal 2025 results and our guidance for 2026 and beyond.

In fiscal 2025, we reported adjusted earnings of $275.5 million or $4.44 per share compared to $247.4 million or $4.13 per share in the prior year. These results include a fourth quarter adjusted loss of $24 million or $0.47 per share, reflecting the seasonality of our businesses. In the quarter, adjusted earnings were $3.5 million or $0.07 per share above last year, but fell below our expectations due to higher utility O&M expense.

Looking at the full fiscal year for our business segments. Gas utilities earned $231 million, up almost 5% over $10 million -- up almost 5% or over $10 million from last year as ISRS recovery in Missouri and new rates in Alabama were partially offset by slightly lower usage in Alabama, higher O&M and depreciation expense. Usage net of weather mitigation in Missouri was comparable in fiscal 2025 to the prior year. Midstream delivered earnings of $56 million, up almost $23 million from last year, driven by additional capacity of asset optimization at Spire Storage, partially offset by higher operating costs from higher activity and scale.

Gas marketing earned $26 million, an increase of $2.5 million, reflecting the business being well positioned to create value. This was partially offset by higher storage and transportation fees. And finally, other corporate costs were $38 million, nearly $8 million higher than the prior year. This reflects the absence of the prior year benefit of an interest rate hedge and higher interest expense in the current year.

Turning to Slide 10 and our updated capital plan, which includes anticipated Tennessee spend. Our latest 5-year investment plan totals $4.8 billion from fiscal 2026 through fiscal 2030. And we project a 10-year capital plan of $11.2 billion. The majority of this investment, 70%, is dedicated to safety and reliability projects, highlighting our commitment to upgrading distribution infrastructure and ensuring the integrity of our systems. Another 19% supports customer expansion and new business connections helping us to safely deliver reliable and affordable natural gas to more homes and businesses.

As a reminder, almost all of our 10-year capital expenditure plan is targeted towards utility investments, and we expect to recover a significant portion through four test year rate making true-up mechanisms or other constructive regulatory tools, helping balance infrastructure investment with customer affordability.

Turning now to our growth outlook on Slide 11. As Scott mentioned, we are reaffirming our long-term adjusted earnings per share growth target of 5% to 7%, anchored on the midpoint of our fiscal 2027 guidance range of $5.75 per share. This growth is supported by expected rate base growth of approximately 7% in Missouri, 7.5% in Tennessee, in addition to 6% equity growth at Alabama Utilities. This also reflects timely recovery of investments across all of our jurisdictions.

For fiscal 2026, we've issued an adjusted EPS guidance range of $5.25 to $5.45 per share. At the midpoint, that represents over 20% growth from our 2025 results, driven by the rate case outcome in Missouri. This range excludes the pending acquisition of the Piedmont Tennessee business, but does include a full year of anticipated earnings from our Gas Storage facilities. We will revise our earnings expectations if the outcome of the storage asset sale evaluation materially affects our outlook.

Looking ahead to fiscal 2027, our adjusted EPS guidance range is $5.65 to $5.85 which incorporates a full year of earnings from Piedmont Tennessee and excludes the Storage facilities due to the expected sale of the assets. At the midpoint, that 7.5% growth over the 2026 guidance midpoint and nearly 10% compounded annual growth from our prior long-term base of $4.35 in fiscal 2024. This strong growth is driven by execution on infrastructure investment, constructive regulatory outcomes and the strategic acquisition of Piedmont Tennessee to expand our Gas Utility business.

Turning to our business segment guidance on Slide 12. We anticipate our gas utilities will generate between $285 million and $315 million next year due to the combined impact of new Missouri rates effective October 24, and anticipated ISRS revenues from our filing expected later this month. New rates in Alabama and Gulf under the RSE mechanism are also expected to benefit earnings beginning in December. Partially offsetting these favorable items, we are targeting O&M expense to increase below the rate of inflation in addition to higher depreciation and interest expense.

Turning to Gas Marketing. We anticipate adjusted earnings of $19 million to $23 million, reflecting expectations on our current market conditions. Midstream adjusted earnings are projected to range between $42 million and $48 million in fiscal 2026, including a full year of storage and pipeline operations. Within the Storage business, we expect to realize the full benefit of the Spire Storage West expansion. Offsetting this are higher operating costs, increased interest and depreciation expense in addition to a decline in year-over-year optimization-related earnings.

We anticipate the Midstream business mix to be 65% storage and 35% pipeline during fiscal 2026. I would like to note that FERC approved our request to merge the STL and MoGas pipeline with the merger targeted for completion by January 1, 2026. And finally, Corporate and Others are anticipated to be in the range of negative $31 million to negative $37 million, an improvement from last year's loss of $38 million, primarily driven by lower interest expense resulting from reduced long-term debt rates.

We've updated our 3-year financing plan for our base business, as outlined on Slide 13. The plan does not include financing related to the pending acquisition of the Piedmont Tennessee business which we expect to update along with the conclusion of the Storage asset sale evaluation.

Our equity needs through fiscal 2028 are minimal and are expected to be managed through our ATM program.

Turning to the long-term debt needs, for our current base business, our 3-year financing plan assumes refinancing of maturities and incremental debt of approximately $625 million. This includes the $200 million of first mortgage bonds issued by Spire Missouri last month. We continue to target FFO to debt of 15% to 16%, providing 300 basis points of cushion above our S&P and Moody's published downgrade thresholds of 12% and 13%, respectively.

With that, let me turn it back over to you, Scott.

Thanks, Adam. As we look ahead to fiscal 2026, our priorities are clear and aligned with Spire's commitment to operational excellence, regulatory engagement, financial discipline and strategic growth. First and foremost, we remain focused on safely delivering reliable natural gas services to our customers. We are executing on our capital plan for the year, providing safety and long-term infrastructure resilience while maintaining customer affordability through disciplined cost management.

On the regulatory front, we're working toward constructive outcomes across all of our jurisdictions. The key step will be preparing to file a future test year rate case in Missouri to ensure timely cost recovery and support ongoing investments.

From a financial perspective, we are committed to delivering on our fiscal 2026 adjusted EPS guidance of $5.25 to $5.45 while maintaining a strong balance sheet that supports both our growth strategy and long-term shareholder value.

Finally, we are making significant progress with the acquisition of the Piedmont Tennessee business. Our focus is on financing and closing the transaction, which includes completing the evaluation of the sale of our natural gas storage assets. We remain laser-focused on ensuring a seamless integration for customers and employees.

Together, these priorities position Spire to deliver strong operational and financial performance and sustainable long-term growth. We are confident in our path forward and energized by the opportunities ahead. Thank you for your continued support and interest in Spire. We will now take your questions.

[Operator Instructions] The first question comes from Julien Dumoulin-Smith with Jefferies.

It's Paul Zimbardo on for Julien. Now thank you for the update. The first question I had was just if you could give a little bit more details and color on the long-term growth rate. And just really, are you expecting continued improvement in earned ROEs within that path? And just any commentary you can share on like how to think about Gas Marketing, Midstream growth in that profile as well?

Yes. Sure. This is Scott. So clearly, we provided 2 years of guidance on this call. And the primary reason for that is, there's a lot of things happening within the business over the next 12 months in this fiscal year. And then using '27 is perhaps a cleaner year based on the assumptions that we've provided in the prepared remarks. So to the point, when we think about earned returns within the utility coming out of the Missouri rate case, there's a step-up associated with that as we've brought capital into base rates from an extended period over the last several years, capital that had not passed through our ISRS mechanism.

And so when we think about earned returns in the utility, particularly in Missouri, we're getting closer to our allowed returns in Missouri. We'll file another case in Missouri in the fall of next year and we'll need to prosecute that case. That case will be based on a future test year, but that -- the outcome of that case is not going to be reflected in the FY '27 time period. So when you think about the guide that we're looking at for FY '27, the earned returns in Missouri will be a little less than what they are in '26 when we think about that.

When you think about Alabama, the earned returns are close to our allowed as we have a forward-looking mechanism there that works annually and we're currently in the process of having it reviewed right now. Marketing and Midstream, so as we think about the guide, clearly, all of Midstream is in the guide for next year. But as we said on the call, we pulled Storage out for FY '27. And then Marketing, as you know, we rebase every year, and it's not part of our growth story when we think about how it supports the overall growth picture or at least the guide for 5% to 7%.

Okay. Great. It does sound like you would expect using that '27 base and tailwinds on earned ROE based on that cadence you described, if that's fair.

Yes, yes. That's correct.

Okay. Okay. Great. And then any additional detail on the FFO to debt target, the 15%, 16%? Just how does that also evolve if we use a 2027 kind of jumping off point, where in that range do you expect to be? And how does that trend over time?

Yes. And Paul, as we've talked, we're at the bottom of the threshold ranges now but that's -- a lot of that is premised on just getting back into the right recovery path for Missouri. And so we see a pretty steady movement up into that -- into the middle of the threshold bands for both Moody's and S&P going forward, really premised on the recoveries in Missouri, but we're also taking, I think, a very deliberate financing tack with Tennessee to make sure that, that is also credit positive as well.

The next question is from Gabe Moreen with Mizuho.

I just wanted to ask a question on the financing mix and timing. Adam, has anything shifted in your mind, I guess, since you announced the acquisition? Just kind of your latest thoughts, you mentioned the minimal common equity issuance. Just maybe latest thoughts on the financing mix and timing.

Yes. No big update. We continue to see -- feel confident about taking a very balanced mix of debt and equity. Obviously, we're taking on these assets, debt free, so we need to recapitalize rate base at Tennessee. So you can expect that. And then we -- obviously, part of that is our evaluation of the Storage business and more to come there. We don't have an announcement there, but that's -- those are terrific assets, and we are seeing quite a bit of interest there, but we will be making an announcement at some point in the not-too-distant future.

Got you. I appreciate that. And then maybe if I can ask just on your O&M assumptions kind of going forward. It seems like '26 year's below and aiming to stick below inflation, does that stick for the rest of the plan? And I guess just sort of an overarching basis with the interaction -- or sorry, the integration planning going on between the utilities, any best practices or major initiatives that you think you'd share between the two that would, I guess, keep a lid on O&M?

Gabe, this is Scott. Great question. Yes, O&M, our guide for this year is below the rate of inflation. And historically, that's been our guide year-over-year and that will be actually our performance this year was below the rate of inflation. When you think about the integration activities, we're in the very early stages, but that is our theme as we step into the integration activities. Anytime we go through these, we look to best practices across both organizations. And as those that know us or have followed our story for a long time, we have been through this before. And when we do that, we find things that others do well.

We want to make sure we incorporate that into our go-forward business. So we'll have more to talk about that as we get a little further into the integration planning and start working more closely with the assets themselves once we close.

The next question is from Paul Fremont with Ladenburg.

I guess my first question is with the future test year rate adjustment taking place in '28. Could '28 be a year that falls outside of that 5% to 7% range, given the fact that you'll be further potentially narrowing your under earning in Missouri?

Yes. Paul, it's Scott. Maybe Adam and I will both tag team this. I think a couple of things to think about when we pivot to future test year, we're going to bring forward some capital into that process. And so we'll have to get through the process before we know what that will be as well. But within the range of what we're providing, we're basing that based on what we know right now and the best guess that we have.

Yes, we don't get too far ahead of rate making, given that that's another couple -- a couple of years out. But I think your implication, Paul, of more fully earned ROE is usually the implication around future test year. So we don't want to get ahead of that, but that's -- we would expect certainly some improvement there.

And it sounds to me like you're more confident about your decision to sell Storage. I think on the last call, you had indicated that would depend on levels of interest. I assume the levels of interest are strong enough that you now feel that it will be sold?

We're -- Paul, we're still in the evaluation process. As I mentioned earlier, we do -- we have seen quite a bit of interest and -- strong interest in the assets, but more to come there. We'll make an announcement once we get to a conclusion of that process.

Great. And you're expecting to make an announcement one way or another between now and the end of the year, right?

Yes, we're targeting by the end of the calendar year.

And then just going back to sort of your original comments, if you were to sell the Storage, the remaining sort of balance of equity and debt, has that changed since your last call?

Well, that is -- that certainly figures into the mix of financing. So we will -- I think once we get to the point of an announcement, we would shed some more light on that.

Okay. And last question. Can you be more specific in terms -- in other words, if you not issuing straight equity, what else would sort of fall into the category of fulfilling your equity need?

I mean there's other -- there are certainly other securities that we would have access to markets to that would provide equity like coverage there, whether those are equity-linked securities or hybrids or what have you, but the -- I think there are some other options there.

And junior subordinated debt, is that included as well?

Yes. I'm using that with -- along with -- that would use that terminology with a hybrid.

The next question is from Alex Kania with BTIG.

Just would you mind reminding me again, just on the -- within Midstream, just the rough split. I think it was 1/3, 2/3 on kind of pipelines versus storage? And would that be like earnings? Or would it be EBITDA as well that's there?

Yes. It's 1/3 pipeline, 2/3 storage is kind of the split. And depending on which way you cut the data, it's about the same, so whether it's EBITDA or earnings.

Great. And then maybe just taking kind of a step too far down that -- down the path of an asset sale. But just if there was a decision to move forward with the sale, does that kind of -- is it -- would that be big enough to sort of change your kind of long-term balance sheet targets, thresholds and things like that as you look forward, given [indiscernible] unregulated assets?

Yes. I mean it's too early to comment. That's part of the evaluation process. There'll be more as we announce the conclusion of the evaluation process.

Good. Great. And my last question just is on the transition to the forward test here in Missouri, do you anticipate -- I guess, do you think that all parties are sort of on the same page just in terms of how the processes are going to look as they kind of think about the rate making kind of a slightly different paradigm as it been in the past? Is there any education that needs to be done or any twists that we should be kind of aware of leading up to the filing?

Yes. No. So I think you're spot on. It's a case of first impression. And so all the parties are going to need to work together in order to understand both what the filing requirements would be and how to prosecute inside that paradigm. And so all parties will work together that's historically how it's worked here, and so we look forward to that process and going through it together.

[Operator Instructions] The next question is from Selman Akyol with Stifel.

Two quick ones for me. Maybe you're at the higher end of your growth range. And so could you remind us just in terms of how you think about the dividend in terms of payout ratios and sort of growth going forward?

Selman, it's Adam. We would continue to expect the dividend to grow basically at our earnings growth rate. And we do target the kind of the common payout ratio for utilities in that 55% to 65% range.

Very good. And then also, as you think about your sort of long-term capital needs and you gave a 10-year sort of outlook. Can you just remind us in terms of how much equity you're thinking about that for you overall?

Yes. So we did refresh our financing needs and this -- and you can find that at the back of, I think, the earnings deck. But we really continue to see a minimal amount of equity per year. That some -- think of that as some additional support for the Utility CapEx program. But when I say minimal, it's kind of in that 0 to $50 million range, so not anything particularly significant.

This concludes our question-and-answer session. I would like to turn the conference back over to Megan McPhail for any closing remarks.

Thank you for joining us this morning. We look forward to speaking with many of you in the coming weeks ahead. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the Spire Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Megan McPhail, Managing Director, Investor Relations. Please go ahead.

Good morning, and welcome to Spire's Fiscal 2025 Third Quarter Earnings Call. On the call with me today is Scott Doyle, President and CEO; and Adam Woodard, Executive Vice President and CFO. We issued an earnings news release this morning, and you may access it on our website at spireenergy.com under Newsroom. There is a slide presentation that accompanies our webcast, which can be downloaded from our website under Investors and then Events and Presentations.

Before we begin, let me cover our safe harbor statement and use of non-GAAP earnings measures. Today's call, including responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC. In our comments, we will be discussing non-GAAP measures used by management when evaluating performance and results of operations. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and slide presentation.

Now here's Scott, who will start on Page 4 of the presentation.

Thank you, and good morning. We are pleased to have you join us today on our fiscal third quarter earnings conference call for an update on recent developments and a review of our quarterly performance outlook. Before we dive into results, I want to take a moment to recognize and thank our employees for their unwavering commitment to safety and service throughout the quarter, especially in the aftermath of the devastating tornadoes that struck the St. Louis community on May 16.

Our team rose to the occasion in extraordinary ways. We received nearly 1,300 emergency calls and responded to more than 620 emergency orders during the days that followed. Beyond restoring service, our employees supported disaster response and recovery efforts by volunteering their time and talents to ensure neighborhoods were safe and accessible. Through our customer relief initiatives, assistance programs and community support, we demonstrated what it means to care for the people and places we serve. I'm incredibly proud of what we accomplished together, and I want to thank each of you for your dedication, resilience and compassion.

Our commitment to service and operational excellence also positions us for long-term growth. A clear example is our recently announced acquisition of the Piedmont Natural Gas Tennessee business from Duke Energy, a strategic investment I'll expand on shortly. But first, let's discuss our quarterly results on Page 4.

This morning, we announced adjusted earnings of $0.01 per share compared to a loss of $0.14 per share a year ago. The year-over-year increase reflects growth across all of our business segments. Our performance was driven by infrastructure investments to modernize our natural gas systems, coupled with our ongoing commitment to disciplined cost management. We continue to make meaningful progress managing our expenses through a focused cost reduction and efficiency initiative while capturing O&M benefits from capital investments. These efforts are delivering benefits to our customers, and we remain focused on unlocking additional value on their behalf. Adam will provide a more detailed breakdown of our results in his remarks.

Now for an update on regulatory matters. We have continued to work closely with key stakeholders in our Missouri rate case. We are pleased to report that a unanimous stipulation and agreement has been filed for an annual revenue increase of $210 million. This resolves all aspects of the case and is pending approval by the Missouri Public Service Commission. In addition, in May, the PSC approved a $19 million revenue increase in our Infrastructure System Replacement Surcharge, or ISRS, request, bringing total annualized revenues recovered through the rider to $72.6 million. These revenues are included in the recently settled rate case. After new base rates take effect this October, the ISRS rider will be available again to recover investments in system modernization. We remain focused on achieving consistent and constructive regulatory outcomes in all of our jurisdictions, leading to a more sustainable financial performance trajectory.

In Alabama, we are pleased to welcome President Almond as the new President of the state's Public Service Commission and look forward to collaborating with her and the entire commission and staff in the future. We extend our sincere thanks to President Cavanaugh for her dedicated service to the commission. Her leadership and commitment to fair regulation have made a lasting impact on Alabama's energy future.

Looking ahead, we are reaffirming our long-term EPS growth target of 5% to 7%. This is supported by our 10-year $7.4 billion capital investment plan, and we expect to deliver within our fiscal 2025 earnings guidance of $4.40 to $4.60 per share. We will provide updates to our 10-year capital investment plan and long-term EPS expectations incorporating Tennessee on our year-end call in November. We are committed to delivering strong results in fiscal 2025 and beyond and are well positioned to achieve our financial and operational goals as we work to grow organically, invest in infrastructure and drive continuous improvement.

Let's turn now to Page 5 and our recently announced acquisition of the Piedmont Natural Gas business in Tennessee. This is a strategic and accretive acquisition that meaningfully increases our scale and expands our regulated utility footprint into a high-quality, high-growth jurisdiction. Tennessee offers a constructive regulatory environment that supports long-term investment in natural gas infrastructure and aligns well with our disciplined growth strategy. The transaction enhances our business mix by adding a new service territory, further diversifying our regulated utility portfolio and reducing overall business risk while remaining squarely within our core competency of regulated gas distribution.

We bring a strong track record of successfully integrating other companies, having completed 3 prior gas utility acquisitions. Leveraging our mature shared services platform, we're confident in our ability to integrate this business efficiently. The Tennessee business will add an incremental $900 million to our 5-year capital plan for a combined $4.4 billion of investment opportunities focused on system modernization, customer growth and infrastructure resilience.

From a financing perspective, we've secured a bridge facility to fund the transaction and are pursuing a permanent capital structure that includes a balanced mix of debt, equity and hybrid securities. We are also evaluating the sale of nonutility assets such as natural gas Storage facilities as a potential source of funds. Our approach is designed to maintain credit quality while supporting long-term adjusted EPS growth of 5% to 7% and continued dividend growth, reinforcing our commitment to delivering sustainable value for shareholders.

The map on the right side of the page illustrates our expanded footprint, including the newly acquired Tennessee territory adjacent to our existing infrastructure in Missouri, Alabama and Mississippi. As you can see, this is a natural fit within our existing utility footprint. We expect to file for regulatory approval with the Tennessee Public Utility Commission within 45 days of the announcement and anticipate closing in the first quarter of calendar 2026.

Let's turn to Page 6 for an update on our Missouri rate case. Following a collaborative and constructive regulatory process, we are pleased with the unanimous stipulation and agreement reached yesterday with all parties involved. This agreement supports an annual revenue increase of $210 million, of which $72.6 million are already being recovered through the ISRS. The increase is based on a $4.4 billion rate base, though the agreement does not specify an allowed return on equity or capital structure. Key objective of this case is the refinement of our weather normalization adjustment mechanism, or WNAR. The agreement incorporates an updated 30-year weather period and revised coefficients to more accurately reflect weather-driven usage. Additionally, the small general service class has now been included in the WNAR mechanism, further strengthening its effectiveness.

We are confident that these updates will materially reduce the impact of weather on our volumetric revenues we've experienced since our last rate case. The stipulation and agreement is pending approval by the Missouri Public Service Commission. If approved, new rates will take effect on October 24, 2025. The outcome of this case underscores our continued focus on regulatory transparency, customer affordability and long-term investment in safe, reliable infrastructure.

I'll now turn the call over to Adam for a financial review and update on guidance and outlook. Adam?

Thanks, Scott, and good morning, everyone. I'll start with a review of our quarterly results, which are detailed on Pages 7 and 8 of our presentation. During the third quarter, we reported adjusted earnings of $4.1 million, an increase of over $8 million compared to last year. The Gas Utility segment had an adjusted loss of $10 million in the third quarter, $1 million better than prior year. This reflects higher contribution margin at Spire Missouri, driven by an increase in ISRS revenues, partially offset by lower Spire Missouri usage net of weather mitigation. Utility earnings also reflected higher O&M expense and higher depreciation expense.

On a year-to-date basis, our O&M run rate is less than 1% higher than the prior year period. Earnings in the Gas Marketing segment were higher by over $4 million as the business was well positioned to create value. During the quarter, we continued to see strong earnings growth in our Midstream segment, driven by additional capacity and asset optimization at Spire Storage, partially offset by higher operating costs from higher activity. Lastly, other corporate costs were slightly lower, primarily due to higher returns on nonqualified benefit plans, partially offset by higher interest expense.

Turning to Page 9. We continue to make capital investments to improve reliability, resiliency and safety for the benefit of our customers. Year-to-date, our CapEx has totaled $700 million, with the majority of the spending taking place at our gas utilities. Year-over-year, utility CapEx increased nearly 20% as we focus on upgrading distribution infrastructure and connecting more homes and businesses to safe, reliable and affordable natural gas.

Investment in our Midstream segment totaled $99 million year-to-date, largely for the expansion of Spire Storage West. The expansion is now complete and the returns on the project are exceeding our expectations. Our capital investment target for fiscal 2025 has increased to $875 million, reflecting a $10 million increase in Midstream and a $25 million increase in Spire Missouri. As a reminder, our long-term investment plan is focused on organic growth at the utilities. Approximately 98% of our 10-year capital expenditure plan is targeted utility spend, driving our growth in rate base.

Turning now to our growth outlook on Page 10. We are confident in our long-term adjusted earnings per share growth target of 5% to 7%. This is reinforced by 7% to 8% rate base growth at Spire Missouri and steady sustained equity growth at Spire Alabama, coupled with efficient recovery mechanisms. We remain committed to executing on our strategy and are affirming our fiscal 2025 adjusted earnings guidance range of $4.40 to $4.60 per share. Our adjusted earnings targets by segment remain the same as provided on the call last quarter. Incorporating results from the third quarter, we expect utility earnings to be lower in the range and Midstream earnings to be higher in the range. Further, our dividend growth is supported by our long-term adjusted EPS growth targets, and we fulfilled our equity needs for fiscal 2025.

Looking ahead, we'll provide an update on our long-term financing strategy during our year-end call in November. At that time, we'll introduce our fiscal 2026 earnings guidance and provide an update on our long-term adjusted earnings per share growth expectations. We expect to close on the acquisition of the Piedmont Natural Gas Tennessee business in the first calendar quarter of 2026. As a result of closing midyear, we expect to exclude net income related to the business from 2026 adjusted earnings and adjusted earnings per share. Importantly, with new rates in Missouri and the ability to earn closer to our allowed return on equity, we anticipate adjusted earnings at our Utility segment to be meaningfully higher in 2026 compared to recent years. This reflects the strength of our regulatory framework and our continued focus on delivering sustainable earnings growth.

With that, let me turn it back over to you, Scott.

Thanks, Adam. As we look to the remainder of fiscal 2025, our priorities are clear. Operationally, our top priority remains delivering safe, reliable natural gas service to our customers. We're executing on our $875 million capital plan, which is focused on system modernization and long-term infrastructure resilience. At the same time, we're maintaining a strong focus on customer affordability through disciplined cost management. On the regulatory front, we're working to achieve constructive outcomes across our jurisdictions. Strengthening our regulatory recovery mechanisms remains essential to ensuring timely cost recovery and supporting continued investment in our systems. From a financial perspective, we are reaffirming our full year adjusted EPS guidance of $4.40 to $4.60 per share. We remain committed to maintaining a strong balance sheet, which supports both our growth strategy and our long-term shareholder value proposition.

And finally, we're making progress on our recently announced acquisition of the Tennessee Piedmont Natural Gas business. We're actively pursuing regulatory approvals and advancing integration planning. Together, these priorities position us to deliver strong operational performance, financial discipline and long-term growth. We're confident in our path forward and excited about the opportunities ahead.

Thank you for your continued support and interest in Spire.

[Operator Instructions] The first question comes from Richard Sunderland with JPMorgan.

Just one for me. I'm curious about the FFO to debt targets you previously outlined of 15% to 16%. Is that still the right framework to think about going forward?

Rich, it's Adam. Those definitely are still the right targets to keep in mind, probably a little bit through the transition period of the acquisition, probably a little bit slower to get to those targets, but that's still what we're aiming for.

The next question comes from Christopher Jeffrey from Mizuho Securities.

Congratulations on the strong quarter. Just a point of clarification. Just wondering in the Midstream results, how much of that is -- how much is the expansion of Storage reflected in the full quarter? And maybe kind of just going forward, should we think of this quarter as a reasonable run rate for the business?

Yes. Chris, it's Adam. We did -- on the Midstream segment, in particular, we did see very strong year-over-year growth, obviously, with Storage coming on. About 90% of the increase in Storage year-over-year was attributable in Midstream is attributable to Storage. That would cut on a net income basis, 75% to 25% Storage to pipeline.

Okay. Great. And then maybe just sticking on the Midstream, just curious more on the pipeline side, just maybe given some trends we're seeing in Missouri comments from the electric utilities there in terms of load growth, is Spire seeing any opportunities just in terms of capacity on various pipelines?

Yes, Chris, this is Scott. Yes, that -- as we see what's taking place in Missouri, particularly around the IRPs associated with the electric businesses, those are creating some opportunities for us that are in future years. Our ability to serve them is good and low CapEx needs associated with serving those needs at this time.

Great. And maybe just one more, if I could. Just maybe any color on the strong marketing results in the quarter? And maybe as we think of 4Q, can we expect the same seasonal strong end of the fiscal year there? Or should we kind of think of those results as being pulled into 3Q a bit?

Chris, it's Adam again. The -- I think they were very well positioned coming into this quarter. It tends to be a little quieter quarter as we get into the summer. Really no comment on what we see going into the fourth quarter, but we feel pretty good about the operations of that business and what they're doing and hitting the -- hitting the targets that we've outlined for year-end.

[Operator Instructions] The next question comes from Dylan Lipner from Ladenburg Thalmann.

Congrats on a really good quarter. I just want to kind of piggyback off of one of Chris' questions about the Storage segment. Maybe if you guys can discuss the year-over-year changes in margins at the Storage business that might be driving revenue up for you guys?

Yes. Dylan, it's Adam. A lot of that's just the expansion that's coming online there. And we are seeing similar as we talked about last quarter, not only a realization of that expansion, but also some additional optimization on top of that. But that's really the story. We do include some more specific information in the Q as it will be filed shortly.

Got you. And then when it just comes to even on the pipes from last year in 2024, should we assume that they're kind of unchanged going forward into 2025 for the Midstream business in the pipeline?

Yes. No, it should be pretty straightforward. Good observation.

The next question comes from [ Barry Klein ] from Macquarie.

I just wanted to be clear here. Does your long-term 5% to 7% growth rate include the impacts of the recent Missouri rate case settlement and future test year legislation that's been enacted?

Barry, it's Adam. So the 5% to 7% is really keyed off of our capital deployment. I think there's a realization on the fact that we had been behind on our recovery in Missouri. And so there would certainly be some catch-up there that would be in addition to the 5% to 7%. But the 5% to 7% really keys off of our rate base -- long-term rate base growth.

Okay. So not -- doesn't have anything to do with if you're able to improve the returns?

No, that's right.

The next question comes from Selman Akyol from Stifel.

Just real quick for me. On the O&M, you guys have done a great job. And I'm just kind of curious how you see that line evolving going forward?

Selman, Thank you. Yes, our target is to be at or below the rate of inflation in any given year. And just really maybe the headline for us year-to-date is we are below 1% year-to-date on O&M. In the quarter, there was a comparison there from this quarter versus last quarter. There was a onetime benefit in the quarter last year and a onetime expense in the quarter of this year that traded against us along with some other things. But all in, we feel good about where we're headed on O&M story.

This concludes our question-and-answer session. I would like to turn the conference back to Megan McPhail for closing remarks.

Thank you for joining us on the call today. We look forward to speaking with many of you in the near future. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.