ST. LOUIS, May 4, 2016 /PRNewswire/ -- Spire Inc. (NYSE: SR)
("Company" or "Spire") today reported operating results for its
fiscal 2016 second quarter and first half ended March 31,
2016. Highlights include:
- Net economic earnings* of $2.37
per diluted share, up from $2.25 per
share a year ago
- GAAP earnings of $2.31 per share
compared to $2.18 per share in prior
year
- Agreement to acquire Mobile Gas and Willmut Gas from Sempra
Energy
"We delivered another solid performance in the second quarter
with net economic earnings increasing to $2.37 per share on higher Gas Utility earnings,"
said Suzanne Sitherwood, president
and chief executive officer of Spire. "We also maintained our high
level of service to our customers as we continue to grow. Last week
we announced plans to acquire two gas utilities - Mobile Gas in
Alabama and Willmut Gas in
Mississippi - and we look forward
to adding their employees, customers and communities to our Spire
family. At the same time, we further crystalized our STL Pipeline
project to access shale gas from the Marcellus/Utica region."
Second Quarter
Results
|
Three months ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
Gas Utility
|
$
|
102.5
|
|
|
$
|
96.5
|
|
|
$
|
2.35
|
|
|
$
|
2.22
|
|
Gas
Marketing
|
3.0
|
|
|
2.1
|
|
|
0.07
|
|
|
0.05
|
|
Other
|
(2.0)
|
|
|
(1.0)
|
|
|
(0.05)
|
|
|
(0.02)
|
|
Total
|
$
|
103.5
|
|
|
$
|
97.6
|
|
|
$
|
2.37
|
|
|
$
|
2.25
|
|
Acquisition related
costs
|
(1.1)
|
|
|
(1.5)
|
|
|
(0.03)
|
|
|
(0.03)
|
|
Fair value
adjustments
|
(1.6)
|
|
|
(1.7)
|
|
|
(0.03)
|
|
|
(0.04)
|
|
Net Income
(GAAP)
|
$
|
100.8
|
|
|
$
|
94.4
|
|
|
$
|
2.31
|
|
|
$
|
2.18
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding (Millions)
|
|
|
|
|
43.5
|
|
|
43.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Non-GAAP, see "Net
Economic Earnings and Reconciliation to GAAP."
|
For the three months ended March 31,
2016, the second quarter of its fiscal year, we reported net
economic earnings (NEE) of $103.5
million (or $2.37 per diluted
share) compared to $97.6 million (or
$2.25 per diluted share) a year
earlier. Consolidated net income for the second quarter was
$100.8 million compared to
$94.4 million in the prior year
period, reflecting higher earnings from both the Gas Utility and
Gas Marketing segments. NEE excludes from net income the effect of
unrealized gains and losses on energy-related derivatives, as well
as the impacts of acquisition, divestiture and restructuring
activities which consist largely of expenses associated with the
integration of Missouri Gas Energy (MGE) and Alabama Gas
Corporation (Alagasco).
Gas Utility
The Gas Utility segment includes the regulated gas distribution
operations of our three utilities - Laclede Gas and MGE
(collectively the Missouri Utilities) and Alagasco. For the second
quarter, the Gas Utility segment posted NEE of $102.5 million compared to $96.5 million a year ago. Segment net income was
$102.4 million for the second quarter
ended March 31, 2016 compared to
$96.2 million in the prior year.
Our utilities overall experienced unseasonably warm conditions
this winter, with the Missouri Utilities seeing the second warmest
winter on record. This weather did impact certain components of
operating results for the quarter. Operating margins (non-GAAP; see
"Operating Margin and Reconciliation to GAAP") were lower
reflecting a $6.1 million impact from
a decrease in overall demand and this was more than offset by
higher Infrastructure System Replacement Surcharge (ISRS) revenues
at the Missouri Utilities of $3.9
million and a lower year-over-year Rate Stabilization and
Equalization (RSE) giveback at Alagasco of $3.9 million. Other operation and maintenance
expenses were lower by $9.5 million,
largely due to the favorable impact of milder weather, especially
on bad debt expense and employee-related costs and, to a lesser
extent, cost efficiencies and the favorable timing of expenses.
Depreciation and amortization increased by $1.6 million reflecting increased capital
investment including infrastructure upgrades.
Gas Marketing
The Gas Marketing segment includes the results of Laclede Energy
Resources, which provides natural gas marketing services to the
Midwest region. Net economic earnings for the second quarter of
fiscal 2016 were $3.0 million, up
from $2.1 million in the prior year.
Quarterly net income for the segment was $1.5 million, up from $0.3
million a year ago. Gas Marketing's improved earnings were
largely driven by favorable natural gas storage results.
Other
The non-utility operations and corporate costs, on a net
economic earnings basis, were $2.0
million in the second quarter of fiscal 2016, compared to
$1.0 million a year ago. Most of
these costs in both periods relate to interest expense on debt
issued to finance the Alagasco acquisition. Costs were $3.1 million in the second quarter of 2016,
compared to $2.1 million a year
ago.
Six Months
Results
|
Six months ended
March 31,
|
|
(Millions)
|
|
(Per Diluted
Share)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net Economic
Earnings (Loss)* by Segment
|
|
|
|
|
|
|
|
Gas Utility
|
$
|
152.5
|
|
|
$
|
146.3
|
|
|
$
|
3.50
|
|
|
$
|
3.38
|
|
Gas
Marketing
|
2.7
|
|
|
2.5
|
|
|
0.07
|
|
|
0.06
|
|
Other
|
(6.6)
|
|
|
(5.5)
|
|
|
(0.16)
|
|
|
(0.13)
|
|
Total
|
$
|
148.6
|
|
|
$
|
143.3
|
|
|
$
|
3.41
|
|
|
$
|
3.31
|
|
Acquisition related
costs
|
(2.0)
|
|
|
(1.9)
|
|
|
(0.05)
|
|
|
(0.05)
|
|
Fair value
adjustments
|
1.1
|
|
|
0.1
|
|
|
0.03
|
|
|
—
|
|
Net Income
(GAAP)
|
$
|
147.7
|
|
|
$
|
141.5
|
|
|
$
|
3.39
|
|
|
$
|
3.26
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding (Millions)
|
|
|
|
|
43.5
|
|
|
43.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See "Net Economic
Earnings and Reconciliation to GAAP."
|
For the first six months of fiscal 2016, we reported
consolidated NEE of $148.6 million
comparable to $143.3 million in the
prior year. Net income was $147.7
million, up from $141.5
million in 2015. The increase in earnings was driven
principally by higher Gas Utility operating results. On a per-share
basis, NEE was $3.41 per fully
diluted share for the first half of fiscal 2016, up from
$3.31 per share in the prior-year
period.
Gas Utility
For the first half of fiscal 2016, the Gas Utility segment
reported NEE of $152.5 million, up
from $146.3 million for the same
period in 2015. Segment net income increased to $151.7 million from $145.8
million a year ago. As noted earlier, the unseasonably warm
winter adversely impacted operating margins and benefited certain
other operating costs. Year-to-date operating margins were lower
reflecting a $17.3 million impact
from lower overall system demand, largely offset by lower RSE
givebacks of $6.9 million in
Alabama and $6.5 million higher ISRS revenues in Missouri. Other operation and maintenance
expenses were lower by $15.0 million
reflecting the beneficial impact of milder winter weather, cost
efficiencies and timing of expenses. Depreciation and amortization
expenses increased by $3.1 million
reflecting higher year-over-year capital investments.
Gas Marketing
For the six months ended March 31,
2016, Gas Marketing NEE was $2.7
million, up from $2.5 million
a year ago. Net income increased to $3.8
million from $2.5 million a
year ago. The earnings increase was largely attributable to better
operating margins in the second quarter driven by favorable natural
gas storage results.
Other
The non-utility operations and corporate costs, on a NEE basis,
were $6.6 million in the first half
of fiscal 2016, compared to $5.5
million in the year-ago period. A significant portion of
these costs are related to interest expense on debt issued to
finance the Alagasco acquisition. Costs were $7.8 million in the first half of 2016, compared
to $6.8 million a year ago.
Acquisition of Mobile Gas and Willmut Gas
On April 26, Spire announced its
intent to acquire EnergySouth, Inc., from Sempra U.S. Gas &
Power, a unit of Sempra Energy (NYSE: SRE). EnergySouth is the
parent company of Mobile Gas, with 85,000 gas utility customers in
Alabama and Willmut Gas, with
19,000 customers in Mississippi.
The purchase price for the utilities is $344
million, and the definitive agreement also calls for the
purchase of working capital of $46
million. The purchase consideration will include the
assumption of $67 million of existing
debt at the two utilities, Spire common equity in the range of
$130 - $150 million, new long-term
debt in the range of $150 - $170
million, cash on hand and borrowing against existing credit
facilities. The transaction is expected to close in 2016, subject
to customary closing conditions and regulatory approvals including
formal regulatory approval by the Mississippi Public Service
Commission. The addition of Mobile Gas and Willmut Gas is expected
to be neutral to net economic earnings per share in 2017 and
accretive in 2018.
STL Pipeline
In February 2016, we identified a
pipeline project - STL Pipeline - as part of our efforts to
modernize our gas transportation, storage and supply assets. This
pipeline will enhance reliability and provide access to lower-cost
shale gas from the Marcellus/Utica
producing regions. We are moving forward with our plans to
construct this 60-mile, 24-inch pipeline with a capacity of 400
MMcf/d. This FERC-regulated interstate pipeline will interconnect
with the Rockies Express and Panhandle Eastern pipelines and
delivery gas to our St. Louis
utility. We intend to have a 100 percent ownership interest in the
pipeline, with Laclede Gas expected to be a foundation shipper. The
estimated total project cost is $170 - $200
million, with an expected timeframe of 30 - 36 months from
the launch of the open season to the in-service date.
Outlook
We affirm our fiscal 2016 NEE per share range of $3.34 to $3.44, representing annual growth of 5
percent to 8 percent. Including the anticipated expenditures for
the STL Pipeline, 2016 capital expenditures are now anticipated to
increase to $320 million, and our
five-year outlook for capital spend target increases to
$1.8 billion.
Balance Sheets and Cash Flows
We maintain a strong capital structure with ample liquidity. At
March 31, 2016, we had a balanced
long-term capitalization of nearly 52 percent equity and 48 percent
debt representing a 160 basis-point improvement in the equity
percentage since fiscal 2015 year end. Short-term borrowings
outstanding at March 31, 2016 were
$253.6 million compared to
$338.0 million at September 30, 2015. These amounts reflect normal
seasonal borrowings.
Net cash provided by operating activities was $243.0 million for the six months ended
March 31, 2016, compared to
$279.9 million in the first half of
fiscal 2015. The change reflects variations in collections under
the purchased gas cost riders in Missouri and Alabama, as well as other working capital
fluctuations which are largely driven by relative weather
conditions in each period.
Capital expenditures for the first half of fiscal 2016 were
$121.8 million compared to
$129.5 million in the prior-year
period. We continue to focus on infrastructure upgrade investments
at the Missouri Utilities and Alagasco.
For additional details on Spire's results for the second quarter
and first six months of fiscal 2016, please see the accompanying
unaudited Consolidated Statements of Income, unaudited Condensed
Consolidated Balance Sheets, and unaudited Condensed Consolidated
Statements of Cash Flows.
Regulatory Matters
Missouri Utilities
As previously reported, on February 1,
2016, the Missouri Utilities filed with the Missouri Public
Service Commission (MoPSC) for increases in ISRS revenues. In
April, the Staff of the MoPSC recommended an increase of
$9.0 million. The increase is subject
to approval by the Commission, which may occur effective later this
month (May). If approved, the additional amounts would bring the
annual ISRS run rate to $35.3
million. ISRS allows for more timely regulatory recovery of
prudent investments made by gas utilities to improve the integrity,
safety and reliability of their distribution systems while reducing
maintenance costs.
On April 26, 2016, the Office of
Public Counsel (OPC) filed a complaint to address whether the gas
rates of the Missouri Utilities are just and reasonable. The OPC
alleged that the Missouri Utilities were overearning based on an
unadjusted return on equity for fiscal 2015. We believe that
complaint lacks merit and is flawed in several respects, and we
will vigorously defend our position that our rates are just and
reasonable.
Conference Call and Webcast
Spire will host a conference call and webcast today to discuss
its second quarter financial results. To access the call, please
dial the number below approximately 5-10 minutes prior to the start
time.
|
Date and
Time:
|
Wednesday, May
4
|
|
|
|
8 a.m. CST (9 a.m.
EST)
|
|
|
|
|
|
|
|
Phone
Numbers:
|
U.S. and
Canada:
|
1-866-652-5200
|
|
|
|
International:
|
1-412-317-6060
|
|
The call will also be webcast in a listen-only format for the
media and general public. The webcast can be accessed at
www.SpireEnergy.com under the Investor Relations tab. A replay
of the call will be available beginning at 10 a.m. CST (11 a.m.
EST) on May 4 and continuing
until June 3 by dialing
1-877-344-7529 (U.S.), 1-855-669-9658 (Canada), or 1-412-317-0088 (International).
The Replay Access Code is 10084052. A replay of the webcast will be
available at www.SpireEnergy.com.
About Spire
At Spire Inc. (NYSE: SR) we believe energy exists to help make
people's lives better. It's a simple idea, but one that's at the
heart of our company. Every day we serve 1.56 million customers
making us the fifth largest publicly traded natural gas company in
the country. We help families and business owners fuel their daily
lives through our regulated utilities – Laclede Gas, Missouri Gas
Energy and Alagasco. Our non-regulated businesses Laclede Energy
Resources and Spire Natural Gas Fueling Solutions provide energy
solutions to other natural gas users. We are committed to
transforming our business and pursuing growth by 1) growing our gas
utility business through prudent infrastructure upgrades and
organic growth initiatives; 2) acquiring and integrating gas
utilities; 3) modernizing our gas supply assets, and
4) investing in innovation. Learn more at
www.SpireEnergy.com.
Cautionary Statements on Forward-Looking Information and
Non-GAAP Measures
This news release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Spire's future operating results may be affected by
various uncertainties and risk factors, many of which are beyond
the Company's control, including weather conditions, economic
factors, the competitive environment, governmental and regulatory
policy and action, and risks associated with recent and pending
acquisitions. For a more complete description of these
uncertainties and risk factors, see the Company's Form 10-K for the
fiscal year ended September 30, 2015,
filed with the Securities and Exchange Commission (SEC) and Spire's
Form 10-Q for the quarter and six months ended March 31, 2016, to be filed with the SEC later
today.
This news release includes the non-GAAP financial measures of
"net economic earnings," "net economic earnings per share," and
"operating margins." Management also uses these non-GAAP measures
internally when evaluating the Company's performance and results of
operations. Net economic earnings exclude from net income the
after-tax impacts of fair value accounting and timing adjustments
associated with energy-related transactions. These adjustments,
which primarily impact the Gas Marketing segment, include net
unrealized gains and losses on energy-related derivatives resulting
from the current changes in the fair value of financial and
physical transactions prior to their completion and settlement,
lower of cost or market inventory adjustments, and realized gains
and losses on economic hedges prior to the sale of the physical
commodity. In calculating net economic earnings, management also
excludes from net income the after-tax impacts related to
acquisition, divestiture, and restructuring activities, including
one-time costs related to the integration of MGE and Alagasco.
Management believes that excluding these items provides a useful
representation of the economic impact of actual settled
transactions and overall results of ongoing operations. Operating
margin adjusts operating income to include only those costs that
are directly passed on to customers and collected through revenues,
which are the wholesale cost of natural gas and propane and gross
receipts taxes. These internal non-GAAP operating metrics should
not be considered as an alternative to, or more meaningful than,
GAAP measures such as operating income or net income.
CONSOLIDATED
STATEMENTS OF INCOME —
UNAUDITED
Spire
Inc.
(In Millions, except
per share amounts)
|
|
|
|
Three months
ended
March 31,
|
|
Six months
ended
March 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
$
|
611.5
|
|
|
$
|
847.0
|
|
|
$
|
1,010.3
|
|
|
$
|
1,428.4
|
|
|
Gas Marketing and
other
|
(2.2)
|
|
|
30.4
|
|
|
(1.6)
|
|
|
68.6
|
|
|
Total Operating
Revenues
|
609.3
|
|
|
877.4
|
|
|
1,008.7
|
|
|
1,497.0
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Gas
Utility
|
|
|
|
|
|
|
|
|
Natural and
propane gas
|
261.1
|
|
|
482.8
|
|
|
409.6
|
|
|
787.1
|
|
|
Other
operation and maintenance expenses
|
94.3
|
|
|
103.8
|
|
|
185.9
|
|
|
200.9
|
|
|
Depreciation
and amortization
|
33.8
|
|
|
32.2
|
|
|
67.3
|
|
|
64.2
|
|
|
Taxes, other
than income taxes
|
43.9
|
|
|
55.7
|
|
|
72.1
|
|
|
93.7
|
|
|
Total Gas Utility
Operating Expenses
|
433.1
|
|
|
674.5
|
|
|
734.9
|
|
|
1,145.9
|
|
|
Gas Marketing and
other
|
8.5
|
|
|
45.2
|
|
|
19.1
|
|
|
106.1
|
|
|
Total Operating
Expenses
|
441.6
|
|
|
719.7
|
|
|
754.0
|
|
|
1,252.0
|
|
Operating
Income
|
167.7
|
|
|
157.7
|
|
|
254.7
|
|
|
245.0
|
|
Other
Income
|
0.8
|
|
|
0.7
|
|
|
2.2
|
|
|
2.1
|
|
Interest
Charges:
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
16.7
|
|
|
16.5
|
|
|
33.6
|
|
|
33.7
|
|
|
Other interest
charges
|
2.6
|
|
|
2.6
|
|
|
4.7
|
|
|
4.6
|
|
|
Total Interest
Charges
|
19.3
|
|
|
19.1
|
|
|
38.3
|
|
|
38.3
|
|
Income Before Income
Taxes
|
149.2
|
|
|
139.3
|
|
|
218.6
|
|
|
208.8
|
|
Income Tax
Expense
|
48.4
|
|
|
44.9
|
|
|
70.9
|
|
|
67.3
|
|
Net Income
|
$
|
100.8
|
|
|
$
|
94.4
|
|
|
$
|
147.7
|
|
|
$
|
141.5
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
43.3
|
|
|
43.1
|
|
|
43.3
|
|
|
43.1
|
|
|
Diluted
|
43.5
|
|
|
43.2
|
|
|
43.5
|
|
|
43.2
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share of Common Stock
|
$
|
2.32
|
|
|
$
|
2.18
|
|
|
$
|
3.40
|
|
|
$
|
3.27
|
|
Diluted Earnings Per
Share of Common Stock
|
$
|
2.31
|
|
|
$
|
2.18
|
|
|
$
|
3.39
|
|
|
$
|
3.26
|
|
Dividends Declared
Per Share of Common Stock
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
$
|
0.98
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS — UNAUDITED
Spire
Inc.
(In
Millions)
|
|
|
March 31,
|
|
September
30,
|
|
March
31,
|
|
2016
|
|
2015
|
|
2015
|
ASSETS
|
|
|
|
|
|
Utility
Plant
|
$
|
4,271.3
|
|
|
$
|
4,234.5
|
|
|
$
|
4,037.8
|
|
Less:
Accumulated depreciation and amortization
|
1,286.1
|
|
|
1,307.0
|
|
|
1,213.1
|
|
Net Utility
Plant
|
2,985.2
|
|
|
2,927.5
|
|
|
2,824.7
|
|
Non-utility
Property
|
13.8
|
|
|
13.7
|
|
|
10.5
|
|
Goodwill
|
946.0
|
|
|
946.0
|
|
|
946.0
|
|
Other
Investments
|
61.1
|
|
|
59.9
|
|
|
60.8
|
|
Total Other
Property and Investments
|
1,020.9
|
|
|
1,019.6
|
|
|
1,017.3
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
8.7
|
|
|
13.8
|
|
|
46.9
|
|
Accounts receivable
(net of allowance for doubtful accounts)
|
265.0
|
|
|
210.6
|
|
|
355.3
|
|
Delayed customer
billings
|
10.1
|
|
|
2.6
|
|
|
61.7
|
|
Inventories
|
124.0
|
|
|
215.4
|
|
|
117.0
|
|
Other
|
96.0
|
|
|
87.7
|
|
|
56.3
|
|
Total Current
Assets
|
503.8
|
|
|
530.1
|
|
|
637.2
|
|
|
|
|
|
|
|
Regulatory Assets and
Other Deferred Charges
|
809.9
|
|
|
813.0
|
|
|
701.5
|
|
Total
Assets
|
$
|
5,319.8
|
|
|
$
|
5,290.2
|
|
|
$
|
5,180.7
|
|
|
|
|
|
|
|
CAPITALIZATION AND
LIABILITIES
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
Common stock and
paid-in capital
|
$
|
1,083.7
|
|
|
$
|
1,081.4
|
|
|
$
|
1,076.6
|
|
Retained
earnings
|
599.4
|
|
|
494.2
|
|
|
539.2
|
|
Accumulated other
comprehensive loss
|
(1.7)
|
|
|
(2.0)
|
|
|
(4.2)
|
|
Total Common
Stock Equity
|
1,681.4
|
|
|
1,573.6
|
|
|
1,611.6
|
|
Long-term
debt
|
1,851.6
|
|
|
1,771.5
|
|
|
1,736.3
|
|
Total
Capitalization
|
3,533.0
|
|
|
3,345.1
|
|
|
3,347.9
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
—
|
|
|
80.0
|
|
|
80.0
|
|
Notes
payable
|
253.6
|
|
|
338.0
|
|
|
247.6
|
|
Accounts
payable
|
127.1
|
|
|
146.5
|
|
|
160.1
|
|
Advance customer
billings
|
31.7
|
|
|
44.3
|
|
|
8.4
|
|
Accrued liabilities
and other
|
206.4
|
|
|
245.0
|
|
|
357.6
|
|
Total Current
Liabilities
|
618.8
|
|
|
853.8
|
|
|
853.7
|
|
|
|
|
|
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
|
|
Deferred income
taxes
|
564.2
|
|
|
482.1
|
|
|
438.7
|
|
Pension and
postretirement benefit costs
|
254.8
|
|
|
253.4
|
|
|
243.9
|
|
Asset retirement
obligations
|
162.8
|
|
|
159.2
|
|
|
101.5
|
|
Regulatory
liabilities
|
110.7
|
|
|
119.3
|
|
|
114.3
|
|
Other
|
75.5
|
|
|
77.3
|
|
|
80.7
|
|
Total Deferred
Credits and Other Liabilities
|
1,168.0
|
|
|
1,091.3
|
|
|
979.1
|
|
Total Capitalization
and Liabilities
|
$
|
5,319.8
|
|
|
$
|
5,290.2
|
|
|
$
|
5,180.7
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
Spire
Inc.
(In
Millions)
|
|
|
Six months ended
March 31,
|
|
2016
|
|
2015
|
Operating
Activities:
|
|
|
|
Net Income
|
$
|
147.7
|
|
|
$
|
141.5
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, and accretion
|
67.6
|
|
|
64.7
|
|
Deferred income taxes
and investment tax credits
|
71.0
|
|
|
29.0
|
|
Changes in assets and
liabilities
|
(42.9)
|
|
|
40.2
|
|
Other
|
(0.4)
|
|
|
4.5
|
|
Net cash provided by
operating activities
|
243.0
|
|
|
279.9
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(121.8)
|
|
|
(129.5)
|
|
Payments for final
reconciliation of acquisitions
|
—
|
|
|
(8.6)
|
|
Other
|
(0.7)
|
|
|
(0.4)
|
|
Net cash used in
investing activities
|
(122.5)
|
|
|
(138.5)
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
Repayment of long-term
debt
|
(80.0)
|
|
|
(34.7)
|
|
Issuance of long-term
debt
|
80.0
|
|
|
—
|
|
Repayment of
short-term debt - net
|
(84.4)
|
|
|
(39.6)
|
|
Issuance of common
stock
|
2.1
|
|
|
2.8
|
|
Dividends
paid
|
(41.6)
|
|
|
(39.2)
|
|
Other
|
(1.7)
|
|
|
0.1
|
|
Net cash used in
financing activities
|
(125.6)
|
|
|
(110.6)
|
|
|
|
|
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
(5.1)
|
|
|
30.8
|
|
Cash and Cash
Equivalents at Beginning of Period
|
13.8
|
|
|
16.1
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
8.7
|
|
|
$
|
46.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ECONOMIC
EARNINGS AND RECONCILIATION TO GAAP
|
|
(In Millions, except
per share amounts)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Total
|
|
Per Share
Amounts(2)
|
Three Months Ended
March 31, 2016
|
|
Net Income (Loss)
(GAAP)
|
$
|
102.4
|
|
|
$
|
1.5
|
|
|
$
|
(3.1)
|
|
|
$
|
100.8
|
|
|
$
|
2.31
|
|
|
Unrealized loss on
energy-related derivatives (1)
|
0.1
|
|
|
1.7
|
|
|
—
|
|
|
1.8
|
|
|
0.04
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
Realized gain on
economic hedges prior to the sale of the physical commodity
(1)
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
|
(0.01)
|
|
|
Acquisition,
divestiture and restructuring activities (1)
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
|
0.03
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
102.5
|
|
|
$
|
3.0
|
|
|
$
|
(2.0)
|
|
|
$
|
103.5
|
|
|
$
|
2.37
|
|
|
Diluted EPS
(GAAP)
|
$
|
2.34
|
|
|
$
|
0.04
|
|
|
$
|
(0.07)
|
|
|
$
|
2.31
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
2.35
|
|
|
$
|
0.07
|
|
|
$
|
(0.05)
|
|
|
$
|
2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
Net Income (Loss)
(GAAP)
|
$
|
96.2
|
|
|
$
|
0.3
|
|
|
$
|
(2.1)
|
|
|
$
|
94.4
|
|
|
$
|
2.18
|
|
|
Unrealized (gain)
loss on energy-related derivatives (1)
|
(0.1)
|
|
|
2.7
|
|
|
—
|
|
|
2.6
|
|
|
0.06
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
(1.0)
|
|
|
(0.02)
|
|
|
Realized loss on
economic hedges prior to the sale of the physical commodity
(1)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
Acquisition,
divestiture and restructuring activities (1)
|
0.4
|
|
|
—
|
|
|
1.1
|
|
|
1.5
|
|
|
0.03
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
96.5
|
|
|
$
|
2.1
|
|
|
$
|
(1.0)
|
|
|
$
|
97.6
|
|
|
$
|
2.25
|
|
|
Diluted EPS
(GAAP)
|
$
|
2.22
|
|
|
$
|
0.01
|
|
|
$
|
(0.05)
|
|
|
$
|
2.18
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
2.22
|
|
|
$
|
0.05
|
|
|
$
|
(0.02)
|
|
|
$
|
2.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2016
|
|
Net Income (Loss)
(GAAP)
|
$
|
151.7
|
|
|
$
|
3.8
|
|
|
$
|
(7.8)
|
|
|
$
|
147.7
|
|
|
$
|
3.39
|
|
|
Unrealized gain on
energy-related derivatives (1)
|
—
|
|
|
(1.2)
|
|
|
—
|
|
|
(1.2)
|
|
|
(0.03)
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
0.01
|
|
|
Realized gain on
economic hedges prior to the sale of the physical commodity
(1)
|
—
|
|
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
|
(0.01)
|
|
|
Acquisition,
divestiture and restructuring activities (1)
|
0.8
|
|
|
—
|
|
|
1.2
|
|
|
2.0
|
|
|
0.05
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
152.5
|
|
|
$
|
2.7
|
|
|
$
|
(6.6)
|
|
|
$
|
148.6
|
|
|
$
|
3.41
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.48
|
|
|
$
|
0.09
|
|
|
$
|
(0.18)
|
|
|
$
|
3.39
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.50
|
|
|
$
|
0.07
|
|
|
$
|
(0.16)
|
|
|
$
|
3.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2015
|
|
Net Income (Loss)
(GAAP)
|
$
|
145.8
|
|
|
$
|
2.5
|
|
|
$
|
(6.8)
|
|
|
$
|
141.5
|
|
|
$
|
3.26
|
|
|
Unrealized gain on
energy-related derivatives (1)
|
(0.1)
|
|
|
(0.3)
|
|
|
—
|
|
|
(0.4)
|
|
|
(0.01)
|
|
|
Lower of cost or
market inventory adjustments (1)
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.01
|
|
|
Realized loss on
economic hedges prior to the sale of the physical commodity
(1)
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
Acquisition,
divestiture and restructuring activities (1)
|
0.6
|
|
|
—
|
|
|
1.3
|
|
|
1.9
|
|
|
0.05
|
|
|
Net Economic Earnings
(Loss) (Non-GAAP)
|
$
|
146.3
|
|
|
$
|
2.5
|
|
|
$
|
(5.5)
|
|
|
$
|
143.3
|
|
|
$
|
3.31
|
|
|
Diluted EPS
(GAAP)
|
$
|
3.36
|
|
|
$
|
0.06
|
|
|
$
|
(0.16)
|
|
|
$
|
3.26
|
|
|
|
|
Net Economic EPS
(Non-GAAP) (2)
|
$
|
3.38
|
|
|
$
|
0.06
|
|
|
$
|
(0.13)
|
|
|
$
|
3.31
|
|
|
|
|
(1) Amounts presented
net of income taxes. Income taxes are calculated by applying
federal, state, and local income tax rates applicable to ordinary
income to the amounts of the pre-tax reconciling items.
|
|
(2) Net economic
earnings per share (EPS) is calculated by replacing consolidated
net income with consolidated net economic earnings in the GAAP
diluted EPS calculation.
|
|
Note: EPS amounts by
segment represent contributions to Spire's consolidated
EPS.
|
OPERATING MARGIN
AND RECONCILIATION TO GAAP
|
|
(In
Millions)
|
Gas
Utility
|
|
Gas
Marketing
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
Three Months Ended
March 31, 2016
|
|
Operating
revenues
|
$
|
612.7
|
|
|
$
|
8.0
|
|
|
$
|
0.9
|
|
|
$
|
(12.3)
|
|
|
$
|
609.3
|
|
|
Natural and propane
gas expense
|
273.0
|
|
|
4.0
|
|
|
—
|
|
|
(12.0)
|
|
|
265.0
|
|
|
Gross receipts tax
expense
|
32.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
32.3
|
|
|
Operating margin
(non-GAAP)
|
307.5
|
|
|
3.9
|
|
|
0.9
|
|
|
(0.3)
|
|
|
312.0
|
|
|
Depreciation and
amortization
|
33.8
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
33.9
|
|
|
Other operating
expenses
|
106.3
|
|
|
1.4
|
|
|
3.0
|
|
|
(0.3)
|
|
|
110.4
|
|
|
Operating income
(loss) (GAAP)
|
$
|
167.4
|
|
|
$
|
2.5
|
|
|
$
|
(2.2)
|
|
|
$
|
—
|
|
|
$
|
167.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
Operating
revenues
|
$
|
849.0
|
|
|
$
|
44.1
|
|
|
$
|
0.9
|
|
|
$
|
(16.6)
|
|
|
$
|
877.4
|
|
|
Natural and propane
gas expense
|
499.1
|
|
|
42.0
|
|
|
0.1
|
|
|
(16.3)
|
|
|
524.9
|
|
|
Gross receipts tax
expense
|
44.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44.1
|
|
|
Operating margin
(non-GAAP)
|
305.8
|
|
|
2.1
|
|
|
0.8
|
|
|
(0.3)
|
|
|
308.4
|
|
|
Depreciation and
amortization
|
32.2
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
32.5
|
|
|
Other operating
expenses
|
115.6
|
|
|
1.4
|
|
|
1.5
|
|
|
(0.3)
|
|
|
118.2
|
|
|
Operating income (loss)
(GAAP)
|
$
|
158.0
|
|
|
$
|
0.6
|
|
|
$
|
(0.9)
|
|
|
$
|
—
|
|
|
$
|
157.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2016
|
|
Operating
revenues
|
$
|
1,012.2
|
|
|
$
|
20.8
|
|
|
$
|
1.7
|
|
|
$
|
(26.0)
|
|
|
$
|
1,008.7
|
|
|
Natural and propane
gas expense
|
434.9
|
|
|
11.4
|
|
|
—
|
|
|
(25.4)
|
|
|
420.9
|
|
|
Gross receipts tax
expense
|
49.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
49.8
|
|
|
Operating margin
(non-GAAP)
|
527.6
|
|
|
9.3
|
|
|
1.7
|
|
|
(0.6)
|
|
|
538.0
|
|
|
Depreciation and
amortization
|
67.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
67.6
|
|
|
Other operating
expenses
|
208.9
|
|
|
3.0
|
|
|
4.4
|
|
|
(0.6)
|
|
|
215.7
|
|
|
Operating income
(loss) (GAAP)
|
$
|
251.4
|
|
|
$
|
6.3
|
|
|
$
|
(3.0)
|
|
|
$
|
—
|
|
|
$
|
254.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2015
|
|
Operating
revenues
|
$
|
1,431.4
|
|
|
$
|
106.3
|
|
|
$
|
1.8
|
|
|
$
|
(42.5)
|
|
|
$
|
1,497.0
|
|
|
Natural and propane
gas expense
|
828.9
|
|
|
99.1
|
|
|
0.2
|
|
|
(42.0)
|
|
|
886.2
|
|
|
Gross receipts tax
expense
|
71.0
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
71.1
|
|
|
Operating margin
(non-GAAP)
|
531.5
|
|
|
7.1
|
|
|
1.6
|
|
|
(0.5)
|
|
|
539.7
|
|
|
Depreciation and
amortization
|
64.2
|
|
|
0.2
|
|
|
0.3
|
|
|
—
|
|
|
64.7
|
|
|
Other operating
expenses
|
224.1
|
|
|
2.7
|
|
|
3.7
|
|
|
(0.5)
|
|
|
230.0
|
|
|
Operating income
(loss) (GAAP)
|
$
|
243.2
|
|
|
$
|
4.2
|
|
|
$
|
(2.4)
|
|
|
$
|
—
|
|
|
$
|
245.0
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/spire-reports-second-quarter-results-300262481.html
SOURCE Spire Inc.