Spire Inc: Form 10-Q for the period ended Jun 30, 2025

(Dollars in millions, except per share amounts)

This section analyzes the financial condition and results of operations of Spire Inc. (the “Company”), Spire Missouri Inc., and Spire Alabama Inc. Spire Missouri, Spire Alabama and Spire EnergySouth are wholly owned subsidiaries of the Company. Spire Missouri, Spire Alabama and the subsidiaries of Spire EnergySouth (Spire Gulf and Spire Mississippi) are collectively referred to as the “Utilities.” This section includes management’s view of factors that affect the respective businesses of the Company, Spire Missouri and Spire Alabama, explanations of financial results including changes in earnings and costs from the prior periods, and the effects of such factors on the Company’s, Spire Missouri’s and Spire Alabama’s overall financial condition and liquidity.

Certain matters discussed in this report, excluding historical information, include forward-looking statements. Certain words, such as “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “seek,” “target,” and similar words and expressions identify forward-looking statements that involve uncertainties and risks. Future developments may not be in accordance with our current expectations or beliefs and the effect of future developments may not be those anticipated. Among the factors that may cause results or outcomes to differ materially from those contemplated in any forward-looking statement are:

• Weather conditions and catastrophic events, particularly severe weather in U.S. natural gas producing areas;
• Volatility in gas prices, particularly sudden and sustained changes in natural gas prices, including the related impact on margin deposits associated with the use of natural gas derivative instruments, and the impact on our competitive position in relation to suppliers of alternative heating sources, such as electricity;
• Changes in gas supply and pipeline availability, including as a result of decisions by natural gas producers to reduce production or shut in producing natural gas wells and expiration or termination of existing supply and transportation arrangements that are not replaced with contracts with similar terms and pricing, as well as other changes that impact supply for and access to the markets in which our subsidiaries transact business;
• Acquisitions may not achieve their intended results;
• Legislative, regulatory and judicial mandates and decisions, some of which may be retroactive, including those affecting:
• allowed rates of return and recovery of prudent costs,
• incentive regulation,
• industry structure,
• purchased gas adjustment provisions,
• rate design structure and implementation,
• capital structures established for rate-setting purposes,
• regulatory assets,
• non-regulated and affiliate transactions,
• franchise renewals,
• authorization to operate facilities,
• environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change and pipeline safety and security,
• taxes,
• pension and other postretirement benefit liabilities and funding obligations, or
• accounting standards;
• The results of litigation;
• The availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets;
• Retention of, ability to attract, ability to collect from, and conservation efforts of, customers;
• Our ability to comply with all covenants in our indentures and credit facilities, any violations of which, if not cured in a timely manner, could trigger a default of our obligation;
• Energy commodity market conditions;
• Discovery of material weakness in internal controls;
• The disruption, failure or malfunction of our operational and information technology systems, including due to cyberattacks; and
• Employee workforce issues, including but not limited to labor disputes, the inability to attract and retain key talent, and future wage and employee benefit costs, including costs resulting from changes in discount rates and returns on benefit plan assets.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s Condensed Consolidated Financial Statements, Spire Missouri’s and Spire Alabama’s Condensed Financial Statements, and the notes thereto.

OVERVIEW

The Company has three reportable segments: Gas Utility, Gas Marketing, and Midstream. Spire’s earnings are derived primarily from its Gas Utility segment, which reflects the regulated activities of the Utilities. Due to the seasonal nature of the Utilities’ business and the volumetric Spire Missouri rate design, earnings of Spire and each of the Utilities are typically concentrated during the heating season of November through April each fiscal year.

Gas Utility – Spire Missouri

Spire Missouri is Missouri’s largest natural gas distribution utility and is regulated by the MoPSC. Spire Missouri serves St. Louis, Kansas City, and other areas throughout the state. Spire Missouri purchases natural gas in the wholesale market from producers and marketers and ships the gas through interstate pipelines into its own distribution facilities for sale to residential, commercial and industrial customers. Spire Missouri also transports gas through its distribution system for certain larger customers who buy their own gas on the wholesale market. Spire Missouri delivers natural gas to customers at rates and in accordance with tariffs authorized by the MoPSC. The earnings of Spire Missouri are primarily generated by the sale of heating energy.

Gas Utility – Spire Alabama

Spire Alabama is the largest natural gas distribution utility in the state of Alabama and is regulated by the APSC. Spire Alabama’s service territory is located in central and northern Alabama. Among the cities served by Spire Alabama are Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential, commercial, and industrial customers, and other end users of natural gas. Spire Alabama also transports gas through its distribution system for certain large commercial and industrial customers for a transportation fee. For most of these transportation service customers, Spire Alabama also purchases gas on the wholesale market for sale to the customer upon delivery to the Spire Alabama distribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.

Gas Utility – Spire EnergySouth

Spire Gulf and Spire Mississippi are utilities engaged in the purchase, retail distribution and sale of natural gas to approximately 100,000 customers in southern Alabama and south-central Mississippi. Spire Gulf is regulated by the APSC, and Spire Mississippi is regulated by the MSPSC.

Gas Marketing

Spire Marketing is engaged in the marketing of natural gas and related activities on a non-regulated basis and is reported in the Gas Marketing segment. Spire Marketing markets natural gas to customers across the U.S. (and into Canada), including customers inside and outside of the Utilities’ service areas. It holds firm transportation and storage contracts in order to effectively manage its transactions with counterparties, which primarily include producers, municipalities, electric and gas utility companies, and large commercial and industrial customers.

Midstream

Spire’s midstream operations consist of Spire Storage West LLC, Spire Storage Salt Plains LLC (jointly, “Spire Storage”), Spire STL Pipeline LLC (“Spire STL Pipeline”), and Spire MoGas Pipeline LLC (“Spire MoGas Pipeline” or “MoGas”). MoGas, a 263-mile FERC-regulated natural gas pipeline and a connected 75-mile gas distribution system in Missouri, was acquired by Spire Midstream LLC, a subsidiary of Spire, on January 19, 2024. Spire STL Pipeline owns and operates a FERC-regulated 65-mile pipeline connecting the Rockies Express Pipeline in Scott County, Illinois, to delivery points in St. Charles County and St. Louis County, Missouri, including MoGas and Spire Missouri’s storage facility, and its operating revenue is derived primarily from Spire Missouri as its foundation shipper. Spire Storage is engaged in the storage of natural gas in both the western and midcontinent regions of the United States. Spire Storage West, located in Wyoming, consists of two storage fields operating under one FERC market-based rate tariff, while Spire Storage Salt Plains, located in Oklahoma, operates under intrastate jurisdiction with authorizations from FERC under Section 311 of the Natural Gas Policy Act to provide certain interstate storage, transportation, and hub services.

Other

Other components of the Company’s consolidated information include Spire’s subsidiaries engaged in the operation of a natural gas liquids pipeline and risk management, among other activities, and unallocated corporate items, including certain debt and associated interest costs.

Pending Acquisition

On July 27, 2025, Spire entered into an agreement with Piedmont Natural Gas, a wholly-owned Subsidiary of Duke Energy, to acquire its Tennessee natural gas business that serves more than 200,000 customers in the Nashville area (the “Transaction”). The strategic rationale for the Company is described below:

• We expect the Transaction to allow Spire to significantly expand its regulated utility footprint in high-quality jurisdictions and significantly increase the scale of its regulated business while delivering on Spire’s commitment to growth and creating long-term shareholder value.
• We expect the Transaction to provide robust growth driven by customer additions and system integrity investments, aligned with Spire’s investment strategy. These long-term investments are expected to be supported by Tennessee’s constructive regulatory environment support of natural gas.
• We expect the Transaction to support Spire’s long-term adjusted earnings per share growth expectations and provide meaningful investment opportunities. The acquisition is expected to generate incremental cash flow to support investment in the business, shareholder returns and dividend growth.

The stated purchase price of the Transaction is $2.48 billion subject to adjustment, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing. The Transaction is supported by a fully committed bridge facility with BMO Capital Markets Corp. for the entire purchase price.

We expect permanent financing of the acquisition will be funded through a balance mix of debt, equity and hybrid securities. Spire is also evaluating the sale of non-utility assets, such as natural gas storage facilities, as a potential source of funds.

The Transaction is expected to close in the first quarter of calendar 2026, subject to customary closing conditions, including the approval of the Tennessee Public Utility Commission and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

NON-GAAP MEASURES

Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of adjusted earnings, adjusted earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to determine incentive compensation and to evaluate financial performance. These non-GAAP operating metrics should not be considered as alternatives to, or more meaningful than, the related GAAP measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are provided on the following pages.

Adjusted Earnings and Adjusted Earnings Per Share

Adjusted earnings and adjusted earnings per share are non-GAAP measures that exclude from net income, as applicable, the impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities, the largely non-cash impacts of impairments, and other non-recurring or unusual items such as certain regulatory, legislative or GAAP standard-setting actions. In addition, adjusted earnings per share would exclude the impact, in the fiscal year of issuance, of any shares issued to finance such activities that have yet to be included in adjusted earnings.

The fair value and timing adjustments are made in instances where the accounting treatment differs from what management considers the economic substance of the underlying transaction, including the following:

• Net unrealized gains and losses on energy-related derivatives that are required by GAAP fair value accounting associated with current changes in the fair value of financial and physical transactions prior to their completion and settlement. These unrealized gains and losses result primarily from two sources:

1) changes in the fair values of physical and/or financial derivatives prior to the period of settlement; and

2) ineffective portions of accounting hedges, required to be recorded in earnings prior to settlement, due to differences in commodity price changes between the locations of the forecasted physical purchase or sale transactions and the locations of the underlying hedge instruments;

• Lower of cost or market adjustments to the carrying value of commodity inventories resulting when the net realizable value of the commodity falls below its original cost, to the extent that those commodities are economically hedged; and
• Realized gains and losses resulting from the settlement of economic hedges prior to the sale of the physical commodity.

These adjustments eliminate the impact of timing differences and the impact of current changes in the fair value of financial and physical transactions prior to their completion and settlement. Unrealized gains or losses are recorded in each period until being replaced with the actual gains or losses realized when the associated physical transactions occur. Management believes that excluding the earnings volatility caused by recognizing changes in fair value prior to settlement and other timing differences associated with related purchase and sale transactions provides a useful representation of the economic effects of only the actual settled transactions and their effects on results of operations. While management uses these non-GAAP measures to evaluate all of its businesses, the net effect of these fair value and timing adjustments on the Utilities’ earnings is minimal because gains or losses on their natural gas derivative instruments are deferred pursuant to state regulation.

Contribution Margin

In addition to operating revenues and operating expenses, management also uses the non-GAAP measure of contribution margin when evaluating results of operations. Contribution margin is defined as operating revenues less natural gas costs and gross receipts tax expense. The Utilities pass to their customers (subject to prudence review by, as applicable, the MoPSC, APSC or MSPSC) increases and decreases in the wholesale cost of natural gas in accordance with their PGA clauses or GSA riders. The volatility of the wholesale natural gas market results in fluctuations from period to period in the recorded levels of, among other items, revenues and natural gas cost expense. Nevertheless, increases and decreases in the cost of gas associated with system gas sales volumes and gross receipts tax expense (which are calculated as a percentage of revenues), with the same amount (excluding immaterial timing differences) included in revenues, have no direct effect on operating income. Therefore, management believes that contribution margin is a useful supplemental measure, along with the remaining operating expenses, for assessing the Company’s and the Utilities’ performance.

EARNINGS – THREE MONTHS ENDED June 30, 2025

This section contains discussion and analysis of the results for the three months ended June 30, 2025 compared to the results for the three months ended June 30, 2024, in total and by registrant and segment.

Spire

Net Income and Adjusted Earnings

The following tables reconcile the Company’s adjusted earnings to the most comparable GAAP number, net income.

* Income tax adjustments include amounts calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items.

** Adjusted earnings per share is calculated by replacing consolidated net income with consolidated adjusted earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares.

Reconciliations of contribution margin to the most directly comparable GAAP measure are shown below.

Select variances for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024 are summarized in the following table and discussed below.

The increase in interest expense reflects interest on higher average levels of debt in the current year that more than offset lower effective interest rates on short-term debt. Weighted-average short-term interest rates were 4.5% in the current-year quarter versus 5.6% in the prior-year quarter.

Other income increased $2.2 versus the prior-year quarter, $1.3 after removing the $0.9 benefit attributable to the Postretirement Non-Service Costs Transfer (“NSC Transfer”), which has no impact on net income. The principal driver of the increase was favorable mark-to-market unrealized gains on non-qualified benefit trusts that more than offset a decline of gas carrying cost credits at Spire Missouri.

The increase in income taxes primarily reflects the higher current-year pre-tax book income.

Gas Utility

For the quarter ended June 30, 2025, Gas Utility net loss and adjusted loss were lower than the corresponding prior-year period by $4.4 and $1.0, respectively. The quarterly change in net income was driven by the $3.8 and $1.6 growth of Spire Missouri and Spire Alabama, respectively. The variance differential between the $4.4 net loss and the $1.0 adjusted loss performance was primarily the result of the prior-year quarter GAAP result including $3.3 (after-tax) charges related to the Company’s customer affordability initiative that was excluded from adjusted earnings.

The decrease in Gas Utility operating revenues was attributable to the following factors:

The primary driver of the current year decrease in revenue was the $31.2 impact of lower gas cost recoveries across all utilities, driven principally by lower PGA recovery and volume, including weather mitigation, at Spire Missouri. These reductions were only partly offset by higher current year ISRS billings and off-system sales.

The year-over-year increase in Gas Utility contribution margin was attributable to the following factors:

Contribution margin increased $4.2 versus the prior-year quarter. Contribution margin benefited from the $8.8 Spire Missouri ISRS growth and the $1.1 increase in off-system sales at both Spire Missouri and Spire Alabama. These favorable impacts more than offset the $2.2 net unfavorable impact of weather-mitigated volume margins at Spire Missouri. The quarter’s results were also unfavorably impacted by a $1.0 lower benefit attributable to Spire Alabama’s Cost Control Measure (CCM).

Reported operation and maintenance (“O&M”) expenses for the three months ended June 30, 2025 were $0.3 lower than the prior-year quarter. Excluding the impact of the NSC Transfer, O&M expenses were $1.2 lower than the prior-year quarter. After excluding the $4.4 relating to the Company’s customer affordability initiative in the prior-year, O&M expenses were $3.2 higher than the prior-year quarter. Lower bad debt expense and insurance claims were more than offset by higher outside service expenses and employee costs.

Taxes, other than income taxes, decreased $1.2, primarily due to $2.8 lower gross receipt taxes resulting from lower revenues more than offsetting an increase in property tax. Depreciation and amortization expenses for the quarter ended June 30, 2025 were $3.3 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities. Interest expense decreased $1.7, with both Spire Missouri and Spire Alabama benefiting mostly from lower average short-term and long-term interest rates partially offset by higher balances in the current year. The benefit of gas carrying cost credits at Spire Missouri, included in other income, decreased $1.5 versus the corresponding prior-year quarter, but was more than offset by unrealized gains in non-qualified benefit trusts.

Gas Marketing

Including $21.4 (after-tax) favorable mark-to-market activity, net income increased $25.7. Adjusted income, after removing the mark-to-market activity, increased $4.3. Gas Marketing’s business portfolio was well-positioned to create value.

Contribution margin increased $33.6 versus the prior-year quarter, reflecting the $28.5 (pre-tax) favorable mark-to-market activity. Excluding this impact, contribution margin increased $5.1. As noted above, Gas Marketing’s business portfolio was well-positioned to create value.

O&M expenses were slightly lower than prior-year levels, the result of lower spend on outside services in the current year that more than offset slightly higher employee costs.

Midstream

Our Midstream segment includes storage and pipeline operations which in the quarter consisted of an approximate net income mix of 75% and 25%, respectively. Net income and adjusted earnings for the Company’s Midstream segment for the quarter ended June 30, 2025 versus the prior-year quarter increased $2.4 and $2.3, respectively. Approximately 65% of the increase in net income was attributable to our storage operations. The increase was driven by higher Spire Storage earnings, reflecting increased asset optimization and additional storage capacity.

Revenues in the current quarter increased $9.7 versus the prior-year quarter, reflecting the higher activity with storage. O&M expenses were up $3.4 over the prior-year period, due primarily to costs associated with the higher storage activity in the current year.

Other

The Company’s other activities generated a $7.4 loss in the three months ended June 30, 2025, $1.0 less versus prior-year performance. Gains from non-qualified benefit and insurance trusts more than offset higher interest expense in the current year.

Spire Missouri

Revenues for the quarter ended June 30, 2025 were $18.7 lower than the comparable prior-year period. Lower PGA gas cost recovery reduced revenues by $27.0. Volume, including weather mitigation, further reduced revenues by $2.2. These reduced revenue drivers also resulted in reduced gross receipts taxes of $2.4. These negative impacts were only partly offset by $8.8 incremental ISRS revenues and $4.9 growth attributable to higher off-system sales in the current-year quarter.

Contribution margin for the three months ended June 30, 2025 increased $6.3 from the same period in the prior year, primarily due to the $8.8 incremental ISRS billings that was only partly offset by $2.2 unfavorable volumetric usage net of weather mitigation.

Degree days in Spire Missouri’s service areas during the three months ended June 30, 2025 were 20.5% warmer than normal, but 30.4% colder than the same period last year. Spire Missouri’s total system volume sold and transported were 220.5 million centum (Latin for “hundred”) cubic feet (CCF) for the quarter, compared with 209.2 million CCF for the same period in the prior year. Total off-system volume sold and transported were 17.6 million CCF for the current-year quarter, compared with 13.2 million CCF a year ago.

O&M expenses for the current-year quarter increased $1.3 versus the prior-year quarter. Excluding the impact of the NSC Transfer, O&M expenses were $0.2 higher than the prior-year quarter. After excluding the $3.5 prior year charge relating to the Company’s customer affordability initiative, O&M expenses were $3.7 higher than the prior-year quarter. Lower bad debt expense was more than offset by higher field operations and employee costs.

Depreciation and amortization expenses increased $3.7 versus the prior-year quarter due to ongoing capital investments. Taxes, other than income taxes decreased $1.0 driven by lower pass-through gross receipts taxes partially offset by higher property tax expense.

Reported other income increased by $0.9 versus the prior-year quarter, but decreased $0.2 after removing the impact of the NSC Transfer. Favorable mark-to-market unrealized gains on non-qualified benefit trusts was offset by a $1.5 decrease in gas carrying cost credits. Interest expense decreased $1.0, reflecting lower average short-term interest rates in the current year more than offsetting the incremental interest expense related to higher average debt levels.

Resulting net loss for the quarter ended June 30, 2025 decreased $3.8 versus the prior-year quarter.

Spire Alabama

Operating revenues for the three months ended June 30, 2025 decreased $4.7 from the same period in the prior year. The decrease in operating revenue was principally due to a $4.2 decrease in gas cost recovery, a $1.1 decrease due to volumetric usage (net of weather mitigation), and $1.1 lower CCM benefit in the current year.

Contribution margin was slightly below the prior-year quarter, as a lower CCM benefit was mostly offset by off-system sales and weather-mitigated volumetric impacts.

As measured in degree days, temperatures in Spire Alabama’s service area during the three months ended June 30, 2025, were 8.2% colder than normal, but 4.1% warmer than a year ago. Spire Alabama’s total system volume sold and transported were 241.3 million CCF for the three months ended June 30, 2025, compared with 231.8 million CCF for the same period in the prior year. Total off-system volume sold and transported were 23.0 million CCF for the current-year quarter, compared with 28.2 million CCF off-system volume sold and transported in last year’s second quarter.

Reported O&M expenses for the three months ended June 30, 2025 decreased $1.4 versus the prior-year quarter. After excluding the impact of the NSC Transfer, O&M expenses in the current year quarter were $1.2 lower than the corresponding prior year period. After excluding the $0.6 prior-year charge relating to the Company’s customer affordability initiative, run-rate O&M expenses were $0.6 lower than the prior-year quarter. Lower employee costs and insurance claims were only partly offset by higher outside services expense.

Depreciation and amortization expenses decreased $0.6 versus the comparable prior-year period as change in rates offset the impact of ongoing capital investments.

Taxes, other than income taxes decreased $0.3 driven by lower pass-through gross receipts taxes.

Interest expense for the current-year quarter decreased $0.8 versus the prior-year quarter, primarily the result of the impact of higher short-term borrowings being more than offset by lower short-term interest rates.

For the quarter ended June 30, 2025, resulting net income increased $1.6 versus the prior-year quarter.

EARNINGS – NINE MONTHS ENDED June 30, 2025

This section contains discussion and analysis of the results for the nine months ended June 30, 2025 compared to the results for the nine months ended June 30, 2024, in total and by registrant and segment.

Spire

Net Income and Adjusted Earnings

The following tables reconcile the Company’s adjusted earnings to the most comparable GAAP number, net income.

* Income tax adjustments include amounts calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items.

** Adjusted earnings per share is calculated by replacing consolidated net income with consolidated adjusted earnings in the GAAP diluted earnings per share calculation, which includes reductions for cumulative preferred dividends and participating shares.

Reconciliations of contribution margin to the most directly comparable GAAP measure are shown below.

Select variances for the nine m0nths ended June 30, 2025 compared to the nine months ended June 30, 2024 are summarized in the following table and discussed below.

The decrease in interest expense reflects lower effective interest rates partially offset by higher average levels of debt in the current year. Weighted-average short-term interest rates were 4.5% in the current-year period versus 5.7% in the prior-year period.

Other income decreased $19.0 versus the prior-year period, $19.5 excluding the impact of the Postretirement Non-Service Costs Transfer (“NSC Transfer”), which has no impact on net income. The principal drivers of the decline was a one-time $8.2 pre-tax hedging gain recognized in the prior year period, a decline of gas-carrying cost credits at Spire Missouri of $8.6 and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts.

The increase in income taxes primarily reflects the higher current-year pre-tax book income.

Gas Utility

For the nine months ended June 30, 2025, Gas Utility net income and adjusted earnings were higher than the corresponding prior-year period by $13.6 and 10.2, respectively. Adjusted earnings growth was lower than net income growth primarily due to excluding the $3.3 after-tax charge relating to the customer affordability initiative that was recorded in the prior year. The year-to-date change in net income was driven by growth at both Spire Missouri and Spire Alabama totaling $7.9 and $5.5, respectively.

The decrease in Gas Utility operating revenues was attributable to the following factors:

The primary driver of the current year decrease in revenue was the $269.5 impact of lower gas cost recoveries across all utilities, driven principally by lower PGA rates at Spire Missouri. This was only partly offset by higher current year ISRS billings and higher off-system sales, impacts of Spire Alabama’s volumetric usage, Spire Missouri weather-mitigated volume, and favorable Spire Alabama RSE adjustments.

The year-over-year increase in Gas Utility contribution margin was attributable to the following factors:

Contribution margin increased $27.3 versus the comparable prior-year period. Contribution margin benefited from the $24.5 Spire Missouri ISRS growth, $5.1 of growth from Spire Alabama’s RSE adjustments, and higher off-system sales. These favorable impacts more than offset the $4.0 negative impact of Spire Alabama’s volume usage net of weather mitigation adjustments and lower CCM benefit.

Reported operation and maintenance (“O&M”) expenses for the nine months ended June 30, 2025 were $0.8 lower than the nine months ended June 30, 2024. Excluding the impact of the NSC Transfer, O&M expenses were $1.6 lower than the prior-year period. After excluding the $4.4 prior year charge relating to the Company’s customer affordability initiative, O&M expenses were $2.8 higher than the corresponding prior-year period. Higher employee-related costs in the current year were only partly mitigated by lower insurance claims and lower non-payroll costs resulting from customer affordability initiatives implemented last year.

Taxes, other than income taxes, decreased $10.4, primarily due to lower gross receipt taxes resulting from lower revenues. Depreciation and amortization expenses for the quarter ended June 30, 2025 were $11.3 higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities.

Interest expense decreased $10.1, with both Spire Missouri and Spire Alabama benefiting mostly from lower average short-term interest rates in the current year. The benefit of gas carrying cost credits at Spire Missouri, included in other income, decreased $8.6 versus the corresponding prior-year period.

Gas Marketing

Including $4.9 (after-tax) favorable mark-to-market activity, net income increased $3.5. The $1.4 year-over-year decrease in adjusted earnings reflects higher storage and transportation fees in the current year.

Contribution margin increased $3.8 versus the prior-year quarter, reflecting the $6.5 (pre-tax) favorable mark-to-market activity. Excluding this impact, contribution margin decreased $2.8, reflecting the higher costs noted above.

O&M expenses were slightly lower than prior-year levels, the result of higher spend on outside services in the current year that were more than offset by lower employee costs.

Midstream

Our Midstream segment includes storage and pipeline operations which currently consist of an approximate year-to-date net income mix of 75% and 25%, respectively. Net income and adjusted earnings for the Company’s Midstream segment for the nine months ended June 30, 2025 versus the comparable prior-year period increased $25.5 and $23.9, respectively. Approximately 90% of the increase was attributable to our storage operations. The increase was driven by higher storage earnings, reflecting increased asset optimization, additional storage capacity and contract renewals at higher rates, combined with the acquisition of MoGas in the second quarter of the prior year.

Revenues in the current year increased $45.2 versus the prior-year period, reflecting the higher rates and activity with storage. O&M expenses were up $6.2 year-over-year, due primarily to costs associated with the higher storage activity in the current year, combined with non-recurring Spire MoGas acquisition costs of $2.1 in the prior year.

Other

The Company’s other activities generated a $29.7 loss in the nine months ended June 30, 2025, $7.9 higher than the prior year. The major contributor to this variance was the $8.2 pre-tax ($6.3 after-tax) interest rate swap gain in the prior year that did not repeat. The remaining variance was mostly a result of higher interest expense in the current year that was offset by lower corporate expenses.

Spire Missouri

Revenues for the nine months ended June 30, 2025 were $191.5 lower than the comparable prior-year period. Lower PGA rates reduced gas cost recoveries by $225.1. This reduced revenue driver also resulted in reduced gross receipts taxes of $9.5. These negative impacts were only partly offset by $24.5 incremental ISRS revenues, $18.0 attributable to higher off-system sales in the current-year, and increased weather-mitigated customer usage versus the prior-year period.

Contribution margin for the nine months ended June 30, 2025 increased $25.9 from the same period in the prior year, primarily due to the $24.5 incremental ISRS billings and favorable $0.9 weather-mitigated customer usage impact.

Degree days in Spire Missouri’s service areas during the nine months ended June 30, 2025 were 8.2% warmer than normal, though 11.8% colder than the same period last year. Spire Missouri’s total system volume sold and transported were 1,402.2 million centum (Latin for “hundred”) cubic feet (CCF) for the current year, compared with 1,299.6 million CCF for the same period in the prior year. Total off-system volume sold and transported were 65.5 million CCF for the current-year, compared with 37.0 million CCF a year ago.

Reported O&M expenses for the nine months ended June 30, 2025 increased $1.8 versus the corresponding prior-year period. Excluding the NSC Transfer impact, O&M expense decreased $0.8. After excluding the $3.5 prior-year charge relating to the Company’s customer affordability initiative, O&M expenses were $2.7 higher than the corresponding prior year period. Higher employee-related costs were only partly mitigated by lower bad debt expense costs and lower

Administrative and General (“A&G”) and support function costs resulting from customer affordability initiatives implemented last year.

Depreciation and amortization expenses increased $11.2 versus the comparable prior-year period due to ongoing capital investments. Taxes, other than income taxes decreased $7.3, driven by lower pass-through gross receipts taxes.

Other income declined by $9.0 versus the prior-year period, $11.6 after excluding the impact of the NSC Transfer. The decrease was primarily driven by the decrease in gas carrying cost credits of $8.6 and unfavorable mark-to-market unrealized losses on non-qualified benefit trusts. Interest expense decreased $6.6, primarily reflecting lower average short-term interest rates in the current year that offset the impact of higher average debt levels.

Resulting net income for the nine months ended June 30, 2025 increased $7.9 versus the nine months ended June 30, 2024.

Spire Alabama

Operating revenues for the nine months ended June 30, 2025 decreased $33.5 from the same period in the prior year. The decrease in operating revenue was principally due to a $44.4 decrease in gas cost recovery, combined with lower gross receipts taxes totaling $2.2. These negative impacts were only partly offset by volumetric usage totaling $5.4, and favorable RSE renewal of $5.3.

Contribution margin was $1.6 higher versus the prior-year period, driven primarily by a net favorable $5.1 RSE update and higher off-system sales, partially offset by net unfavorable volume usage and weather mitigation adjustments of $4.0 and $1.0 lower CCM benefit.

As measured in degree days, temperatures in Spire Alabama’s service area during the nine months ended June 30, 2025, were 4.2% warmer than normal, but 2.9% colder than a year ago. Spire Alabama’s total system volume sold and transported were 845.9 million CCF for the nine months ended June 30, 2025, compared with 783.9 million CCF for the same period in the prior year. Total off-system volume sold and transported were 58.5 million CCF for the current-year period, compared with 62.1 million CCF off-system volume sold and transported in the prior-year period.

Reported O&M expenses for the nine months ended June 30, 2025 declined $1.5 versus the comparable prior-year period. After excluding the impact of the NSC Transfer, O&M expenses in the current year were $0.2 higher than the corresponding prior-year period. Higher payroll costs and bad debt expense were only partially offset by A&G and support function costs resulting from customer affordability initiatives implemented over the last year.

Depreciation and amortization expenses decreased $1.0 versus the comparable prior-year period as changes in rates offset the impact of ongoing capital investments. Taxes, other than income taxes decreased $3.1, driven by lower pass-through gross receipts taxes.

Interest expense for the current-year decreased $3.2 versus the prior year, primarily the result of lower short-term borrowings combined with lower short-term interest rates.

For the nine months ended June 30, 2025, resulting net income increased $5.5 versus the nine months ended June 30, 2024.

LIQUIDITY AND CAPITAL RESOURCES

Recent Cash Flows

For the nine months ended June 30, 2025, net cash from operating activities decreased $246.6 from the corresponding period of fiscal 2024. The key drivers of the unfavorable change are regulatory timing and fluctuations in working capital items, as discussed below in the Future Cash Requirements section.

For the nine months ended June 30, 2025, net cash used in investing activities was $105.3 less than the same period in the prior year due to payments for business acquisitions (net of cash acquired) of $175.9 for MoGas in the prior year. However, total capital expenditures were $68.2 higher than last year, with a $100.2 spending increase in the Utilities driven by infrastructure upgrades, advanced meter installations, and new business offset by a $31.8 spending decrease for Midstream.

Lastly, for the nine months ended June 30, 2025, net cash provided by financing activities increased $146.6 versus the nine months ended June 30, 2024. In the first nine months of fiscal 2025, there was a $205.5 increase of debt, while debt decreased $166.1 in the first nine months of fiscal 2024. The relative cash inflow of those changes were partially offset by a $211.2 decrease in cash from issuance of common stock and a relative net increase in cash outflow from dividends paid on common stock of $11.5 this year.

Future Cash Requirements

The Company’s short-term borrowing requirements typically peak during colder months when the Utilities borrow money to cover the lag between when they purchase natural gas and when their customers pay for that gas. Changes in the wholesale cost of natural gas (including cash payments for margin deposits associated with Spire Missouri’s use of natural gas derivative instruments), variations in the timing of collections of gas cost under the Utilities’ PGA clauses and GSA riders, the seasonality of accounts receivable balances, and the utilization of stored gas inventories cause short-term cash requirements to vary during the year and from year to year, and may cause significant variations in the Company’s cash provided by or used in operating activities.

Spire’s material cash requirements as of June 30, 2025, are related to capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations, and dividends. There were no material changes outside the ordinary course of business from the future cash requirements discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Total Company capital expenditures are planned to be approximately $875 for fiscal 2025.

Source of Funds

It is management’s view that the Company, Spire Missouri and Spire Alabama have adequate access to credit and capital markets and will have sufficient liquidity and capital resources, both internal and external, to meet anticipated requirements. Their debt is rated by two rating agencies: Standard & Poor’s Corporation (“S&P”) and Moody’s Investors Service (“Moody’s”). The debt ratings of the Company, Spire Missouri and Spire Alabama (shown in the following table) remain at investment grade with a stable outlook for Moody’s. S&P ratings also remain at investment grade with a negative outlook.

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Cash and Cash Equivalents

Bank deposits were used to support working capital needs of the business. Spire had no temporary cash investments as of June 30, 2025.

Short-term Debt

The Company’s short-term cash requirements can be met through the sale of up to $1,500.0 of commercial paper or through the use of Spire’s $1,500.0 revolving credit facility. For information about these resources, see Note 6, Financing, of the Notes to Financial Statements in Item 1 and “Interest Rate Risk” under “Market Risk” below.

Long-term Debt and Equity

Factoring in the current portion of long-term debt, the Company’s long-term consolidated capitalization consisted of 47% equity at June 30, 2025 and 46% equity at September 30, 2024, respectively. At June 30, 2025, Spire had outstanding principal of long-term debt totaling $3,914.1, of which $1,968.0 was issued by Spire Missouri, $750.0 was issued by Spire Alabama, and $216.1 was issued by other subsidiaries.

Effective October 27, 2024, Spire Missouri was authorized by the MoPSC to issue conventional term loans, first mortgage bonds, unsecured debt, preferred stock and common stock in an aggregate amount not to exceed $850.0 any time from that date through December 31, 2027. As of June 30, 2025, approximately $625.4 may still be issued under this authorization. Spire Alabama has no standing authority to issue long-term debt and must petition the APSC for each planned issuance.

Spire has a shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission (SEC) for the issuance and sale of up to 250,000 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 201,102 and 218,141 shares at June 30, 2025 and September 30, 2024, respectively, remaining available for issuance under this Form S-3. Spire and Spire Missouri also have a universal shelf registration statement on Form S-3 on file with the SEC for the issuance of various equity and debt securities, which expires on May 7, 2028.

For more information about the issuance of common stock under Spire’s “at-the-market” (ATM) equity distribution agreement, see Note 4, Shareholders’ Equity, of the Notes to Financial Statements in Item 1.

ENVIRONMENTAL MATTERS

The Utilities and other Spire subsidiaries own and operate natural gas distribution, transmission and storage facilities, the operations of which are subject to various environmental laws, regulations, and interpretations. While environmental issues resulting from such operations arise in the ordinary course of business, such issues have not materially affected the Company’s, Spire Missouri’s, or Spire Alabama’s financial position and results of operations. As environmental laws, regulations, and interpretations change, however, the Company and the Utilities may be required to incur additional costs. For information relative to environmental matters, see Contingencies in Note 11 of the Notes to Financial Statements in Item 1.

REGULATORY MATTERS

For discussions of regulatory matters for Spire, Spire Missouri, and Spire Alabama, see Note 5, Regulatory Matters, of the Notes to Financial Statements in Item 1.

ACCOUNTING PRONOUNCEMENTS

The Company, Spire Missouri and Spire Alabama have evaluated or are in the process of evaluating the effects that recently issued accounting standards will have on the companies’ financial position or results of operations upon adoption, but none are currently expected to have a significant impact.

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources are based upon our financial statements, which have been prepared in accordance with GAAP, which requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting estimates used in the preparation of our financial statements are described in Item 7 of Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and include regulatory accounting, employee benefits and postretirement obligations, impairment of long-lived assets, and income taxes. There were no significant changes to critical accounting estimates during the nine months ended June 30, 2025.

For discussion of other significant accounting policies, see Note 1 of the Notes to Financial Statements included in this Form 10-Q as well as Note 1 of the Notes to Financial Statements included in Spire, Spire Missouri, and Spire Alabama’s combined Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

MARKET RISK

There were no material changes in the Company’s commodity price risk or counterparty credit risk as of June 30, 2025, relative to the corresponding information provided in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

Spire enters into cash flow hedges through execution of interest rate swap contracts to protect itself against adverse movements in interest rates. At June 30, 2025, the following swaps were outstanding:

The two interest rate swaps entered into during the first quarter of fiscal 2025 are hedging $350.0 of the Company's short-term commercial paper program. As of June 30, 2025, the Company has recorded through accumulated other comprehensive income a cumulative mark-to-market net gain of $12.4 on open swap contracts.

For this discussion, see Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk.

Spire

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Change in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Spire Missouri

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Spire Alabama

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no material changes in the Company’s risk factors from those disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024.