SR - Earnings call transcript Q3 2020

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Operator

Good day, and welcome to the Spire Q3 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Scott Dudley. Please go ahead.

Scott Dudley

welcome third and earnings everyone, morning, to quarter our call. Good this our website you earnings issued morning, at news Energy. our We on release and it may Spire access may that or site our website, then webcast, slide the and from accompanies Investors & a either from presentation and There's you Events download under it webcast our Presentations. the Steve and President Vice Operating Officer; Lindsey, Steve and call Executive and are President Sitherwood, Suzanne today on Executive Presenting President CEO; Vice Rasche, and Chief CFO.

briefly me of Securities let the begin, our Today's Safe including use we Before the questions Litigation within and statement cover of XXXX. forward-looking non-GAAP call, Private Harbor Act meaning of statements measures. earnings Reform may responses to contain

risk discussing factors our others, are may performance in forward-looking we margin, be net than annual these their are results among will evaluating used be reconciliations in future statements different In that to based the or and quarterly comments, our outlined anticipated. filings uncertainties assumptions, management are by of are with and Explanations and capitalization, SEC. These measures there slide our in and our and GAAP adjusted adjusted when long-term to risks operations. economic contained of those EBITDA and reasonable non-GAAP news cause which, results Although and uncertainties on are various release measures earnings, performance the counterparts contribution presentation. our

to Suzanne. So with over will call I that, the turn

Suzanne Sitherwood

update. good morning Scott, and joining for third Thank everyone you, us our to quarter

and to First, that safe say I'd healthy. I you're hope like

every new those members, working well us and of family challenges challenges day. colleagues adapting through as many and So to friends each and our are as

self-reflection us. important quickly our minds, of and we not safe, to and we It's count that moments are behaviors, while and inward, us challenges that's Spire, also delivering environment because the racial difficult inspire and everything outward work to around it's helped our us At of during and to social look a knowing yet who changing beliefs, these reflecting us. it's justice perspective hearts on energy action. on times own With people have many communities attention world who on are, makes values pay the important the who reliable global pandemic still and that the to answer over

Day For examples. So changes to to Coronavirus-specific including ongoing most all Coronavirus creating late service held business safety We ensure to temporarily for for example, fees like to for Coronavirus, the other We guidelines customers; a operations, wherever work the focus why did and expanded Spire-like few calls we suspended got other stopped shifted educational possible this communications to for each through environment fund the new leave dedicated five mobile work-from-home assistance employees; customers; for you programs Internet states. needs. through disconnection in who environment forum for and thing and show the to in employees midst donations our connected; we imaginable. always our local we what, our that of and provide quickly shifts the while for between work, how ourselves, current Spire beliefs, seamless ends related news, to covered gathering bill relief to just the ongoing each our matched donated know their an And a to and Good the are. volunteering offer make further all team help program ask we we focus DollarHelp creating Spire care Spire is field values across the throughout meet; we distance serve Spire for defined. employee food adjust have channel on shifted clearly when how the increased serve? been we and and no because customers leaders immediately to care provides And Spire all people for communities elevated I'd can and And the is on program. communities virtual a for to we for did our time closing echoed struggling matter Foundation culture we and our justice to again world inclusive calls leaders our on all. behaviors, is inclusion We communities,

of Spire doing employees this businesses adjustments vital while that many I'll virus. spread essential delivering also part With uber-focused necessary responsibility, being quarter whether while Through and results. up customers have layers third with well an and on government our kept part preventing comes to certain say authorities, I'm energy supported homes our that guidelines safely turn possible. the the all, schedule, service, to to embracing our As and stepped to done nation's And done they've a to this we and we're actively healthy level of it ensure communities designated of are delivering proud our thanks and full They've served, that energy and and add staying business to safe extra by already incredible our our infrastructure. reliably that as results. an are safety employees, now and make

better for higher we're by I'm pipeline the contributions replacement pleased guidance marketing. were results share now earnings we were utility earnings note as have to our lower earnings fiscal on program. offset ready $X.XX from XXXX, gas from midstream Missouri that provide business economic net clarity and to Our gas per that

year-to-date Lindsey Rasche topics. will call turn about share, to for We our guidance earnings and expect our of be important this this ISRS Steve reflecting more With have settlements. year. in for on $X.XX economic over year of range to per the Steve an I'll net to Coronavirus earnings $X.XX impact our several and to say that, results range update the the

provides our and safer, Storage more the to First, also resulting regarding speak reliable Steve? while ISRS, finally, plan; initiatives better in our systems, acceleration revisions which then regulatory development of and he to will legislative program environmental performance. Missouri investment in even continued the Spire capital

Steve Lindsey

on employees the during difficult efforts you, by times begin Coronavirus Thank the our want resulting Suzanne. brought by I and acknowledging to shutdown. economic the of outstanding

calendar into We for opportunity reflects or Public Office out accelerated Missouri pipes render support while and with communities the clarify the are legislature I'll much. their my with we've great frame replaced. service OPC, your to was enable call, recovery, the is helping the need. Clarification regulatory customers reasonable or as cast on made effective legislation to remarks XX. sets a encountered cases. recovery which from to care were August for allows the providing We Past update plastics own intermittent have ensure centered our Public plastics of and that ISRS significant to and all specifically the the as time to Counsel standard safety upgrades. and amount invested deteriorated. this legislation still the time also of ISRS XXX worn well-being being Missouri The health, the days, very the taking when to in worn providing we've enacted year. or file two out adjudicate mechanism to cases time statute has challenges our cast iron, on of capital our you extra for deteriorated more progress last Missouri well ISRS. bare Service Since Thank of that begin steel pipe decision ISRS infrastructure in a steel remove bare of iron pending evidence the in Commission for The earnings and law been an

appeals. adverse appeals also Service We back cases Missouri our Under calling cases dispute XXXX, settled will subject Public for rulings to court in to and last settlement, November, and Commission. we refunds the certain XXXX collected of for ISRS the to under were continue amounts XXXX collect that that amounts the be remanded the the to were the

million Public we approved of to will cases commission, the settlement, of calendar form be Court million. in continuing Under credit $XX.X annualized refund we're year. rate making However, the two are to of our filing, through $XX through XXXX extend May customer that the is our the of Latest a the we XXXX increased bill at end effective onetime we august. process Missouri where OPC. a expect February work the our Commission Appeals, ISRS appeals Meanwhile, this a $XX.X an collection was and this million settlement increase, our ISRS Missouri Service with XX. by In run which by ISRS reached staff annual in

are momentum we dealing new request including Overall, a in positive we ISRS some resolving the for we've been filed the encouraged plastics. we Finally, time. with by $X.X yesterday for overhang million, ISRS have

Turning to capital drive to growth. program our

to year our XX% our our to fiscal XXXX estimated our with We increased quarter, $XXX for million last at utilities. compared again, million have, earmarked total $XX higher the be now We update for gas over expect spend.

year-to-date gas utilities. infrastructure totals you into is our STL continued went our Pipeline, investment upgrades last And new lower million, businesses for of at $XXX due which bit our quite as spend to gas-related can CapEx Our see, a completion the the reflecting Spire in business and service November.

the growth, important results of performance driving investment upgrades, infrastructure to in achieved. the environmental other addition In we that our better

the XX% by our miles latest in achieved lower report, XX% drive we're system per reduction social last methane years. XXXX. already are corporate a also X,XXX XX% which continuing noted we're distribution We've since five And Specifically, over pipeline reduction as down emissions, targeting to in we of responsibility a XXXX. leaks

In leak addition and to O&M the reduction a expenses. lower reliability a in rate results safety, improved benefit, environmental in

our Lastly, announced in Spire let revised early that we review July. for me Storage development plan

and customers. we want current I are serving emphasize to that storage to future fully First, our committed

plans to better the them the fact, we enable serve designed to future. even in In have are us

reflects longer and from which position western storage energy markets, markets the input to serve calls the recognized nationally engineering, gas which for to evolve. continue horizon to facility experts plan, revised a Our and U.S. and on time optimize analysis

to validation there plan our commercial for seeking commit the are our we to is capital. required services for We demand before that ensure

FERC expanded the We by gas storage outline will with our filing that need of contemplating. the services early prove for and make will path we a next fiscal development X(c) year are

to the building believe while demonstrate in of advance two STL recall, may we years over will continuing $XX you In it Spire remainder obtain validation, operating the interim, fiscal the and million its to to take through Overall, and invest approval performance. we As the went XXXX. expect Pipeline. three regulatory we XXXX process commercial to of X(c)

Rasche announced $XXX.X quarter. our review earlier, As over to With Steve plan turn resulted value asset and development I'll million it our financial that, we Steve? Storage's a write-down in Spire a in update. for third revised

Steven Rasche

Steve, let wishes my or me us joining safety for well good who call who's and afterwards. the good on add health everybody everyone. today and Thanks, to listen afternoon, And will

for loss discuss million, the quarter results capital Today, start and earnings then under our includes GAAP million. just Let's The quarterly and me and two guidance. totaling pieces. spend let charges review $XXX net $XX with impairment was This charge our reflecting results. forward noncash

as roughly location or write-down Carolina. principally million. storage $XXX compressed under Steve secondly, in just million natural fueling write-down the the assets of South First, $X our just of And gas our totaling a commercial stations, Greer, discussed, CNG

evaluated apparent the for this economic over the to we the venture, announced CNG periods, persistently an Results preferred results XX the financially lag less Greer demand is in Results to last months. share expectations part the in ours $X.X quarter the with large GAAP fueling eight attractive. orderly per were for We've we which million, $X.X became make months. earnings common quarter facility economic and year. last XX Class in process included earnings from As of the and bring low begun true-up it reflecting next exit up impact to continuing the settlement conversion million the were $X.XX Net million and issued that of due trucks for market last $XX to prices, line month. both net ISRS stock diesel also in the

were the as at from margins drivers utilities earnings reflect Operation on slide at smaller business and also Storage from in quarter. revenues, demand other, $X.X of include that results by touch driven STL and loss lower the Gas growth improvement forward. from Spire $X.X earnings in going offset well less both Contribution that million, as more XX. look on maintenance impacts ISRS net lower, were expenses marketing down Quarterly than $X.X Pipeline year. COVID I'll in of detail market and also higher year, were $X.X a just second. last net $XXX,XXX higher million up more and costs million up favorable segments take this and conditions million as Key Spire Gas advantage expenses. customer Let's posted current a reflecting of margins as a higher planned. earnings take both last significant as we market

bit as impacted internationally. market demand in March, natural significant detail. Beginning a seen Let also in not demand LNG but me drop the more drop gas a in domestic a has explain trigger in both only shipments COVID

While natural asset season, for lower curve the spot creating $X at for high we and and This demand price now until gas we optimization winter and Uncertainty have forward also significantly drop we per today production, this contractions have price summer volatility. heating wellhead, in are is reduced prices MMBtu quarter. opportunities regarding well a the the differential that lower was over kept the gas, just recently. flowing seeing seasonal prices weather seen a had impact or

last the only fact, In few days.

and to differential take at Spire to of is a of result premium, situation. excess both taking gas seasonal as of as advantage flowing marketing that is a storage dynamics, price well advantage that address As these now market

were to on There and to regulatory and expenses this benefit different reported, quarter, doubled I seasonal price our income natural it in pension O&M does touch and draw winter, This fixed this us gas quarter, cost costs have up will quarter, variances the winter, statement. and storage cost the for classification for other going We lines income. commitment the positions fixed expenses, deferrals O&M similar those next that continue almost storage other winter. are of the up locking we this push until two But Total show storage last $X.X differential. well in want our of million. on into but up as the

a recur costs And million did realization higher of this a from stem these operational in efficiencies, in expenses this cost year actually COVID-related gas Excluding and $X second. talk rate O&M reclassification, net million bit prior our These timing, about I'll that not more more that lower and were than $X.X run expenses savings that by utilities. the than the year. savings offset

in run The $X.X this year-to-date other reference. prior Spire in it's variance year key your rate category contribution the of up for of is decrease are from the show With Note service, analysis margin to AFUDC other a there above due Remember, Pipeline. in results quarter income. that cost STL results million its the the in variances, so other appendix P&L. in additional and now

Turning to slide XX.

million it or XXXX estimates roughly $X.XX last to reduced $X.XX have financial year fiscal from We our per estimated share, reducing impact initial Coronavirus of by $X.X our quarter.

bringing partially Actual fees components. year the continue restrictions. by Looking commercial were impact to were at customers This especially for the demand commercial down total small Margins industrial and the are the an million, we brunt higher for continuing by $X.X $XXX,XXX residential the quarter as loss bearing quarter $X.X were area late is closely, who million. operating of watch margins. offset lower for the to

in risen past We our an increase are expense also due has million. seeing debt $X.X and quarter balances, bad by this

other customers. roughly increase forecast further enhanced a And expect the our savings savings out and We $X finally, seen for a of net options annual for as quarter quarter where in $XXX,XXX expenses, of million. the we payment fourth roll we've

level pursue of We defer savings. us that to AAO, we also filed have loss has bad for mechanisms coronavirus, or impacts relief the could certain of Alabama impact existing and regulatory provide recovery, to Accounting an O&M if certain levels. Authority about Missouri, In continue enable including future potentially Order, fees, rises to debts net already costs relief.

guidance. Finally, let me turn to

now This well reaffirm year-to-date impacts $X.XX target we mentioned, guidance COVID-XX for range X% as I $X.XX initiate per with X%. share reflects fiscal our the fully Missouri, around per just clarity XXXX we Suzanne recovery forecasted As at in our the results to share. as net ISRS earnings And economics talked of to range about. growth long-term can

with remains growth plan billion, X%. plan utility reflects territory the supported XX% capital for to with regulatory our five-year across long that is Our a X% $X.X underlying regulatory programs ensure lives base that spend. This and mechanisms our reminder plan minimal over and service rate diversified lag of of well by

XXXX. modest plans the for remain needs remainder track, financing on including of Our equity fiscal

I So but most it remain Suzanne. over me delivering shape. solid say, our working for you, let stakeholders. in all With And back turn focused year, summary, we we're unusual that, might this through in on to

Suzanne Sitherwood

has a Clearly, you, year. Thank this Steve. challenging been

However, are we to challenge. the up

us Our to answer challenges. calls mission

Spire in energy with every employees, infrastructure. are our working customers and reporting you on serving each hard and we'll see As communities results, our compassion day. quarter then, can our November, look and third of part and employees taking of to forward nation's a in results care vital care our focused focused We and being year-end until stay

Now your we're ready take to questions.

Operator

with will Credit come ahead. first Michael Please from question Instructions] Suisse. Weinstein Our [Operator go

Michael Weinstein

afternoon guys. Hi, good

Suzanne Sitherwood

Hey, Michael.

Michael Weinstein

So X% as at growth the for baseline the states to look XXXX rate the X% to guidance that?

Steven Rasche

is Yes. Michael, Steve. this

take at anticipated me Let funny. that, question. shot a the It's

and our don't we actually rate come rate from we that bit calculate time bet together wrestling to question when We're compound wondering house. not most the here, with our home, big the of with And I'm different run at the beyond? growth try like launched into what today, to struggling think when but we we're looked rate, what's run guidance back is all We really XXXX your XXXX. and it in I I a rate you're a As I ways. we're know sit what's at working going office. does we're here little couple what we're run could looked and As XXXX. and is of look

things to coronavirus. X, were coronavirus where But to a back I'm be again, this would changed, which free and there XXX% could sure and just and means And going the time to like will view that the couple frame. ISRS our or the of and of in do going we back the not aren't simply we're months, days, some for up two recur at willing months we're settlement is of six-year year, that did couple back clearly is as or we that. a world. folks completely October on market are looking all always we we're observation, day that to three of and And to a I that, the all make do going year. next add of add which sign one-offs What But Now of impacts. to five- that's want

and were clearly and it our plan, And we look so team growth where it XXXX if rate go a supports our as forward run and to we five-year through of at back I did compound X%. then X% in

run been basis, XXXX normally isolate it are But be at next long-term when you this we fact the CAGR, basis. to some higher rate But we when we a great true So to to I carrying because we're rate true to rating that the all have we year-end call XXXX at I are think and all we guidance, we'll we to all map we're the that negative to business want analysts over I going comfort would overall. end look a look than nominal talking think much exercise into would is going we've the up the and acknowledge how honestly, specifically XXXX the on impacts and is that over to add to from still but growth as XXXX, growing run when a about all over additional start that. about think on try year back we an that. investors could get be How map we how

last everything X% baseline, So comfortable need it year-end I kind thoughts our with And as a X%. as and think enough to triangulated that we'll if get of you we conference our call. before that year hit, was we've think because of update we're to

Suzanne Sitherwood

long costs. that is record add Steve been our operational have and saying, of to a just deployed is performance our has yes, to capital in what year-over-year of terms to their utilities relative specifically Michael, track we the and

just around through. Steve So that degree went greater confidence also that of gives us a Rasche wrapped what

Steven Rasche

when It's comfortable bottom growth get X% you growth at base X% of our of to have line. rate rate kind compound easy in Yes. with to utilities the

Michael Weinstein

right. Yes, makes that sense. All Right.

at could expectations returns Storage, where the for value Spire remind I year starting hand to are just you also, to earnings other become what's this least going around this your book us you point? better book when are value at little that the EBITDA guess, or if What And that on a positive do On and forward? remaining and than positive? expected, turn expect you already things

Steven Rasche

we just me Michael, start that. Yes, on million. for net about as over talked July, the Yes, in $XXX value book was let early business the

at asset million we're So net $XX the value you off take after impairment charge. about

that what further where right business talked has expected the the the over And to $XX will about. expanding invest not that And middle So is the months, of in it so that's that we'll contribution investing about stands of right without the it be we EBITDA our range changed the now positive. it next view XX we about speak. nearly million after

are we step again, positive that and to told where be. have $X what or an and on be around what the up have one is fact, track need to decide isn't still breakeven. way on. next we're market. now the to zero. always especially was And right In as time going focus be of other might perspective, EBITDA within is we Storage, which that it's do target focus the What between It earnings to in the would the on quarter, And we million, next demand to where Spire prove our going we the we thing from

Steve Lindsey

Really, winter, is our did. coming Lindsey. commitments, year operations Steve deliver which which to we short-term this and solidify our we -- did our I'll were this customer goals into the really on And through

markets three and and evolving the go some forward, validation and to to approval. energy we really I west clarity the commercial think to it's through obtain next then years looking that to regulatory in get things accomplished to, the So we more those and as over alluded two around

forward do than there's a time to of we think But going for originally I were line a So what the little those and still, bit in term, thought. this short longer we're out look opportunities. year, to we we accomplished

of And as the bit a where forward. little the so look pause we that's

Suzanne Sitherwood

call matter. and if Michael, the that you do on everyone for

months. recall, in to executive brought we winter prior you If the a storage seasoned

given that which job, the this to And runway year. his it is forth, so did really and and the executive head you've So around operation that in seen past terms a series really a the they nice of wrapped math in get operations events. of

proved highly You out you you operationally it on know, storage, before start customers. engaging as

him have but plan We a manager customers the need of a is he's about our I'll and move executive that offering runway. nice deployed that recently that runway the facility, many this services is the are using to also bit time, where And doing think over capital plant we're and looking topic The really experienced. types hired forward and that for. of job. on customers very they're They're come that in end a piece

helped of as him gives the more as more the side he's and facility operation that capital himself to satisfied that around well work of go now capacity that now So do that he out of build. customer the the plan

Michael Weinstein

last other situation, opportunities One subject. California some are Or will same major a are for the there? Aliso Canyon major the there that as on question opportunity that at point, Spire Storage? that still looking than even and is at opportunity larger that The or? Are you

Suzanne Sitherwood

is one It the opportunities. of

in industry across more one somebody holistically And our resources sort much we very United terms a really that States. market the another the besides mentioned, our tactical gas that's etiology. in of flows knowledge, understands and group, of looks Lindsey hired a hired internal Steve who well-known at uses also and we then As group

that's that California the intermittent so especially play of and as they're western are and broad of storage Midwest saying uses than that for facility the part uses generation in how the how is are of will country. works significant, new of role And the added, California. power a that more significant Obviously, and facilities way and just those added a

country. as long to so flows way on storage, of with a asset western in And gas our And on role valuable in key storage gas we side America. in we the a a talked view the about industry that like prepared it today relative play will North remarks, feel is the the earlier

Michael Weinstein

ISRS congratulations on ISRS much and you getting legislation very Thank or and resolved of the passed. all getting

Suzanne Sitherwood

Great, thank you.

Operator

Our Please question with come from America. ahead. will go Ciciarelli next Bank of Richard

Harry Pollans

is actually Harry Richie. guys, for on Hey This Pollans

headwinds quick been what you any few be could pending are or XXXX refunds? of questions. a a Just signed How are ISRS that this you're appeal has now given thinking kind booking? windfall you the currently and Or opportunity about legislation expecting

Steven Rasche

Yes. first bit of well that passed the be little how go as process appeal. does the approached. will Well, August think the a with provide legislation and intent so of effect going all, Again, regulatory we into forward-looking, clearly, this but is we're should that perspective, XX it's it was as as legislative guidance through still to

through probably the the And think that mentioned, those relative play I be till for early So as it's end of to us speaking are being filed. will calendar to anything to year. that, I briefs

pleased, three we the legislation past, the I to get the put think again, XXXX the get settled in very and to passed. were get to

XXXX, and be should I momentum way but that the administered it, to really with the, relative starting comfortable need see let very we just positive to I the program definitions to for think process think I we're So for call would play we're our customers. the out

Harry Pollans

That it. size sense. the incremental makes any to Got was then equity the of right balance guys And your storage the anticipate do you debt front, impacting to regards needs cap, to down, sheet? kind on year with

Steve Lindsey

hasn't changed in as is a developments contemplated guidance, No. our been would that this would result really really. we and quarter. already financing have None Anything This the need that of Steve.

Harry Pollans

it. Got

earlier question. We be CAGR. growth Okay. the using If I could clarify for to should Correct? squeeze of one just kind more XXXX long-term EPS in, an

Steve Lindsey

pretty figuring where opinion an XXXX on of not time a base us specifically kind I you and one-off of can I'm we is rate and and not And of not the and XXXX, have think this been and completely we're about COVID growth it that forward. a run out of enough that was is is But do said has it forms I in much I back XXXX which can that any we've game, to as fundamentally run that. economic rate What that to also because how with real something clear when have, first rate. but go I would view the our up tough I did going understand clear say going run it you is of impacts. understand before supports clearly have, play our much all, it long-term changed How it

still of think in you books, we to a call year-end I better So earnings assured, it work guidance, bit XXXX launch we'll XXXX, call rest basing the And that that numbers have want our fine in it. when continue were little at the we'll if if to I'm not we how make to I'm because best run and forward get to with understands view economy, beyond. you, going XXXX about but I view. our honest rate XXXX everybody do opinion sure what we'll how the without our a an are prospects in be sure forming to that

Harry Pollans

Perfect. Thank Understood. you.

Steve Lindsey

you. Thank

Operator

from with Our will next go question Please Sunderland JPMorgan. ahead. Richard come

Richard Sunderland

taking Hi, questions. my thanks for

Suzanne Sitherwood

Sure.

Richard Sunderland

to benefit for is could a the costs on commentary with expected marketing, you little think versus the position bit speak quarter And any locked in this incurred XXXX? next to what year? way starting around about to Just more the

Steven Rasche

are have give I Steve. obviously We level way. not work. we actually to is this operational would to where try that try it in. locked detailed But and good opportunity a of view the and answer this detail, us have to of fairly what's Richard, to to Yes. get you I

in ground. storage the this look bit in vast the putting difference majority associated little of the is the loss positions, and Marketing of year, gas with quarter Spire earnings cost at between shortfall really of that the you hedging If the a last

that would the same last been had year. that positioning, earnings from Aside we or at near level we have

which the to out, storage is would the withdrawing time the that the Now how forward we about for think before frame. will winter quarter if storage a of bit will quarter meet February start of first in next the actually for heating you January start November, incur year plays during suspect going would good and to withdrawal but probably actually I cost we and that season, be fourth

rate, the that how think run gives cost at cost. the about about you to think better least you as a that view So of

it differential the the four of maybe creating, start even full $X.XX to really we're what the move. terms That $X.XX per where Hub versus and $X of $X.XX, that the part now just differential, seasonal $X, MMBTu is quarter. now a that we may not up the Henry and ago. was last trading of seasonal But between is a phenomenon for which transaction days. be days value better below In show that's have the done we had was bigger over be technical, wouldn't four the but it but the may entered analysis

past. we're going So we take and it to that but is as it. not quarters, get have on that only to doing look going market a what the a the right you advantageous have half to winter. we're we get of is first But to cost remarks. very, at I natural we're value for storage in not in to ones lot Spire the fairly value, we significant say, of than going amount suspect record significant us to next the trade fairly the created of over oil, end-to-end, make storage X.X take the which so, may close we're least more for going gas this this now, And do Marketing's of to these create all when prepared or believe market reasons year XXXX. and tops the talked when we're the levels year bit where may we a earnings fairly chances, we've again, a is, during close the create pretty the they pretty gives opportunity very seasonal going at advantage I it to have the And tank about two seen value we're that available There's quarters the market a this of significant and

Richard Sunderland

And reading the favor if table I it. I'm guess, I this correctly, somewhat Got in on there appear appreciate several COVID I items And wanted quarter. slide color a then impacts. just there. that next XX your reversal. be going revisit will of to the on are

Just that's any provide around the curious if of those bit regulatory more little dependent a if color release? you and on could

Steven Rasche

a Rich, it's question. And Yes. great

XX, on four lines. at look done. fees The there's really you loss if So slide is

operations more mode. normal are in back a We now

gals that that So know, more between exposure that remarks, We and we and see should the really will being But economy upon our how they people of believe expect jurisdictions And have best will fourth the we then get do debt outstanding spoke sector. we in don't offset those industrial we a go the fourth we and estimate up in change first But quarter. and does in their quarter, depend little gentle to see especially get able to the still you're an guys the full be prepared on the many can question. are bit are call, the in and right. benefit arrearages. the small commercial better on they information, in to especially than year. you for see And those I restricted as a Bad in that the our any as do three I which that's is our where we residential you uptick restaurant. said as of quarters margins expect

and were the as this about in lot continue we so claw as far cost on our see calendar entertainment. that the are doing which to get this travel We're probably it be now arms of not some little of doing and a and our year our of balance runway bit saying. April that you to naturally up other seen gave peers as protecting to turns and see end be naturally back the reduce. of the other get that, actually not costs the we've that's of you around And some are if versus we'll going right and for around March lower, think to year. incurred our of it us and we of lot costs, year customers as like And most And we what We a just that, early a also it can employees. ramping

in create for last if about was year. bit back, opportunity So an is really step that is over estimates that our more. offset a And down us the where a offset going it is to of then more margin favorable little bit and debt a higher little the view a that's by bit offset of impact expense. what And the direct XX% cost to And down, bit impact bad overall little be. will you

Richard Sunderland

Suzanne. Thanks, Steve and

Operator

from will go Stifel. next Akyol Our ahead. come with question Selman Please

Selman Akyol

your just that you. to there. to Thank relationship I up follow in last wanted question table on

the do recovered to AAO things about Alabama going expect as I that think guess, And how in we you be much so under of forward?

Steven Rasche

Yes. estimate reticent Selman, to I'm that.

get broadly and overall think would various it's on to to across We a have peers, have from us have very for with our kind AAO. we of is for the step one are see more back a as active that you out. recovery in, cost And because North if net And highest wait filed who it opportunity. do weigh easiest regulators how chance probably discussions lot all with talked in those their around the easily Missouri, and the increases utilities have America I we'll chat of want we about, where us to the to parties both I We're and look because the getting and the at of definable. in for plays heads a question

that expect to tough in to margins get that on. utilities really recovery a get And I'm for would think I are broadly area we not sure Missouri.

thresholds. say the in Alabama, above would I Now certain mechanisms

So those adverse above on do of margins. actually get loss some impact thresholds, have amount. we a to certain we an recovery But have

specific We to loss that for in and which able and fees want in We clearly there we that are case those. defer see between along and consider And once in able our that or those would we'll get would is fourth be whether really the And we're level rate that. in get I of in now quarter not. we're we identification handicap not those two. Missouri. yet, that fees, the sure get and Missouri, mostly be we're kind confident whether discussion should or recovery at whether loss then have next further in the is then another you of them the to to are immediately, some not don't we'll show them benefit we can process

Suzanne Sitherwood

I add, an only because Selman, had specifically that. you perspective The thing about asked maybe would Alabama from

we've we've As the Alabama, because Steve two are Mobile basically Birmingham who Alagasco, we got there then got thresholds Montgomery, have utilities piece. said, in certain and

I wanted those. So there's different make. both for to set points real of point But the

RSC reset. we annual through and have in recall, an you As goes Alabama, the it

and that's are need those true And process and a we then and So company. observations reset those manage made the be place to all to prospectively, decades. tried companies they over the

bit. just that add I want yes, So to

Selman Akyol

as wouldn't just I debt appreciate your that. me kind terms of to and the ask of we continue we know I expect And that XXXX, season? difficult into to go in let looking revenue bad expense, into accelerate but peak

Steven Rasche

minus, no unemployment, have and stimulus for we are control, our way say the of things view a activity us to It's we our to say, do It pay. a in feel think, like But gets would had for COVID then sure great including outside things And debt ago. even XXXX we at customers' level run Selman, the I and that that of we clearly to whatsoever. would question. abilities economic rate that to prior is was if moved a bad that's rate up a it knew determined and lot to by bad But debt support run level. that expenses, of XXXX have expense going level than different at which be packages plus in a federal what on months be probably may it been that to will looks like a lower our higher before have I five stood

Steve Lindsey

assistance, situations, tried really are only do our I for customers, would would I what this up early working folks are her payment thing times was on that the energy tried as a is, of things hit that this thing really remarks, on know into because so some for that to we've it's new have scenario. add proactively Suzanne And add lot the whether of difficult to the we've in arrangements, people not we in come step there's these do very normally we those the can

the past. people do in to and a the trying done we've we're educate things, And help some probably process, way so help even than advanced more through in

Selman Akyol

for appreciate I $XX minute correctly. million you're thinking over I'm XX for breakeven, to storage going Thank so it months. to another you're a or make to back sure just that. you getting go And I next want invest the about to this and and

time So contribute, asset do million, to something to small? expect be get we expect see albeit do the $XX at by Or the to to you breakeven? start you still

Steven Rasche

$XX going the It's It's Yes. impact. net improve that we EBIT our a firm will And the that we've little million still that is capacity the move We our from needle services bit. the it when to seen clearly to be income we up to can allows you sell going to be expect do at customers. for demand what to contribution provide. would us because the breakeven storage customers to look around significant

level comfort allow it bit. have to a that our We us at little kept $XX And customers are at. delivering level a incrementally on will the we increase million comfortable that just

either does way operating want we decide a hang on until lot overall the help what wouldn't with So to small It's to of I improve our want results. in development we term plan. longer our it Selman. businesses, such portfolio of do a piece it

Selman Akyol

from other then and this have places about Understood. suspected. guess And I'm normally just last one Can wouldn't question that I hearing here. you I guys just

hydrogen all? guys look Are at system, at all your And you can cetera.? getting on about you et anything about that? think you out out there guys years So talking you as comment and are XX

Suzanne Sitherwood

a read that. lot great It's all Yes. about question. a We've

obviously, we're about reading. so we're And intrigued what

what one different about list pieces holds, call. list year that but this our our being that's yet, future not imperatives, up currently. not on who showing talking far earnings Spire it's of the not focused on all that this on As and least strategic been on our stayed the knows as at We've we've obviously,

for into going and has year that this focus our been year. clearly next So

Selman Akyol

so Understood. much. Thank you

Suzanne Sitherwood

Thank you.

Operator

Our Sidoti. last question go with come Brian will today Russo Please from ahead.

Brian Russo

Hi, good afternoon.

Suzanne Sitherwood

Good afternoon, Brian.

Brian Russo

Most rate case of have settled, just was curious, all-party been asked answered. was I an settlement? the last questions was that my that and

Steven Rasche

Are talking rate about Missouri case? you

Brian Russo

Yes, Missouri.

Steven Rasche

But Or in we you which XXXX, your definition, by rate to that got case, agreement -- frame parties had follow-on? do We that settle when a a of Yes. have all we the settled answer the with you involved. question? April time

Brian Russo

my No, know the wanted part just of question. that settlement. was OPC I the to answers

Steven Rasche

discussions. the They part the are and of settlement always

Brian Russo

And us is just remind the the strategy what with HoldCo then debt. Okay.

I total think debt, than less to you want XX% where it is but of be it now?

Steven Rasche

go will We'll year because on percentage numerator. we hold drive operating have that in the a amount growing the to market You second versus by Give now. come down can next It's regular bottom We'll great in that XX% if here, that's retirements that the I and us up I'll down. know me bring That's right steady. operating about half that which a calculation the debt the pretty holding will to question. the companies, see work will what? invest do will go will every number. current utilities. in get reducing amount. that the company of And in million the for denominator, have couple allow most $XXX too, a of company then And We continue the on that some working years as of to we and forward

Brian Russo

the And structure rate in last case, disclosed? cap in settlement the just Missouri was the

Steven Rasche

XX.X% remember equity, in Commission and you're And as in. Missouri the cap structure, A was they opted case an correctly. was cap was Missouri the the structure actual company for last decided and the calculation I rate of companies that via which operating if

Brian Russo

you much. great, thank Okay, very

Operator

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

Scott Dudley

We us. you appreciate all busy you to with the joining I your always earnings and it's talk questions. for chance a day. know Thank Great. answer

around rest any of the will Have the Be day. We safe. great for day follow-ups. for a be

Operator

has now you attending today’s for Thank presentation. conference The concluded.

disconnect. now may You

Spire (SR) 8 Aug 202020 Q3 Earnings call transcript