Spire (SR) 7 May 212021 Q2 Earnings call transcript

Company Profile

Participants

Scott Dudley	Managing Director, Investor Relations
Suzanne Sitherwood	President and Chief Executive Officer
Steve Lindsey	Executive Vice President and Chief Operating Officer
Steve Rasche	Executive Vice President and Chief Financial Officer
Shar Pourreza	Guggenheim Partners
Julien Dumoulin-Smith	Bank of America
Richard Sunderland	JPMorgan
Gabe Moreen	Mizuho
Michael Weinstein	Credit Suisse
Selman Akyol	Stifel

Call transcript

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Operator

Good day, and welcome to the Spire Inc Second Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Scott Dudley. ahead. go Please

Scott Dudley

under welcome download CEO; call. and and Presenting Steve Fiscal second site webcast, at XXXX may presentation website a Vice Good accompanies Investors in Executive Steve Sitherwood, and on or Presentations. the from that and is us issued to under either & Suzanne and a earnings call room our Woodard, our the spireenergy.com website and from President our We President it you President Vice Treasurer. Events morning, and There Lindsey, news Vice quarter Officer; Also is access slide Chief may morning, and President are today on Spire's then Newsroom. with it release Adam you webcast and this Operating CFO. Executive Rasche, the

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

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

Suzanne Sitherwood

for quarter our Thank you us conference everyone. you Scott appreciate earnings second call. good morning joining We and

full of our we're and life mission, ground every energy. advance mission strength a customers, enrich through every this answer potential community our mission every and in forward our shareholders. to on day ourselves a serving in stepping deliver every the As company, our reach always to challenge, We to communities

tested So to take. months midcontinent many past pandemic weather pricing our country. In challenges disrupted across challenging and in the when the particularly our with had and Spire that challenging we by know our followed exceptionally XX that of report well coronavirus industry, supply operations, that natural all ways. the came to the way, across performed company systems times path employees tested our extreme in our areas our The significantly impact been of and of our agility. strategies, context, pleased Combined our our It many businesses. our these technology I'm gas

and successfully utilities essential to throughout the weather our communities delivered event. our energy First, customers

critical plan to to and time. a to of Our reliability consistent gas allowed result best deliver transportation reliable including of of supply. STL planning our a to approach our us at determine lower was assets ability the pipeline This Spire to Pipeline. construct shining storage, our example decision cost the process gas to array connect shale and was A

fortified across is investments footprint has that example the Another and upgraded the of distribution been by utility system system. delivery our our resiliency multi-year

our marketing business also utility positioned segment, gas our serve to While was is well gas primary customers.

Marketing Spire heading increased XXXX season. we recall, winter the might you As storage position into

by due Spire time, value incremental hit, us to which So accessing to critical a allowed supplies was market weather volatility. also Marketing needs cold February when able at gas meet to customer realize

our in solid decisive technology, has resources planning, For Spire like everything to and the team. and investment shine. in all train business moments with by our that do action units, It's success employees this

days Spire late the communication the Regardless don't is our work, but the cold done. situation circumstances, our night to is day taking This key. when answering up committed best winter customers. to and also in of great job challenges short, are are fluid, employees in obstacles the care of until We is get quit hours supply the day shows of and they

I'm grateful. forever much For this and so more,

financial advancing solid to we performance reported of guidance and $X.XX details our quarter, thanks economic performance, plans to earnings financing On the resiliency our the will initiatives net maintaining for our moment we've the our beyond. will in and per more highlight provide commitments. share, results strong a Steve and Marketing. earnings XXXX growth, exceptional operations, and second Moving Spire and of in also for revised utilities been of the ESG showing Rasche earning

May report. This next our to XXXX provide a report, be I'm its updates company will to promise report Corporate So Monday, neutral governance the environmental, commitments, Social carbon pleased and including by Responsibility social digital XX, issue will Spire our CSR mid-century. share or on

environmental continue part As we of in our make significant progress emissions. reducing focus, to methane

plus you'll we CSR the XX% reduction production to shows, chart more which on highlights report also the on we've retrieved in our from improvement CSR by website access a we've through be that the Other slide and this, on programs on XXXX. in increased As reported reduction able in our inclusion diversity. the Based our include and represents even report focus serve, XXXX. deeper support XX a SpireEnergy.com. initiatives our targets communities Starting Monday, XX% years,

while driving to commitments the and Steve? our discuss to on deliver how investments. I'll operations, through our to Now, growth our Lindsey call we're resilience our to turn enhancing employees customers Steve continuing and

Steve Lindsey

the receipt we from our basins, Pipeline role well a availability especially keeping echo conditions. heating that the gas midst of summer, of to employees customers, to one to to Getting reliable and gas transportation and to the Want in no examples perspective. our a the necessary on activated were largely market incident stayed made plans efforts to team impact in the to carefully of shape, right great weather providing gas resources ensure took safe were Certainly, access We This taken company, active or and during we event, coldest for to our prior weather the outstanding the prices on we by our February which support in points, thoughtful making Missouri we came customers customers of it thanks our operational throughout without when executing of storm, Utica prior cold expected steps maintaining functional appropriate. supply, days actions optimal cold acknowledgement the cold events. had of communities STL Suzanne. we the operations plan critical overall handle to storage positioned ensure ensuring service the modifications of A is secure supply leading and extremely your ensure the through from our during to supply the resources operations and to, February the our and adjustments have year. which days and were leaders supply. we changes we flowing contractual played team, outcomes to interruption. up the storm gas the in The customers and the delivery including for the after an supply perspective. preparations, to the saw were But up you, sources, season, or our extent unaffected weather Thank event. Marcellus heart and few

We manage gas. our best very to also our of cost did

handful weather is these recovery a including gas which non-performing reflects Our event projected of approximately recovered. yet $XXX estimate offsets million, of marketers. penalties during tariff costs for the assessed costs the We're net based and marketers against of penalties gas pursuing not

fortunate higher We're of to have For of supplies some gas we of we were incurred. the the sales, off-system cost able reach beyond to regions. mitigate diversification effective

also mitigated in the storage that a management weather prices able impact approach manner we will Our prudent the to unprecedented manage were through to gas and proactive that gas event conservative thanks witnessed. to to our On this customers. minimize impact of planning we

our Suzanne system investment to when like emission utilities matters mentioned. keep all and bar commitments; foundation our Our and greater upgrading, most the we've strengthening the our deploying field customers. Capital in service it and stronger This system operations, notable, really most in in in integrity deliver serving both ability to and Care greater methane our resiliency, continued investments the that Customer for draws reductions our it raising levels, technology. the make supporting is the environmental

pace Meanwhile, was utilities. Pipeline gas our of plans million, our $XXX CapEx year. million, the on last to target STL the of the is year. our our for new been $XXX rate Pipeline. in up full we to lion's we're we due drives of CapEx for six was have investment focused spend million with in X% and months Total first We investment gas forward down that spend time, on XX% know our fall spin our that Spire about nearly was for $XXX totaled December. the to growth. upgrades fiscal lower share continued including of review our on $XXX year-to-date. year just continuing over remain same compared move our million which to non-utility continue million business, track our with $XX X% for which which ramp-up back At We utilities, Missouri We in XX% to rate base considerably

our significant the to number capital reminder, of implementing recovering greener, and about or make reliable a right service is invested system As while resilient enhancements. really we've and the review a safer,

file other the been data For working complete at staff the we've Commission diligently prepare Service to the months, interested last their testimony as case. in and to they numerous parties the several requests, Public Missouri

late testimony follow As and recommendations Two reach in their in May settlement. filed include items local year this test expectation testimony on Missouri requirements sooner will milestones process is be update on in will Other our hearings issues We get set and their Public used great timely followed ultimately May, our the than XX, capital through on revenue formal goal later design. August. other include to June, end hearings Service on and the for to later, to and class words Commission return July public of they rates. cost-to-service, in and the recalls on weeks another structure noted to on a before by key before agreement to equity,

financial Steve that ability now review wanted know to gas and turn the call fuel and select provide ensure Before laws to Alabama in choice. will updates. have recently states businesses Steve individuals and of as natural to have continue will that Steve? been I in over to signed Mississippi, their With the will I Rasche that those Rasche,

Steve Rasche

and thanks customers to good Thanks, whether. during let period me outstanding their And historic to of morning this Steve for my our add team service our everyone.

consolidated million, net second delivered share the share, million per $X.XX per up last $XXX of or we nearly $XXX year. For economic quarter earnings $X.XX from or

well recur not this earned did Our million year. revenues, million, gas demand as on as headwinds ISRS some $XXX and that year $XX up higher utilities prior

$XX million. navigated corporate the As other chaotic performance the marketing $X conditions successfully reflecting under businesses resulting Storm nearly and All just Winter and by million, Uri Storage. challenges earnings improved market Spire that costs better by from

up for of at quickly few $XX million volumes total year margin slightly we last were year overall depending XX% operating than demand margins not a upon higher due higher utility were colder details, between XX% the $X.X first, higher revenues quarter XX% $XX and were commodity million on than temperatures but Net last by to normal, prices. from Likewise, Looking were increased XX%. surprisingly and or contribution billion warmer geography.

results market the this also effective were by an a team very other from last million including marketing on enhanced weather not added up And The higher and quarter lastly, ISRS $XX from were the working the of energy storage commercial the on margins to ISRS recur Missouri, their like arising did withdrawal disputes ongoing of storage, Marketing reflect Gas Uri. mitigation serve provision summer. NEE Spire for their and many year gas revenues we that our challenging our estimates rose current basis. more in positions to prior RSE a margins Secondly, companies, customers in incremental by negotiations and occasion including year.

on consistent $X rate Looking after at of up up million here two a XX. costs with maintenance run basis couple outlined impact expenses revenues. gas a natural the adjustments removing other higher and Slide variances, were key were on significantly Operations

pension bottom impact. This result, second, court $X to line which our Service reversal on and in XXXX a a First, favor Missouri February, the issue in right no our offer case the the costs, quarters pension This ruling for in rate has ruled included purposes. the regarding we've appeal. back and and reclassification million of the prior discussed Supreme And Commission rate to as In remanded reversal disallow base. was earnings. reconsideration economic recorded of not Public that we cost is Court GAAP

offset And reflect higher corporate our lower related rate non-qualified with by cost, higher Excluding costs utilities. these two reflects Other partially net above strengthened and plans. financial taxable income the expenses the sheet gas in well finally, challenging income income good reclassification growth O&M adjusted value mix. maintain and investments marketing our higher run EBITDA. of at We and further on and a strong we operations tax items, associated and and employee gas last liquidity expense was year quarter and delivered earnings a balance position

our at premium. attractive balanced, better And offering storm. of very at highly of winter middle long-term not successful offering could and million in Our arrived remains equity conversion mid-February including the the capitalization the a yield process this have time in $XXX

financial term at part [indiscernible] over quarter loan end, cash with a Spire liquidity Our and excellent $XXX at Missouri. flexibility remains of million $XXX million in by

per to $X as safe, also to results long-term share growth of of X% $X.XX raising mentioned, customers, to will target a we year, that as of for continuing we well X% target turning energy to We reduce five-year sustainable target our With this billion. are capital continue range reaffirm per and fiscal we Now earnings reliable deliver our methane ensuring on to while range half And Steve million with our Marketing's to of first to XXXX are current forecasts our share. expenditure $X.XX our as CapEx emissions. NEE $XXX our track our guidance. Spire

programs supported mechanisms Our covered plan diversified is and the well long by recovery minimize service lives regulatory across lag. territories, upgrade that by with

deliver investors sustain our back environment, the needs next you that given years say plan interesting March to also most historic to quarter, and and Suzanne. have our XXst. that [indiscernible] strong reducing of going forward. two in equity we customers, through me We communities, each positioned our turn our and financing at our our in With a position are some we XXXX, our would momentum over let well updated it

Suzanne Sitherwood

compelling you. again let the investment. closing, In once a Thank me case for make Spire is

operational Rasche Steve continue through and new we investments well drive noted, as upgrading growth as utility to our gas As resiliency and infrastructure, business.

regulated, supports team, workforce stability which in by Our long-term and our talented business XX% invest is and winter the We focus weather. over our management growth. earnings extreme as performance mix in evidenced and consistent

regulatory We recovery have earnings long-term robust a CapEx timely and growth share. plan that per underpins base rate and and annual

I company focused have of last week. effort We greenhouse declared to would also a becoming that have our attractive a quarterly Board including growing mid-century. a the note an dividend to performance, regular offers yield. ESG dividend in gas Directors reduce we carbon support strong that by commitment neutral And emissions of our

we healthy. time As the many stay Spire. you and in forward upcoming Financial look weeks. in In we spent with us few interest Forum connecting always, the then, at closing, of ADA safe with your appreciate you today Until to a and Virtual

Now we're ready your questions. to take

Operator

[Operator Shar go Instructions] Guggenheim Our will first from ahead. question Partners. Please come today Pourreza with

Shar Pourreza

you me? Can guys. morning, Good hear

Scott Dudley

Speakers, your line maybe muted?

Steve Rasche

Yes.

morning, Good Sorry. Shar.

Suzanne Sitherwood

good Hey, Shar. morning,

Shar Pourreza

technology. So, wonders of

Suzanne Sitherwood

I actually button. the pushed

Shar Pourreza

key parties a of maybe metering, sense about Any also far, updates where and sort piece And of some proposed west, on it's with combining of moving and thinking in on issues. the the the other really upgrades it's advanced maybe it days. so still give rate case some the for I'm start mean, east stand like obviously are RNG? I how understanding items the tech on of conversations kind of a the progressing kind case; to Love early the XXXX. maybe

Steve Lindsey

question. Steve the It's for Thanks Shar. Hey, I'll start. Lindsey.

this anchor this case. just why really is to we Again, the think about I capital to recovery. want back for rate

outcomes or we the invested actually from this with case we we've on over other our part from $XXX think have West. very we ISRS and the strong the is about consistent If commission's Missouri cap to very And the it's decision, relative you case last in reached million, this. think positions

it and that's call programs, would I The I we're yanker technology, some I the that's again, reason customer because of options, to on Again, whys, – interesting, type other back we're new the think whether focused a here. and in. of think think are first is this so what why it's other in then we around service customers parts, I are really RNG a case want, some introducing some types

the Now, next around as the the discussions schedule that's and of part your that, several of you terms the know question what early about, weeks will really like the bring things in filing.

discussions when start a the So lot after of will that's that.

all So I us early the to those items. that. think it's probably But same cases always REO, cap for of items speculate structure, are on in as such relevant type

a lot this I won't be think different. So

forward last move we're litigated, as And we I that this good the think one comfortable one. set pretty with as forward. we with up very was us go framework a

combining part other about I think The was utilities. two you mentioned the

same something and the be helps us for since opportunities in a state. benefit and bringing just whether City, they're wherever I strived think Kansas customers aren't really million It opportunities there. of across efficient Joplin the really everybody from to think some more really you're for those Louis, ago when really St. I years X.X we've in efficiency that's sometimes, disconnected provide MGP that you are the that

Shar Pourreza

Got the rate similar investments want non-utility to unregulated, announced don't opportunity system, RNG your case. peers on the to it. are reducing be maybe you to focused have obviously just of the in you LDC And any, you RNG emissions the tip, you one quarter first for That's RNG, one but yesterday from guys your New it then it. for if can in that. call methane wondering And obviously outline some the helpful. and I'm that's burner call in considering wellhead announced on; Got I may Jersey. joining future you Thank then

Suzanne Sitherwood

Steve is to organization, him. then that Hey, with I'll pop our Shar, that non-regulated this with so is the back start lead Suzanne. – and it piece, on I'll

the on market, and structure as they our highly we're As non-regulated itself the in can the utilities rate and PGA. do our we're of either available that focused far on behalf studying what interest, in customers, what's or

basis. investments those And that joined a learning, pass you But reason and mentioned, to part I’ll what industry AGA if there shareholders. terms is you are might get look and so part are between and industry the organization of other like Steve to in to we collective Steve, organizations. benefit the our to… in We it's of and that the it go-forward definitely on the of customers want our And organization,

Steve Lindsey

Yes.

at right well the looked the as least that, our for the down for When looking as felt the And I other been our from that technology, very improvements, think of collected we've proud even our reductions. we companies process where like think not scale. I that's the as are initial you're part so we've opportunities, if company, the us, industry, of you are one just this given changes, advanced level, And opportunities benefits at you'd company for process I see necessarily get is. focus methane obviously, think really then emission to at

to go over If well you back we're XXXX, XX%.

think accelerate and trips you Now, all relative that our those through such deploy number, if vehicle is starting to somewhere. improvements. that things but the in of we prevention, think to to our ultrasonic continue things and to field advances lot across do going pipeline damage going our a footprint, that's as continue we'll meters, detection, to that we're some leak I that is that reduce through about primarily replacement, And even southeast,

think opportunities on to part that And a this, and well. information joining But the individual was I in think I organization for a direction as an but And there's access positive and there's think have. us an lot we're and up doubles, moving think, has one us really take think for that collectively of singles I I big industry, give company that no of so I homerun to stand again, might as a as not credit it's little we that. time to some impact right

Shar Pourreza

far? of the segment obviously just path it. after backseat when on you And multiple a the has of file should in forward for messaging And updates lastly we storage your side, for expect post process visibility segment? Got then weather me the the When you event? sort a market the bit Got changed additional it. so on that for your and took guys review initiated on that the Any review of passive FERC. viewpoints that

Steve Lindsey

Steve. Well, and again is this

be our like a So I some and were Really to reliability, in winter. that what be think developmental still way the what we're say But delivered honest stage, I we right the at at future, I this dynamics. changing, the we're we're safety the that would quite report types from thing and to emerge are that markets, think looking found would proud through things terms nothing customers looking opportunities most is we'll is and imagine And move years the that X.X improve literally I we over as you foremost, to on to that forward. of to facility. the of that operations up really then evaluate first these And storage now, in about when committed for continue the of occur. we we and can events of we stepped

Shar Pourreza

I’ll pass else. guys. Terrific. you, and Congrats it to Thank someone

Shar Pourreza

Thank sure. you,

Suzanne Sitherwood

Yes. you. Thank

Operator

Julien Our from America. with will ahead. of come Please Bank next question go Dumoulin-Smith

Julien Dumoulin-Smith

Hey, it good Thanks. this well the Thanks done just together. winter for together holding team. morning, all and on opportunity congratulations Excellent.

Steve Rasche

Thanks, Julien.

Suzanne Sitherwood

Thanks, Julien.

Julien Dumoulin-Smith

time. a quite Indeed,

Shar So mind. I to pick-up don't you if where, want left-off

is will. run compounded anomaly, $XX your Like $XX million you segment storage to would visibility gas incremental any into with us going that thoughts on one can – marketing, the amount this the give weather an the million events, the year last the hedges, you've season the certainly performance specifically about you guidance of hope. Looking ability obviously winter and rate if of at capacity around something talked any the carried historically? given forward relative But to

Steve Lindsey

I question great a on think hit good it. and Julien, Yes. you It's morning.

to but that gas are heating folks conditions way think winter. the they're and a were is Houston down First did which right since was allowed watching pretty summer. still Houston a what hanging look part a molecules behind the the into we're in interesting into many to extra to actually is only lot And what if an market able We're that value And team go customer's the in run the the it's create rose there below value. an go interesting, were that's storage where utility, the Henry customers we kind of good MMBtu, like from as industry not the where and and release going on about world you that right, next extra is up with, and this against what they going rate third as and norm going we're the create in of and This And overall value. you Xx Hub just a event occasion year-to-date dealing to create storage a is result it's marketing cost and we set think Storm We're referenced. be us to – to foremost, value to you needs looking and of to of as and sometimes our follow our results, we're studying of $X in. I Winter interesting place positioning rig Uri. the that counts to at one-time gas meet about that We're as at a market, lot pretty closely. and with season you

watching So that we're pretty closely.

comments we that to with business solid that overall expectations, I stand the we that we contributor. terms earlier expect think of be made In a

in procuring, a molecules business, the referenced delivering a services. is think you good If place range, other few low-XX and transporting that's our which you base range to the customers that at to and that about look

ability grow of the return And of advantage that would this range year we grow conditions back within market our to over our Now, time, that of based course, half but we'll the growth have it of expect take guidance. outsize the will upon to in overall February.

Suzanne Sitherwood

some those has And it's customers to predominately Marketing add if non-utility point, you of on I either because Julien or unlike Steve and customers kinds organically, marketing think, if of on they're year-after-year not want extremely things, think utility. you firm an what it And role and those serve, governments a that footprint will. customers, I will, by picking-up could grow the industrial serving sort it's the we may geography – its customers important they just the and and if to be additional Spire

now there we either about it advantage serve years However, with is there's providing a years, and geographies customers, are services they and customers those our mostly to I they're take in that they When marketers. have. events the seven those those of other know, every, to predominantly, weather heavy weather contracts potential the that XX commercial And those don't events five event. industrial weather or events,

those customers, like based So marketing they they Spire market take to at advantage contracts, conditions of the work do. on our and year those their vision, year assets hold, utilities serving much

that to just I'd So it's that emphasize like point.

Julien Dumoulin-Smith

super Excellent. quick Got the it. And things if of I can. I wanted close to loop on couple a

FERC certificate March. Pipeline, to here, STL hearings the the in obviously On challenges

saw together on on the any for if speak events; comments will de-risking, Just outcome but they Obviously you on I the this. all your side comment think about of here? we February themselves STL

Suzanne Sitherwood

we've I we this supporting Lindsey, of the the extremely were in our I were our all It then two expected bit size, our to and gas want operated we the is, to could operated Louis, into my as we region. room in to in on yes, and backbone so it's System, said to. me, proud as comment it but we exactly this high I this customers Lindsey. but with one comment want one infrastructure, that It investment between in Steve's there really it of make with I'll event event. in of to of precisely to because around are pipeline a and make distribution serving region Yes. has the it modeling powerful St. And it pass about our upgrading weather the our value to we event. the this system winter and investment it in operate it to during go pressures, that operate, just had our during interconnects and Louis it and looked operating the and supply system around combination how expected how this all in we the And holds a significant. terms And St. started plan. areas going it, that been and when path, weather at produce was investments I of that, highly are operations those since

structure provided initially customers. Steve, a will at know that data And like… commission the for it held were if event. our relatively you I the anything FERC cost And So we the we during pipeline there's both the we designing you this completely low winter and speaking, when did don't if

Steve Lindsey

Yes. probably move even the and performed but say mean than And best I CEO, career I not is… we better even thought, to the would that it by yes, challenge it's what

Suzanne Sitherwood

modest. I was being

Steve Lindsey

from of opportunities, there, the supported. Yes, very, state, on lot of with side makes if what this and you gives opportunities what for the gas event, before period And is southeast. pipeline to this now, the is this I have our terms and in if diversity obviously to very to – whole This were pipeline longer interconnect but, the operationally. very, went northeast going long that a unbelievable west very a look get us comfortable an even we short customers the in honest, be time. gas were be you we of that example, occurred would at even And yes, we about we this supply that benefit with our for in around and are, did reasons the to into move strongly we system additional MoGas, ability know through did this say, opportunity quite you have the think coming even I then the this the more the to other sense. reasons over

into great that's I out originally is enter to think of for this this, we better, opportunity a was this So us even think everything and come than thought. I

Suzanne Sitherwood

and distribution entered So work. our and And perspective. that then we just of flows follow-up, our and planning distribution different so one important. the the and on do into sit around, at pipelines think of or do all day design sit and bays that from supply cold down themselves that, I winters facilities, a The control employees, or it's how a gas the storage we interstate how gas our systems There's down annual these look and market, it have winter more utilities criticality proved fire that's because storm. and daily projects data redesign well Steve's employees system as and our as basis of we this say even our storage, about system. highly And done these as that the our really this and during planning And prove effective enough basis. getting the durational I the on infrastructure, to, planning supply, based what investments that and operation and interstate for distribution pipelines that design a then event. our And can't long-term

Julien Dumoulin-Smith

Excellent. Thank you guys.

a you if slight, don't Just mind.

customers total savings to to with negotiating about What or the with lower? of efforts it bring commented to and reduce thoughts your the are I'll holistically. those the some costs wider you Just you respect litigation earlier have efforts bill, frame respect Obviously, underway. to

some to already – headway yesterday One of they'd peers that of with made your respect headwind savings. the disclosed

around any of Just curious status and here? efforts the on pending timeline

Steve Rasche

Julien, Yes. Rasche. Steve is this

I referencing much anything. that tariffs, felt marketers – paid make situation Commission unique the and are update. we we any that that and Not legally less the Service don't three and that Missouri think move hadn't on filed filed Spire we much prescribed cost no over that in the We to counterparties Activities. really control is lawsuits compelled the the Public you're of that some Missouri penalties defined which gas, the because have have

we good strongly everybody Lindsey Actually, Pipeline, talked So Steve just Spire at impact industry that, clearly our those. else benefited STL we're it's was in compared pursue small when continue a by the fairly to to about. cost, overall that and will position, if that we feel gas look you in

and are we and ways were gas, from resilient always but because our for customers to economic but to looking also only upgrading in cost of that investing sure system, our service, we that So operating not a the also benefit were reduce we that good want managing value. costs, the only reliable make not so to our continue cost we

Steve Lindsey

it gets And gas for costs that that I'll just granted, sometimes the add customers. passed I part on get is to along taken think to

that our that a can for is positively think own – entire company, because to view the we do I we personally good effectuate customers anything that thing. bill a we as

the go when on out this step in things we contracts. that there's gas And who reduce so brought supply different behalf think than adjusted we're customers of instance can those and this gas up costs. emphasis, in ones this no case, some and negotiate and our In say, we should be to back really

and for cost we is the sometimes So ownership the customers. as entire about you do can terms, think doing of thing of try the our I a when again, PGA, to utility really business everything think then either we take and PGA

Julien Dumoulin-Smith

Thank the Best time. luck. for Excellent. all you of

Operator

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

Richard Sunderland

Good for morning. taking Thanks my questions.

Steve Rasche

morning. Good

Suzanne Sitherwood

morning. Good

Richard Sunderland

there around forecast, could I Maybe delta the and XXXX presumably between year? Is the this curious starting-off color units the in done think marketing provide the you just revised changes attributable offsets benefits financing or and differently to the if equity that guess, the XXXX. with more equity

Steve Rasche

that terms remarks, referenced units XXXX the XXXX, year, as in Uri were issuing before that's we the you liquidity, taking, the of if what to extra ability at each where the Yes. needs there stand does the have capital of do opportunity we so, it because as give intensive into CapEx And midpoint business us Marketing, plow years is them said every those to look principally these a five which, in in really the draw in range. every can or happened Spire once Spire our Storm reduce from end and really when it's our at at Richard, a we $XX a matter equity quarter from actually in line believe, essentially in the Well, the out our Marketing we the if if direct prepared of events, the the for you clearly then take I earnings as drove funds back million guided about of you results to total it XXXX, four the and low look equity highly of we've right successful utility. past, once fact. in

kind you bad situation. value we're where liquidity, March the great in during operating a so between how the going towards we stand February-March timeframe, became Again line far. results of at draw in And of the our So an a end as something phenomenal of and that's which never and with we forward. position eye the mentioned, can were we

Richard Sunderland

can the you presumably Got in helpful. you And to remarks. you separately, it. there more just the color prepared That's provide marketing then results, aren't as on curious on these what's the referenced referenced, surrounding going claims that material

Steve Lindsey

is talking energy everybody depending because situation in southwestern with. the upon same space, Yes, dealing the in And different who food you're this about almost especially chuckled, going the midcontinent I is anybody who it in operates that to chain. the down the Texas flavors, has

tight. with what them, costs disputes. with suppliers Ours deal of we think is are at supply which extra interpretation, language There were didn't – from with and commercial customers how are they of I the of and our negotiations. curtailed really to And meeting gas some to associated supply when contract of cut it cuts principally commercial the handful some the a because the price became really allocate were apply, our pipe, about is when other end do them we – you have the

will the view to the Clearly, at the update in our value, on can't time negotiations negotiations. take look stand and and we're resolve as today, continue. rest well right the are really at To the resolve a estimate performance Marketing. we'll at those we're those extent where know. estimates our and of you will nouns information, as we the I discussions we we'll based best market those in we speak and our make that confident we But those and that we for those get of we when Now, right numbers. let more Spire clearly and the we

Richard Sunderland

one, there. this there Got then beyond? to programs XXXX any the year and extra de-risk And can is financial curious color one you any last just with it, I opportunities cushion expense advance and appreciate

Steve Rasche

start. I'll Well,

two as to to we always we do you the customer for things example, better that things where that – expense with the that of continue last innovation out. noted. to make down look slightly, those last mentioned We infrastructure of period, process and base going look at bit do rate parts And actually it's during we the trending of us a the our underneath If but with change better well those including the that utility acknowledge you lot year to bill. the And reasons were manage and and earlier. because looking add over We're inflation. is clearly at give of can quarter that fundamentally want find first cost six the time at costs, customers the the just to that a service other in balancing a understand up sure management investments expenses Steve improvement, great them for and months, focus interact and technology, We all to they're companies value. we in a ways our do how they're this to below discretionary a we're

Steve Lindsey

add together the would the three not years. quarter, think, part to and I to company managing only utilities the a is to managing just we the brought as I managing I year Yes, these that think evolved think we've but as to

opportunities we winter have a those sometimes years perhaps from even much bit. about have processes our to businesses, so, now when and holistically and weather We'll what it but we or and do in differ keep or things where terms have better five in you think our everything plan ago. just insight warmer I transparency winter. a some and a forward that created couldn't of its And of could really of little you needs cases as do colder perspective sometimes pull or than to Obviously, technology to could some a be, we'll think we have the compliance because

Suzanne Sitherwood

the Lindsey listening says facilities as this point company higher infrastructure Steve lower. new other raise at system our the are and maintenance pressures, modernize those actually would on we I only after costs modernize lot internally a The and

in all bit maintenance because different those meters, to you So you'd and of the a the Steve and constructed to continue to if same the deploy we in like you'll abilities. you replace capital invest those including cost we're on as see a are as talk maintenance systems, can facilities that, as will that we those but curve downward about to way the they're we make new. the continue investments meter, new of and decline they're meter, the costs which investing modern, our see And

Richard Sunderland

time the for thanks today. Great,

Steve Lindsey

Thank you, Rich.

Steve Rasche

Thank you.

Operator

Our come ahead. will go with Please Mizuho. Moreen Gabe next question from

Gabe Moreen

morning, Good everyone.

you're like that XXXX year. Just I I on of it I wondering I'm even may behind some for up the half guess and XXXX, come wanted what's looks lower half great up of the may question first year. to the up the I in which guidance think on percent and this Is last just guess, following that? back setting ask somewhat spend any is the the going regardless about, half it realized up, be mean, wondering to the implied of I back last catch of year, but a sort them year, explicitly I'm guidance year. than in for just have

Steve Lindsey

anything items that? I to our on half in else the there in little Yes, number I Gabe bit of a think, is think the of range. guidance you add in circled – year some – back of the the expense we Steve,

Steve Rasche

now of a we're lot here on of doing work and in that going as cadence again field. And out the you can even during And February March. were the on we imagine, is into the based and that Gabe, focused

both capital activity. our and we'll up activity, So, our O&M ramp our

the you it's If for what this standard pretty you expense run rate look should quarter, on forward. at going think

be to some seeing say to I us little can bit forward more goes having flights actually but show to on any that maybe the of start we face, we a especially to tell as love customers up able of that be I we but our Now, And our I to I some would the mode. side. love and bit on to all year from load marketing look little doing and schedules, travel folks we'll opportunity work home that we'll office handle would bring that, would face the a probably think cost the that, in we start assuredly on continue and you so in And think

Gabe Moreen

be AGA non-virtual a Thanks nice. that agree have. would I all Totally everyone. That's

Suzanne Sitherwood

Yes, you. thank

Steve Rasche

you. Thank

Operator

Our Michael next go will from ahead. Weinstein come with Please Credit question Suisse.

Michael Weinstein

guys. Hi, good morning

Steve Lindsey

Michael. morning, Good

Steve Rasche

morning. Good

Suzanne Sitherwood

Michael. morning, Good

Michael Weinstein

thinking or lights comment without those in sitting third having just about million the dark in Hi, about $XX about down thinking in And a $XX million on. even just I Houston, guys was am world your I making Texas.

Steve Lindsey

Yes.

Suzanne Sitherwood

Not even having heat.

Michael Weinstein

present there down very the the value in that might is – any any obvious on Hey, in chance just, recently based all there a I of that value now Spire Storage. guess… write-up wrote is be mean, I the there storage? chance you Is future? And mean I

Steve Rasche

Steve for larger once what we get Yes, it's is. storage to addressed assessment we the and think And our of next the market, whatever I make to make. the which what question, question. the Michael, give – through move in earlier strategic we'll an is interesting we And come that then step rationale have obviously decision

an know at down get the at then into accounting trained. Arcane downside, look I the what, And and you look always you never everything. upside. of was the We we that's accountant how Now

So write-ups to happen write-downs have happen. can't immediately,

really I into of took the would as with Rockies, actually adjustment out the increased We've gap storage up in unfortunately, of that you last strong Uri. Storm result doesn't July. a across And storage the our seen so, seen move And contract that any rates intrinsic we agree we've of nation. value but the Winter demand translate has field in write-up

Michael Weinstein

at new think. I are there West mentioned, right especially Right. you especially But in the of as would terms – utility in Missouri, opportunities now,

Steve Rasche

within those time to incremental in either the our putting find give And I after some that that to the is only that data Alabama. that energy we think see do there figure or we'll us, themselves. Missouri and we've good Storm the actually over we've space we the And present a is on assessing opportunities, CapEx point. would the us a things new outside, we're minds in especially Well, clear investment I Winter Uri side we're been learned all fresh pretty for some out the from analyses where that down in not opportunity. everyone point will opportunities and in finer of utility but it opportunity now with west taking pretty clear That's the think, identify

Suzanne Sitherwood

Yes, would say. I point, I Michael, additional just as guess, an

ability annually, the of it but I times a the physical those has also physical as is a went your go will, And physical and example, planning coldest financial think So to it peak aspects to you that is through – you and get a there basis. there molecules it day that market on reminded storage means if including an flow what around mentioned a at itself what episode, all is a or flow. customers, earlier, planning the we the supply, I either durational of to it's

get of your the matters, when storage the flow, right you time. what I location of to think, physically basins. And and Steve the have matters storage And these so, reminder at looking the financial at as done, versus Uri in to storage the market terms significance, its start a ability right in said, system is of importance

didn't And last winter got strong executive this organization different in so very just that's of strong built than in it because of though we've in a have Storage, facility Spire this years he's directly few the way that they a hit got very decades that team. storm, experience geography. at operated even weather leading a They

during Steve to these peak facilities what they're these wanted really so, is to lot for. physical the which And out Steve point significance going said, of to of these I everything back – repeat locations not designed I'm just a periods,

Michael Weinstein

earlier, updated you be Maybe in with gas be but the to utility have you. going the that test in from to going million that is this case? may that rate that storm costs at rate – dealt Is part – $XXX Got here the of the through Or… of is the covered the process? base

Steve Lindsey

think the essence now. those review separate and of be PGA these. rate That's what right I outside we're in handled well, to need part that in we the are Yes, will of

are there separate So, items.

we actually while think just to to bill, the need entire I customers to we portion. take spoke So are I clarify and pieces PGA the – that separate own these that's

Michael Weinstein

mean, I effect mild more a securitization versus anticipate you this is would is your – And kind needed? neighbors. any Right. even of any

So…

Steve Lindsey

with staff, Yes, still the commission continue on have the had We've review Michael, determined. camera to be and that's discussions. to we

smaller some I that think as option it industry. us. as lot is works the to configured options that in currently And our best We're using them. a number for every looking not utility we looking securitization at others the Again, than the the we think is need. PGA to available is

securitization that's Now, speak state, their I the are. targeted drive in coal plans and there I more that but for some some legislation where of utilities to other the know can't gas really from other costs. than the But toward utilities retirement recovering in state fleet coal is the of it the is and

Steve Lindsey

And an Michael, the while event. PGA type I piece the is add, typically one annual will

I to to this think, what work the to impact gas looking we're case, we over two in years out if on try to perhaps from customers this can commission three cost perspective. that the right spread with do see or minimize the to

Michael Weinstein

right? assume, costs, carrying Right. And I those with

Steve Rasche

saying, followed we sure Michael. not you're what I'm Yes,

Michael Weinstein

Oh, return in spread not you're a it over in you get and if words, securitizing years, during equity time. out theory, other would, on it, you that three

Steve Rasche

You know…

Michael Weinstein

only there was …Xr I short-term know. yes, don't debt,

Steve Rasche

bill. is costs. excess the it in cash this is customer Yes, And

in about philosophy finance frankly, loan it's how that the goes on And, we it with the in out incur actual the reasons to to that separation earnings Missouri cost why was costs call, to of customer. and Our recovering started she scenario, back that Suzanne focus way And some associated we the go. this that. get cost took best the to unusual cost one is the to the short-term was

Michael Weinstein

really make you. good It's and relatively a big got not very quarter. last anyway. much, you It's thank to just going I amount work impact. Anyway, this a small

Suzanne Sitherwood

Yes, thanks much. so

Steve Lindsey

Michael. you, Thank

Steve Rasche

Thank Mike. you,

Michael Weinstein

right. All

Operator

Stifel. [Operator ahead. with Selman Akyol Instructions] question next from Pleases will Our go come

Selman Akyol

and Thank you. but Most if asked been I have ones, quick I answered, may. get two

capital gas planning it comments, to your I from marketing. you're doesn't correctly… So like sound increasing Did on

Steve Lindsey

it's fine we and technology it actually, make a to visibility is because We invest low There of intensive bit year little a is a fashion. thank Selman during Uri us business. ago implemented Marketing did actually good COVID it always actually year but a gave Yes, that and capital through god low last in capital the business. morning. capital, in did, really technology

believe happen don't lot is there to in continue to grow for that order to a and us I so, And that needs that support there business.

Selman Akyol

about talked expand I have than thing, you be industrial on you XX%, Okay. growth higher side. commercial guys And guess, would of on second I and then the would little a the bit customer Could thought? that

Steve Rasche

Yes.

if Missouri which programs, haven't versus translating to are of reference are convenience six And six premise this like fairly across necessity. the that And west of business. our opportunities, we business so, meter new three that last through CCN, term the the into but and the investment new thing whatever will months is move example, think year-over-year, served spread our same way I activation, actually certificate that's seeing with areas for months Alabama. which and large kind you and East the growth, one infrastructure year West share that capital. right new into It's was a side is evenly are to on about it year, much is. new those a utilities, And We're our

to couple activity. propane. type a us. They're some really want then the things customers we coming the don't good And we to And We're in in go in conversion on the lot we from county, year some to that of opportunities we if we'll Alabama we're that poultry piece to of want similar go we'll are serve then large saying what example, do big news don't a serve, extend, past expand. for a is that the convert into in increase so commission, a to to and then And seeing serve. seeing that follow areas is to farms

the up, as well new all you all seeing it, capital divided you a as relative we're think so add across kind about pieces into business And deployment if our meters. really of of footprint translating to if new evenly

second is hard do like after because And to correlate and net of always COVID, Now, course, that try there necessarily coming some system. things attrition don't the growth, on out worked with them that our customers but we've as things piece some our we're not that. to is necessarily to keep very to of, a to year then, of

of plan. plus percent moving from business and you – lot a when our is net that's think of about there so, a roughly And growth, but new capital XX pieces capital

And our so capital. as we high we're is it think about the quality way deploying capital,

revenue new business, even about if which we about lot you going think and of some advanced metering the benefits you track our creates that deploying we're we're which road. the five think additional going customer the the programs, directly think If plan that We will capital a down infrastructure for. it's technology, of have very think comfortable and high to very a be on quality year

Suzanne Sitherwood

Steve testament about more also conversions Selman gas. gas. housing mentioned, Steve I new I it. but that new want hit I place. natural XX% are But And of taking think just getting add, and importantly, their to states, know certain starts housing you our States People I'd point growth regions. our as the there and portion housing start. a in of starts, a to growth of that probably natural region one like across seeing hear We're selection the and lot are And United it's think a also

So with we share are and a and and builders like know said again, And and housing developers. our stars that. out field our have at their getting strong probably that's these the team states nationally business, I looked of working in our I fair you've

Steve Rasche

that to them our I states recently of think about support I thought fuel which should obviously, that being actually we I've have laws the mentioned, my approach. as know have point choose. And signed is, made remarks, think been have like fuel us, last Mississippi right we Missouri. for three and opportunity Yes, to and choice, is Alabama, customers there's think in choose progress now which which one We the two in to we the

footprint. So operate, really our I us that areas opportunity across have think to in good we to we see entire conditions the for continue

Selman Akyol

so you thank much. Awesome,

Suzanne Sitherwood

Yes, thank you, Selman.

Operator

would will and closing Scott to over conference question-and-answer the conclude our for to any Ladies Dudley like remarks. session. back this I gentlemen, turn

Scott Dudley

today. of on thank Well, very you all week, it's know joining Friday, us I all, earnings for first a busy especially.

you be any we look with of chatting AGA. forward many will for at We later today and around follow ups to

conference now The concluded. So thanks again. has attending today's Thank you for presentation.

disconnect. now may You

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