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Table of Contents

 
 
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q
(Mark One)
[ X ]
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
 
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission
File Number
 
Name of Registrant, Address of Principal Executive Offices and Telephone Number
 
State of Incorporation
 
I.R.S. Employer Identification Number
 
 
 
 
 
 
 
1-16681
 
Spire Inc.
700 Market Street
St. Louis, MO 63101
314-342-0500
 
Missouri
 
74-2976504
 
 
 
 
 
 
 
1-1822
 
Spire Missouri Inc.
700 Market Street
St. Louis, MO 63101
314-342-0500
 
Missouri
 
43-0368139
 
 
 
 
 
 
 
2-38960
 
Spire Alabama Inc.
2101 6th Avenue North
Birmingham, AL 35203
205-326-8100
 
Alabama
 
63-0022000

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report) and (2) has been subject to such filing requirements for the past 90 days.
Spire Inc.
 
Yes [ X ]
 
No [ ]
Spire Missouri Inc.
 
Yes [ X ]
 
No [ ]
Spire Alabama Inc.
 
Yes [ X ]
 
No [ ]

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Spire Inc.
 
Yes [ X ]
 
No [ ]
Spire Missouri Inc.
 
Yes [ X ]
 
No [ ]
Spire Alabama Inc.
 
Yes [ X ]
 
No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large
accelerated filer
 
Accelerated
filer
 
Non-
accelerated filer
 
Smaller
reporting company
 
Emerging growth company
Spire Inc.
X
 
 
 
 
 
 
 
 
Spire Missouri Inc.
 
 
 
 
X
 
 
 
 
Spire Alabama Inc.
 
 
 
 
X
 
 
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Spire Inc.
 
[ ]
 
 
Spire Missouri Inc.
 
[ ]
 
 
Spire Alabama Inc.
 
[ ]
 
 

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Spire Inc.
 
Yes [ ]
 
No [ X ]
Spire Missouri Inc.
 
Yes [ ]
 
No [ X ]
Spire Alabama Inc.
 
Yes [ ]
 
No [ X ]

The number of shares outstanding of each registrant’s common stock as of July 30, 2018, was as follows:
Spire Inc.
 
Common Stock, par value $1.00 per share
 
50,669,092

Spire Missouri Inc.
 
Common Stock, par value $1.00 per share (all owned by Spire Inc.)
 
24,577

Spire Alabama Inc.
 
Common Stock, par value $0.01 per share (all owned by Spire Inc.)
 
1,972,052


Spire Missouri Inc. and Spire Alabama Inc. meet the conditions set forth in General Instructions H(1)(a) and (b) to Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instructions H(2) to Form 10-Q.

This combined Form 10-Q represents separate filings by Spire Inc., Spire Missouri Inc., and Spire Alabama Inc. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants, except that information relating to Spire Missouri Inc. and Spire Alabama Inc. are also attributed to Spire Inc.
 
 
 
 
 


Table of Contents

TABLE OF CONTENTS
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
Spire Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spire Missouri Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spire Alabama Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1



Table of Contents

GLOSSARY OF KEY TERMS AND ABBREVIATIONS
APSC
Alabama Public Service Commission
 
O&M
Operation and maintenance expense
ASC
Accounting Standards Codification
 
PGA
Purchased Gas Adjustment
Degree days
The average of a day’s high and low temperature below 65, subtracted from 65, multiplied by the number of days impacted
 
RSE
Rate Stabilization and Equalization
FASB
Financial Accounting Standards Board
 
SEC
US Securities and Exchange Commission
FERC
Federal Energy Regulatory Commission
 
Spire
Spire Inc.
GAAP
Accounting principles generally accepted in the United States of America
 
Spire Alabama
Spire Alabama Inc.
Gas Marketing
Segment including Spire Marketing, which is engaged in the non-regulated marketing of natural gas and related activities
 
Spire EnergySouth
Spire EnergySouth Inc., the parent of Spire Gulf and Spire Mississippi
Gas Utility
Segment including the regulated operations of the Utilities
 
Spire Gulf
Spire Gulf Inc.
GSA
Gas Supply Adjustment
 
Spire Marketing
Spire Marketing Inc.
ISRS
Infrastructure System Replacement Surcharge
 
Spire Mississippi
Spire Mississippi Inc.
Missouri Utilities
Spire Missouri, including Spire Missouri East and Spire Missouri West, the utilities serving Missouri
 
Spire Missouri
Spire Missouri Inc.
MMBtu
Million British thermal units
 
Spire Missouri East
Spire Missouri’s eastern service territory
MoPSC
Missouri Public Service Commission
 
Spire Missouri West
Spire Missouri’s western service territory
MSPSC
Mississippi Public Service Commission
 
TCJA
The Tax Cuts and Jobs Act of 2017
NYSE
New York Stock Exchange
 
US
United States
 
 
 
Utilities
Spire Missouri, Spire Alabama and the subsidiaries of Spire EnergySouth
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Table of Contents

PART I. FINANCIAL INFORMATION
The interim financial statements included herein have been prepared by three separate registrants — Spire Inc. (Spire or the Company), Spire Missouri Inc. (Spire Missouri or Missouri Utilities) and Spire Alabama Inc. (Spire Alabama) — without audit, pursuant to the rules and regulations of the United States (US) Securities and Exchange Commission (SEC). These financial statements should be read in conjunction with the financial statements and the notes thereto included in the registrants’ combined Form 10-K for the fiscal year ended September 30, 2017.
The Financial Information in this Part I includes separate financial statements (i.e., balance sheets, statements of income and comprehensive income, statements of shareholders’ equity and statements of cash flows) for Spire, Spire Missouri and Spire Alabama. The Notes to Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations are also included and presented herein on a combined basis for Spire, Spire Missouri and Spire Alabama.

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Table of Contents

Item 1. Financial Statements

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In millions, except per share amounts)
2018
 
2017
 
2018
 
2017
Operating Revenues:
 
 
 
 
 

 
 
Gas Utility
$
334.8

 
$
305.1

 
$
1,667.3

 
$
1,419.1

Gas Marketing and other
15.8

 
18.4

 
58.5

 
62.9

Total Operating Revenues
350.6

 
323.5

 
1,725.8

 
1,482.0

Operating Expenses:
 
 
 
 
 
 
 
Gas Utility
 
 
 
 
 
 
 
Natural and propane gas
107.2

 
76.7

 
731.7

 
524.8

Operation and maintenance
105.6

 
100.8

 
347.1

 
298.6

Depreciation and amortization
40.5

 
38.4

 
121.9

 
114.0

Taxes, other than income taxes
33.5

 
30.5

 
128.2

 
112.2

Total Gas Utility Operating Expenses
286.8

 
246.4

 
1,328.9

 
1,049.6

Gas Marketing and other
11.4

 
26.8

 
97.6

 
112.6

Total Operating Expenses
298.2

 
273.2

 
1,426.5

 
1,162.2

Operating Income
52.4

 
50.3

 
299.3

 
319.8

Other Income - Net
3.4

 
1.5

 
6.3

 
5.6

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
20.8

 
19.0

 
62.5

 
57.3

Other interest charges
3.4

 
2.4

 
11.5

 
8.9

Total Interest Charges
24.2

 
21.4

 
74.0

 
66.2

Income Before Income Taxes
31.6

 
30.4

 
231.6

 
259.2

Income Tax Expense (Benefit)
5.7

 
8.7

 
(8.5
)
 
84.3

Net Income
$
25.9

 
$
21.7

 
$
240.1

 
$
174.9

 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding:
 
 
 
 
 
 
 
Basic
49.6

 
48.1

 
48.7

 
46.4

Diluted
49.7

 
48.2

 
48.8

 
46.6

Basic Earnings Per Share
$
0.52

 
$
0.45

 
$
4.92

 
$
3.76

Diluted Earnings Per Share
$
0.52

 
$
0.45

 
$
4.91

 
$
3.75

Dividends Declared Per Share
$
0.5625

 
$
0.525

 
$
1.6875

 
$
1.575

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


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Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In millions)
2018
 
2017
 
2018
 
2017
Net Income
$
25.9

 
$
21.7

 
$
240.1

 
$
174.9

Other Comprehensive Income, Before Tax:
 
 
 
 
 
 
 
Cash flow hedging derivative instruments:
 
 
 
 
 
 
 
Net hedging gains (losses) arising during the period
0.6

 
(1.0
)
 
2.5

 
11.5

Reclassification adjustment for (gains) losses included in net income
(0.3
)
 

 
(1.1
)
 
0.1

Net unrealized gains (losses) on cash flow hedging derivative instruments
0.3

 
(1.0
)
 
1.4

 
11.6

Net gains on defined benefit pension and other postretirement plans

 
0.1

 
0.1

 
0.2

Net unrealized losses on available for sale securities

 

 
(0.1
)
 
(0.1
)
Other Comprehensive Income (Loss), Before Tax
0.3

 
(0.9
)
 
1.4

 
11.7

Income Tax (Benefit) Expense Related to Items of Other Comprehensive Income

 
(0.4
)
 
0.2

 
4.3

Other Comprehensive Income (Loss), Net of Tax
0.3

 
(0.5
)
 
1.2

 
7.4

Comprehensive Income
$
26.2

 
$
21.2

 
$
241.3

 
$
182.3

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


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Table of Contents



SPIRE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in millions, except per share amounts)
2018
 
2017
 
2017
ASSETS
Utility Plant
$
5,501.6

 
$
5,278.4

 
$
5,071.4

Less: Accumulated depreciation and amortization
1,669.8

 
1,613.2

 
1,609.6

Net Utility Plant
3,831.8

 
3,665.2

 
3,461.8

Non-utility Property (net of accumulated depreciation and amortization of $9.7, $8.6 and $8.4 at June 30, 2018, September 30, 2017, and June 30, 2017, respectively)
143.5

 
52.0

 
39.9

Goodwill
1,171.6

 
1,171.6

 
1,163.9

Other Investments
71.0

 
64.2

 
63.8

Total Other Property and Investments
1,386.1

 
1,287.8

 
1,267.6

Current Assets:
 
 
 
 
 
Cash and cash equivalents
6.9

 
7.4

 
8.3

Accounts receivable:
 
 
 
 
 
Utility
159.8

 
140.5

 
141.9

Other
111.6

 
149.2

 
124.0

Allowance for doubtful accounts
(24.7
)
 
(18.3
)
 
(17.7
)
Delayed customer billings
32.8

 
3.4

 
7.0

Inventories:
 
 
 
 
 
Natural gas
119.8

 
194.9

 
144.4

Propane gas
12.0

 
12.0

 
12.0

Materials and supplies
21.4

 
18.9

 
18.4

Natural gas receivable
2.7

 
1.9

 
6.5

Derivative instrument assets
8.4

 
5.9

 
7.3

Unamortized purchased gas adjustments
14.6

 
102.6

 
73.9

Other regulatory assets
82.1

 
72.9

 
70.7

Prepayments and other
37.5

 
34.2

 
32.4

Total Current Assets
584.9

 
725.5

 
629.1

Deferred Charges:
 
 
 
 
 
Regulatory assets
695.1

 
791.1

 
840.5

Other
87.0

 
77.1

 
99.2

Total Deferred Charges
782.1

 
868.2

 
939.7

Total Assets
$
6,584.9

 
$
6,546.7

 
$
6,298.2


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Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
 
2018
 
2017
 
2017
CAPITALIZATION AND LIABILITIES
 
 
 
 
 
Capitalization:
 
 
 
 
 
Common stock (par value $1.00 per share; 70.0 million shares authorized; 50.7 million, 48.3 million and 48.3 million shares issued and outstanding at June 30, 2018, September 30, 2017 and June 30, 2017, respectively)
$
50.7

 
$
48.3

 
$
48.2

Paid-in capital
1,480.2

 
1,325.6

 
1,323.7

Retained earnings
772.4

 
614.2

 
653.1

Accumulated other comprehensive income
4.4

 
3.2

 
3.2

Total Equity
2,307.7

 
1,991.3

 
2,028.2

Redeemable noncontrolling interest
6.5

 

 

Long-term debt (less current portion)
2,024.5

 
1,995.0

 
1,925.3

Total Capitalization
4,338.7

 
3,986.3

 
3,953.5

Current Liabilities:
 
 
 
 
 
Current portion of long-term debt
155.5

 
100.0

 

Notes payable
191.0

 
477.3

 
450.7

Accounts payable
195.5

 
257.1

 
206.4

Advance customer billings
9.7

 
32.0

 
15.9

Wages and compensation accrued
39.6

 
38.7

 
38.9

Dividends payable
28.4

 
26.6

 
26.3

Customer deposits
35.4

 
34.9

 
35.0

Interest accrued
27.8

 
14.6

 
24.2

Taxes accrued
56.5

 
61.0

 
55.6

Unamortized purchased gas adjustments
1.1

 
1.0

 
1.0

Other regulatory liabilities
23.4

 
21.6

 
24.9

Other
50.2

 
33.1

 
30.9

Total Current Liabilities
814.1

 
1,097.9

 
909.8

Deferred Credits and Other Liabilities:
 
 
 
 
 
Deferred income taxes
476.8

 
707.5

 
705.3

Pension and postretirement benefit costs
219.3

 
237.4

 
300.4

Asset retirement obligations
305.9

 
296.6

 
214.7

Regulatory liabilities
364.3

 
157.2

 
139.8

Other
65.8

 
63.8

 
74.7

Total Deferred Credits and Other Liabilities
1,432.1

 
1,462.5

 
1,434.9

Commitments and Contingencies (Note 10)

 

 

Total Capitalization and Liabilities
$
6,584.9

 
$
6,546.7

 
$
6,298.2

 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 


7



Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)

 
Common Stock Outstanding
 
Paid-in Capital
 
Retained Earnings
 
AOCI*
 
Total
(Dollars in millions)
Shares
 
Par
 
 
 
 
Balance at September 30, 2016
45,650,642

 
$
45.6

 
$
1,175.9

 
$
550.9

 
$
(4.2
)
 
$
1,768.2

Net income

 

 

 
174.9

 

 
174.9

Common stock offering
2,504,684

 
2.5

 
143.0

 

 

 
145.5

Dividend reinvestment plan
18,025

 

 
1.2

 

 

 
1.2

Stock-based compensation costs

 

 
5.9

 
0.9

 

 
6.8

Stock issued under stock-based compensation plans
119,660

 
0.1

 
(0.1
)
 

 

 

Employee’s tax withholding for stock-based compensation
(35,167
)
 

 
(2.2
)
 

 

 
(2.2
)
Dividends declared

 

 

 
(73.6
)
 

 
(73.6
)
Other comprehensive income, net of tax

 

 

 

 
7.4

 
7.4

Balance at June 30, 2017
48,257,844

 
$
48.2

 
$
1,323.7

 
$
653.1

 
$
3.2

 
$
2,028.2

 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30, 2017
48,263,243

 
$
48.3

 
$
1,325.6

 
$
614.2

 
$
3.2

 
$
1,991.3

Net income

 

 

 
240.1

 

 
240.1

Common stock offering
2,300,000

 
2.3

 
150.7

 

 

 
153.0

Dividend reinvestment plan
16,952

 

 
1.2

 

 

 
1.2

Stock-based compensation costs

 

 
5.6

 

 

 
5.6

Stock issued under stock-based compensation plans
111,742

 
0.1

 
(0.1
)
 

 

 

Employee’s tax withholding for stock-based compensation
(33,777
)
 

 
(2.8
)
 

 

 
(2.8
)
Dividends declared

 

 

 
(81.9
)
 

 
(81.9
)
Other comprehensive income, net of tax

 

 

 

 
1.2

 
1.2

Balance at June 30, 2018
50,658,160

 
$
50.7

 
$
1,480.2

 
$
772.4

 
$
4.4

 
$
2,307.7

 
 
 
 
 
 
 
 
 
 
 
 
* Accumulated other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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Table of Contents

SPIRE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
Nine Months Ended June 30,
(In millions)
2018
 
2017
Operating Activities:
 
 
 
Net Income
$
240.1

 
$
174.9

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
122.9

 
114.4

Deferred income taxes and investment tax credits
(9.5
)
 
84.1

Changes in assets and liabilities:
 
 
 
Accounts receivable
20.1

 
(33.1
)
Unamortized purchased gas adjustments
133.0

 
(26.1
)
Accounts payable
(53.0
)
 
14.8

Delayed/advance customer billings – net
(51.6
)
 
(59.7
)
Taxes accrued
(4.4
)
 
(4.8
)
Inventories
72.6

 
27.5

Other assets and liabilities
(3.4
)
 
24.2

Other
44.5

 
4.5

Net cash provided by operating activities
511.3

 
320.7

Investing Activities:
 
 
 
Capital expenditures
(334.3
)
 
(298.6
)
Business acquisitions
(28.1
)
 
3.8

Other
(8.9
)
 
1.1

Net cash used in investing activities
(371.3
)
 
(293.7
)
Financing Activities:
 
 
 
Issuance of long-term debt
75.0

 
250.0

Repayment of long-term debt

 
(393.8
)
(Repayment) issuance of short-term debt – net
(286.3
)
 
52.0

Issuance of common stock
154.2

 
146.4

Dividends paid
(80.2
)
 
(70.9
)
Other
(3.2
)
 
(7.6
)
Net cash used in financing activities
(140.5
)
 
(23.9
)
Net (Decrease) Increase in Cash and Cash Equivalents
(0.5
)
 
3.1

Cash and Cash Equivalents at Beginning of Period
7.4

 
5.2

Cash and Cash Equivalents at End of Period
$
6.9

 
$
8.3

 
 
 
 
Supplemental disclosure of cash paid for:
 
 
 
Interest, net of amounts capitalized
$
(60.6
)
 
$
(54.5
)
Income taxes
(0.9
)
 
(0.7
)
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 

9



Table of Contents


SPIRE MISSOURI INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In millions)
2018
 
2017
 
2018
 
2017
Operating Revenues:
 

 
 
 
 

 
 

Utility
$
215.5

 
$
198.5

 
$
1,141.0

 
$
1,009.3

Total Operating Revenues
215.5

 
198.5

 
1,141.0

 
1,009.3

Operating Expenses:
 
 
 
 
 
 
 
Utility
 
 
 
 
 
 
 
Natural and propane gas
81.1

 
61.9

 
598.5

 
494.4

Operation and maintenance
65.5

 
61.2

 
229.3

 
179.2

Depreciation and amortization
24.2

 
23.2

 
74.2

 
68.9

Taxes, other than income taxes
23.7

 
21.7

 
91.1

 
81.6

Total Operating Expenses
194.5

 
168.0

 
993.1

 
824.1

Operating Income
21.0

 
30.5

 
147.9

 
185.2

Other Income - Net
2.0

 
0.7

 
2.8

 
2.7

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
9.6

 
8.0

 
29.3

 
24.5

Other interest charges
1.7

 
1.5

 
5.5

 
4.4

Total Interest Charges
11.3

 
9.5

 
34.8

 
28.9

Income Before Income Taxes
11.7

 
21.7

 
115.9

 
159.0

Income Tax Expense (Benefit)
0.2

 
6.2

 
(23.4
)
 
48.5

Net Income
$
11.5

 
$
15.5

 
$
139.3

 
$
110.5

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


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Table of Contents

SPIRE MISSOURI INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In millions)
2018
 
2017
 
2018
 
2017
Net Income
$
11.5

 
$
15.5

 
$
139.3

 
$
110.5

Other Comprehensive Income, Net of Tax
0.1

 

 

 

Comprehensive Income
$
11.6

 
$
15.5

 
$
139.3

 
$
110.5

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


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Table of Contents

SPIRE MISSOURI INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in millions, except per share amounts)
2018
 
2017
 
2017
ASSETS
 
 
 
 
 
Utility Plant
$
3,227.1

 
$
3,091.8

 
$
2,914.1

Less: Accumulated depreciation and amortization
697.6

 
681.6

 
670.3

Net Utility Plant
2,529.5

 
2,410.2

 
2,243.8

Goodwill
210.2

 
210.2

 
210.2

Other Property and Investments
56.7

 
59.4

 
58.9

Total Other Property and Investments
266.9

 
269.6

 
269.1

Current Assets:
 
 
 
 
 
Cash and cash equivalents
3.5

 
2.5

 
2.6

Accounts receivable:
 
 
 
 
 
Utility
110.5

 
101.7

 
94.4

Associated companies
3.2

 
3.3

 
1.7

Other
18.7

 
15.0

 
13.8

Allowance for doubtful accounts
(18.2
)
 
(14.1
)
 
(13.4
)
Delayed customer billings
32.8

 
3.4

 
7.0

Inventories:
 
 
 
 
 
Natural gas
76.8

 
138.2

 
93.6

Propane gas
12.0

 
12.0

 
12.0

Materials and supplies
12.4

 
11.3

 
11.3

Derivative instrument assets

 
0.1

 
0.7

Unamortized purchased gas adjustments
7.0

 
57.4

 
29.0

Other regulatory assets
48.1

 
38.2

 
38.2

Prepayments and other
20.3

 
19.6

 
21.3

Total Current Assets
327.1

 
388.6

 
312.2

Deferred Charges:
 
 
 
 
 
Regulatory assets
473.8

 
557.8

 
583.4

Other
7.7

 
5.3

 
3.1

Total Deferred Charges
481.5

 
563.1

 
586.5

Total Assets
$
3,605.0

 
$
3,631.5

 
$
3,411.6

 
 
 


 
 

12



Table of Contents

SPIRE MISSOURI INC.
CONDENSED BALANCE SHEETS (Continued)
(UNAUDITED)
 
 
June 30,
 
September 30,
 
June 30,
 
2018
 
2017
 
2017
CAPITALIZATION AND LIABILITIES
 
 
 
 
 
Capitalization:
 
 
 
 
 
Paid-in capital and common stock (par value $1.00 per share;
50.0 million shares authorized; 24,577 shares issued and outstanding)
$
759.3

 
$
756.2

 
$
755.3

Retained earnings
519.8

 
416.5

 
414.0

Accumulated other comprehensive loss
(1.7
)
 
(1.7
)
 
(1.8
)
Total Equity
1,277.4

 
1,171.0

 
1,167.5

Long-term debt 
824.2

 
873.9

 
804.5

Total Capitalization
2,101.6

 
2,044.9

 
1,972.0

Current Liabilities:
 
 
 
 
 
Current portion of long-term debt
150.0

 
100.0

 

Notes payable – associated companies
128.6

 
203.0

 
260.2

Accounts payable
62.3

 
89.9

 
54.0

Accounts payable – associated companies
4.9

 
5.4

 
5.4

Advance customer billings

 
13.3

 
0.7

Wages and compensation accrued
30.5

 
29.6

 
29.4

Dividends payable
9.0

 

 

Customer deposits
13.0

 
13.3

 
13.2

Interest accrued
11.6

 
8.0

 
9.5

Taxes accrued
26.5

 
34.1

 
28.3

Regulatory liabilities
8.7

 
2.7

 
2.7

Other
17.4

 
8.5

 
7.5

Total Current Liabilities
462.5

 
507.8

 
410.9

Deferred Credits and Other Liabilities:
 
 
 
 
 
Deferred income taxes
393.9

 
623.8

 
620.9

Pension and postretirement benefit costs
154.4

 
173.0

 
204.2

Asset retirement obligations
163.6

 
158.6

 
77.9

Regulatory liabilities
281.6

 
81.2

 
83.6

Other
47.4

 
42.2

 
42.1

Total Deferred Credits and Other Liabilities
1,040.9

 
1,078.8

 
1,028.7

Commitments and Contingencies (Note 10)

 

 

Total Capitalization and Liabilities
$
3,605.0

 
$
3,631.5

 
$
3,411.6

 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 



13



Table of Contents

SPIRE MISSOURI INC.
CONDENSED STATEMENTS OF SHAREHOLDER’S EQUITY
(UNAUDITED)

 
Common Stock Outstanding
 
Paid-in Capital
 
Retained Earnings
 
AOCI*
 
 
(Dollars in millions)
Shares
 
Par
 
 
 
 
Total
Balance at September 30, 2016
24,577

 
$
0.1

 
$
751.9

 
$
318.3

 
$
(1.8
)
 
$
1,068.5

Net income

 

 

 
110.5

 

 
110.5

Stock-based compensation costs

 

 
3.3

 

 

 
3.3

Dividends declared

 

 

 
(14.8
)
 

 
(14.8
)
Balance at June 30, 2017
24,577

 
$
0.1

 
$
755.2

 
$
414.0

 
$
(1.8
)
 
$
1,167.5

 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30, 2017
24,577

 
$
0.1

 
$
756.1

 
$
416.5

 
$
(1.7
)
 
$
1,171.0

Net income

 

 

 
139.3

 

 
139.3

Stock-based compensation costs

 

 
3.1

 

 

 
3.1

Dividends declared

 

 

 
(36.0
)
 

 
(36.0
)
Balance at June 30, 2018
24,577

 
$
0.1

 
$
759.2

 
$
519.8

 
$
(1.7
)
 
$
1,277.4

 
 
 
 
 
 
 
 
 
 
 
 
* Accumulated other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 
 
 
 


14



Table of Contents

SPIRE MISSOURI INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
Nine Months Ended June 30,
(In millions)
2018
 
2017
Operating Activities:
 
 
 
Net Income
$
139.3

 
$
110.5

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
74.2

 
68.9

Deferred income taxes and investment tax credits
(23.4
)
 
48.5

Changes in assets and liabilities:
 
 
 
Accounts receivable
(8.3
)
 
(11.0
)
Unamortized purchased gas adjustments
95.3

 
12.8

Accounts payable
(19.6
)
 
(6.2
)
Delayed/advance customer billings – net
(42.7
)
 
(53.8
)
Taxes accrued
(7.5
)
 
(0.7
)
Inventories
60.3

 
31.6

Other assets and liabilities
(6.3
)
 
0.5

Other
44.1

 
1.4

Net cash provided by operating activities
305.4

 
202.5

Investing Activities:
 
 
 
Capital expenditures
(203.1
)
 
(189.5
)
Other
0.1

 
0.7

Net cash used in investing activities
(203.0
)
 
(188.8
)
Financing Activities:
 
 
 
Repayment of short-term debt – net

 
(243.7
)
(Repayments to) borrowings from Spire – net
(74.4
)
 
260.2

Dividends paid
(27.0
)
 
(28.7
)
Other

 
(1.0
)
Net cash used in financing activities
(101.4
)
 
(13.2
)
Net Increase in Cash and Cash Equivalents
1.0

 
0.5

Cash and Cash Equivalents at Beginning of Period
2.5

 
2.1

Cash and Cash Equivalents at End of Period
$
3.5

 
$
2.6

 
 
 
 
Supplemental disclosure of cash paid for:
 
 
 
Interest, net of amounts capitalized
$
(30.7
)
 
$
(26.9
)
Income taxes

 

 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 


15



Table of Contents


SPIRE ALABAMA INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

 
Three Months Ended June 30,
 
Nine Months Ended June 30,
(In millions)
2018
 
2017
 
2018
 
2017
Operating Revenues:
 

 
 
 
 

 
 

Utility
$
100.3

 
$
90.5

 
$
439.4

 
$
336.0

Total Operating Revenues
100.3

 
90.5

 
439.4

 
336.0

Operating Expenses:
 
 
 
 
 
 
 
Utility
 
 
 
 
 
 
 
Natural gas
32.2

 
22.5

 
159.7

 
65.1

Operation and maintenance
34.2

 
32.9

 
100.1

 
95.6

Depreciation and amortization
13.5

 
12.6

 
39.4

 
37.2

Taxes, other than income taxes
8.1

 
7.0

 
30.7

 
23.9

Total Operating Expenses
88.0

 
75.0

 
329.9

 
221.8

Operating Income
12.3

 
15.5

 
109.5

 
114.2

Other Income - Net
0.5

 
0.6

 
1.4

 
2.1

Interest Charges:
 
 
 
 
 
 
 
Interest on long-term debt
3.6

 
2.8

 
10.0

 
8.4

Other interest charges
0.8

 
0.8

 
2.8

 
2.3

Total Interest Charges
4.4

 
3.6

 
12.8

 
10.7

Income Before Income Taxes
8.4

 
12.5

 
98.1

 
105.6

Income Tax Expense
2.1

 
5.1

 
85.8

 
40.3

Net Income
$
6.3

 
$
7.4

 
$
12.3

 
$
65.3

 
 
 
 
 
 
 
 
See the accompanying Notes to Financial Statements.
 
 
 
 
 
 
 


16



Table of Contents

SPIRE ALABAMA INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
(Dollars in millions, except per share amounts)
2018
 
2017
 
2017
ASSETS
 
 
 
 
 
Utility Plant
$
1,920.3

 
$
1,838.0

 
$
1,809.0

Less: Accumulated depreciation and amortization
816.8

 
782.0

 
791.2

Net Utility Plant
1,103.5

 
1,056.0

 
1,017.8

Current Assets:
 
 
 
 
 
Cash and cash equivalents

 
0.1

 
0.1

Accounts receivable:
 
 
 
 
 
Utility
40.3

 
32.0

 
40.6

Associated companies
0.2

 

 
0.2

Other
6.5

 
6.2

 
5.8

Allowance for doubtful accounts
(3.6
)
 
(2.6
)
 
(2.2
)
Inventories:
 
 
 
 
 
Natural gas
30.5

 
33.9

 
29.0

Materials and supplies
7.7

 
6.5

 
5.9

Unamortized purchased gas adjustments
7.6

 
45.2

 
44.9

Other regulatory assets
19.3

 
19.4

 
17.3

Prepayments and other
8.6

 
6.7

 
6.6

Total Current Assets
117.1

 
147.4

 
148.2

Deferred Charges:
 
 
 
 
 
Regulatory assets
193.4

 
197.0

 
228.7

Deferred income taxes
98.2

 
185.6

 
181.1

Other
58.6

 
57.0

 
63.2

Total Deferred Charges
350.2

 
439.6

 
473.0

Total Assets
$
1,570.8

 
$
1,643.0

 
$
1,639.0


17



Table of Contents

SPIRE ALABAMA INC.
CONDENSED BALANCE SHEETS (Continued)
(UNAUDITED)

 
June 30,
 
September 30,
 
June 30,
 
2018
 
2017
 
2017
CAPITALIZATION AND LIABILITIES
 
 
 
 
 
Capitalization:
 
 
 
 
 
Paid-in capital and common stock (par value $0.01 per share;
3.0 million shares authorized; 2.0 million shares issued and outstanding)
$
390.9

 
$
420.9

 
$
420.9

Retained earnings
436.3

 
446.5

 
463.5

Total Equity
827.2