Spire Inc.

Good day and welcome to the SPIRE first quarter earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Scott Dudley, Managing Director of Investor Relations. Please go ahead.

Good morning everyone and welcome to our first quarter earnings call. We issued our earnings news release this morning and you may access it on our website at spireenergy.com under newsroom. There's also a slide presentation that accompanies our webcast and you may download it either from the website site from the webcast site or from our website, and that would be under investors and then events and presentations. Presenting on the call today are Suzanne Sutherwood, President and CEO, and Steve Rasche, Executive Vice President and CFO. Also in the room with us today is Steve Lindsey, Executive Vice President and Chief Operating Officer. Before we begin, let me cover our safe harbor statement and use of non-GAAP earnings measures. Today's call, including responses to questions, may contain forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC. In our comments, we will be discussing the economic earnings, contribution margin, adjusted EBITDA, and adjusted long-term capitalization, which are all non-GAAP measures used by management when evaluating our performance and results of operations. Explanations of these measures to their GAAP counterparts are contained in our news release and the slide presentation. With that, I will turn the call over to Suzanne.

Thank you, Scott, and hello to everyone joining us this morning for our first quarter update. On our year-end earnings call last November, we talked for a few minutes about how we advanced our growth strategy in fiscal 2019, creating enhanced value for our shareholders, our customers, and our communities. And at our annual shareholders meeting last week, our chairman and I had the chance to share more about last year's successes, stories about how we served our customers better than ever before. stories about safety, stories about innovation. We shared how we're pushing boundaries and doing all that we can to advance people, performance, and possibilities. I'm pleased to say that our collection of stories is now available online. I hope you take the time to go to rstory.fireenergy.com and see all the ways we've used our energy to answer challenges, advance communities, and enrich lives in 2019. Today, we are reporting that we're off to a strong start in the first fiscal 2020. As you know, our strategy for growth is grounded in our mission and focused on three imperatives, growing organically, investing in infrastructure, and advancing through innovation. With this focus, we continued our momentum of growth, delivering improved financial and operating performance in the first quarter. We posted higher first quarter net economic earnings of $1.33 per share, reflecting growth at our gas utilities, continued solid performance by SPIRE marketing, and increased earnings from SPIRE SEL pipeline. As Steve Lindsey highlighted on our year-end call, in fiscal 2019, we saw additional gains in our gas utility operating performance metrics, including safety, system integrity, and service. While we're still early in our current fiscal year, I'm pleased to say that our SPIRE employees are on track to deliver another strong operating performance this year, highlighted by exceptional performance and safety. Turning to our investment and growth, our capital spend was $192 million in the first quarter, reflecting an increase at our gas utilities and a decrease for our midstream operations. We increased the investment in our gas and our utilities by $15 million year over year with a continued focus on upgrading our pipelines in order to improve safety and reliability. A strong quarter considering last fiscal year our employees delivered record results. Needless to say, these investments also reduce methane emissions and support organic growth through new business initiatives. We invested $29.5 million in fire SEL pipeline to bring it into service, slightly more than we spent a year ago. And our capital spend on storage was $10 million. For the first fiscal year 2020, we increased our capital spend target to $610 million, including a $20 million increase for our gas utilities. This utility investment will drive rate-based growth that we now expect to be between 7% and 8%. Outside our utilities, we plan to invest $70 million, including $50 million on SPIRE STL pipeline and $20 million on storage and other. In regard to our midstream operations, Steve Lindsey will provide an operational update next quarter, but I'd like to report now that SPIRE STL pipeline, which went into service last November, has already proven to be a valuable winter asset for the St. Louis region, delivering reliable, low-cost natural gas off the rec lateral. As you know, I announced last November that Scott Smith, an energy industry veteran with 30 years of experience, joined our team as president of Fire Midstream. And I'm happy to say that Scott has hit the ground running. Scott is also fully engaged in further developing the long-term strategy for SDL Pipeline and Storage. Relative to storage, he and the team are providing service to our customers and evaluating his first full winter of operational data and results. All of this while assessing the capital plan. So, more to come relative to storage as Scott provides us his perspective and analysis of the business. Beyond our capital investment infrastructure, we continue to grow through several ongoing organic initiatives. From a capital perspective, we're increasing our spend on new business, including for our residential customers, but also commercial and industrial users. Along with new business development, we are more engaged in economic development. We are working closely with key organizations in our communities, bringing our expertise and solutions to help attract and grow businesses in our geographic areas. As you know, growing the number of homes and businesses we serve and recovering our investment through supportive regulatory outcomes continues to drive higher margins. The third pillar of our growth strategy is advancing through innovation. We're continuing to enhance the quality and efficiency of our service while reducing our costs. Technology, core to our business, is playing an important role in our innovation efforts, enabling new and better approaches to serving our customers and community. Now, let me turn now to regulatory matters and share an update on recent developments. I'll start with Missouri. First, a new commissioner has joined the Missouri Public Service Commission. State Senator Jason Holzman was appointed by the governor and confirmed effective January 16th. Mr. Holzman replaced Daniel Hall, whose term expired. Last quarter, we spent a good bit of time talking about the Missouri Court of Appeals ruling in our ISRS cases for 2016, 2017, and 2018. At the time of the ruling, we said we would pursue all options, regulatory, judicial, and legislative, to defend our position and resolve the issue over the Office of Public Counsel's challenge to ISRS. On January 2nd, we filed applications with the Missouri Supreme Court to review the appeals court ruling. We're hopeful that the state Supreme Court will take up the case and that we will know their decision, one way or the other, in the months to come. In the meantime, our application states the effectiveness of the appeals court ruling. The Missouri legislature began its 2020 session in early January. and bills have been filed in both the House and Senate to clarify the language in the ISRS statute. Specifically, the bills clarify that the purpose of pipeline replacement is to enhance safety and reliability in line with industry standards and that such replacement is to be done in the most cost-effective manner possible. Further, the legislation clarifies that ISRS eligibility should not be tied to the age or condition of the pipe being replaced. On Monday of this week, we filed for an additional $13.4 million in issuance revenue to recover new investments and pipeline upgrades. We also completed our annual rate setting filing under the RSE mechanism, and new rates for our Alabama utilities were effective December 1st. Our new rates for Spire Alabama include an off-system sales and capacity release program. The program is similar to the one we have in Missouri, in which 75% of the value creation benefits our customers, and the company retains the remaining 25%. You may also recall that the Alabama Commission established an incentive for the accelerated replacement of remaining cast iron and bare steel distribution lines. The Accelerated Infrastructure Modernization Rider, or AIM, provides an opportunity to earn a higher equity return if the target levels of replacement miles is met. We exceeded that target in 2019, so our ROE in fiscal 2020 will be 10 basis points higher. Before I turn the call over to Steve, let me say a quick word about our dividend. An important part of how we delivered value to our investors over the years has been through an increased dividend. We're proud of our track record. 75 years of uninterrupted dividend payments, including increases for 17 years in a row. This includes a 5.1% increase effective in January of this year to an annualized rate of $2.49 per share. Our Board has declared the quarterly dividend of 62.25 cents per share payable April 2nd. The Board also declared the quarterly preferred stock dividend, which is payable May 15, 2020. With that, let me turn the call to Steve Rasche to cover our financial performance and outlook.