Spire Inc.

Good day, and welcome to the SPIRE Fiscal 2024 Second 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 a touch-tone phone. 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 Megan McPhail, Managing Director of Investor Relations. Please go ahead.

Good morning and welcome to SPIRE's fiscal 2024 second quarter earnings call. We issued an earnings news release this morning and you may access it on our website at spireenergy.com under newsroom. There's a slide presentation that accompanies our webcast. You may download it either from the webcast site or from our website at under Investors and then Events and Presentations. 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 meaning 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 net economic earnings and contribution margin, which are both non-GAAP measures used by management when evaluating our performance and results of operations. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and slide presentation. On the call today is Steve Lindsay, President and CEO Scott Doyle, Executive Vice President and COO, and Steve Rasche, Executive Vice President and CFO. Also in the room today is Adam Woodard, Vice President and Treasurer. With that, I will turn the call over to Steve Lindsay. Steve?

Thanks, Megan, and good morning, everyone. Thank you for joining us today to review our second quarter performance and an update on recent developments and outlook. Let's start with our quarterly results. This morning, we reported fiscal second quarter net economic earnings of $3.45 per share compared to NEE of $3.70 per share a year ago. The year-over-year decrease was driven by a few key items, including lower usage in Missouri due to significantly warmer than normal weather and higher interest expense. Scott and Steve will discuss our results in more detail in a moment. Our results reflect our dedication and commitment to serve our customers and communities safe and reliable energy. And we continue to execute on our strategy to grow our businesses, invest in infrastructure, and drive continuous improvement to deliver value over the long term. Having a diverse portfolio of natural gas businesses enhances our ability to provide value. Further, consistent with our board of directors' focus on strong oversight and governance, last month we announced the election of Sherri Cook as the newest addition to our board. Her extensive business experience and leadership in human resources along with our background in economics and finance, will be vital as we execute our strategy. Her presence and involvement throughout our Alabama service territory further ensures we remain connected to our communities we serve, and I look forward to working closely with her in the future. Before I wrap up, I would like to highlight the important role that natural gas plays and will continue to play as part of America's sustainable energy future. Approximately 200 million Americans and businesses use natural gas because it's affordable, reliable, and safe. In fact, according to the American Gas Association, households that use natural gas for heating, cooking, and clothes drying save over $1,100 on average per year compared to homes using electricity. Together, natural gas utilities across the country, including Aspire, continue to invest billions of dollars of capital each year to enhance the natural gas distribution and transmission systems. As an industry, we can be proud of the important work we've done in modernizing infrastructure and deploying technology that has led to increased safety, efficiency, and reliability for natural gas customers. To sum up, we are well positioned for success in the second half of fiscal year 24 and over the long term as we execute on our robust capital investment plan to support the growth and performance of our utilities and our gas-related businesses. As far as a strong and well-positioned company with a proven growth strategy, We have confidence in that strategy and in the ability of our experience management team and employees to successfully lead us into the future. With that, I'll now turn the call over to you, Scott. Thank you, Steve, and good morning, everyone. I'd like to begin by thanking our employees for their hard work and continued focus maintaining safe and reliable natural gas service to our customers through the winter heating season. I am extremely grateful and proud to be a part of the Spire team. turning now to an update on the gas utility segment. Our commitment to strong operations and continued modernization of our system was visible when we were well-positioned to deliver safe, reliable, and affordable natural gas energy for our customers and communities who depend on this resource as a critical energy need. We remain focused on driving efficiencies throughout the organization, including streamlining systems and processes, and maintaining an unwavering commitment to operational excellence. On the regulatory front in Missouri, we were pleased with the constructive outcome in our recent filing for an updated ISRIS, our semi-annual capital recovery infrastructure rider. Last week, the Missouri Public Service Commission approved $16.8 million in new revenues for recovery of system upgrade investments made September 2023 through February 2024. bringing our annualized ISRIS revenue to $36.9 million. Rates are expected to be effective later this month. In Alabama, the rates that were effective January 1st were the result of working alongside the Public Service Commission staff during our annual rate-setting process. As you may recall, our rates in Alabama are set using a forecasted budget. Our second quarter results reflect the benefits of these constructive regulatory mechanisms we have in each state as earnings benefited from new rates in Alabama and previously approved Missouri ISRIS revenues. During the quarter, we experienced warm temperatures across all of our service territories. In Alabama, temperatures were approximately 10% warmer than normal. I'm glad to say as a result of our efforts with the Alabama PSE to incorporate more accurate customer usage patterns into rates, the weather normalization mechanism in Alabama continues to be effective. However, in our Missouri service territory, severe fluctuations in temperatures throughout the quarter resulted in the weather normalization adjustment rider, or WNAR, being less effective than last year. and the lost weather-related margins in our residential customer class during the quarter were only partially mitigated. Overall, weather for the quarter was 15% warmer than normal. However, combined, the months of February and March were nearly 32% warmer than normal. During these months, we saw periods of extremely warm days followed by periods of more normal temperatures. These significant fluctuations in weather can cause usage to be lower than what the degree days would imply. We look forward to working with the Missouri PSC staff to evaluate how to better recover lost weather related margin in the future. As a reminder, the WNAR does not apply to the less weather sensitive commercial, industrial, and transportation customer classes. Slides 15 and 16 in our appendix include further information on weather and customer usage for the quarter and year to date. During the quarter, interest costs increased and O&M costs were also slightly higher than last year's second quarter, increasing $2.3 million, or approximately 2%. However, year to date, our O&M expenses remain below last year. Let me assure you, we are laser-focused on navigating these headwinds. On the cost side, we continue to control our O&M expenses. We believe that going forward, controlling O&M increases will enable our utility financial performance to further improve fiscal 2024. We are working to improve efficiencies and reduce costs across the organization. We are targeting elements of our cost structure that can be reduced based on enhancements in technology that have occurred or will occur in the coming years. In addition, we are working to ensure our shared services are efficiently aligned and supportive of our capital investment programs. Moving to slide five and an update on our capital investment plan. We continue to invest significant amounts of capital focused on modernizing our gas utilities. Fiscal year to date, our capex totaled $409 million, which was primarily in our gas utility. Year over year, our gas utility CapEx increased 7% to $311 million, with an emphasis on upgrading distribution infrastructure and connecting more homes and businesses. We continue to install advanced meters for residential customers across our service territory. In fiscal year to date, we have installed over 120,000 advanced meters, bringing the total number of customers benefiting from this technology to 660,000. Investment in our midstream segment totaled $98 million fiscal year to date, largely for the expansion of Spire Storage West. Looking ahead, the expected fiscal year 24 capital investment at the gas utility segment remains unchanged. However, we are increasing our total fiscal year 24 capital investment target by $35 million to $800 million in support of our storage expansion project. I will now hand the call over to Steve Rasche to discuss this project in more detail and provide a financial update.