Good morning, and welcome to Spire Inc.'s 2025 first quarter earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. 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 Megan McPhail, Managing Director of Investor Relations. Please go ahead.

Good morning, and welcome to Spire Inc.'s fiscal 2025 first quarter earnings call. We issued an earnings news release this morning. You may access it on our website at spireenergy.com under Newsroom. There is a slide presentation that accompanies our webcast which can be downloaded from our website 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 non-GAAP measures used by management when evaluating our 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 Scott Doyle, Executive Vice President COO, and Acting CEO, and Adam Woodard, Executive Vice President and CFO. With that, I will turn the call over to Scott Doyle.

Thank you, Megan, and good morning, everyone. Thank you for joining us today for a review of our fiscal first quarter results and an update on recent developments and outlook. Before we dive into results, we were pleased to announce earlier this week that Steve Lindsey, Spire Inc.'s President and Chief Executive Officer, will return to work on February 10th after taking a leave of absence. He's eager to get back to the office, and we're looking forward to his return next week. I would also like to take this opportunity to thank our employees for their continued effort and dedication to maintaining safe and reliable gas delivery service for our customers as we entered the winter heating season. While we experienced a warmer than normal first quarter in both Missouri and Alabama, we began to see much colder, sustained weather patterns in early January. In fact, this past January was among the coldest in recent years throughout our service territories. The preparedness of our employees and past investment in our systems ensured reliable energy delivery for the communities we serve. Turning now to our first quarter results. This morning, we announced adjusted earnings of $1.34 per share compared to $1.47 per share a year ago. Our results reflect growth in our utility and midstream segments, with lower earnings in our gas marketing segment. Key drivers of our results include our investments to modernize our natural gas infrastructure and our continued focus on cost management. Adam will provide more detail on our results and outlook in a moment. Turning to regulatory matters, starting with Missouri. Last November, we filed a rate case with the Public Service Commission or PSC for new rates effective by October of this year. In addition, in January, we filed a new infrastructure system replacement surcharge…

Turning to page five for an update on capital investments. During the first quarter, our CapEx totaled $260 million with the majority of the spend taking place at our gas utilities. Year over year, utility CapEx increased nearly 25% with an emphasis on upgrading distribution infrastructure and connecting more homes and businesses to safe, reliable, and affordable natural gas. During fiscal 2025, we plan to invest a total of $790 million with a focus on reliability, system modernization, new service connections, and advanced meter installation. Remember, approximately 98% of our ten-year capital expenditure plan is targeted utility split, driving our growth and rate base. Moving to page six, in late November 2024, we filed a request with Missouri PSC to increase revenues by $289.5 million. The drivers of our requested increase include significant capital investments in our delivery system as well as the inflationary impacts on our cost of service since our last rate case was completed in December 2022. The request includes a 10.5% return on equity, a 55% equity ratio, and an estimated rate base of $4.4 billion with a May 31 true-up update. This filing is also inclusive of discrete adjustments of known and measurable items that will occur beyond the true-up update but before new base rates are implemented. We believe this represents a more accurate snapshot of our costs when new rates take effect. These updates include items such as capital investments and changes to leases, payroll, and call center expenses, for example. We are also seeking to improve recovery of volumetric revenue, including the impacts of both weather and conservation. If approved as requested, when rates become effective, the average customer bill is expected to increase approximately 15% or $14 per month. However, when paired with the PGA decrease approved and implemented in November 2024, average customer bills are expected to be lower or unchanged compared to average bills in 2024 when final rates are approved. The Missouri PSC approved the procedural schedule last month, and we expect an order and new rates effective by October. I'll now turn the call over to Adam Woodard for a financial review and update on guidance and outlook. Adam?

Thanks, Scott, and good morning, everyone. I'll begin by addressing our quarterly results, which are detailed on pages seven and eight of our presentation. During the first quarter, we reported adjusted earnings of $81.1 million or $1.34 per share compared to $82.7 million or $1.47 per share a year ago. The results were driven by earnings growth at the Gas Utility and Midstream segment, offset by lower earnings at marketing and other. Gas utility earnings were higher, reflecting increased earnings at Spire Alabama and Spire Gulf, partially offset by lower Spire Missouri earnings. Contribution margin increased across all utilities. We benefited from higher ISRIS revenues in Missouri and new rates and usage at Spire Alabama, net of weather mitigation, offset in part by lower Missouri usage which was not fully mitigated. Utility earnings also reflected lower run-rate O&M expense and higher depreciation expense. We saw strong earnings growth in our midstream segment driven by new contracts on additional capacity and higher rates on contract renewals of existing capacity at Spire Storage and the acquisition of MOGAS in January of last year. Our marketing segment was lower than the prior year due to reduced market volatility combined with higher transportation storage fees. I would like to note that we expect marketing to deliver within its originally expected guidance range during the fiscal year. Lastly, other corporate costs were higher primarily due to the absence of a $6.3 million after-tax benefit of an interest rate hedge settlement that occurred in the prior year, coupled with higher interest expense this year. I will briefly touch on a couple of drivers of our results. We experienced another warm start to the winter in both Missouri and Alabama. From a heating degree day perspective, Missouri was 18% warmer than normal. Although this was in line…

Thank you, Adam. To wrap up, I want to remind everyone of our fiscal 2025 priorities to build a more resilient, efficient, and sustainable company that delivers value for our customers and shareholders. First and foremost, we are committed to delivering natural gas safely and reliably. During the year, we expect to achieve our capital plan and engage with key stakeholders to realize constructive regulatory outcomes for customers and shareholders. Furthermore, we're focused on delivering on our fiscal 2025 EPS guidance range and maintaining the strength of our balance sheet. Executing on these objectives remains a priority in fiscal 2025 and beyond. This concludes our prepared remarks, and we're now ready to take questions. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Gabe Moreen with Mizuho. Please go ahead.

Hey, good morning, everyone. First of all, Scott, sorry to hear your moment in the spotlight here might be a little bit shorter than you anticipated, but mostly just really glad that Steve is coming back soon. But with that, let me just ask about the weather impact for the quarter. Is there any way you make up some of the warmer than normal and the impact on customer classes, whether it's residential or C&I, with a colder than normal set in Q2? Obviously, you mentioned the weather in January, so I'm just curious if that might have reversed a little bit in Q2.

No. So, Gabe, I think you point out, you know, we are early in winter, and I think that's a fair observation. We did include quite a bit of detail in the appendix on page eighteen around the different classes and the performance over the quarter, but it's the first quarter. We're not even in the heart of winter yet. So to your point, there's a lot of winter to go, and I think your observation is a good one, and you are correct.

Thanks, Adam. And then maybe if I can just follow-up. You mentioned, Adam, that you still are confident that marketing can hit its guidance for the year despite, I guess, the 1Q result. Can you just talk about how marketing's been doing given some of the volatility that you've seen here in wholesale markets in January and also to what extent some of that volatility may or may not have extended also to the storage segment as well?

Absolutely. And we don't think of marketing as having a completely normalized run rate on a quarter-to-quarter basis. So not anything we're, you know, as we said in our prepared remarks, we're very comfortable with where they're at. To your observation, the second quarter really started out with a constructive backdrop. So we feel very comfortable about where they're headed. Yeah, we continue to see where midstream is operating and, you know, are hopeful there. We're liking the pull-through that we see there as those assets have come online and we're getting a full year under our belt. But that's, you know, we're very comfortable with the guidance range and where we're moving from here.

Great. Thanks, Adam. Appreciate that.

The next question comes from Richard Sunderland with JPMorgan. Please go ahead.

Hey, good morning. I also want to say thanks, Rich. Picking up some of the guidance questions, so if marketing returns to its original trajectory, kind of across factors here, are you looking at still trending towards the midpoint? I guess I'm trying to parse the utility weather and how much you need to recapture there after 1Q to hit the midpoint of guidance.

Yeah. I don't want to leave an impression that we need extra weather for marketing to hit its goals. We feel very comfortable regardless of where weather is at any given month that we're comfortable with the plan that we laid out and the segment guidance that we gave. So that's, I just want to leave that there for marketing. I know that's a question. But to the overall kind of recapture, you know, clearly, we lost a little margin in Missouri in the first quarter, but I would regard that as something that is, as we talked about with Gabe's question, I think that's something that's achievable and then retrievable over the course of the year.

Understood. Thank you for that. Then turning to the rate case, how are you thinking about strategy overall, given this new element of pursuing discrete adjustments beyond the true-up period? Don't know if there's any way to rank order priorities or just how your strategy around settlement and whatnot could be impacted by somewhat of a different look to this case.

Hey. Yeah. Hey, Rich. Thank you. So maybe just take it up a level from, you know, maybe that specificity and just say, yeah, we're pleased with the progress on the rate case as it's moving along. It's moving along as expected. We have a couple of good things that have occurred of late. One is the procedural schedule being laid out that has rates being effective in October contemplated being effective in October of this year. And then to your point about discrete adjustments, we're encouraged by the order that has been placed in this case that allows for the proposal of discrete adjustments. And just as a reminder, you know, to those listening, the discrete adjustments are balanced in that they are both puts and takes. As we update capital, but we also update the depreciation expense associated with it. And we have certain costs that are going up, certain costs will be moderated during that period. So it works to balance those out. And we see that as a positive as we move forward in the case. So, you know, all in too early to call out strategy or settlement parameters or anything like that. It really is progressing as it should, and we look forward to the continued efforts in that case.

Great. I'll leave it there. Thank you.

Thanks, Rich.

The next question comes from Shar Pourreza with Guggenheim Partners. Please go ahead.

Hey, guys. How are you doing?

Hey. Good morning, Shar.

Morning. Morning. So just real quick on the rate case question. I guess if we're looking for a settlement, should we be looking for a settlement prior to the August hearings? Is that kind of the data point we should be looking at?

No. I would just look to the procedural schedule and just key off of the dates that are in there for key waypoints along the path. Too early to have any discussions around that.

Got it. So if there, so I guess what I'm trying to ask is if there isn't a settlement announced before the August hearings, there still could be a settlement post the hearings?

Oh, yeah. Yeah. No. Those within the context of the rate case, there's always opportunity to talk.

Got it. Okay. And then just real quick on Missouri legislation. Just any updated thoughts there? How are you thinking about some of the more utility-focused bills? And can you speak a little bit more broadly of how that could impact the current case? I have to make an assumption it doesn't, but how are you focused on the utility side of it, including forward test years? Thanks.

Yeah. Sure, Shar. So maybe a little bit of update. This recent as of yesterday afternoon, yesterday evening. So maybe just answer your first question around, you know, impacts to this case. It has no impact on this case, this legislation, that we have or that's proposed. And maybe just to level set, the legislation that's proposed is around future test year. It would not take effect or would not be effective till July of 2026 for rate cases filed after that day. So a lot of rulemaking that would need to be put in place as it's currently proposed for that to be something that we would be able to utilize in the context of a rate case. But maybe just a little bit of what's happening in the legislature. Yesterday, the bill was brought to the senate floor, and the kind of style of the bill has been modified from its original proposal, which we had proposed in senate bill four. It's now been combined with other utility legislation. All of the wording that was in the original senate bill four has survived inside of what is now senate substitute bill four. There was some floor debate. We're looking forward to some additional debate a couple weeks from now. And for that bill to continue moving forward. So maybe a way to think about that is that we're pleased with the progress today and look forward to the continued dialogue with parties as we help move that further along. But if you're tracking a particular bill, the new bill to track now is the senate substitute bill four.

Got it. And then just lastly on this, and there's a perception that this is an electric issue and the electrics are taking the lead. How vested is Spire in this process?

Yep. Fully vested. Spire is fully vested in the process, and the future test year is what's our component or at least the gas utility component. Electric has some other issues that are non-future test year, but have some maybe some similarities associated with it, whether it's PISA for plan and service. Associated with their gas plants. But if you read through to the bill, there are specific provisions in it that are unique to gas utilities, and that's what we're advocating for in there.

Fantastic. Thank you, guys. I appreciate it.

Thanks, Shar.

Again, if you have a question, please press star then one. The next question comes from David Arcara with Morgan Stanley. Please go ahead.

Hey, thanks so much. Good morning.

Hey, David. Good morning.

Hey, great to hear the news about Steve. Really wish him all the best. Great to see him coming back in action.

Yeah. Absolutely.

Question for me on the rate case. I was just wondering if you could frame the size of the customer bill increase that is being requested here and maybe more broadly, kind of how you think that might trend over time after this one-time bump? Obviously, this reflects multiple years since your last base rate case. But how do you see that evolving maybe beyond just this increase?

Yes. So maybe as we shared in our remarks, the customer impact is $14 to $15 on a monthly basis on an average bill. However, that's the all-in increase based on our proposal. As we mentioned late in the year last calendar year, we lowered rates as a result of our gas costs coming down. That reduction allows for when, if these rates are to be implemented, we basically return average customer bills to what they were prior to the reduction in gas cost. So a different way to think about it is our customers are receiving the benefit now of lower gas costs over the time period of the rate case being contemplated. So we feel really good about kind of how this is impacting our customers. Worked hard to maintain our O&M flat. That's how we're trending so far this year as well. When we think about future projections, this is really a function of the modernization program that we have in place associated with our capital investment in our systems and serving our customers more reliably and safely as we make those investments, and that's what will have the impact on customer bills going forward.

Yep. Okay. Great. Thanks for that. And then I was just wondering if you could update us on the level of inflationary pressures you're seeing on O&M, you know, confidence in keeping O&M flat for this year, maybe just given we're seeing inflation kind of stickier in the broader economic backdrop?

Sure. No. And we're certainly seeing some continued cost pressures, but I think we're having, you know, showing a pretty good run rate of keeping that under control as well. So, you know, it's something that we're focused on continually, but, you know, certainly things came in. We don't expect it to be necessarily a quarter-to-quarter phenomenon, but we continue to feel very comfortable with our guide around O&M being flat at the utilities for the year.

Okay. Sounds good. Great. Thanks so much.

Hey, David. Thank you for your comments about Steve and others as well. We're excited about him coming back. So we're looking forward to that.

Absolutely. This concludes our question and answer session. I would like to turn the conference back over to Megan McPhail for any closing remarks.

I'd like to thank you for joining the call this morning and appreciate your interest in Spire Inc. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.