Good morning and welcome to Spire's Fiscal 2025 Year End Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist followed by 0. Please note this event is being recorded. I would now like to turn the conference over to Megan McPhail, Managing Director, Investor. Please go ahead.

Good morning, and welcome to Spire's fiscal 2025 year-end earnings call. On the call with me today is Scott Doyle, President and CEO, and Adam Woodard, Executive Vice President and CFO. We issued an earnings news release this morning, and you may access it on our website at spireenergy.com under newsroom. There is a slide presentation that accompanies our webcast that can be downloaded from our website under Investors, 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 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. Now here's Scott, who will start on page four of the presentation. Thanks, Megan, and good morning, everyone.

Thank you for joining us for Spire's year-end fiscal 2025 update. We appreciate your continued interest and support as we review our financial results, discuss recent developments, and share our outlook for 2026 and beyond. I am incredibly proud of what we accomplished during the year to advance our strategic goals both operationally and financially. We made significant progress towards setting Spire up for long-term success. This includes the pending acquisition of the Piedmont Natural Gas Tennessee business from Duke, which I will provide an update on in a moment. We had a great year, and none of this would be possible without our 3,500 dedicated employees. I want to thank them for everything they do for our customers and the communities we serve. The commitment and hard work of our employees are the heart of these strong results and the opportunities ahead. We are continuing to build a strong leadership team, and I am delighted to welcome Steve Greenlee, our new Executive Vice President and Chief Operating Officer. Steve has over 25 years of utility operations experience and will oversee our gas utilities in addition to our midstream segment. We are excited about the expertise and collaborative leadership style Steve adds to our team. I am confident that he will play a key role as we continue to advance our strategy. Turning now to our fiscal 2025 results. Adjusted EPS came in at $4.44, up 7.5% from $4.13 in fiscal 2024, reflecting growth across all segments driven by infrastructure investments. In fiscal 2025, we invested $922 million, with close to 90% being spent at the utilities, enhancing the reliability and safety of our systems for our customers. On the regulatory front, we are pleased to reach a positive settlement and outcome in the Missouri rate case, and new rates…

Thanks, Scott, and good morning, everyone. Let's review our fiscal 2025 results and our guidance for 2026 and beyond. In fiscal 2025, we reported adjusted earnings of $275.5 million or $4.44 per share compared to $247.4 million or $4.13 per share in the prior year. These results included a fourth-quarter adjusted loss of $24 million or $0.47 per share, reflecting the seasonality of our businesses. In the quarter, adjusted earnings were $3.5 million or $0.07 per share above last year but fell below our expectations due to higher utility O&M expense. Looking at the full fiscal year for our business segments, gas utilities earned $231 million, up almost 5% or over $10 million from last year, as ISRS recovery in Missouri and new rates in Alabama were partially offset by slightly lower usage in Alabama, higher O&M, and depreciation expense. Usage net of weather mitigation in Missouri was comparable in fiscal 2025 to the prior year. Midstream delivered earnings of $56 million, up almost $23 million from last year, driven by additional capacity and asset optimization at Spire Storage, partially offset by higher operating costs from higher activity and scale. Gas Marketing earned $26 million, an increase of $2.5 million, reflecting the business being well-positioned to create value. This was partially offset by higher storage and transportation fees. Finally, other corporate costs were $38 million, nearly $8 million higher than the prior year. This reflects the absence of the prior year benefit of an interest rate hedge and higher interest expense in the current year. Turning to Slide 10 and our updated capital plan, which includes the anticipated Tennessee spend. Our latest five-year investment plan totals $4.8 billion from fiscal 2026 through fiscal 2030, and we project a ten-year capital plan of $11.2 billion. The majority of this investment, 70%,…

This strong growth is driven by execution on infrastructure investment, constructive regulatory outcomes, and the strategic acquisition of Piedmont, Tennessee to expand our gas utility business. Turning to our business segment guidance on slide 12. We anticipate our gas utilities will generate between $285 million and $315 million next year due to the combined impact of new Missouri rates effective October 24 and anticipated ISRS revenues from a filing expected later this month. New rates in Alabama and Gulf under the RSC mechanism are also expected to benefit earnings beginning in December. Partially offsetting these favorable items, we are targeting O&M expense to increase below the rate of inflation in addition to higher depreciation and interest expense. Turning to gas marketing. We anticipate adjusted earnings of $19 million to $23 million, reflecting expectations on our current market conditions. Midstream adjusted earnings are projected to range between $42 million and $48 million in fiscal 2026, including a full year of storage and pipeline operations. Within the storage business, we expect to realize the full benefit of the Spire Storage West expansion. Offsetting this are higher operating costs, increased interest, and depreciation expense in addition to a decline in year-over-year optimization-related earnings. We anticipate the midstream business mix to be 65% storage and 35% pipeline during fiscal 2026. I would like to note that FERC approved our request to merge the STL and Mogas pipeline with the merger targeted for completion by January 1, 2026. Finally, Corporate and Other is anticipated to be in the range of negative $31 million to negative $37 million, an improvement from last year's loss of $38 million, primarily driven by lower interest expense resulting from reduced long-term debt rates. We have updated our three-year financing plan for our base business as outlined on Slide 13. The…

We will now begin the question and answer session. The first question comes from Julien Dumoulin-Smith with Jefferies. Please go ahead.

Hi, good morning team. It's Paul Zimbardo on for Julian. How are you? Hey, Hi, good morning. Thank you for the update. The first question I have is just if you could give a little bit more details and color on the long-term growth rate. And just really, are you expecting continued improvement in earned ROEs within that path? And just any commentary you can share on how to think about gas marketing midstream growth in that profile as well?

Yes, sure. This is Scott. So clearly we provided two years of guidance on this call. And the primary reason for that is there's a lot of things happening within the business over the next twelve months in this fiscal year. And then using 2027 as perhaps a cleaner year based on the assumptions that we provided in the prepared remarks. So to the point when we think about earned returns within the utility coming out of the Missouri rate case, there's a step up associated with that as we've brought capital into base rates from an extended period over the last several years, capital that had not passed through our ISRS mechanism. And so when we think about earned returns in the utility, particularly in Missouri, we're getting closer to our allowed returns in Missouri. We'll file another case in Missouri in the fall of next year and we'll need to prosecute that case. That case will be based on a future year. But the outcome of that case is not going to be reflected in the FY '27 time period. So when you think about the guide that we're looking at for FY 2027, the earned returns in Missouri will be a little less than what they are in 6% when we think about Alabama, the earned returns are close to or allowed. As we have a forward-looking mechanism there that works annually and we're currently in the process of having it reviewed right now. Marketing and midstream. So as we think about the guide, clearly all of midstream is in the guide for the year. But as we said on the call, we pulled storage out for FY 2027. And then marketing, as you know, we rebase every year and it's not part of our growth story. When we think about how it supports the overall growth picture or at least the guide for 5% to 7%.

Great. So it does sound like you would expect using that '27 base some tailwinds on earned ROE based on that cadence you described, if that's fair?

Yes. Yes.

That's correct. Okay.

Okay.

Great. Then any additional detail on the FFO to debt target, the 15%, 16%? Just how does that also evolve if we use a 2027 kind of jumping-off point? Where in that range do you expect to be? And how does that trend over time? Thank you.

Yes. Paul, as we've talked, we're at the bottom of the threshold ranges now. But that's a lot of that is premised on just getting back into the right recovery path for Missouri. And so we see a pretty steady movement up into the middle of the threshold bands, both Moody's and S&P going forward, really premised on the recoveries in Missouri. But we're also taking, I think, a very deliberate financing tact with Tennessee to make sure that that is also credit positive as well. Indeed. Yes. Okay. Thank you. That makes sense.

Appreciate it.

Thanks, Paul.

The next question is from Gabe Moreen with Mizuho. Please go ahead.

Hey, good morning everybody. I just wanted to ask a question on the financing mix and timing. Adam, has anything shifted in your mind, I guess, since you announced the acquisition, just kind of your latest thoughts? You mentioned the minimal common equity issuance. Just maybe latest thoughts on the financing mix and timing.

Yes, no big update. We continue to feel confident about taking a very balanced mix of debt and equity. Obviously, we're taking on these assets debt-free. So we need to recapitalize rate base at Tennessee. So you can expect that. And then we obviously, part of that is our evaluation of the storage business and more to come there. We don't have an announcement there, but those are terrific assets and we are seeing quite a bit of interest there. But we will be making an announcement at some point in the not too distant future.

Gotcha. Thanks, Adam. I appreciate that. And then maybe if I can ask just on your O&M assumptions kind of going forward, it seems like 2026 you're below and aiming to stick below inflation. Does that stick for the rest of the plan? And I guess, just have an overarching basis with the interaction or sorry. The integration planning going on between the utilities any best practices or major initiatives that you think you'd share between the two that would, I guess, keep a lid on O&M?

Gabe, this is Scott. Great question. Yes, O&M, our guide for this year is to be below the rate of inflation. And historically, that's been our guide year over year, and that would be actually our performance this year was below the rate of inflation. When you think about the integration activities, we're in the very early stages, but that is our theme as we step into the integration activities. Anytime we go through these, we look to best practices across both organizations. And as those that know us or have followed our story for a long time, we have been through this before. And, when we do that, we find things that others do well. We want to make sure we incorporate that into our go-forward business. So we'll have more to talk about that as we get a little further into the integration planning and start working more closely with the assets themselves once we close.

Thanks, Scott.

The next question is from Paul Fremont with Ladenburg. Please go ahead.

Thanks. I guess my first question is, with the future test year rate adjustment taking place in 2028, could 2028 be a year that falls outside of that 5% to 7% range?

Given the fact that you'll be further potentially narrowing your under-earning in Missouri. Yeah. Hey, Paul, it's Scott. Maybe Adam and I will both tag team this. I think a couple of things to think about when you pivot to future test year, we're going to bring forward some capital into that process. And so we'll have to get through the process before we know what that will be as well, but within the range of what we're providing, we're basing that based on what we know right now and the best guess that we have. Yeah. We don't get too far ahead of rate making. I think given that that's another couple of years out. But I think your implication, Paul, of a more fully earned ROE is usually the implication around future test year. So we don't want to get ahead of that, but we would expect certainly some improvement there.

And it sounds to me like you're more confident about your decision to sell storage. I think, on the last call, you know, you had indicated that would depend on levels of interest. I assume the levels of interest are strong enough that you now feel that it will be sold.

You know, Paul, we're still in the evaluation process. As I mentioned earlier, we do have seen quite a bit of interest and strong interest in the assets, but more to come there. We'll make an announcement once we get to a conclusion of that process.

Great. And you're expecting to make an announcement one way or another between now and the end of the year, right?

Yes, we're targeting by the end of the calendar year.

And then just going back to sort of your original comments, if you were to sell the storage, the remaining sort of balance of equity and debt, has that changed since your last call?

Well, that certainly figures into the mix of financing. So that we will, I think, once we get to the point of an announcement, we would shed some more light on that.

Okay. And last question, can you be more specific in terms of, in other words, if you're not issuing straight equity, what else would sort of fall into the category of fulfilling your equity needs?

I mean, there are certainly other securities that we would have access to markets to that would provide equity-like coverage there, whether those are equity-linked securities, hybrids, or what have you, but there are some other options there.

And junior subordinated debt, is that included as well?

Yeah. I'm using that sign, you know, along with high. That would use that terminology with the hybrid. Yeah.

Got it. Okay. That's it for me. Congratulations.

Thanks, Paul. Thanks, Paul.

The next question is from Alex Kania with BTIG. Please go ahead.

Good morning. Thanks for taking my question. Just would you mind reminding me again, just on the within midstream, just the rough split? I think it was one-third, two-thirds on, you know, kind of pipelines versus storage. And would that be earnings or would it be EBITDA as well as fair?

Yeah. It's one-third pipeline, two-thirds storage, is kind of the split. And depending on which way you cut the data, it's about the same. So whether it's EBITDA or earnings, about the same.

Great. Thanks. And then, maybe, you know, maybe we're just taking kind of a step too far down that path of an asset sale. But just if there was a decision to move forward with the sale, would that be big enough to sort of change your kind of long-term balance sheet targets, thresholds, and things like that as you look forward?

You know, given the unregulated assets? Yes. I mean, too early to comment. That's part of the evaluation process. There'll be more as we announce the conclusion of the evaluation process.

Okay, great. Thanks. And my last question just is on the transition to the Ford test here in Missouri. You know, do you anticipate, or I guess, do you think that all parties are sort of on the same page in terms of how the process is going to look as they kind of think about the rate making kind of a slightly different paradigm as it's been in the past? Is there any education that needs to be done or any twists that we should be kind of aware of leading up to the filing?

Yes. No. I think you're spot on. It's a case of first impression. And so, all the parties are going to need to work together in order to understand both what the filing requirements would be and how to prosecute inside that paradigm. And so all parties will work together. That's historically how it's worked here. And so we look forward to that process and going through it together.

Great. Thanks very much.

Thanks, Alex.

The next question is from Selman Akyol with Stifel. Please go ahead.

Thank you. Good morning. Two quick ones for me. Maybe you're at the higher end of your growth range. And so could you remind us just in terms of how you think about the dividend in terms of payout ratios and sort of growth going forward?

Yes. Hi, Selman, it's Adam. We would continue to expect the dividend to grow basically at our earnings growth rate. And we do target the kind of the common payout ratio for utilities in that 55% to 65% range.

Very good. And then also as you think about your sort of long-term capital needs and you gave a ten-year sort of outlook. Can you just remind us in terms of how much equity you're thinking about that for overall?

Yes. So we did refresh our financing needs in this, and you can find that at the back of, I think, the earnings deck. But we really continue to see a minimal amount of equity per year that some of that as some additional support for the utility CapEx program, but when I say minimal, it's kind of in that $0 to $50 million range. So not anything particularly significant.

Alright. Thank you very much.

Thank you, Selman.

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

Thank you for joining us this morning. We look forward to speaking with many of you in the coming weeks ahead. Have a good day.

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