SPIRE INC (SR)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in millions, except per share amounts)

This section analyzes the financial condition and results of operations of Spire Inc. (the “Company”), Spire Missouri Inc., and Spire Alabama Inc. Spire Missouri, Spire Alabama and Spire EnergySouth are wholly-owned subsidiaries of the Company. Spire Missouri, Spire Alabama, the subsidiaries of Spire EnergySouth (Spire Gulf and Spire Mississippi), and Spire Tennessee are collectively referred to as the “Utilities.” This section includes management’s view of factors that affect the respective businesses of the Company, Spire Missouri and Spire Alabama, explanations of financial results including changes in earnings and costs from the prior periods, and the effects of such factors on the Company’s, Spire Missouri’s and Spire Alabama’s overall financial condition and liquidity.

Certain matters discussed in this report, excluding historical information, include forward-looking statements. All statements, other than statements of historical fact, including statements regarding our expectations, plans and objectives for future performance, future operating results, earnings guidance, capital investment plans, and the expected timing and benefits of, and risks associated with, acquisitions, dispositions and related integration and transition activities (including the completed acquisition of the Piedmont Tennessee business, the completed sale of Spire Marketing and Spire Storage, and the pending sale of Spire Mississippi), are forward-looking statements. Certain words, such as “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “seek,” “target,” and similar words and expressions identify forward-looking statements that involve uncertainties and risks. Future developments may not be in accordance with our current expectations or beliefs and the effect of future developments may not be those anticipated. Among the factors that may cause results or outcomes to differ materially from those contemplated in any forward-looking statement are:

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Weather conditions and catastrophic events, particularly severe weather in U.S. natural gas producing areas;

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Volatility in gas prices, particularly sudden and sustained changes in natural gas prices, including the related impact on margin deposits associated with the use of natural gas derivative instruments, and the impact on our competitive position in relation to suppliers of alternative heating sources, such as electricity;

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Changes in gas supply and pipeline availability, including as a result of decisions by natural gas producers to reduce production or shut in producing natural gas wells and expiration or termination of existing supply and transportation arrangements that are not replaced with contracts with similar terms and pricing, as well as other changes that impact supply for and access to the markets in which our subsidiaries transact business;

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Acquisitions may not achieve their intended results;

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Legislative, regulatory and judicial mandates and decisions, some of which may be retroactive, including those affecting:

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allowed rates of return and recovery of prudent costs,

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incentive regulation,

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industry structure,

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purchased gas adjustment provisions,

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rate design structure and implementation,

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capital structures established for rate-setting purposes,

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regulatory assets,

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non-regulated and affiliate transactions,

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franchise renewals,

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authorization to operate facilities,

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environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change and pipeline safety and security,

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taxes,

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pension and other postretirement benefit liabilities and funding obligations, or

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accounting standards;

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The results of litigation;

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The availability of and access to, in general, funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) operating cash flow, or (iii) access to the capital markets;

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Retention of, ability to attract, ability to collect from, and conservation efforts of, customers;

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Our ability to comply with all covenants in our indentures and credit facilities, any violations of which, if not cured in a timely manner, could trigger a default of our obligation;

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Energy commodity market conditions;

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Discovery of material weakness in internal controls;

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The disruption, failure or malfunction of our operational and information technology systems, including due to cyberattacks; and

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Employee workforce issues, including but not limited to labor disputes, the inability to attract and retain key talent, and future wage and employee benefit costs, including costs resulting from changes in discount rates and returns on benefit plan assets.

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•
The satisfaction of conditions to, and the timing and completion of, the pending sale of Spire Mississippi (including receipt of required regulatory approvals), and Spire’s ability to realize the anticipated benefits of, and successfully integrate or separate from, the recently completed Piedmont Tennessee Transaction and the Spire Marketing and Spire Storage dispositions;

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s Condensed Consolidated Financial Statements, Spire Missouri’s and Spire Alabama’s Condensed Financial Statements, and the notes thereto.

RECENT EVENTS

Acquisition of Tennessee Piedmont Natural Gas business. On March 31, 2026, Spire completed the acquisition of the Tennessee natural gas business of Piedmont, a wholly owned subsidiary of Duke Energy, for a total cash purchase price of $2.50 billion. Upon closing, Piedmont's Tennessee business began operating as Spire Tennessee. The acquisition increased Spire's scale of regulated utility operations and expanded its presence in the growing Middle Tennessee region.

Sale of Spire Marketing. On March 28, 2026, Spire, entered into an agreement to sell Spire Marketing Inc., to Boardwalk. The transaction closed on April 30, 2026, for cash consideration of approximately $212, subject to customary post-closing adjustments. Spire Marketing has been classified as a discontinued operation.

Sale of Spire Storage. On April 14, 2026, Spire, entered into an agreement to sell Spire Storage to Subterra Energy Holdings, LLC an affiliate of I Squared Capital. The transaction closed on June 30, 2026 and provides for total consideration of approximately $657, consisting of $607 payable in cash and a $50 deferred consideration payment to be paid on or before September 30, 2027.

Sale of Spire Mississippi. On April 21, 2026, Spire entered into an agreement to sell Spire Mississippi Inc., to Delta Utilities. The transaction provides for a cash purchase price of $75.0, subject to customary purchase price adjustments, and is expected to close during the first quarter of Spire’s fiscal year 2027, subject to regulatory approval by the MSPSC and other customary closing conditions.

Sale of Non-Core Equity Interest. During the second quarter of fiscal 2026, the Company completed the sale of a non-core equity interest that was outside its reportable segments. The investment had previously been accounted for under the equity method and was carried at an immaterial value. The Company received approximately $30.0 in cash proceeds.

For additional information on the transaction above, see Note 2 – Acquisitions and Note 3 - Divestitures.

OVERVIEW

Due to recently announced corporate transactions, the Company has one reportable segment: Gas Utility. See Note 12 - Segment Information for additional information on Spire’s segment structure. Spire’s earnings are derived primarily from its Gas Utility segment, which reflects the regulated activities of the Utilities. Due to the seasonal nature of the Utilities’ business and the volumetric rate designs of the Utilities, earnings of Spire and each of the Utilities are typically concentrated during the heating season of November through April each fiscal year.

Gas Utility – Spire Missouri

Spire Missouri is Missouri’s largest natural gas distribution utility and is regulated by the MoPSC. Spire Missouri serves St. Louis, Kansas City, and other areas throughout the state. Spire Missouri purchases natural gas in the wholesale market from producers and marketers and ships the gas through interstate pipelines into its own distribution facilities for sale to residential, commercial and industrial customers. Spire Missouri also transports gas through its distribution system for certain larger customers who buy their own gas on the wholesale market. Spire Missouri delivers natural gas to customers at rates and in accordance with tariffs authorized by the MoPSC. The earnings of Spire Missouri are primarily generated by the sale of heating energy.

Gas Utility – Spire Alabama

Spire Alabama is the largest natural gas distribution utility in the state of Alabama and is regulated by the APSC. Spire Alabama’s service territory is located in central and northern Alabama. Among the cities served by Spire Alabama are Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabama purchases natural gas through interstate and intrastate suppliers and distributes the purchased gas through its distribution facilities for sale to residential, commercial, and industrial customers, and other end users of natural gas. Spire Alabama also transports gas through its distribution system for certain large commercial and industrial customers

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for a transportation fee. For most of these transportation service customers, Spire Alabama also purchases gas on the wholesale market for sale to the customer upon delivery to the Spire Alabama distribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.

Gas Utility - Spire Tennessee

Spire Tennessee is the largest investor-owned natural gas distribution utility in the state of Tennessee and is regulated by the TPUC. Spire Tennessee is a regulated natural gas utility engaged in the purchase, retail distribution, and sale of natural gas to more than 200,000 customers primarily in the Nashville metropolitan area and surrounding communities in Tennessee. Spire Tennessee delivers natural gas to customers at rates and in accordance with tariffs authorized by the TPUC. The earnings of Spire Tennessee are primarily generated by the sale of heating energy.

Gas Utility – Spire EnergySouth

Spire Gulf and Spire Mississippi are utilities engaged in the purchase, retail distribution and sale of natural gas to approximately 100,000 customers in southern Alabama and south-central Mississippi. Spire Gulf is regulated by the APSC, and Spire Mississippi is regulated by the MSPSC.

Other

Other components of the Company’s consolidated information include Spire’s subsidiaries engaged in the transportation of natural gas, risk management, among other activities, and unallocated corporate items, including certain debt and associated interest costs.

NON-GAAP MEASURES

Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of adjusted earnings, adjusted earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in millions, except per share and per unit amounts)

INTRODUCTION

This section analyzes the financial condition and results of operations of Spire, Spire Missouri, and Spire Alabama. Refer to Item 1, Business, for descriptions of the businesses and the Company’s reportable segments. This Item 7 includes management’s discussion and analysis of financial results including changes in earnings and costs from the prior periods, as well as their financial condition and liquidity. Unless otherwise indicated, references to years herein are references to the fiscal years ending September 30 for the Company and its subsidiaries.

Reference is made to “Forward-Looking Statements” and Item 1A, Risk Factors, in Part I, which describe important factors that could cause actual results to differ from expectations and non-historical information contained herein. In addition, the following discussion should be read in conjunction with the audited financial statements and accompanying notes thereto of Spire, Spire Missouri and Spire Alabama included in Item 8, Financial Statements and Supplementary Data.

NON-GAAP MEASURES

Net income, earnings per share and operating income reported by Spire, Spire Missouri and Spire Alabama are determined in accordance with GAAP. Spire, Spire Missouri and Spire Alabama also provide the non-GAAP financial measures of adjusted earnings, adjusted earnings per share and contribution margin. Management and the Board of Directors use non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting, to determine incentive compensation and to evaluate financial performance. These non-GAAP operating metrics should not be considered as alternatives to, or more meaningful than, the related GAAP measures. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are provided on the following pages.

Adjusted Earnings and Adjusted Earnings Per Share

Adjusted earnings and adjusted earnings per share are non-GAAP measures that exclude from net income, as applicable, the impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities, and the largely non-cash impacts of impairments and other non-recurring or unusual items such as certain regulatory, legislative or GAAP standard-setting actions. In addition, adjusted earnings per share would exclude the impact, in the fiscal year of issuance, of any shares issued to finance acquisitions that have yet to be included in adjusted earnings.

The fair value and timing adjustments are made in instances where the accounting treatment differs from what management considers the economic substance of the underlying transaction, including the following:

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Net unrealized gains and losses on energy-related derivatives that are required by GAAP fair value accounting associated with current changes in the fair value of financial and physical transactions prior to their completion and settlement. These unrealized gains and losses result primarily from two sources:

1)
changes in the fair values of physical and/or financial derivatives prior to the period of settlement; and

2)
ineffective portions of accounting hedges, required to be recorded in earnings prior to settlement, due to differences in commodity price changes between the locations of the forecasted physical purchase or sale transactions and the locations of the underlying hedge instruments;

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Lower of cost or market adjustments to the carrying value of commodity inventories resulting when the net realizable value of the commodity falls below its original cost, to the extent that those commodities are economically hedged; and

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Realized gains and losses resulting from the settlement of economic hedges prior to the sale of the physical commodity.

These adjustments eliminate the impact of timing differences and the impact of current changes in the fair value of financial and physical transactions prior to their completion and settlement. Unrealized gains or losses are recorded in each period until being replaced with the actual gains or losses realized when the associated physical transactions occur. Management believes that excluding the earnings volatility caused by recognizing changes in fair value prior to settlement and other timing differences associated with related purchase and sale transactions provides a useful representation of the economic effects of only the actual settled transactions and their effects on results of operations. While management uses these non-GAAP measures to evaluate all of its businesses, the net effect of these fair value and timing adjustments on the Utilities’ earnings is minimal because gains or losses on their natural gas derivative instruments are deferred pursuant to state regulation.

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Contribution Margin

In addition to operating revenues and operating expenses, management also uses the non-GAAP measure of contribution margin when evaluating results of operations. Contribution margin is defined as operating revenues less natural gas costs and gross receipts tax expense. The Utilities pass to their customers (subject to prudence review by, as applicable, the MoPSC, APSC or MSPSC) increases and decreases in the wholesale cost of natural gas in accordance with their PGA clauses or GSA riders. The volatility of the wholesale natural gas market results in fluctuations from period to period in the recorded levels of, among other items, revenues and natural gas cost expense. Nevertheless, increases and decreases in the cost of gas associated with system gas sales volumes and gross receipts tax expense (which are calculated as a percentage of revenues), with the same amount (excluding immaterial timing differences) included in revenues, have no direct effect on operating income. Therefore, management believes that contribution margin is a useful supplemental measure, along with the remaining operating expenses, for assessing the Company’s and the Utilities’ performance.

PENDING ACQUISITION

On July 27, 2025, Spire entered into an agreement with Piedmont Natural Gas, a wholly-owned Subsidiary of Duke Energy, to acquire its Tennessee natural gas business that serves more than 200,000 customers in the Nashville area (the “Transaction”). The strategic rationale for the Company is described below:

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We expect the Transaction to allow Spire to significantly expand its regulated utility footprint in high-quality jurisdictions and significantly increase the scale of its regulated business while delivering on Spire’s commitment to growth and creating long-term shareholder value.

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We expect the Transaction to provide robust growth driven by customer additions and system integrity and reliability investments, aligned with Spire’s investment strategy. These long-term investments are expected to be supported by Tennessee’s constructive regulatory environment support of natural gas.

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We expect the Transaction to support Spire’s long-term adjusted earnings per share growth expectations and provide meaningful investment opportunities. The acquisition is expected to generate incremental cash flow to support investment in the business, shareholder returns and dividend growth.

The stated purchase price of the Transaction is $2.48 billion subject to adjustment, including adjustments based on net working capital, regulatory assets and liabilities and capital expenditures at closing. The Transaction is supported by a fully committed bridge facility with Bank of Montreal ("BMO") Capital Markets Corp. for the entire purchase price.

We expect permanent financing for the acquisition to be provided through a balanced mix of debt, equity, and hybrid securities. As part of the financing plan, Spire is considering the sale of its natural gas storage facilities, Spire Storage West LLC and Spire Storage Salt Plains LLC, to help fund the acquisition. The sale would be subject to board approval and customary closing conditions, including regulatory approval.

The transaction is expected to close in the first quarter of calendar 2026, subject to customary closing conditions, including approval by the Tennessee Public Utility Commission ("TPUC"). On October 31, 2025, FERC approved the transfer of gas supply contracts to Spire. The applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired without objection, satisfying one of the key regulatory requirements for the transaction.

EARNINGS

This section contains discussion and analysis of the results for the year ended September 30, 2025 compared to the results for the year ended September 30, 2024. The discussion and analysis of the results for the year ended September 30, 2024 compared to the results of the year ended September 30, 2023 can be found in Part II, Item 7 of Spire Inc.’s fiscal 2024 Annual Report on Form 10-K, filed with the SEC on November 20, 2024.

The following sections present and discuss the financial metrics in total and by registrant and segment.

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Spire

The following tables reconcile the Company’s adjusted earnings to net income.

*Income tax adjustments inclu

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