SPIRE INC Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)
(in millions of dollars, 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 EnergySouthare wholly owned subsidiaries of the Company. Spire Missouri, Spire Alabama and the subsidiaries of Spire EnergySouth(Spire Gulf and Spire Mississippi) 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'sand Spire Alabama's overall financial condition and liquidity. Certain matters discussed in this report, excluding historical information, include 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:
• Weather conditions and catastrophic events, in particular weather conditions
• Impacts related to the COVID-19 pandemic and uncertainties as to their
continuous duration and severity;
• The volatility of gas prices, in particular sudden and sustained changes in
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,
• Changes in gas supply and pipeline availability, including as a result of
decisions by natural gas producers to reduce or stop production
natural gas wells and the expiration or termination of existing supply and
transportation arrangements that are not replaced by contracts with
conditions and prices (including following a failure of the Spire STL
Pipeline to obtain permanent authorization from the
changes that impact supply for and access to the markets in which our subsidiaries transact business; • Acquisitions may not achieve their intended results;
• Legislative, regulatory and judicial mandates and decisions, some of which may
be retroactive, including those affecting: ? allowed rates of return and recovery of prudent costs, ? incentive regulation, ? industry structure, ? purchased gas adjustment provisions, ? rate design structure and implementation, ? capital structures established for rate-setting purposes, ? regulatory assets, ? non-regulated and affiliate transactions, ? franchise renewals, ? authorization to operate facilities, ? environmental or safety matters, including the potential impact of
legislative and regulatory measures related to climate change and pipeline
safety and security, ? taxes, ? pension and other postretirement benefit liabilities and funding obligations, or ? accounting standards; • The results of litigation; • The availability of and access to, in general, funds to meet our debt
obligations before 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; • Retention of, ability to attract, ability to collect from, and conservation efforts of, customers; 43
• Our ability to comply with all covenants in our indentures and credit
facilities, any violation of which, if not corrected in a timely manner, could
trigger a default of our obligation; • Energy commodity market conditions; • Discovery of material weakness in internal controls;
• Disruption, failure or malfunction of our operational and information systems
technological systems, including due to cyberattacks; and
• Labor issues, including but not limited to labor disputes,
inability to attract and retain key talent, as well as future salaries and employees
benefit costs, including costs resulting from changes in discount rates and
return on benefit plan assets.
The MD&A and discussion of financial condition and results of operations should be read in conjunction with the company’s condensed consolidated financial statements, the condensed financial statements of Spire Missouri and Spire Alabama and the accompanying notes.
The Company has two reportable segments: Gas Utility and Gas Marketing. Nearly all of Spire's earnings are derived from its Gas Utility segment, which reflects the regulated activities of the Utilities. Due to the seasonal nature of the Utilities' business and the Spire Missouri rate design, earnings of Spire and each of the Utilities are typically concentrated during the heating season of November through April each fiscal year.
Gas Utilities – Spire Missouri
Missouriis Missouri'slargest natural gas distribution utility and is regulated by the MoPSC. Spire Missouriserves St. Louis, Kansas City, and other areas throughout the state. Spire Missouripurchases 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 Missourialso transports gas through its distribution system for certain larger customers who buy their own gas on the wholesale market. Spire Missouridelivers 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 Utilities – Spire Alabama
Alabamais the largest natural gas distribution utility in the state of Alabamaand is regulated by the APSC. Spire Alabama'sservice territory is located in central and northern Alabama. Among the cities served by Spire Alabamaare Birmingham, the center of the largest metropolitan area in the state, and Montgomery, the state capital. Spire Alabamapurchases 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 Alabamaalso transports gas through its distribution system for certain large commercial and industrial customers for a transportation fee. Effective December 1, 2020, 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 Alabamadistribution system. All Spire Alabama services are provided to customers at rates and in accordance with tariffs authorized by the APSC.
Gas service –
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
Alabamaand south-central Mississippi. Spire Gulf is regulated by the APSC, and Spire Mississippi is regulated by the MSPSC. 44 --------------------------------------------------------------------------------
Spire Marketing is engaged in the marketing of natural gas and related activities on a non-regulated basis and is reported in the Gas Marketing segment. Spire Marketing markets natural gas throughout the
U.S.It holds firm transportation and storage contracts in order to effectively manage its transactions with counterparties, which primarily include producers, municipalities, electric and gas utility companies, and large commercial and industrial customers. Other
Other elements of the Company’s consolidated information include:
• unallocated corporate elements, including certain associated debts and interests
(“Spire Storage”), described below; and
• Spire’s subsidiaries engaged in the operation of a propane pipeline and the risk
management, among other activities.
Spire STL Pipeline is a wholly owned subsidiary of Spire which owns and operates a 65-mile pipeline connecting the
Rockies Express Pipelinein Scott County, Illinois, to delivery points in St. Louis County, Missouri, including Spire Missouri'sstorage facility. The pipeline is under the jurisdiction of the FERCand is currently permitted to deliver natural gas supply into eastern Missouriunder a temporary certificate authorization. Spire STL Pipeline's operating revenue is derived primarily from Spire Missouri as its foundation shipper. Spire Storage is engaged in the storage of natural gas in the western region of the United States. The facility consists of two storage fields operating under one FERCmarket-based rate tariff.
The outbreak of coronavirus disease 2019 (COVID-19) has adversely impacted economic activity and conditions worldwide. We are continuing to assess the developments involving our workforce, customers and suppliers, as well as the response of federal and state authorities, our regulators and other business and community leaders. The Company has implemented what we believe to be appropriate procedures and protocols to ensure the safety of our customers, suppliers and employees. Impacts on our results of operations from COVID-19 have been minimal, partly as a result of regulatory recovery mechanisms and approvals. The Company is participating in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provisions allowing for a payroll tax deferral which did not have an impact on our results of operations but deferred the payment of the Company's portion of certain payroll taxes until late in fiscal 2021 and 2022. Although the Company does not currently expect to seek relief under any other CARES Act provisions, we will continue to monitor all pending and future federal, state and local efforts related to the COVID-19 health crisis and assess our need and, as applicable, eligibility for any such relief.
MESURES NON CONFORMES AUX PCGR
Net income, earnings per share and operating income reported by Spire, Spire
Missouriand 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 net economic earnings, net economic 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. 45 --------------------------------------------------------------------------------
Bénéfice économique net et bénéfice économique net par action
Net economic earnings and net economic earnings per share are non-GAAP measures that exclude from net income 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, net economic 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 net economic 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:
• Gains et pertes nets non réalisés sur les dérivés liés à l’énergie
requis par les PCGR comptabilisation à la juste valeur associée aux changements actuels de
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) variations des justes valeurs des dérivés physiques et/ou financiers
prior to the period of settlement; and
2) les parties inefficaces des couvertures comptables, devant être enregistrées
earnings prior to settlement, due to differences in commodity
changes between the locations of the forecasted physical
sale transactions and the locations of the underlying hedge instruments;
• Le moindre des ajustements du coût ou du marché à la valeur comptable de la marchandise
les stocks résultant de la baisse de la valeur nette de réalisation de la marchandise
below its original cost, to the extent that those commodities are economically hedged; and
• Gains et pertes réalisés résultant du règlement des couvertures économiques
avant la vente de la marchandise physique.
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.
Marge de contribution
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. 46
BÉNÉFICES – TROIS MOIS CLOS
Revenu net et gains économiques nets
Les tableaux suivants rapprochent les bénéfices économiques nets de la société avec le chiffre GAAP le plus comparable, le bénéfice net.
Per Diluted Common Gas Utility Gas Marketing Other Total Share** Three Months Ended
December 31, 2021Net Income (Loss) [GAAP] $63.1$(2.3) $(5.1) $55.7 $1.01Adjustments, pre-tax: Fair value and timing adjustments - 3.7 - 3.7 0.07 Income tax adjustments* 4.1 (0.9 ) - 3.2 0.06 Net Economic Earnings (Loss) [Non-GAAP] $67.2$0.5
Three Months Ended
December 31, 2020Net Income (Loss) [GAAP] $ 76.5$ 15.2 $ (2.8 ) $ 88.9 $ 1.65Adjustments, pre-tax: Fair value and timing adjustments (0.1 ) (15.9 ) - (16.0 ) (0.31 ) Income tax adjustments* - 4.0 - 4.0 0.08 Net Economic Earnings (Loss) [Non-GAAP] $ 76.4$ 3.3 $ (2.8 ) $ 76.9 $ 1.42
* Income tax adjustments include amounts calculated by applying the
and the local income tax rates applicable to ordinary income to the amounts of
pre-tax reconciling items, and for fiscal year 2022, include a Spire Missouri
** The net economic result per share is calculated by replacing the consolidated net result
result with consolidated net economic result according to GAAP diluted result
per share, which includes reductions for cumulative preferred shares
dividends and participating shares.
Note: In the following discussion, all references to earnings (loss) per share and net economic earnings per share refer to earnings (loss) per common share and net economic earnings (loss) per common share.
Spire had net income of
$55.7for the three months ended December 31, 2021, compared with net income of $88.9for the three months ended December 31, 2020. Income per diluted share was $1.01for the current quarter compared to income of $1.65per diluted share for the prior year quarter. The net income decline of $33.2was primarily driven by a $17.5reduction in the Gas Marketing segment and $13.4lower performance in the Gas Utility segment. Spire's net economic earnings for the first quarter were $62.6( $1.14per diluted share), compared to $76.9( $1.42per diluted share) in the prior year, reflecting lower earnings at Gas Utility, combined with lower Gas Marketing results and a decline in Other, as reflected in the above table. These impacts are described in further detail below.
Net economic earnings for the Gas Utility segment decreased
$9.2from the first quarter of the prior fiscal year, as all Utilities reported decreases versus prior year performance. Spire Missourideclined by $7.1, Spire Alabama decreased $1.5, and the subsidiaries of EnergySouth reported a $0.6decrease versus the prior year quarter. This decline was primarily the result of unseasonably warm weather in the Utility territories and higher depreciation and amortization costs. These impacts are discussed in further detail below. 47 --------------------------------------------------------------------------------
The Gas Marketing segment’s net economic profit in the first quarter was
For the three months ended
Operating income and expenses and contribution margin
Reconciliations of the Company’s contribution margin to the most directly comparable GAAP measure are provided below.
Gas Utility Gas Marketing Other Eliminations Consolidated Three Months Ended December 31, 2021 Operating Income (Loss) [GAAP]
$ 94.4$ (3.1 ) $ 4.0$ - $ 95.3Operation and maintenance expenses 107.3 2.7 10.0 (3.6 ) 116.4 Depreciation and amortization 54.6 0.3 2.0 - 56.9 Taxes, other than income taxes 37.0 - 0.6 - 37.6 Less: Gross receipts tax expense (21.7 ) (0.2 ) - - (21.9 ) Contribution Margin [Non-GAAP] 271.6 (0.3 ) 16.6 (3.6 ) 284.3 Natural gas costs 210.2 48.0 - (9.0 ) 249.2 Gross receipts tax expense 21.7 0.2 - - 21.9 Operating Revenues $ 503.5$ 47.9 $
Three Months Ended
December 31, 2020Operating Income [GAAP] $ 106.8$ 20.3 $ 5.8$ - $ 132.9Operation and maintenance expenses 103.0 3.3 8.6 (3.3 ) 111.6 Depreciation and amortization 48.6 0.3 1.9 - 50.8 Taxes, other than income taxes 35.5 0.2 0.4 - 36.1 Less: Gross receipts tax expense (21.7 ) - - - (21.7 ) Contribution Margin [Non-GAAP] 272.2 24.1 16.7 (3.3 ) 309.7 Natural gas costs 204.3 0.7 - (23.8 ) 181.2 Gross receipts tax expense 21.7 - - - 21.7 Operating Revenues $ 498.2$ 24.8 $ 16.7 $ (27.1 ) $ 512.6Consolidated Spire reported operating revenue of $555.4for the three months December 31, 2021, a $42.8increase versus the prior year quarter. Both the Gas Utility and Gas Marketing segments experienced year-over-year increases in operating revenues. Spire's contribution margin decreased $25.4compared with last year, with decreases of $24.4in the Gas Marketing segment combined with marginal decreases for both the Gas Utility segment and Other (STL Pipeline and Spire Storage). Depreciation and amortization expenses were up $6.1, reflecting higher Gas Utility expenses. Gas Utility operation and maintenance (O&M) expenses of $107.3for the quarter were $1.6higher than last year, after removing the $1.7transfer of year-over-year nonservice postretirement benefit costs to other expense below the operating income line (the "Nonservice Cost Transfer") and $1.0of non-operational overheads charged to O&M as a result of the MoPSC amended report and order effective December 23, 2021for Spire Missouri (discussed in Note 4 , Regulatory Matters, of the Notes to Financial Statements in Item 1). These impacts are described in further detail below. 48 --------------------------------------------------------------------------------
Operating Revenues - Gas Utility operating revenues for the three months ended
December 31, 2021, were $503.5, or $5.3higher than the same period in the prior year. The increase in Gas Utility operating revenues was attributable to the following factors:
Alabama- RSE adjustments, net
(5.5 ) Spire
Missouriand Spire Alabama - Off-system sales and capacity release (4.3 ) All other factors (1.3 ) Total Variation $ 5.3The Gas Utility segment benefited $12.1through higher gas cost recoveries, $3.4in net rate adjustments under the RSE mechanism at Spire Alabama, and a $0.9increase in ISRS revenues. These positive impacts were mostly offset by a $5.5reduction attributable to volumetric usage and a $4.3reduction related to lower off-system sales. Weather in the current year quarter across our Utility footprint was 19% warmer than prior year and 26% warmer than normal.
Contribution margin – Gas utility contribution margin was
Alabama- Rate adjustment under RSE mechanism, net $
(1.8 ) Spire
Missouriand Spire Alabama - Off-system sales and capacity release (0.8 ) All other factors (2.1 ) Total Variation $ (0.6 )As previously noted, warmer weather impacted commercial and industrial sales although weather mitigation lessened the impact on residential sales. This decrease was partially offset by $3.2net favorable rate adjustments under the RSE mechanism at Spire Alabama and Spire Missouri's $0.9ISRS increase. Operating Expenses - O&M expenses for the three months ended December 31, 2021, were $4.3higher than the prior year. After removing the $1.7impact of the Nonservice Cost Transfer and $1.0of non-operational overheads mentioned earlier, expenses increased $1.6. The increase was largely due to modestly higher costs in operations, and employee-related expenses, partly offset by lower bad debt expense. Depreciation and amortization expenses for the quarter were $6.0higher than the same period in the prior year primarily driven by continued infrastructure capital expenditures across all the Utilities.
Operating revenue – Increase in operating revenue
Contribution Margin - Gas Marketing contribution margin during the quarter ended
December 31, 2021, decreased $24.4from the same period in the prior year, due principally to a $19.6unfavorable change in derivative activity and fair value measurements. The remaining decrease of $4.8reflects both less favorable market conditions and lower storage margins.
Consolidated interest charges increased by
$2.9, principally due to higher Gas Utilitieslong-term debt and higher average short term borrowings in the current year. For the three months ended December 31, 2021and 2020, average short-term borrowings were $808.6and $734.7, respectively, and the average interest rate on these borrowings was 0.4% in both periods. 49 --------------------------------------------------------------------------------
Consolidated income tax for the three months ended
December 31, 2021, decreased $4.2versus the same period in the prior year. The variance is due principally to the lower pre-tax book income, offset partly by a $4.1Spire Missouri regulatory adjustment. Spire MissouriThree Months Ended December 31, 2021 2020 Operating Income [GAAP] $ 65.4 $ 75.5 Operation and maintenance expenses 66.3
Depreciation and amortization 34.2
Taxes, other than income taxes 25.7
Less: Gross receipts tax expense (14.9 ) (15.2 ) Contribution Margin [Non-GAAP] 176.7 178.7 Natural gas costs 156.3 161.6 Gross receipts tax expense 14.9 15.2 Operating Revenues $ 347.9 $ 355.5 Net Income $ 45.3 $ 56.6 Operating revenues for the three months ended
December 31, 2021, decreased $7.6from the same period in the prior year primarily due to $14.7in unfavorable volumetric impacts (including weather mitigation), and a $2.8decrease related to lower off-system sales, primarily due to warmer weather. Contribution margin for the three months ended December 31, 2021, decreased $2.0from the same period in the prior year, largely the result of a $1.0decrease due volumetric impacts (including weather mitigation) and $0.6lower off-system sales. O&M expenses increased $3.4versus the prior year. After removing the $1.7year-over-year impact of the Nonservice Cost Transfer and $1.0of non-operational overheads mentioned earlier, the increase was $0.7. The increase was largely due to modestly higher costs in administrative and employee-related expenses. Depreciation and amortization increased $3.8versus the prior-year quarter due to ongoing capital investments.
Other income increased
Resulting net profit for the quarter ended
compared to the quarter of the previous year.
Degree days in Spire Missouri's service areas during the three months ended
December 31, 2021, were 25.9% warmer than normal, and 19.5% warmer than the same period last year, resulting in lower usage on a year-over-year comparative basis. Spire Missouri'stotal system therms sold and transported were 439.6 million for the quarter, compared with 522.8 million for the same period in the prior year. Total off-system therms sold and transported were 2.1 million for the quarter, compared with 8.5 million a year ago. 50 --------------------------------------------------------------------------------
AlabamaThree Months Ended December 31, 2021 2020 Operating Income [GAAP] $ 21.1 $ 22.5 Operation and maintenance expenses 34.5
Depreciation and amortization 16.5
Taxes, other than income taxes 9.0
Less: Gross receipts tax expense (5.7 ) (5.3 ) Contribution Margin [Non-GAAP] 75.4 73.2 Natural gas costs 45.5 35.1 Gross receipts tax expense 5.7 5.3 Operating Revenues $ 126.6 $ 113.6 Net Income $ 12.2 $ 13.7 Operating revenues for the three months ended
December 31, 2021, increased $13.0from the same period in the prior year. The change in operating revenue was principally due to $9.2attributable to favorable weather usage impacts, net favorable rate adjustments under the RSE mechanism of $3.4, higher gas cost recoveries of $1.5, slightly offset by a decrease in off-system sales totaling $1.5. Contribution margin was $2.2higher versus the prior-year quarter, primarily driven by the favorable net rate adjustments under the RSE mechanism of $3.2, partly offset by $0.8weather/usage impacts and $0.2lower off-system sales. O&M expenses for the three months ended December 31, 2021, increased $1.7versus the prior-year quarter, primarily due to higher employee-based costs that were only partly offset by lower bad debt expense. Depreciation and amortization expenses were up $1.5, the result of continued investment in infrastructure upgrades.
For the quarter ended
compared to the quarter of the previous year.
As measured in degree days, temperatures in Spire Alabama's service area during the three months ended
December 31, 2021, were 10.5% warmer than normal but 6.1% colder than a year ago. Spire Alabama'stotal system therms sold and transported were 257.8 million for the three months ended December 31, 2021, compared with 244.4 million for the same period in the prior year. Total off-system therms sold and transported were 0.1 million for the quarter, compared with 13.6 million a year ago.
CASH AND CAPITAL RESOURCES
Recent Cash Flows Three Months Ended December 31, Cash Flow Summary 2021 2020
Net cash (used in) provided by operating activities
Net cash used in investing activities
(143.1 ) (163.6 ) Net cash provided by financing activities 376.9 155.4 For the three months ended
December 31, 2021, net cash from operating activities decreased $237.5from the corresponding period of fiscal 2021. In addition to the decline in net income of $33.2, the change was due principally to regulatory timing and fluctuations in working capital items, as discussed below in the Future Cash Requirements section. Those typical variance drivers have been impacted by Spire Missouri's Operational Flow Order and Filing Adjustment Factor put into place last year, as discussed in Note 4 , Regulatory Matters, of the Notes to Financial Statements in Item 1. 51 -------------------------------------------------------------------------------- For the three months ended December 31, 2021, net cash used in investing activities was $20.5less than for the same period in the prior year, primarily driven by a $17.9decrease in capital expenditures. The primary drivers of the lower capital expenditures were a $9.0decline related to Spire Storage and Spire STL Pipeline, and a $8.2spending decline at Gas Utility. Lastly, for the three months ended December 31, 2021, net cash provided by financing activities was up $221.5versus net cash provided for the three months ended December 31, 2020. Current year long-term debt issuances were $300.0, or $150.0higher than a year ago, and net short-term debt issuances rose $125.9in the current period. Partially offsetting these fluctuations was a $50.4increase in long-term debt repayments during the first quarter of fiscal 2022 versus the same prior year period. Future Cash Requirements The Company's short-term borrowing requirements typically peak during colder months when the Utilities borrow money to cover the lag between when they purchase natural gas and when their customers pay for that gas. Changes in the wholesale cost of natural gas (including cash payments for margin deposits associated with Spire Missouri's use of natural gas derivative instruments), variations in the timing of collections of gas cost under the Utilities' PGA clauses and GSA riders, the seasonality of accounts receivable balances, and the utilization of storage gas inventories cause short-term cash requirements to vary during the year and from year to year, and may cause significant variations in the Company's cash provided by or used in operating activities. Spire's material cash requirements as of December 31, 2021, are related to capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations, and dividends. Except for Spire Missouri's December 2021issuance of $300.0of floating rate bonds due in December 2024, there were no material changes outside the ordinary course of business from the future cash requirements discussed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Total Companycapital expenditures are planned to be $570for fiscal 2022.
Source of funds
It is management's view that the Company, Spire Missouri and Spire Alabama have adequate access to capital markets and will have sufficient capital resources, both internal and external, to meet anticipated requirements. Their debt is rated by two rating agencies: Standard & Poor's Corporation ("S&P") and Moody's Investors Service ("Moody's"). As of
December 31, 2021, the debt ratings of the Company, Spire Missouri and Spire Alabama (shown in the following table) remain at investment grade with a stable outlook (other than Moody's negative outlook for Spire Missouri debt). S&P Moody's
BBB Ba1 Spire Inc. short-term debt A-2 P-2
Cash and cash equivalents
Bank deposits were used to meet the company’s working capital requirements. Spire had no short-term cash investments
Short term debt
The Company's short-term cash requirements can be met through the sale of up to
$975.0of commercial paper or through the use of Spire's $975.0revolving credit facility. For information about short-term borrowings, see Note 5 of the Notes to Financial Statements in Item 1. 52 --------------------------------------------------------------------------------
Long-term debt and equity
December 31, 2021, including the current portion but excluding unamortized discounts and debt issuance costs, Spire had long-term debt totaling $3,258.9, of which $1,648.0was issued by Spire Missouri, $575.0was issued by Spire Alabama, and $205.9was issued by other subsidiaries. For information about long-term debt issued this fiscal year, see Note 5 of the Notes to Financial Statements in Item 1. Spire Missouriwas authorized by the MoPSC to issue registered securities (first mortgage bonds, unsecured debt and preferred stock), common stock, and private placement debt in an aggregate amount of up to $660.0for financings placed any time before September 30, 2023. As of December 31, 2021, $55.0remained available under this authorization, and Spire Missouri has applied for a new $800.0authorization over three years. Spire Alabamahas no standing authority to issue long-term debt and must petition the APSC for each planned issuance. Spire has a shelf registration statement on Form S-3 on file with the U.S. Securities and Exchange Commission(SEC) for the issuance and sale of up to 250,000 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 176,456 and 170,904 shares at December 31, 2021and January 28, 2022, respectively, remaining available for issuance under this Form S-3. Spire and Spire Missouri also have a universal shelf registration statement on Form S-3 on file with the SECfor the issuance of various equity and debt securities, which expires on May 14, 2022. On February 6, 2019, Spire entered into an "at-the-market" equity distribution agreement, supplemented as of May 14, 2019, pursuant to which the Company may offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $150.0. Those shares are issued pursuant to Spire's universal shelf registration statement referenced above and a prospectus supplement dated May 14, 2019. Under this program, a total of 626,249 shares were issued in fiscal 2019 and 2020, and as of December 31, 2021, Spire can still issue shares having an aggregate offering price of up to $102.2.
Taking into account the current portion of long-term debt, the consolidated long-term capitalization of the Company consisted of 45% equity at
The Utilities and other Spire subsidiaries own and operate natural gas distribution, transmission and storage facilities, the operations of which are subject to various environmental laws, regulations, and interpretations. While environmental issues resulting from such operations arise in the ordinary course of business, such issues have not materially affected the Company's, Spire
Missouri's, or Spire Alabama's financial position and results of operations. As environmental laws, regulations, and interpretations change, however, the Company and the Utilities may be required to incur additional costs. For information relative to environmental matters, see Contingencies in Note 10 of the Notes to Financial Statements in Item 1.
For discussions of regulatory matters for Spire, Spire Missouri and Spire Alabama, see Note 4, Regulatory Matters, Notes to Financial Statements at 1.
The Company, Spire Missouri and Spire Alabama have assessed or are in the process of assessing the effects that recently issued accounting standards will have on the financial condition or results of operations of the companies upon their adoption, but none are currently expected to have an impact. significant impact.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources are based upon our financial statements, which have been prepared in accordance with GAAP, which requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting estimates used in the preparation of our financial statements are described in Item 7 of Spire, Spire Missouri, and Spire Alabama's combined Annual Report on Form 10-K for the fiscal year ended
September 30, 2021, and include regulatory accounting, employee benefits and postretirement obligations, impairment of long-lived assets, and income taxes. There were no significant changes to critical accounting estimates during the three months ended December 31, 2021. For discussion of other significant accounting policies, see Note 1 of the Notes to Financial Statements included in this Form 10-Q as well as Note 1 of the Notes to Financial Statements included in Spire, Spire Missouri, and Spire Alabama'scombined Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
There were no material changes in the Company's commodity price risk or counterparty credit risk as of
December 31, 2021, relative to the corresponding information provided in the Company's Annual Report on Form 10-K as of September 30, 2021. In the second fiscal quarter of 2020, the Company entered into multiple ten-year interest rate swaps with fixed interest rates ranging from 0.934% to 1.2975% for a total notional amount of $75.0to protect itself against adverse movements in interest rates on future interest rate payments. The Company recorded a $1.2mark-to-market loss in accumulated other comprehensive income on these swaps for the three months ended December 31, 2021. In the third quarter of 2021 the Company entered into multiple ten-year interest rate swaps with fixed interest rates ranging from 2.008% to 2.1075% for a total notional amount of $150.0to protect itself against adverse movements in interest rates on future interest rate payments. The Company recorded a $2.1mark-to-market loss in accumulated other comprehensive income on these swaps for the three months ended December 31, 2021. In the fourth quarter of 2021, the Company entered into two swap contracts. Both contracts are ten-year interest rate swaps; the first swap has a notional amount of $50.0with a fixed interest rate of 1.597%, while the second swap has a notional amount of $50.0with a fixed interest rate of 1.821%. The Company recorded a $1.9mark-to-market loss to accumulated other comprehensive income on these swaps for the three months ended December 31, 2021. In the first quarter of fiscal 2022, the Company entered into a ten-year interest rate swap contract with a notional amount of $50.0with a fixed interest rate of 1.4918%. The Company recorded a $0.3mark-to-market gain to accumulated other comprehensive income on this swap for the three months ended December 31, 2021.
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