Good morning and welcome to the Spire Year End Conference Call. Please also note today’s event is being recorded. And at this time, I would like to turn the conference call over to Scott Dudley, Managing Director of Investor Relations. Sir, please go ahead.

Good morning, everyone and welcome to Spire’s fiscal 2020 year end earnings call. 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 and you may download it from either the webcast site or from our website under Investors and then Events & Presentations. Presenting on the call today are Suzanne Sitherwood, President and CEO; Steve Lindsey, Executive Vice President and Chief Operating Officer; and Steve Rasche, Executive Vice President and CFO. Before we begin, let me cover our Safe Harbor statement and use of non-GAAP earnings measures. Today’s call, including responses to questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC. In our comments, we will be discussing net economic earnings and contribution margin, which are both non-GAAP measures used by management when evaluating our performance and results of operations. Explanations and reconciliations of these measures to their GAAP counterparts are contained in both our news release and the slide presentation. With that, I will turn the call over to Suzanne.

Thank you, Scott and good morning to everyone joining us for our fiscal 2020 full year update. I am pleased to report that in 2020 with all of its challenges, we were able to achieve progress on our strategic priorities, delivering growth and solid financial and operating results while advancing our sustainability objectives. Steve Lindsey will provide an update on our capital investment, regulatory matters and operating performance. Steve Rasche will cover our financial results and outlook. But first, I would like to cover the highlights for 2020 and provide a glimpse into the future as we step forward into 2021 and beyond. As you know, nearly all of our business is from our gas utilities. So, it was and is important for us to help our customers manage through a challenging year, while remaining focused on upgrading our infrastructure. We continued our robust capital expenditure program with the majority of our spend focused on pipeline replacement. This important work is the primary path toward reducing our methane emissions footprint and advancing our company’s goal of carbon neutrality. We continue to achieve organic growth supported by our investment in new business and our economic development initiatives. And we also continue to advance in innovation, including the upgrade of our enterprise technology management systems and deployment of advanced metering technology, among other initiatives. We could not have achieved our collective success this year without the dedicated efforts of our 3,600 incredible Spire employees. As the coronavirus pandemic unfolded earlier this year, Spire employees were and still are resilient, stepping up to make the adjustments necessary to ensure that our customers and communities are well served, supported and kept safe and healthy as possible. I am especially proud of our efforts to support our customers. They have enhanced bill assistance and other initiatives to help people cope with the financial challenges created by the pandemic. For this and for their continued diligence, care and compassion in a very challenging time, I extend my gratitude to each and every Spire employee. This year, we advanced on regulatory matters in Missouri gaining greater clarity on infrastructure replacement recovery in three ways: the passage of new ISRS legislation, the resolution to pass the organizations that have been under appeal and agreement on our 2020 request. We are also preparing to file our next rate case which will reflect our significant investment in the state since 2018. Overall, we have achieved solid performance this year. Our earnings were up over last year despite the impact of the coronavirus and we built on our strong performance on the operation side. Based on our solid performance and future growth opportunities, today, we are launching an expanded 5-year capital spend plan, totaling $3 billion through 2025 and we have increased our long-term growth target range. We now expect our earnings per share to grow to 5% to 7%. This is driven by our gas utilities with a focus on infrastructure upgrades and rate base growth, while continuing to step forward with emission reductions. At Spire, we have an excellent ESG track record with strong performance in the areas of social and governance. For example, in 2020, Spire was recognized by Newsweek as one of 300 companies across 14 industries to be included in the good list as one of the most responsible companies in the United States. And Spire was recognized by the Women’s Forum of New York for having a diverse Board of Directors with 30% female representation. In regards to environmental sustainability, Spire continues to reduce its carbon footprint through lowering greenhouse gas emissions. For example, we are targeting methane emission reductions from 2005 levels and have already achieved a cumulative 39% reduction through 2019 and expect to see further reductions when our numbers are finalized for 2020. By 2025, we are targeting a cumulative 53% reduction. As you know, our long-term goal is to achieve carbon neutrality by mid-century. And we are busy developing plans to do so. While the main driver is in our investment and pipeline upgrades, we are also looking at other means to achieve our environmental goals. These include renewable natural gas, or RNG, hydrogen, carbon offset and Energy Efficiency Program. We are evaluating RNG opportunities across our utilities and have already contracted for RNG supply through an interconnect agreement in Missouri. The Missouri Public Service Commission has recently opened a working case to study and address quality standards for biogas. They are actively engaged in this process and plan to seek approval to offer RNG in our upcoming rate case filings. There is more work to be done to fully understand the feasibility, economics and methane reduction potential of RNG and hydrogen. Some of the key considerations in determining how RNG as well as hydrogen might fit with our gas system include the availability of surplus renewable energy that would require investment, commodity costs and achievable environmental benefits from replacing some portion of our natural gas. There are also operational considerations, including the impact of hydrogen on our infrastructure and end-users, including their equipment and facilities. As we endeavor to advance our environmental sustainability, we are engaging with and leveraging the work that AGA is doing. In fact, I have a leadership position on the AGA Board of Directors and I Co-Chair a task force to help shape AGA’s leadership on climate change and greenhouse gas emission policy. With that, I will turn the call over to Steve Lindsey. Steve?

Thank you, Suzanne. I also want to acknowledge the outstanding efforts of our employees during a challenging year to deliver great operating performance while caring for and supporting our customers and communities. I will begin my remarks by discussing how we continue to invest to drive growth, while achieving further improvement in operating performance, including safety, reliability, and sustainability. I will also discuss the great clarity we have in Missouri regarding regulatory recovery of our investment through ISRS and through a rate case we plan to file before calendar year end. Starting with our capital program, we invested a total of $638 million in fiscal year ‘20, including $548 million in our gas utilities. Of that amount, we spent over $300 million on infrastructure upgrades and replaced 318 miles of pipeline. We invested $97 million in new business. Our new business spend has been growing every year over the last 5 years and we continue to add new meters at a growing rate. In fact, we have record new meter growth this last year with new premise activations, including conversions of 7% over last year. We also invested $90 million in non-utility businesses mostly for the completion of our Spire STL pipeline, which went into service last November. Our continued focus on upgrading our distribution infrastructure drives rate base growth across our utilities in Missouri, Alabama and Mississippi. As you can see, our combined rate base growth has grown from $2.6 billion in 2017 to $3.5 billion in 2020. Suzanne noted our capital spending focused on infrastructure upgrades through our sustainability, also supports our mid-century carbon neutrality commitment. The investments we make in our system, technology and people lead to better operating performance in the areas of safety, system integrity and sustainability as we further reduce our methane emissions. On this slide are performance measures that show an improving trend over the last 5 years. At Spire, everything starts with safety and I am pleased to note that our employee injury rate once again fell. Our OSHA DART rate was 1.56, 17% better than in fiscal 2019. Our damages per thousand locates, an important measure how we prevent accidental methane releases, held steady with last year’s level. At the same time, our leaks per thousand system miles fell below 50, reflecting a reduction of this measure by two-thirds over the last 5 years. Lastly, we continue to have outstanding average leak response time for our customers while showing improvement in many other operational metrics. Now, let me turn to the progress we have made in clarifying the regulatory recovery of our investment in Missouri, starting with the resolution of ISRS matters. I would note that ISRS has been a successful program for more than 15 years and has produced very good outcomes. Not only do our customers and communities benefit from a safer, more reliable natural gas system, but Spire benefits from timely recovery of our investment in its important upgrade work with minimal impact on customer rates. At the same time, our pipeline replacement work helps support employment in the state, which aligns with the Governor’s priorities of workforce development and investing in infrastructure. As we noted, last quarter legislation was passed in Missouri effective August 28 that clarified the eligibility of pipeline upgrade spend to be recovered under ISRS. We also settled our two ISRS cases that were under appeal at the Missouri Court of Appeals. No change occurred in the amount of ISRS revenues that we can collect. Under a settlement with the Missouri Public Service Commission and our 2018 case, we agreed to make a one-time $15 million refund to customers in August. In addition, we reached agreements with all parties in both of our 2020 ISRS filings. The Missouri Public Service Commission approved these agreements for a total of $18 million in incremental annualized ISRS revenue. With the latest approval, our annual ISRS run-rate is $47.3 million. Now, let me turn to our upcoming Missouri rate case, which we expect to file before the end of this calendar year. Last month, we provided the required 60-day advance notice of our intention to file a rate case. Even though we weren’t required to file a case until October of next year, we believe that filing now is the right approach given our rate base growth we need to recover and other developments. We have made our system greener, safer, and more reliable for our customers and communities. We have invested more than $850 million in infrastructure upgrades to modernize our system. We will propose new programs and options that our customers want and expect, including RNG that will support our commitment to carbon neutrality by mid-century. We also implemented a number of customer service enhancements, including an online customer portal, technology platform enhancements and advanced metering technology. The important consideration in the timing of filing our rate case is that Spire Missouri West reached its cap and thus cannot seek any further recovery of ISRS eligible amounts. They must reset the cap in order to continue the timely recovery of important infrastructure work. Lastly, we want to combine Missouri East and Missouri West under a single tariff to reflect the integrated utility that we operate today to serve our 1.2 million customers in the state. This will also ensure that all Missouri customers will be treated consistently. In terms of timing, I would remind you that rate cases in Missouri can take up to 11 months to be decided. Under that timeline, new rates will be implemented in late calendar 2021. Although our last rate case completed in April of 2018 extended to the full timeframe, in prior cases, we have worked to achieve settlements in less than the maximum time. With that, I will turn it over to Steve Rasche for a financial review and update. Steve?

Thanks, Steve, and good morning everyone. And let me add my wishes for good health and safety and thanks to our team for a job well done this year. Now, let’s take a quick look back at fiscal 2020 and then step forward into 2021 and beyond. Our fiscal 2020 net income includes the impairment charge from last quarter. So I am going to focus on our net economic earnings, which for the year were up nearly $13 million, or 6.5%. On a per share basis, net economic earnings were $3.76 per share, up $0.03 from last year. Looking at the results by business, gas utility posted earnings of $213 million, up nearly $14 million from last year. This increase reflects a higher contribution margin due to Missouri ISRS and the Alabama RSC, and our new off-system sales program, as well as lower overall O&M costs partially offset by higher depreciation. Other businesses and corporate expenses were $9 million lower than last year. This reflects the earnings from the Spire STL pipeline, which as Steve mentioned, went into service last November, and improved operating performance at Spire Storage. Gas marketing’s earnings of $9.1 million were down $10 million from a year ago, reflecting both less favorable market conditions, and as we discussed last quarter, our pivot towards storage positions to take advantage of that situation. As a reminder, this spring, we saw a significant drop in natural gas demand and commodity prices due to COVID. While this reduced volatility and near-term asset optimization opportunities, it also creates significant seasonal price differentials as the market forecasted a drop in natural gas production just as demand returns this winter heating season. To take advantage of that situation, we almost doubled our storage commitments, locking in the seasonal price differentials. This put us in a strong position for 2021, but in 2020 and through the first quarter of our fiscal 2021, we are incurring the cost to procure, inject and store gas each month. The significant value will be unlocked upon withdrawal, generally in our second fiscal quarter. Our base business in marketing remains intact and profitable. In fact, from an order of magnitude standpoint, roughly half of our annual shortfall to prior year can be tied to incremental storage. Let me touch for a second on several other key variances. Natural gas costs were down 17%, reflecting lower commodity cost at the gas utilities. Operations and maintenance expenses were down over $6 million for the year after considering the reclassification of pension costs and regulatory deferral as outlined here in the summary. Looking at O&M by business, gas utility O&M was lowered by $11 million, reflecting both lower operational and employee-related costs. These costs also reflect the net impact of COVID-19, which I will come back to in just a second. Gas marketing O&M was essentially flat to last year, and all other O&M expenses recognized that Spire STL pipeline was placed into service, whereas the prior year operating results were included in other income. And lastly, other income showed a run-rate decrease of $12 million composed of two items. First, as I just mentioned, the movement of Spire STL pipeline operating results above the line compared to the roughly $8 million of AFUDC recorded here last year and secondly, lower investment earnings. Overall, we have largely offset the financial headwinds created by COVID-19 as outlined here. Lower fee revenue and higher bad debt costs have remained fairly consistent with our view last quarter. We have been able to offset these adverse impacts with higher margins and cost reductions, and we now have regulatory clarity in both Missouri and Alabama. Last month, the Missouri Public Service Commission approved our COVID AAO that first and foremost allowed us to rollout new customer relief programs. It also allowed us to defer net costs totaling $3.8 million, essentially higher bad debts and the cost of COVID response, less cost reductions achieved. Finally, the AAO allowed us to track lost fee revenues. We felt that both cost and revenue amounts will be considered for recovery in our next rate case. In Alabama, the RSC by design includes all cost of operations, including COVID impact. Our year-end giveback position ensures that we hit our authorized ROE, including those impacts. Now, let’s step forward into 2021. As Suzanne mentioned, we have raised our long-term net economic earnings per share growth target range now to 5% to 7%, reflecting the continued and consistent growth of our utilities and improved contributions from Spire Marketing. That growth rate uses 2019 as a base year to remove any impacts of coronavirus in the year just ended. Consistent with that growth target, our net economic earnings for fiscal 2021 is expected to be between $4 and $4.20 per share. This range assumes continued reasonable economic conditions, consistent with what we have seen in the back half of this calendar year. We have also rolled forward our capital investment targets through 2025 and increased the total to $3 billion. Our forecast for 2021 was also increased to $590 million, up $60 million from our last forecast. This plan ensures that we will continue to deliver safe, viable and sustainable energy to our customers and drives rate base growth of between 7% and 8%. As a reminder, our capital investment plan is well-diversified across our service territories and supported by upgrade programs with long lives and regulatory mechanisms that ensure minimal regulatory lag for over 80% of our spend. Finally, we have updated our long-term financing plans over the next 3 years that include a steady level of equity, paired with operating company long-term debt in 2021 tied to our capital investments. Those plans support our targeted credit metrics, as noted here. In summary, we have stepped into 2021 and beyond in solid shape and we are accelerating our growth targets and our capital investment plans. With that, let me turn it back to you, Suzanne.

Thank you, Steve and Steve. I want to first highlight that our Board of Directors has increased the common stock dividend for 2021. Effective with the January 5 payment, Spire’s annual dividend is $2.60 per share, marking the 18th year in a row that we have increased the dividend. The increase reflects the Board’s confidence in our growth strategy and plans going forward. They realize that a growing dividend, combined with increasing earnings, are compelling reasons to invest in Spire. In closing, let me recap the key points we discussed today and why Spire is a compelling investment. As you heard, we continue to pursue growth through further investments and upgrading our gas utility infrastructure. We believe a focus on our regulated business is the key to what makes Spire an attractive investment. Our business mix is over 90% regulated, ensuring earnings stability and value, has a robust CapEx plan through 2025 totaling $3 billion, with 98% of that spend going to our gas utilities, and we receive timely regulatory recovery on that spend. Our capital plan drives 7% to 8% annual rate base growth, which supports our updated long-term annual EPS growth target of 5% to 7%. As I just discussed, Spire pays a growing dividend that offers an attractive yield in excess of 4% based on our most recent stock price. And we have strong ESG performance with a focused effort to further advance our environmental sustainability through reduced greenhouse gas emissions on the way to achieving carbon neutrality by mid-century. We look forward to updating you on our progress and success in achieving our goals in fiscal 2021. As always, we appreciate your interest and investment in Spire. Stay safe and healthy. Now we are ready to take your questions.

And our first question today comes from Richard Ciciarelli from Bank of America. Please go ahead with your question.

Hey, good morning. Thanks for taking my question here.

Good morning.

Good morning.

Hey, just curious on the increase in the 5% to 7% growth rate, do you provide a breakdown of the utility versus non-regulated earnings in that outlook?

Hey, Richie, this is Steve. I will take a shot at it. And first, before I go any further, I also wanted to let everybody know that Adam Woodard, our Treasurer, has joined the call, so if you stop me and more importantly, if I say something incorrect, he will jump in and correct it to make sure I stay on track. If you look at our mix of business, Richie, even if you were to put a run-rate; Spire earnings were still 91% to 92% utility. And we have opted not to break out the two clearly and we talked about it in our prepared remarks that Spire Marketing’s performance for the year if you look just at the numbers reflects the drag of the storage positions, which was the right thing to do given the market opportunity and that will clearly come back. I think you can expect that. We would like to see Spire Marketing get back to the kind of run-rate earnings that you saw in last year and prior years. So that should give you some guidelines on how to think about the growth between Spire marketing and the utilities and frankly, the pipeline is just going to crank along under reasonable and steady level of earnings for years and years to come.

Got it. That is very helpful. And then just separately, I mean, I see you have a pretty robust CapEx program, but just curious how you are thinking about the strategic landscape. I know there are a few utility peers that have some gas LDC assets for sale, just curious on your thoughts on that overall?

Hey, Richard this is Suzanne, I will take that, and I am sure my colleagues will add some color as well. So as most on the call know that we have had a few acquisitions since my tenure here. And so yes, we know how to approach these transactions. And every one that we have done has been, I would say, highly successful on many levels, including operational levels. That being said, we are aware of certain companies that have certain interests in selling certain assets. But we take a deep evaluation of any of those assets. And we don’t even think about moving forward unless we can create value not immediately, but also over the long term, which you have seen exhibited from us from the other utilities that we have acquired.

Yes, and Richie, I would add that our growth target range is not predicated on any acquisitions, but we will remain tuned into what’s going on in the market. And I think we have a long track record of anything we do, there is a clear path to creating excess value as a result of increasing scale.

And Richie this is Steve Lindsey. Just to kind of reinforce the $3 billion, I think we are very confident in relative to our level of spend relative to infrastructure upgrades, which is very diversified across all of our companies. I think that’s great in getting all the ISRS things cleared in Missouri really gives us some clarity. I think secondly, we have some other opportunities for investments such as new technology, AMI, and some programs like that. And then third, even with our new business that we have continued to see strong growth with in Missouri, whether it’s the west side of the state, or Alabama and Mississippi, we are starting to expand relative to our service territory. So I think when you add all those pieces together, just like Suzanne and Steve mentioned, other opportunities may emerge, but we are very confident in the plan that we have really for the next 5 years.

Alright, got it. That’s very helpful. Thanks a lot.

Our next question comes from Shahriar Pourreza from Guggenheim Partners. Please go ahead with your question.

Hey good morning, guys.

Good morning.

Just a couple of questions here. Just honing in on sort of the year-over-year growth into ‘21, a little bit more short term versus the five to seven, how much of the sort of that increase year-over-year is kind of driven by the utilities versus marketing, versus maybe the large storage position you built going into this winter season? I am just trying to get a little bit of a sense on the year of your drivers?

Shahriar, this is Steve, I will take a shot at it. If you look at the marketing, clearly underperformed this year based upon its historic average contribution, which is it contributed just over $19 million two years ago and we would expect it to get back to that run rate contribution. And clearly the storage positions will help us regain that. So that I think that’s one of the biggest movers that you can think about. We clearly expect our utilities to grow. And we have, as we have already talked about, we have significant investments in rate base, we will continue to see rate base growth; we are in and recovery of land. We are going to see that slow down just a little bit only because, as we mentioned in the prepared remarks, we are capped out in the western side of the state in terms of additional ISRS. So that would be a little bit of a headwind in terms of the additional CapEx and getting recovery on that, but that’s okay; that was part of our plan. And one of the reasons why we opted to file the next rate case in Missouri here later this calendar year. And the other thing I would point out is when you think about the cadence of earnings quarter to quarter, and I did mention this in the prepared remarks. The cost for storage principally at this point that we are seeing in Spire Marketing in the back half of the year we are going to see that in Q1 also. So from a seasonality perspective, if I can use that term, you are going to see more of the value for Spire Marketing concentrated in the second fiscal quarter which is the winter, because that’s when we will deliver the gas that we’ve positioned with our storage investments earlier in the year.

Got it. But Steve, just maybe just honing in a little bit more exact that 9% growth that you have got year-over-year from base 2020 to the midpoint of the ‘21 guidance. Is that predominantly coming from storage or is it regulated, just trying to get a little bit more of a sense on that driver?

Yes. Marketing will have an outsized piece of it this year, just because of the storage position. We expect all of our businesses to grow. And we are clearly, as with everybody in the industry, while we are still living through coronavirus times, I think we have done a good job of offsetting the impact there and we look at that going forward. And remember, in 2020, we did have the headwinds of our ISRS settlement; it’s nice. We are 1 year forward from where we were a year ago with the First Appeals Court ruling; it’s a 180-degree change. But remember, at 2020 results there were a handful of cents, I think $0.04 worth of drag in the 2020 results as a result of that settlement. So that clearly comes back in addition to just organic growth in the utility.

Got it. Got it. And then obviously, you guys highlighted some additional programs that you plan to file in the Missouri rate case, right; so RNG, AMI etcetera. Have you sort of had any initial conversations with stakeholders on these items? Any feedback so far and are any of these sort of items potentially incremental to your current capital outlook?

Well, this is Steve Lindsey. I think it’s early to really talk about the programs and the discussions, because we haven’t even filed the case yet. But I think what I can say is, since the last case, we have been engaging with all of the constituents and stakeholders on the programs that we look to embark on, whether it’s for customers, whether it’s for infrastructure, whether it’s technology to really put the why out there. Here is why we are doing this. Here is what we expect to come from this. So, I think we set a pretty good stage. And I think as you can see, even recently in some of the settlements that we have come to, I think all the parties involved are starting to work a little better together, if you think about it that way. And then your second question relative to capital, again, I think if you think about the capital that we are really looking at, for our plan going forward, it’s still focused on infrastructure, new business, AMI and other types of technology, a lot of the things that we have either been doing or we are going to look to do. So, I don’t think there is anything new and shiny that we haven’t done again; if other opportunities emerge, we will always consider those. But I think we are really sticking to our plan and that’s where we have our highest level of confidence.

Got it. Super helpful. And just lastly, I know you guys stated in the past that you expected storage to be EBITDA positive in the quarter; could we just get an update on that?

Yes, sure. We achieved our goals. It was above the line of EBITDA for the quarter, still underwater for the year and our expectation going forward is just going to be largely breakeven, until and if we move forward, and we are going to use the next period of time, which could stretch for the next 2 to 3 years to evaluate the market opportunity and to seek regulatory approval as you know.

Terrific. Congrats on the results, guys.

Thank you.

Thank you.

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

Hi. Good morning. Thanks for taking my questions here. Maybe just starting real quick on a follow-up around storage, are there any changes around storage as part of that evaluation process baked into the growth rate or anything beyond that sort of breakeven going forward expectation incorporated?

Richard, this is Steve. Not at this point. It’s we are early in our evaluation. And again, we expect that to take a bit of time. It’s clearly not factored into our long-term growth prospects. And once we make a decision on how we want to move forward, which will likely be well out in the future, we will make sure to come back to the market and explain what our rationale is for whatever decision we take.

Got it. Thank you. That was very clear. And then I just want to return to the CapEx briefly, if you could provide any color around the changes in the program now versus prior? And in particular, some of the drivers behind the increased regulated CapEx as you move through the plans here, which I think is a little unusual, where you often see declines over time?

Sure. And again, I will kind of go back to the anchors of really our program. And so if you think about the infrastructure programs, that we have; those are anywhere between 7 to 15 years in all of our jurisdictions again. I think having the clarity relative to ISRS provides us a lot more certainty going forward on that. We were going to do the work anyway. But I think that really helps us from the level of return on it. The other pieces again, I think you go back to like, for example, this year $90 million, relative to new business that is sizable. And that’s good, because that’s delivering longer term earnings opportunities from new growth in our system; we are expanding our system on the west side. And in Alabama, and Mississippi, we just had a big kickoff yesterday in Mississippi, around an expansion into an area that we don’t serve. And then the other types of programs, AMI and other technology, I think those are the big buckets I would put these in. Everything else kind of comes with just the normal operations of a business, such as fleet facilities, those type things, but those are the areas that we are focused on, and that we think we have an opportunity to continue to grow for the next five years.

Great. And just to follow-up on the new business spend, so that’s been an area of strength to you over the past few years, thinking about that going forward I can appreciate you have more line of sight to say this year versus two years from now. But to the extent those trends continue, is that fair to consider this added to your CapEx program, or would that potentially offset other investments you have in the plan?

I don’t know that I would look at added; we had five straight years of growth of new business year-over-year, as well as five straight years of higher new meters than the previous year. So that’s a great trend. I don’t again some of it is where we are a little bit at the mercy of the economy. And we don’t know what’s coming going forward, especially when you think about small commercial, small business. So what I will say is we have had an emphasis on conversions. And so this year was our strongest year of converting customers that were, for example, on propane to natural gas or already on our system. That’s a great opportunity for us. The other parts, again, are the expansion of our service territory. So I don’t know that I would necessarily say it’s a trend that would continue for five years. But I think we are very comfortable with the increased emphasis and efforts that we have, that if there’s an opportunity, we are going to take advantage of it, and we are going to deliver on it.

Great, thanks. And one final one for me, just looking at the financing plan and thinking about the equity component, any updated phasing around kind of the common versus hybrid options, and maybe what headroom you have there around the hybrids?

Yes. Richard, the financing plan is largely consistent with what we have seen in prior years. And as you know, we are not along the bottom; we actually are in the range on our credit metrics. So we are really trying to make sure that we have a balanced capital structure that’s our commitment does into our rating agencies, and to our investors. And we are pretty nimble, and we stay pretty close to where the market is. And we will evaluate where the market opportunities are, when it’s time for us to go out to market. It’s great to have the ATM program. And you can expect, as you saw last year that we will continue to use that to our advantage. But as you mentioned, we are also looking at other vehicles that might achieve our goal. And a lot of that will be predicated upon how the market continues to value not only us, but really our sector. And really, it’s the Schmid utilities, and we have been on a pretty good run here for the last week and a half. If you would have asked us any of us that questions I am sure you did at AEI a week or two ago is that the answer may have been a little bit differently, because we were all valued, I would say undervalued by the market. So we are going to continue to watch it. And as you have seen in the past, we have used whatever vehicle makes the most sense to get cost-effective capital to continue to have a strong financial position to support essentially the capital that we are investing in the utility.

Great, thank you for the color there and appreciate the update.

Our next question comes from Michael Weinstein from Credit Suisse. Please go ahead with your question.

Hey, good morning, guys.

Good morning, Michael.

Hey, just a follow up on that last question. Do you think you will need any block equity to top off for the rate case or is the ATM probably going to be sufficient for any common equity need going forward?

Yes. Mike, the bandwidth that we have in our forecast, we could clearly handle with the ATM. And with regard to the Missouri rate case, we manage the capital structures of HR companies at all levels, whether it be the operating company or the holding company. And we want to make sure that we have the right level of cash structure that supports the rates at each of those levels and we will continue to refine that as we normally do. When we enter a rate case in Missouri, since that’s a rate – a historic rate case rate base state, you can expect that we will tweak the capital structure in order to get it to the right level that makes sense for us and ultimately for our customers in terms of the weighted average cost of capital, but I don’t see it being a big driver one way or another.

Got it. And does the current capital plan already include the higher ISRS caps that you are hoping to achieve or is that – could we expect to see higher – an even higher capital forecast after the rate case is filed or decided, I guess?

Yes, I think, Mike, this is Adam, the current CapEx plan, I think is really status quo on that front. We are not planning on additional cap room there. I don’t think that’s a real driver for us.

Yes. And really, the cap is just it’s formulaically driven based on the outcome of the revenue requirement. So, I don’t think we planned for anything like that again and the other part is, again, our diversification on both sides of the state is a full robust plan for a long period of time. So it’s not like its contingent on one side or the other. So I don’t think relative to the cap, if that’s a limiter for us, I think obviously, in this case, that’s one of the drivers for why we are coming in a little bit early this time. And so again, I think we have hit some really good run-rates that we are comfortable with moving forward over the next several years.

Understood. Understood. In other words, you would build no matter, regardless of whether there was an ISRS or you just waited till the next rate case, but it’s not really dependent on that? And…

I think two things. One is that we are doing it for the right reasons, which is safety, reliability, and the reason that we are out there doing this, but obviously, there is a regulatory construct that we want to operate within. And in this case, this is the first time that we have, in essence, hit the cap prior to the 3-year period. So this is a different world that we are kind of operating in now. But that’s a good thing, because we have really ramped this up on both sides of the state.

Yes, the only thing I would add and Steve Lindsey may add more color is we do plan on when we make this filing to combine both sides of the state to create basically in essence one utility. So, these conversations in the future after assuming the commission would approve such, we will quit talking about east and west and basically talk about one number, so I think that will be helpful.

Yes, that is a good point. I think really, we are trying to approach Missouri in its entirety as we have 1.2 million customers, let’s treat everybody fairly the same consistently, regardless if you are in Kansas City or St. Louis. And I think this was one opportunity for us to take a step towards that in this rate filing.

And the political audiences would also appreciate that the Governor, legislative audience as well as the commission removed some complications for them as well.

Right. In fact, maybe just remind me, I remember in the last rate case, one of the issues that had come up was the allocation of shared services across jurisdictions, like there was a call center that was physically located in Alabama. Missouri regulators didn’t necessarily want to pay for their share of it or whatever. Are those issues resolved, cross-border and cross-jurisdictional issues, are those resolved at this point or those going to have to be addressed again in this rate case?

I am going to say, I think there will always be something to discuss. But I think we have provided a lot more transparency and clarity around what the shared service model is and that comes with growth through acquisitions and expansion. And again, our shared service model, we think is very effective, it’s very efficient. And if you are thinking about operating multiple jurisdictions, it’s the best approach. And so – but as you go through the initial cases, sometimes there are some challenges on that and presentation. And yes, so who is paying for what and where is it coming from? But I think really, we have done a good job of establishing a very efficient process, whether it’s on call centers or engineering or the finance functions or IT. And I think we are in a much better position in all of our regulatory proceedings going forward to justify the rationale behind how we set up our shared service organization.

And more recently, I would say that the commission was very focused on the customer experience on what our metrics were. And we have spent a lot of time with the commission staff on that very topic and they are very pleased. So it’s not as much about the location as it is an entire customer experience and what our metrics look like and what has enabled us to perform and Steve Lindsey could tell you more about this performance levels, what has enabled us to perform, it’s just not the people but the technology that we have deployed, for example, having My Account where our customers can go online and see their bills and be interactive online and do it at their convenience, those kinds of things that we all enjoy. And that’s really been their area of focus, which is good news, because, again, our metrics we have improved year over year, and we are in a good space actually.

Yes, Steve. You said before that you were hoping to get to the old run rate for Spire Storage and Marketing or Spire Marketing, what’s that? What is that run-rate that you are hoping to get to? And I guess it’s the after 2021 right, because 2021 is going to be a good year?

Yes, they were just over $19 million in, in 2019. That’s probably a good neighborhood.

It’s a good run-rate. It will be higher than that probably next year, right, because of the opportunities.

Now, we are starting at $9 million. So if we can get back to the neighborhood that would be a pretty, pretty big step up.

I see, I see. Okay. And one last question for me and this is more of a long term strategy question. But, can you comment on your view of long-term load growth as the country itself just moves forward towards increasing electrification of load currently served with natural gas, oil and coal? Now, there has been an argument that, I guess, not an argument. But there has been some, concern among some investors out there, right, that gas utilities have a secular decline in their opportunities to grow if you look out far enough, like 20 years, and, as they deserve to trade at a discount because of this. I don’t necessarily agree with that. But I would love to hear your point of view on that, just in general?

I am glad to hear that you don’t agree with it, because obviously, we don’t agree with that either. And part of the reason we don’t agree with it is, first of all, natural gas is only 4% if you will, the total greenhouse gas emissions. And Steve Lindsey went through a lot of pipeline replacement steps and the amount of methane reductions because of the infrastructure. But more importantly, it’s a domestic fuel, it’s green, it’s abundant, it’s safe, it’s economical, it’s efficient. It’s all those things. And then if you go to the electrification side of the house, so to electrify the entire energy sector in the United States, and not take advantage of having that natural benefit of natural gas, and the amount of costs that would be shoved onto customers at a residential and small business, and yes, industry level, would make us uncompetitive in the world. Plus, our customers at residential small business levels could not afford. I mean, I have heard estimates from $590 billion to $1.2 trillion through 2035. That’s staggering when you think about it as an individual customer. And if you think about just filing rate cases in the process, we go through and trying to contain our costs, and seek these recoveries through the commission. It’s just for someone that’s been in this industry for 40 years, I find it very hard to believe that our customers and our regulators are going to have a tolerance for putting that kind of cost structure where the science doesn’t support it, especially again, given as a country have an abundance of natural gas, we have the infrastructure in place. Most gas companies have modernized these facilities, and were deploying technology in a way that customers are engaging with us in a way that really benefits. I could sort of go on and on about this topic, but I will just sort of stop there, but…

Well, I think the one thing that I would add to what Suzanne talked about is we are taking an active role, whether it’s at the federal level, state level or local level and trying to educate policymakers, whether it’s legislative, whether it’s regulatory, whether it’s local mayors, before you make decisions, let’s understand the consequences. And all the points that Suzanne hit on, I think it’s incumbent on us as a company and as an industry to make sure that people that are making decisions really understand the long-term benefits or impacts or consequences of those decisions. And I think, we are at this economic development of affordable energy, reliable energy, environmentally friendly energy, we got a great story, and we need to continue to do a good job telling them.

And that’s why I guess I am going to say, well, that’s one of the reasons that we came out early and said we would be carbon-neutral by mid-century, we wanted to not only capture the reliability, resiliency and safety of our pipeline replacement program, but we also want to educate our customers and our investors on the benefits of those investments from a carbon neutrality basis as well. And that doesn’t mean that we are not looking at other opportunities like RNG, hydrogen, those kinds of things we are; we are doing it as a company and I have mentioned earlier, with my role with the American Gas Association as an industry looking at these types of technologies. So we are focused, but we also believe our products will exist 20 years from now, in fact, in a very good way, serving our customers.

Alright. Thanks a lot, guys and have a great week.

Thanks, Mike.

And our next question comes from Brian Russo from Sidoti. Please go ahead with your question.

Hi, good morning.

Good morning, Brian.

Just to clarify, with the understanding that you won’t be filing an ISRS for the Missouri West in 2021 due to the cap, what about East? I know you are still under the cap, but are you going to postpone that considering you’ll be involved in a rate case?

No, Brian, our history is that we will file ISRS about every 6 months even if we are in a rate proceeding and you would expect that we would do that, because we are continuing to invest in infrastructure upgrades across the state. So we will take advantage of ISRS, the best possible. It will likely be involved in the adjudication of the rate case, but we want to make sure to stay on that case.

Okay, got it. And just remind me, what are the mechanics of the ISRS? Is it a percent of revenue? Just trying to get a feel for what kind of increase in total spend you can recover over the next 3 years to potentially avoid having to file a rate case sooner than that?

Yes, the ISRS cap is set at 10% of the awarded revenues from a rate case. So, once we get – we are sitting here a year from now and we will be talking about hopefully the rate case in our rearview mirror, you can look at the total reward in terms of customer rates – growth rates and 10% of that would become the cap that would apply to this.

Okay, got it. And then just lastly, on the dividend increase that was announced to 4% for 2021 versus the increase in the EPS CAGR to 5% to 7%. I guess my first question is what’s your target payout ratio and how should we kind of look at the dividend growth outlook versus the increased any EPS outlook?

Yes, it’s a great question, Brian. Yes, you are right, when we think about our dividend we do focus on the payout ratio. Our target range is 55% to 65%. And we are right about at the top of that range and that clearly was one of the considerations in raising our dividend to $2.60 and $0.11 increase, second biggest in our history. So, it’s not – it isn’t a good size increase. That puts us within our range. And then I think as you go forward, you can think about the growth that you would expect from our earnings would drive to the same level of growth expectation in our dividend. Remember, we have been paying a dividend for 76 years and 18 years of increases and we understand that and we believe that a portion of our earnings that will continue to grow, we should be sharing back with our equity investors as part of their total return.

Okay. Also the RNG landfill agreement that you disclosed in the presentation, could you just add a little bit more detail? What exactly service are you providing just transporting RNG through your pipes? Is it margin positive or are you getting a fee? Just curious.

Yes, Brian, that’s just an interconnect agreement for now; we are – more to come on that.

Okay, thank you.

And our next question comes from Selman Akyol from Stifel. Please go ahead with your question.

Thank you. Good morning. I just want to go back to Spire Marketing for a moment. In your opening comments, you talked about taking on additional storage as you saw the volatility increase and clearly have guided to recognizing earnings in Q1 Q2. But that said, as I think about it longer term, do those storage contracts roll off fairly quickly or should I think about those having tenures of 3 to 5 years and therefore need volatility to continue in order to drive a return overall for Spire Marketing?

Yes, hey, Selman. It’s a great question. For our Spire Marketing with a few exceptions, our storage positions are seasonal, so they are less than a year. And so just as we ramped up and doubled our position in the springtime of last year, we will go through the same assessment once we see what the market looks like as we are exiting the winter season. There is any level of storage; think about it as the base level of stories that we would have in our business that we need to have in order to serve our customers, because remember it’s a logistics business, where we transport and store gas when necessary and sell it to our customers when they need it and that is a seasonal demand generally during that winter heating season.

Understood. Thank you for that. And then a number of times you talked about cost savings, and I am just wondering, is there more of that to come as we go forward?

We have got a history of keeping our O&M costs down and this year, you can look at the numbers for gas – for that gas utilities and again we have been able to control those. We use a combination of investing in technology and other things that make us more efficient. But at the same time, we are investing where we need to in order to drive especially things as Suzanne mentioned, like customer experience and making sure that they have the right availability and experience with our customer service team. So, we do try to balance that. We are always looking for ways to at a minimum offset inflation so that we are keeping that component of our customers well under control. So that when we add in the rate base growth, we are not hoisting our growth on our customers.

Yes. And I think if you think about in the utilities specifically, I think one of the comments we mentioned earlier is that over the last 5 years, we have seen a 66% reduction in leaks per thousand miles; that goes to O&M obviously, all the safety, environmental, all the other things that we talked about. But over a period of time leveraging the technology, using some things such as workload planning to really become more efficient and to go forward. I think a lot of those things are setting up well. So when you think about the capital investments, all the benefits that we always talk about are there, but ultimately, they should translate to O&M cost savings as well.

Alright. Thank you very much.

And our next question comes from Andrew Levi from HITE Hedge. Please go ahead with your question.

Hey, good morning. How are you?

How are you doing, man?

I am doing well, thank you. Just if I am not mistaken, is there a court challenge going on with the STL Pipeline from some of the environmental groups?

Yes. And so Andy, that’s relative, it’s basically a challenge of FERC and that’s with the Environmental Defense Fund and so we continue to build very positive about the pipe that’s in servers, that’s doing a great job. And so yes, it is a process that’s moving forward and that will ultimately I think have some core challenges, but I don’t think, that’s any different than most of the others, but that’s not specifically with us. That’s more of FERC’s approval of the process.

Okay, so because I am not that familiar with it. So could you just explain what court it’s in, what’s the status of that case? And for the Environmental Defense Fund, what are they specifically challenging? If I remember correctly, I think it has to do maybe like a used and useful versus that enable pipe existing or something like that and certain rules weren’t followed or am I mistaken or maybe just could explain it, because I am really not that familiar with it?

Yes, I see – This is Suzanne, obviously, I guess. Yes, so FERC approved our pipeline. We obviously did not build nor activate a pipeline without FERC approval. We went through the tried and true for decades FERC process and again, have approval of that pipeline. EDF did file, I guess I would call it a challenge to that FERC certificate in the DC court. There is a legal path to the extent that we have to most likely stay – we will probably remand it back to FERC would be my guess, but I don’t know that for a fact. But either way, that DC court or FERC themselves will have to deal with the matter. But again, we followed the FERC process and have FERC approval and – excuse me, and the other piece that’s interesting to me, this pipeline has been functioning now for over a year. And it’s created great benefits for the region of St. Louis in terms of the gas supplies it’s being brought into the region. But we will also be able to show that from an operational perspective, it’s created great operational benefits, because of where that gas is delivered in the region, upholding pressures and systems and allowing economic development that wasn’t able to really happen with the support of natural gas before. So my point is there that we have great operating information that we can also provide, but again, the punch line is FERC approved the pipeline, we went through decades old process, if you will, for FERC approval, we have that approval and we have built the pipeline and it is in service, but since then…

When we may hear from the courts or from the court, I should say not courts – court?

Yes, I don’t think I can get ahead of the court. I don’t want to…

Ladies and gentlemen, with that, we will end today’s question-and-answer session. I would like to pass the conference back over to the management team for any closing remarks.

Great. Well, thank you all for joining us. We had a lot of things to say today. We appreciate all your interest and your questions. We will be around the rest of the day for any follow-ups. Take care. Be well. Be safe. Thanks, everybody.

Thank you.

Thank you.

Ladies and gentlemen, with that we will conclude today’s conference. We do thank you for attending. You may now disconnect your lines.