For the first nine months of fiscal 2023, we reported consolidated net income of $248.6 million ($4.51 per diluted share) compared to $227.9 million ($4.16 per share) from the prior year. NEE for the nine months ended June 30, 2023, was $265.7 million ($4.83 per share), up from $247.7 million ($4.54 per share) a year ago. The increases reflect the strong results from Spire Marketing in the first half of the fiscal year. More detail about our businesses is discussed below.

Gas Utility

For the first nine months of fiscal 2023, the Gas Utility segment reported NEE of $234.5 million, down from $240.6 million a year ago, reflecting a higher contribution margin that was more than offset by higher O&M, depreciation and amortization, and interest costs.

Year-to-date Gas Utility contribution margin increased by $68.6 million, reflecting improved margins from rate resets, partially offset by lower usage and the timing of regulatory adjustments in Alabama and higher costs. Weather for the nine months was 15% warmer than normal and 7% warmer than the prior year, and while weather mitigation largely worked as designed in Missouri, it did not fully mitigate lower usage in Alabama.

O&M expenses of $350.9 million increased by $44.4 million compared to the prior-year period, or $35.5 million after removing an $8.9 million non-service cost transfer to other income (no earnings impact). The increase in O&M also reflects approximately $18 million in overhead costs expensed in fiscal 2023 versus deferral last year. Excluding those items, O&M expenses increased by $17.5 million, as a $14.4 million increase in non-payroll operations costs and $4.8 million in higher bad debt expense were partially offset by lower employee-related costs.

Depreciation and amortization rose by $12.4 million reflecting capital investment across our utilities. Taxes other than income taxes increased by $25.9 million reflecting primarily higher gross receipts taxes.

Gas Utility interest expense, net of carrying cost credits at Spire Missouri, were $90.0 million, up from $58.9 million in the prior year, due to much higher interest rates on slightly higher borrowing levels associated with capital expenditures and other working capital items.

Gas Marketing

NEE was $45.0 million in the first nine months of fiscal 2023, up from $15.3 million in the prior-year period. The significant increase in year-over-year performance was driven by favorable market conditions in the first half of this fiscal year that allowed us to optimize storage and transportation positions. First half favorability was partially offset by less favorable conditions in the third quarter, including higher demand charges and storage costs.

Midstream

NEE for the Midstream segment totaled $11.6 million, an increase of $1.8 million over the prior year, reflecting optimization of withdrawal commitments at Spire Storage.

Other

Corporate costs on an NEE basis were $25.4 million, compared to $18.0 million in the prior-year period, reflecting higher interest costs and corporate expenses.

Balance Sheets and Cash Flow

For the third quarter of fiscal 2023, short-term borrowings outstanding at June 30, 2023, were $557.6 million, down from $1,037.5 million at the end of fiscal 2022 and $709.2 million a year ago. In the third quarter of fiscal 2023, we executed forward sales agreements for approximately 2.09 million shares, including a block of 1.74 million shares that must be settled on or before December 28, 2023. We also have a forward sale agreement for approximately 229,000 shares that must settle by the end of September 2023.

Net cash provided by operating activities was $404.1 million for the nine months ended June 30, 2023, up from $204.6 million for the comparable period a year ago. The increase reflects higher net income in the current year and recovery of deferred gas costs.

Capital expenditures for the first nine months of fiscal 2023 were $483.3 million, up from $402.5 million last year, reflecting the planned higher investment for both our Gas Utility and Midstream segments, including expansion of Spire Storage West.

For additional details on Spire's results for the third quarter and first nine months of fiscal 2023, please see the accompanying unaudited Condensed Consolidated Statements of Income, Balance Sheets, and Statements of Cash Flows.

Regulatory Update

Missouri

On June 20, 2023, Spire Missouri filed with the Missouri Public Service Commission (MoPSC) a request for $14.2 million in additional Infrastructure System Replacement Surcharge (ISRS) revenues, reflecting infrastructure upgrade investment for the period March – August 2023. A decision on this filing is required by December 17, 2023. As previously reported, the MoPSC approved an incremental annual ISRS revenue increase of $7.7 million, effective May 6, 2023.

Guidance and Outlook

We remain confident in our long-term ability to grow NEE per share 5–7% given our growth strategy and planned capital investment in infrastructure upgrades, new business and innovation. We are adjusting our expectations for our gas utilities due to lower margins since most of our recoveries occur during the winter and early spring. While we will continue to exercise cost controls to offset a portion of this shortfall, we are reducing our fiscal 2023 NEE per share guidance range to $4.15–$4.25 and lowering the NEE range for the Gas Utility segment by $5 million.

Our targeted capital investment for the 10-year period through fiscal 2032 remains $7 billion, which is anticipated to drive 7–8% utility rate base growth. Expected capital expenditures for fiscal 2023 remain $700 million.

Dividends

The Spire board of directors has declared a quarterly common stock dividend of $0.72 per share, payable October 3, 2023, to shareholders of record on September 11, 2023. We have continuously paid a cash common stock dividend since 1946, with 2023 marking the 20th consecutive year of increasing dividends on an annualized basis.

The board also declared the regular quarterly dividend of $0.36875 per depositary share on Spire's 5.90% Series A Cumulative Redeemable Preferred Stock payable November 15, 2023, to holders of record on October 25, 2023.