XML 39 R20.htm IDEA: XBRL DOCUMENT
v3.20.2

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 12. INCOME TAXES The Company, Spire Missouri, and Spire Alabama are subject to federal income tax as well as income tax in various state and local jurisdictions. Spire files a consolidated federal income tax return and various state income tax returns and allocates income taxes to Spire Missouri, Spire Alabama and its other subsidiaries as if each entity were a separate taxpayer. The provision (benefit) for income taxes during the fiscal years ended September 30, 2020, 2019, and 2018 was as follows:
|  | Spire |  |  | Spire Missouri |  |  | Spire Alabama |
|  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 0.4 |  |  | $ | 0.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred |  |  | 5.8 |  |  |  | 27.4 |  |  |  | (22.7 | ) |  |  | 14.9 |  |  |  | 11.5 |  |  |  | (26.1 | ) |  |  | 17.4 |  |  |  | 16.3 |  |  |  | 81.5 |
Investment tax credits |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  |  | — |
State and local: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 3.0 |  |  |  | 2.1 |  |  |  | 2.2 |  |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Deferred |  |  | 3.4 |  |  |  | 4.6 |  |  |  | (5.8 | ) |  |  | 2.5 |  |  |  | 2.0 |  |  |  | (6.3 | ) |  |  | 4.6 |  |  |  | 4.2 |  |  |  | 0.1 |
Total income tax expense (benefit) |  | $ | 12.4 |  |  | $ | 34.5 |  |  | $ | (26.5 | ) |  | $ | 17.3 |  |  | $ | 13.3 |  |  | $ | (32.6 | ) |  | $ | 22.0 |  |  | $ | 20.5 |  |  | $ | 81.6 |
The effective income tax rate varied from the federal statutory income tax rate for each year due to the following:
|  | Spire |  |  | Spire Missouri |  |  | Spire Alabama |
|  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
Federal income tax statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 24.5 | % |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 24.5 | % |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 24.5 | %
State and local income taxes, net of federal income tax benefits |  |  | 9.0 |  |  |  | 3.6 |  |  |  | 3.4 |  |  |  | 2.6 |  |  |  | 2.6 |  |  |  | 3.4 |  |  |  | 4.1 |  |  |  | 4.1 |  |  |  | 3.8 |
Certain expenses capitalized on books and deducted on tax return |  |  | (6.6 | ) |  |  | (3.8 | ) |  |  | (2.3 | ) |  |  | (4.6 | ) |  |  | (6.5 | ) |  |  | (4.6 | ) |  |  | — |  |  |  | — |  |  |  | — |
Taxes related to prior years |  |  | (1.8 | ) |  |  | 0.2 |  |  |  | (0.4 | ) |  |  | (1.4 | ) |  |  | 0.1 |  |  |  | (0.7 | ) |  |  | 0.1 |  |  |  | — |  |  |  | — |
Tax law changes |  |  | — |  |  |  | — |  |  |  | (35.9 | ) |  |  | — |  |  |  | — |  |  |  | (50.3 | ) |  |  | — |  |  |  | — |  |  |  | 70.0 |
Amortization of excess deferred taxes |  |  | (8.3 | ) |  |  | (3.8 | ) |  |  | (1.8 | ) |  |  | (5.7 | ) |  |  | (6.6 | ) |  |  | (3.6 | ) |  |  | — |  |  |  | — |  |  |  | — |
Other items – net * |  |  | (1.0 | ) |  |  | (1.4 | ) |  |  | (1.6 | ) |  |  | (0.2 | ) |  |  | (0.3 | ) |  |  | (2.5 | ) |  |  | (0.1 | ) |  |  | 0.2 |  |  |  | 0.1 |
Effective income tax rate |  |  | 12.3 | % |  |  | 15.8 | % |  |  | (14.1 | )% |  |  | 11.7 | % |  |  | 10.3 | % |  |  | (33.8 | )% |  |  | 25.1 | % |  |  | 25.3 | % |  |  | 98.4 | %
* | Other consists primarily of property adjustments.
The significant items comprising the net deferred tax liability or asset as of September 30 were as follows:
|  | Spire |  |  | Spire Missouri |  |  | Spire Alabama |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reserves not currently deductible |  | $ | 24.8 |  |  | $ | 31.4 |  |  | $ | 16.7 |  |  | $ | 21.2 |  |  | $ | 5.9 |  |  | $ | 6.2 |
Pension and other postretirement benefits |  |  | 108.3 |  |  |  | 102.7 |  |  |  | 78.5 |  |  |  | 78.7 |  |  |  | — |  |  |  | — |
Goodwill |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 101.3 |  |  |  | 116.8 |
Operating losses |  |  | 170.4 |  |  |  | 162.2 |  |  |  | 36.0 |  |  |  | 51.1 |  |  |  | 111.3 |  |  |  | 94.2 |
Regulatory amount due to customers, net |  |  | 36.1 |  |  |  | 46.5 |  |  |  | 32.3 |  |  |  | 42.7 |  |  |  | — |  |  |  | — |
Other |  |  | 44.7 |  |  |  | 20.0 |  |  |  | — |  |  |  | 1.2 |  |  |  | — |  |  |  | — |
Deferred tax assets |  |  | 384.3 |  |  |  | 362.8 |  |  |  | 163.5 |  |  |  | 194.9 |  |  |  | 218.5 |  |  |  | 217.2 |
Less: Valuation allowance |  |  | (0.9 | ) |  |  | (1.8 | ) |  |  | (0.9 | ) |  |  | (1.8 | ) |  |  | — |  |  |  | — |
Total deferred tax assets |  |  | 383.4 |  |  |  | 361.0 |  |  |  | 162.6 |  |  |  | 193.1 |  |  |  | 218.5 |  |  |  | 217.2 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Relating to property |  |  | (614.0 | ) |  |  | (562.9 | ) |  |  | (427.1 | ) |  |  | (395.1 | ) |  |  | (151.4 | ) |  |  | (129.3 | )
Regulatory pension and other postretirement benefits |  |  | (138.4 | ) |  |  | (135.9 | ) |  |  | (107.4 | ) |  |  | (111.7 | ) |  |  | (3.4 | ) |  |  | (2.0 | )
Other** |  |  | (142.4 | ) |  |  | (113.6 | ) |  |  | (62.8 | ) |  |  | (50.9 | ) |  |  | (4.4 | ) |  |  | (4.6 | )
Total deferred tax liabilities |  |  | (894.8 | ) |  |  | (812.4 | ) |  |  | (597.3 | ) |  |  | (557.7 | ) |  |  | (159.2 | ) |  |  | (135.9 | )
Net deferred tax (liability) asset |  | $ | (511.4 | ) |  | $ | (451.4 | ) |  | $ | (434.7 | ) |  | $ | (364.6 | ) |  | $ | 59.3 |  |  | $ | 81.3 |
** | For Spire, Other consists primarily of goodwill-related liabilities.
The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017, with an effective date of January 1, 2018, for substantially all of the provisions. This comprehensive act includes significant reform of the current income tax code including changes in the calculation for business entities and a reduction in the corporate federal income tax rate from 35% to 21%. The specific provisions related to regulated public utilities in the TCJA generally allow for the continued deductibility of interest expense, the elimination of full expensing for tax purposes of certain property acquired after September 27, 2017 and the continuation of certain rate normalization requirements for accelerated depreciation benefits. ASC Topic 740, Income Taxes, requires that the effects of changes in tax laws be recognized in the period in which the new law is enacted. It also requires deferred tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. For the Company’s regulated entities, the changes in deferred taxes related to the regulated operations are recorded as either an offset to or creation of a regulatory asset or liability and may be subject to refund to customers in future periods. The changes in deferred taxes that are not associated with rate making (including all changes for the Company’s non-regulated operations) are recorded as adjustments to deferred tax expense or benefit. As indicated in Note 1, Summary of Significant Accounting Policies, the Company’s regulated operations accounting for income taxes is impacted by ASC Topic 980, Regulated Operations. Reductions in deferred income tax balances due to the reduction in the corporate income tax rate resulted in amounts previously collected from utility customers for these deferred taxes becoming refundable to such customers, generally through reductions in future rates. The TCJA includes provisions that stipulate how these excess deferred taxes are to be passed back to customers for certain accelerated tax depreciation benefits. In fiscal 2018, the MoPSC Amended Report and Order took effect and the estimated excess accumulated deferred income tax began to be returned to Spire Missouri customers in rates. The amount being returned is estimated with a tracker established to defer the difference from the estimated amounts to the actual amounts once the actual amounts have been calculated. Excess accumulated deferred taxes of $8.4 were returned by Spire Missouri during both fiscal 2020 and 2019. The treatment for accumulated deferred income tax balances for Spire Alabama, Spire Gulf and Spire Mississippi is yet to be determined by state regulators. The Company recorded the TCJA impacts in fiscal 2018, including the impact of the federal income tax rate reduction and the revaluation of the deferred tax assets and liabilities. The total adjustments recorded, before reduction for amounts returned to customers, for the year ended September 30, 2018, were as follows:
|  | Spire |  |  | Spire Missouri |  |  | Spire Alabama |
Adjustment to deferred tax liabilities |  | $ | (318.3 | ) |  | $ | (285.3 | ) |  | $ | (61.0 | )
Adjustment to deferred income tax expense |  |  | (75.0 | ) |  |  | (57.0 | ) |  |  | 58.8 |
Adjustment to regulatory assets |  |  | (75.9 | ) |  |  | (78.1 | ) |  |  | 2.2 |
Adjustment to regulatory liabilities |  |  | 167.4 |  |  |  | 150.2 |  |  |  | — |
In assessing whether deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers all significant available positive and negative evidence, including the existence of losses in recent years, the timing of deferred tax liability reversals, projected future taxable income, taxable income in carryback years, and tax planning strategies to assess the need for a valuation allowance. Based upon this evidence, management believes it is more likely than not the Company, Spire Missouri and Spire Alabama will realize the benefits of these deferred tax assets, except for the contribution carryforward valuation allowances noted below. The Company had federal and state loss carryforwards of approximately $726.8 at September 30, 2020. The loss carryforwards begin to expire in fiscal 2030 for certain state purposes and fiscal 2035 for federal and other states purposes. The Company also had contribution carryforwards of approximately $9.3 at September 30, 2020, which began to expire this year. The Company has a valuation allowance of $3.6, as a portion of the contribution carryforward will not be realized prior to its expiration. The Company also has various tax credit carryforwards of approximately $2.9 along with a valuation allowance of $0.1 as a portion of these tax credits began to expire in 2020. Spire Missouri had federal and state loss carryforwards of approximately $207.8 at September 30, 2020 on a separate company basis, which begin to expire in fiscal 2035. For federal tax purposes, these loss carryforwards may be utilized against income from another member of the consolidated group. Spire Missouri also has contribution carryforwards of approximately $5.4 at September 30, 2020 that began to expire this year. Spire Missouri has a valuation allowance of $3.0, as a portion of the contribution carryforward will not be realized prior to its expiration. Spire Missouri also has approximately $2.0 of various tax credit carryforwards, and a valuation allowance of $0.1 as a portion of these tax credits began to expire in 2020. On a separate company basis, Spire Alabama had federal and state loss carryforwards of approximately $443.5 at September 30, 2020. The loss carryforwards begin to expire in fiscal 2030 for state purposes and fiscal 2035 for federal purposes. For federal tax purposes, these loss carryforwards may be utilized against income from another member of the consolidated group. The Company, Spire Missouri and Spire Alabama recognize the tax benefit from a tax position only if it is at least more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Unrecognized tax benefits are reported as a reduction of a deferred tax asset for an operating loss carryforward to the extent the recognition of the benefit would impact the operating loss carryforward, pursuant to ASU 2013-11. In addition, pursuant to the TCJA, the deferred tax asset for a net operating loss carryforward was revalued in fiscal 2018 based on the federal tax law change. The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits:
|  | Spire |  |  | Spire Missouri |
|  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
Unrecognized tax benefits, beginning of year |  | $ | 10.7 |  |  | $ | 8.1 |  |  | $ | 11.0 |  |  | $ | 10.4 |  |  | $ | 7.8 |  |  | $ | 10.7 |
Decrease related to tax law changes |  |  | — |  |  |  | — |  |  |  | (4.0 | ) |  |  | — |  |  |  | — |  |  |  | (4.0 | )
Increases related to tax positions taken in current year |  |  | 2.6 |  |  |  | 4.5 |  |  |  | 1.2 |  |  |  | 2.6 |  |  |  | 4.5 |  |  |  | 1.1 |
Reductions related to tax positions taken in prior year |  |  | — |  |  |  | (1.9 | ) |  |  | — |  |  |  | — |  |  |  | (1.9 | ) |  |  | — |
Reductions due to lapse of applicable statute of limitations |  |  | (0.1 | ) |  |  | — |  |  |  | (0.1 | ) |  |  | — |  |  |  | — |  |  |  | — |
Unrecognized tax benefits, end of year |  | $ | 13.2 |  |  | $ | 10.7 |  |  | $ | 8.1 |  |  | $ | 13.0 |  |  | $ | 10.4 |  |  | $ | 7.8 |
As of September 30, 2020 and 2019, the amounts of unrecognized tax benefits which, if recognized, would affect the effective tax rate were $2.9 and $2.5 , respectively, for the Company and $2.7 and $2.2, respectively, for Spire Missouri. It is reasonably possible that events will occur in the next 12 months that could increase or decrease the amount of the unrecognized tax benefits. The Company and Spire Missouri do not expect that any such change will be significant to the balance sheets. Spire Alabama reported no unrecognized tax benefits for fiscal years 2020, 2019, and 2018. The Company, Spire Missouri, and Spire Alabama record potential interest and penalties related to uncertain tax positions as interest expense and other income deductions, respectively. As of September 30, 2020 and 2019, interest accrued associated with uncertain tax positions was de minimis, and no penalties were accrued. The Company, Spire Missouri, and Spire Alabama are no longer subject to examination for fiscal years prior to 2017, except to the extent the net operating losses from prior years are reviewed.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration