Slide 1: Investor Presentation December 2017
It’s a promise. Investor Presentation December 2017
Slide 2: Forward-looking statements and use of non-GAAP measures
Forward-looking statements and use of non-GAAP measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward- looking statements in this presentation speak only as of today, and we assume no duty to update them.
Slide 3: We've transformed our company through increasing our scale and expanding our geographic footprint
We’ve transformed our company through increasing our scale and expanding our geographic footprint. • We operate natural gas companies across Alabama, Mississippi and Missouri • Since 2012: – Homes and businesses served increased by 1.1 million – Enterprise value more than quadrupled to $6.5 billion*
Slide 4: Delivering on our promises
Delivering on our promises • Solid performance in FY17 ‒ Grew net economic earnings per share ‒ Further improved safety, customer service and system operations • Continued execution on growth plans ‒ Growing organically ‒ Investing in infrastructure ‒ Acquiring and integrating ‒ Innovation and techn
Slide 5: Honoring our commitment to the people we serve
When we replace pipe, install meters or help a customer grow their business, we’re honoring our commitment to the people we serve, including the financial community. 5 S pire | Investor Present at ion – Decembe r 2017
Slide 6: We're doing what we said we would do
We’re doing what we said we would do • Driving growth – Increased customers and margins – Achieved FY17 earnings growth of 4.1% – Raised calendar 2018 dividend by 7.1% • Increased capital investment including utility infrastructure upgrades and Spire STL Pipeline • Transitioned our gas companies to
Slide 7: Growing the homes and businesses we serve
Growing the homes and businesses we serve • Increased customers for third straight year Total utility customers – Installed more than 10,000 new meters (Millions) – Added 1,300 multi-family units 1.8 1.68 1.69 1.55 1.57 – Increased new business investment 1.5 • Enhanced our tools and processes 1.12
Slide 8: Investment in growth remains a top priority
Capital expenditures Investment in growth (Millions) remains a top priority • FY17 capital spend up $145 million – $240 million for infrastructure upgrades – $58 million for new business (+26%) $438 • 83% of spend recovered with minimal lag $293 or reflected in earnings • FY18 target of $485 million
Slide 9: We're progressing on plans to bring new energy to St. Louis
We’re progressing on plans to bring new energy to St. Louis • Spire STL Pipeline improves our supply diversity, reliability and resiliency ‒ 65-mile pipeline connecting to REX ‒ Capacity of 400 MMcf/d with Spire Missouri to be foundation shipper (350 MMcf/d) • Investment of $190 million - $210 milli
Slide 10: Working with communities to modernize the business environment in Missouri
As we have been growing and acquiring gas companies, we’ve been working with our communities to modernize the business environment in Missouri. 10 S pire | Investor Present at ion – Decembe r 2017
Slide 11: We see potential for regulatory change in Missouri
We see potential for regulatory change in Missouri • Republican governor with party majority in House and Senate, focused on ‒ Improving business environment ‒ Supporting economic development ‒ Promoting more efficient government • We continue pursuing improvements to regulatory approach through ‒ L
Slide 12: We're progressing on our Missouri rate proceedings
We’re progressing on our Missouri rate proceedings • We updated our original filings Missouri rate filings through Sept. 30, including utility Spire Missouri capital structure at 54% equity East West Total Filed rate base $1.2B $0.8B $2.0B • Our proposals seek to % CAGR 6.4% 9.6% ‒ Better align our
Slide 13: How we're improving service through technology
How we’re improving service through technology • Upgraded technology platforms to make it easier for customers to connect with us and manage their account ‒ Spire transition included launch of a new, mobile-friendly website ‒ Also rolled out online customer account management tool (My Account) • Enh
Slide 14: We're maximizing all of our businesses
We’re maximizing all of our businesses • Spire Marketing provides wholesale services to diverse customer base • It optimizes a portfolio of commodity, transportation and storage contracts ‒ Operated on over 20 interstate and intrastate pipelines in FY17 ‒ 7.2 Bcf of leased storage • Its core operati
Slide 15: Driving financial performance and shareholder value
We use our deep business knowledge to drive financial performance and deliver shareholder value. 15 S pire | Investor Present at ion – Decembe r 2017
Slide 16: We're driving earnings growth
We’re driving earnings growth • FY17 NEE per share of $3.56, up 4.1% • 5-year growth in Gas Utility earnings of 10.1% Gas Utility Gas Marketing Other2 Net economic earnings per share1 $4.00 $3.56 $3.42 0.14 $3.05 $3.19 0.15 $3.00 $2.79 $2.87 0.10 0.31 0.39 0.55 $2.00 3.46 2.83 3.14 2.48 2.51 $1.00 2
Slide 17: Strong cash flow and financial position
Strong cash flow and 1 FY17 EBITDA financial position (Millions) $500 1 • FY17 EBITDA grew 13% to $482 million $400 • Ample liquidity provided by our credit $300 facilities and commercial paper program 2 $482 • Solid LT equity capitalization of 48.7% $200 $428 – Includes $170 million Spire Missouri
Slide 18: Raising our dividend by 7.1%
Raising our dividend by 7.1% Annualized dividends per share +7.1% $2.30 $2.251 Dividend Yield +7.1% 2.9%2 $2.10 $2.10 +6.5% +4.5% $1.96 +2.4% +3.5% $1.90 $1.84 $1.76 $1.70 $1.70 $1.66 $1.50 $1.30 2012 2013 2014 2015 2016 2017 2018 • 2018 annualized dividend increased to $2.25 per share • 7.1% increa
Slide 19: Driving continued growth
Driving continued growth • 5-year capital spend of $2.3 billion Capital expenditure by jurisdiction/project – Driven by utility infrastructure upgrade (Millions) $510 programs with lives of roughly 20+ years $485 $438 95 $420 $430 – Over 80% recovered with minimal regulatory 25 70 lag or reflected i
Slide 20: We continue to deliver on our promise
We continue to deliver on our promise to bring people and energy together in ways that make the world a better place. 20 S pire | Investor Present at ion – Decembe r 2017
Slide 21: Appendix
Appendix 21 S pire | Investor Present at ion – Decembe r 2017
Slide 22: Our Spire utility portfolio
Our Spire utility portfolio Alabama MO East MO West Gulf Mississippi (Alagasco) (Laclede Gas) (MGE) (Mobile Gas) (Willmut Gas) Founded 1852 1857 1867 1836 1933 Primary Office Birmingham St. Louis Kansas City Mobile Hattiesburg Employees 819 1,695 576 1891 Customers 420,800 649,700 511,400 85,000 18,
Slide 23: Missouri regulatory summary
Missouri regulatory summary • Below-average rated regulatory jurisdiction by RRA1 • Traditional approach: general rate case typically filed every three years ‒ Cost-of-service, rate base and capital structure determined using historical test year ‒ Both utilities have weather mitigated rate designs
Slide 24: Missouri rate case highlights
Missouri rate case highlights Rate base growth (Millions) ($ millions, except customer impact) MO East MO West $2,500 Gross base rate increase $ 58.1 $ 50.4 ~$2.0B $2,000 ISRS rider included above 32.6 16.4 Net change in customer rates $ 25.5 $ 34.0 ~$1.5B $1,500 Approx. impact on avg. residential $
Slide 25: Alabama regulatory summary
Alabama regulatory summary • Top-rated regulatory jurisdiction by RRA • Progressive approach using forward year budget • Rate Stabilization and Equalization (RSE) ‒ Annual rate-setting process with quarterly reviews for potential rate reductions ‒ Rates set based on retained shareholders’ equity Spi
Slide 26: Mississippi regulatory summary
Mississippi regulatory summary • Above-average rated regulatory jurisdiction by RRA • Rate Stabilization Adjustment (RSA) ‒ RSA provides for annual rate performance reviews rather than periodic rate cases • Formulaic approach to ROE setting with equity capitalization currently set at 50% • Rate adju
Slide 27: We delivered solid FY17 performance
We delivered solid FY17 performance Twelve Months Ended September 30, (Millions, except earnings per share) FY17 FY16 Earnings by Segment Gas Utility $ 181.5 $ 160.3 Gas Marketing 6.8 6.4 Other (20.7) (17.6) Net Economic Earnings (non-GAAP)1 $ 167.6 $ 149.1 Net Economic Earnings Per Share (non-GAAP)
Slide 28: FY17 earnings growth driven by Gas Utility
FY17 earnings growth driven by Gas Utility • Net economic earnings1 (NEE) $167.6 million, up $18.5 million (12%) • NEE per share $3.56 (+$0.14 or 4%), reflecting 6% share increase from issuances ‒ In May 2016 for EnergySouth acquisition, and ‒ In April 2017 upon maturity of equity units • Gas Utilit
Slide 29: Net economic earnings per share (non-GAAP) reconciliation
Net economic earnings per share (non-GAAP) reconciliation Fiscal Years Ended September 30, 2012 2013 2014 2015 2016 2017 Total Spire Diluted Earnings Per Share (GAAP) $ 2.79 $ 2.02 $ 2.35 $ 3.16 $ 3.24 $ 3.43 Adjustments, pre-tax: Unrealized (gain) loss on energy-related derivatives (0.02) 0.04 (0.0
Slide 30: Net economic earnings (non-GAAP) reconciliation
Net economic earnings (non-GAAP) reconciliation Gas Gas Per Diluted (Millions, except per share amounts) Utility Marketing Other Total Share2 Fiscal Year Ended September 30, 2017 Net Income (Loss) (GAAP) $ 180.5 $ 3.4 $ (22.3) $ 161.6 $ 3.43 Adjustments, pre-tax: Unrealized loss on energy-related de
Slide 31: Contribution margin (non-GAAP) reconciliation
Contribution margin (non-GAAP) reconciliation Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Fiscal Y ear Ended September 30, 2017 Operating income (loss) $ 321.6 $ 5.2 $ (5.1) $ - $ 321.7 Operation and maintenance expenses 409.1 5.9 11.8 (5.5) 421.3 Depreciation and amortizati
Slide 32: EBITDA and adjusted long-term capitalization reconciliation
EBITDA1 (non-GAAP) reconciliation Fiscal Year Ended September 30, (Millions) 2017 2016 Net Income $ 161.6 $ 144.2 Add back: Interest Charges 89.1 77.2 Income Tax Expense 77.6 69.5 Depreciation & Amortization 154.1 137.5 EBITDA $ 482.4 $ 428.4 Adjusted long-term capitalization reconciliation As of Se