Slide 1: Energy that advances
Energy that advances Investor Presentation August 2020
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: Energy that advances
Energy that advances • Executing on our value-creation strategy – Growing organically – Investing in infrastructure – Advancing through innovation • Continuing robust capital investment • Maintaining strong financial position • Advancing Missouri regulatory and legislative initiatives • Revising Spi
Slide 4: We’re a growing, financially strong natural gas company
We’re a growing, financially strong natural gas company • 5-year capex target of $2.8B focused on infrastructure upgrades Delivering • Growing organically across our utility and gas-related businesses growth • Targeting 4-7% annual long-term EPS growth • Strong and growing cash flow; FY19 EBITDA $51
Slide 5: Enhancing stakeholder value
Enhancing stakeholder value 1 Growing organically O&M expenses per customer $270 • Strong focus on new business $270 • Greater engagement on economic $260 $256 $256 development $252 $250 $244 • Driving margin via customer growth $241 $251 $247 and supportive regulatory outcomes $240 $230 2014 2015 2
Slide 6: Investing in growth
Investing in growth Capital expenditures (Millions) $700 $650 • FY20 capex increased to $650M $600 90 $500 • YTD investment of $475M reflects $400 – Continued robust gas utility $300 560 investment for infrastructure $200 upgrades and new business $100 – Lower spend for STL Pipeline $0 reflecting in
Slide 7: Guidance and long-term growth
Guidance and Capital expenditures long-term growth (Millions) 5-year forecast: $2.8B • Long-term annual NEEPS growth $650 target remains 4-7% (base year FY19) 90 $530 $520 $530 $540 30 10 10 10 • FY20 NEE guidance of $3.70 - $3.75 per share 560 500 510 520 530 • $2.8B capex plan through 2024 – Focus
Slide 8: Upgrading our infrastructure and reducing methane
Upgrading our infrastructure and reducing methane • Targeting 53% methane reduction by Estimated replacement miles remaining As of 12/31/19 2025 from 2005 levels • Committed to achieving carbon neutrality by midcentury *Completion expected in 15+ years. 1Includes bare steel mains and services; threa
Slide 9: Delivering strong operating performance
Delivering strong operating performance Reducing employee injuries Improving pipeline safety OSHA DART1 rate Damages per 1,000 locates 3.65 4.76 4.78 3.22 4.24 3.87 3.78 2.63 1.88 1.42 2016 2017 2018 2019 2020 2 2016 2017 2018 2019 2020 2 Strengthening system integrity Enhancing service and safety L
Slide 10: Maintaining strong financial position
Maintaining strong financial position Adjusted EBITDA 1 (Millions) • Maintain significant liquidity in $600 $501 revolver and CP program, with $500 $478 ~$650M available at June 30 $400 • Robust YTD EBITDA $300 $200 • FY20 YTD raised $24.8M in gross $100 proceeds under ATM program $0 • Balanced long
Slide 11: Growing the dividend
Growing the dividend Annualized common stock dividend per share Dividend $2.70 yield 3.9%2 80% $2.491 $2.50 $2.37 $2.30 $2.25 Dividend payout ratio Dividend Dividend per share 70% payout ratio $2.10 $2.10 $1.96 $1.90 $1.84 60% $1.70 $1.50 $1.30 50% 2015 2016 2017 2018 2019 2020 • Annualized common s
Slide 12: Advancing Missouri regulatory and legislative initiatives
Advancing Missouri regulatory and legislative initiatives • ISRS legislation enacted into law – Clarifies infrastructure investments that qualify for ISRS recovery – Sets MoPSC decision timeframe to 180 days • Settlement of pre-2019 cases – ISRS rates going forward remain unchanged – Results in $15M
Slide 13: Revising our Spire Storage development plan
Revising our Spire Storage development plan • We’re committed to serving customers through the ongoing development and operation of the facility • Revised development plan, announced on July 8 – Sets a longer time horizon required to optimize and position the facility – Reflects evolving energy mark
Slide 14: Supporting our employees, customers and communities
Supporting our employees, customers and communities Amid coronavirus and social unrest, we’ve remained focused on safely and reliably serving our customers while supporting our employees and communities. Employees Customers Community • Created mobile intranet channel for • Temporarily suspended late
Slide 15: Coronavirus – financial impacts and mitigation
Coronavirus – financial impacts and mitigation FY20 impacts (Millions, except EPS) Q3 YTD FY '20 Lost fees ($1.8) ($2.3) ($2.3) Lower margins (0.7) (1.2) (0.3) Higher bad debt expense (3.8) (3.8) (4.6) Other direct costs 0.4 (0.3) 1.0 ($5.9) ($7.6) ($6.2) EPS impact ($0.09) • Margins reflect lost fe
Slide 16: The case for natural gas
The case for natural gas 110+ Abundant and domestic years The U.S. has 3,374 Tcf of The U.S. natural gas Direct use of natural gas is a future natural gas supply, transmission and distribution more efficient energy: 91% vs more than 110 years worth system (2.6M miles of 36% for generation from under
Slide 17: Our commitment to Corporate Social Responsibility (CSR)
Our commitment to Corporate Social Responsibility (CSR) Environment Communities People Leadership • Ongoing investment in • Supporting our • Inspiring future • Experienced manage- pipeline upgrades and communities through leaders via training, ment with deep bench system integrity financial contribu
Slide 18: For more than 160 years, we serve people
For more than 160 years, there has been one constant— we serve people. As we continue to focus on the future, we’re committed to growing, innovating and doing all we can to advance people, performance and possibilities. 18 Spire | Investor presentation – August 2020
Slide 19: Supplemental Material
Supplemental Material • Spire leadership • Our business and operating footprint • Additional gas utility information • Our gas-related businesses • Financial performance • Other financial information 19 Spire | Investor presentation – August 2020
Slide 20: Spire executive leadership team
Spire executive leadership team B Suzanne Steve Steve Mark Mike Sitherwood Lindsey Rasche Darrell Geiselhart President and Executive Vice President, Executive Vice President, Senior Vice President, Senior Vice President, Chief Executive Officer Chief Operating Officer Chief Financial Officer Chief L
Slide 21: Spire business unit presidents
Spire business unit presidents Scott Carter Joe Hampton Scott Smith Pat Strange President, Spire Missouri President, Spire Alabama President, Spire STL Pipeline President, Spire Marketing and Mississippi and Spire Storage 21 Spire | Investor presentation – August 2020
Slide 22: We’ve expanded to serve more customers and markets
We’ve expanded to serve more customers and markets • We’re the fifth largest publicly traded natural gas company serving 1.8 million homes and businesses across Alabama, Mississippi and Missouri • We are developing and growing our gas-related businesses – Spire Marketing – Spire STL Pipeline – Spire
Slide 23: Additional gas utility information
Additional gas utility information 23 Spire | Investor presentation – August 2020
Slide 24: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Employees1 941 119 35 2,389 Customers1 420,600 83,900 18,500 1,169,900 Pipeline miles ~23,000 ~4,300 ~1,200 ~30,000 Rate base (Millions) $5092 $922 $293 $2,2174 Return on equity 10.40
Slide 25: Coronavirus
Coronavirus Alabama Missouri New daily cases 7-day moving average: New cases Deaths Reopening our economies • Alabama is now using phased guidelines by risk category for each county https://www.alabamapublichealth.gov/covid19/guidance.html#guidelines • Missouri Show Me Strong Recovery Plan began Pha
Slide 26: Missouri regulatory summary
Missouri regulatory summary • 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 and me
Slide 27: ISRS filings
ISRS filings Expected (Millions) Authorized FY20 revenue Notes June 2018 $8.0 $8.0 effective 10/8/18 January 2019 12.4 12.4 Under appeal at Missouri Court of Appeals; fully briefed; awaiting effective 5/25/19 scheduling of oral arguments July 2019 8.8 7.3 Under appeal at Missouri Court of Appeals; f
Slide 28: Alabama regulatory summary
Alabama regulatory summary • Top-rated regulatory jurisdiction by RRA • Rate Stabilization and Equalization (RSE) annual rate-setting process – RSE parameters evaluated every four years (last set in 2018) – Uses forward-year budget and quarterly reviews Spire Alabama – Rates set based on retained sh
Slide 29: Mississippi regulatory summary
Mississippi regulatory summary • 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 adjustment
Slide 30: Our gas-related businesses
Our gas-related businesses 30 S p i r e | I n v e s t o r p r e s e n t a t i o n – A u g u s t 2 0 2 0
Slide 31: Growing Spire Marketing
Growing Spire Marketing • Provides gas marketing services Spire Marketing’s operational reach in the central and southern U.S. • Mostly wholesale services to munis, producers, power generators, storage operators, pipelines and utilities • Utilities account for majority of customers (by net dollar ex
Slide 32: Spire STL Pipeline completed and placed into service
Spire STL Pipeline completed and placed into service • Began commercial operation in mid-November 2019 • The 65-mile pipeline is providing a new gas supply to the St. Louis region – Enhances diversity, reliability and resiliency – Capacity of 400 MMcf/day with Spire Missouri contracted for 350 MMcf/
Slide 33: Developing Spire Storage
Developing Spire Storage • We’re committed to serving customers through ongoing development and operation of the facility • Disciplined approach to project development based on revised plan – Longer time horizon to optimize and position facility to serve western U.S. – Seeking commercial validation
Slide 34: t a t i o n – A u
34 S p i r e | I n v e s t o r p r e s e n t a t i o n – A u g u s t 2 0 2 0
Slide 35: Financial results for YTD and Q3 FY20 ending June 30
Financial results for YTD and Q3 FY20 ending June 30 35 S p i r e | I n v e s t o r p r e s e n t a t i o n – A u g u s t 2 0 2 0
Slide 36: Year-to-date earnings
Year-to-date earnings Per diluted common Millions share Nine months ended June 30, 2020 2019 2020 2019 Gas Utility $ 221.8 $ 220.7 Gas Marketing 11.3 17.8 Other (10.0) (19.7) Net Economic Earnings (NEE)1 $ 223.1 $ 218.8 $ 4.14 $ 4.27 Impairments (148.6) - (2.90) - All other adjustments2 33.8 0.1 0.6
Slide 37: Year-to-date FY20 financial summary
Year-to-date FY20 financial summary Nine months ended June 30, (Millions, except earnings per share) 2020 2019 Earnings by Segment Gas Utility $ 221.8 $ 220.7 Gas Marketing 11.3 17.8 Other (10.0) (19.7) Net Economic Earnings (non-GAAP)1 $ 223.1 $ 218.8 Net Economic Earnings Per Share (non-GAAP)1 $ 4
Slide 38: Business unit performance
Business unit performance Millions Three months ended June 30, 2020 2019 Gas Utility $ 8.4 $ 7.6 Gas Marketing 0.1 3.3 Other (1.2) (5.9) Net Economic Earnings (NEE)1 $ 7.3 $ 5.0 • Gas Utility: +$0.8M – Margins reflect COVID impacts in lower demand and fees ($2.5M), and the net impact of the ISRS set
Slide 39: Q3 contribution margin
Q3 contribution margin Millions Change Three months ended June 30, 2020 2019 $ % Operating Revenues Gas Utility $ 306.0 $ 301.6 $ 4.4 1% Gas Marketing 11.6 18.3 (6.7) -37% Other and eliminations 3.5 1.4 2.1 $ 321.1 $ 321.3 $ (0.2) 0% 1 Contribution Margin Gas Utility $ 198.2 $ 195.3 $ 2.9 1% Gas Mar
Slide 40: Key Q3 variances
Key Q3 variances Three months ended June 30, As reported Pension (Millions) 2020 2019 Variance adjustment Variance O&M Gas Utility $ 115.5 $ 113.4 $ 2.1 $ (9.5) $ (7.4) Spire Marketing 2.2 3.2 (1.0) (1.0) All Other 7.2 5.8 1.4 1.4 Total $ 124.9 $ 122.4 $ 2.5 $ (7.0) Other Income $ 13.0 $ 6.4 $ 6.6 $
Slide 41: Q3 operating expenses
Q3 operating expenses Three months ended June 30, 2020 2019 As Pension Pro forma As (Millions) reported reclass 1 run rate reported Operating Expenses Gas Utility Natural & propane gas $ 70.7 $ $ 70.7 $ 75.5 Operation and maintenance (O&M) 112.5 (9.5) 103.0 111.2 Depreciation and amortization 4
Slide 42: t a t i o n – A u
42 S p i r e | I n v e s t o r p r e s e n t a t i o n – A u g u s t 2 0 2 0
Slide 43: Other financial information
Other financial information 43 S p i r e | I n v e s t o r p r e s e n t a t i o n – A u g u s t 2 0 2 0
Slide 44: Net economic earnings reconciliation to GAAP
Net economic earnings reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Other Total common share2 Three months ended June 30, 2020 Net Income (Loss) [GAAP] $ 12.6 $ 13.6 $ (118.5) $ (92.3) $ (1.87) Adjustments, pre-tax: Impairments 148.6 148.6 2.89
Slide 45: Net economic earnings reconciliation to GAAP
Net economic earnings reconciliation to GAAP Gas Gas Per diluted 2 (Millions, except per share amounts) Utility Marketing Other Total common share Nine months ended June 30, 2020 Net Income (Loss) [GAAP] $ 222.0 $ 13.6 $ (127.3) $ 108.3 $ 1.90 Adjustments, pre-tax: Impairments 148.6 148.6 2.90 U
Slide 46: Contribution margin reconciliation to GAAP
Contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Three months ended June 30, 2020 Operating income (Loss) [GAAP] $ 20.4 $ 18.2 $ (145.1) $ $ (106.5) Operation and maintenance 115.5 2.2 10.5 (3.3) 124.9 Depreciation and amortization
Slide 47: Contribution margin reconciliation to GAAP
Contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Nine months ended June 30, 2020 Operating income (Loss) [GAAP] $ 329.6 $ 18.2 $ (141.5) $ $ 206.3 Operation and maintenance 319.9 8.9 28.0 (9.6) 347.2 Depreciation and amortization 14
Slide 48: Spire Inc. adjusted EBITDA reconciliation to GAAP
Spire Inc. adjusted EBITDA1 reconciliation to GAAP Nine months ended June 30, (Millions) 2020 2019 Net Income [GAAP] $ 108.3 $ 218.9 Add back: Impairments 148.6 Interest charges 80.3 79.1 Income tax expense 16.9 45.2 Depreciation and amortization 146.8 134.9 Adjusted EBITDA [Non-GAAP] $ 500.9 $ 47
Slide 49: Adjusted long-term capitalization reconciliation to GAAP
Adjusted long-term capitalization reconciliation to GAAP As of June 30, 2020 As of September 30, 2019 1 (Millions) Equity Debt Total Equity1 Debt Total Capitalization $ 2,562.2 $ 2,478.3 $ 5,040.5 $ 2,546.4 $ 2,082.6 $ 4,629.0 Current portion of long-term debt — 5.4 5.4 — 40.0 40.0 Long-term Capital