Slide 1: Year end fiscal 2017 earnings conference call
Year end fiscal 2017 Earnings conference call November 15, 2017
Slide 2: Participants on today's call
Participants on today’s call Suzanne Sitherwood President and Chief Executive Officer Steven L. Lindsey Executive Vice President and Chief Operating Officer, Distribution Operations Steven P. Rasche Executive Vice President and Chief Financial Officer 2 Spire | Year End FY17 Earnings Conference Call
Slide 3: 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 4: 2017 was another year of achievements for Spire
2017 was another year of achievements for Spire • Achieved further organic growth • Increased our investment in infrastructure • Posted strong operating performance • Transitioned our gas companies to Spire • Delivered earnings per share growth 4 Spire | Year End FY17 Earnings Conference Call
Slide 5: 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 • Annualized dividend increased to $2.25 per share • 7.1% increase su
Slide 6: Delivering on our promises
Delivering on our promises • We grew organically – Added customers for third straight year – Leveraged our scale, technology and shared services to drive efficiencies • Increased our investment in infrastructure – FY17 total capital spend up ~50%, driven by gas company infrastructure upgrades – Incl
Slide 7: How we're improving service through technology
How we’re improving service through technology • Spire transition included launch of a new, mobile-friendly website • Debuted My Account, an online customer account management tool • These platforms make it easier for customers to connect with us and manage their account on the go • Launched multi-y
Slide 8: Driving growth and improving operating performance
Driving growth and improving operating performance • Continued growth in customers and margins • Increased investment in infrastructure upgrades, technology and our people • Improved safety, customer service and overall system performance 8 Spire | Year End FY17 Earnings Conference Call
Slide 9: Growing the homes and businesses we serve
Growing the homes and businesses we serve • Increased customers across our Total utility customers Missouri and Alabama utilities (Millions) – Installed more than 10,000 new meters 1.8 1.68 1.69 1.55 1.57 – Added 1,300 multi-family units 1.5 – Increased new business investment 1.2 1.12 • Enhanced ou
Slide 10: Increasing capital investment in our gas utilities
Increasing capital investment Spire capital expenditures in our gas utilities (Millions) $438 • FY17 Gas Utility capital spend $25 of $413 million, up 42% $293 – $240 million for infrastructure upgrades $413 (pipeline replacement) $291 – $58 million for new business (+26%) – $17 million for EnergySo
Slide 11: Raising the bar on performance
Raising the bar on performance • At Spire, everything starts with safety and we’re getting even better – Conducted 4th Annual Safety Summit – Decreased employee injury rate by 7% • Reduced leaks across our system • Further improved leak response times • Improved customer service levels – Appointment
Slide 12: We're driving earnings growth
We’re driving earnings growth Year Ended September 30 Millions Per Diluted Share 1 Net Economic Earnings 2017 2016 2017 2016 Gas Utility $ 181.5 $ 160.3 $ 3.86 $ 3.67 Gas Marketing 6.8 6.4 0.14 0.15 Other (20.7) (17.6) (0.44) (0.40) $ 167.6 $ 149.1 $ 3.56 $ 3.42 % Growth 12.4% 4.1% • Net economic ea
Slide 13: Revenues and margin
Revenues and margin Gas Utility Year Ended September 30 Change Change (Millions) 2017 2016 $ % EnergySouth Run Rate Operating Revenues Gas Utility $ 1,667.9 $ 1,459.4 $ 208.5 14% $ 92.1 $ 116.4 Gas Marketing 79.3 78.5 0.8 1% Other and Eliminations (6.5) (0.6) (5.9) $ 1,740.7 $ 1,537.3 $ 203.4 13% 1
Slide 14: Expenses
Expenses Gas Utility Year Ended September 30 Change Change (Millions) 2017 2016 $ % EnergySouth Run Rate Operating Expenses Gas Utility Natural & propane gas $ 570.5 $ 492.2 $ 78.3 16% $ 22.0 $ 56.3 Other operation & maintenance 405.0 377.5 27.5 7% 33.5 (6.0) Depreciation & amortization 153.5 136.9
Slide 15: Fourth quarter highlights
Fourth quarter highlights Fourth Quarter Ended September 30 Millions Per Diluted Share Net Economic Earnings1 2017 2016 2017 2016 Gas Utility $ (5.8) $ (10.2) $ (0.12) $ (0.23) Gas Marketing 3.1 1.9 0.06 0.04 Other (7.8) (5.8) (0.16) (0.13) $ (10.5) $ (14.1) $ (0.22) $ (0.32) • Q4 loss is typical as
Slide 16: We're growing our cash flow
We’re growing our cash flow 1 FY17 EBITDA (Millions) $500 1 $400 • FY17 EBITDA grew 13% to $482 $482 $300 $428 million $200 • Ample liquidity provided by our FY16 FY17 credit facilities and commercial Long-term capitalization2 paper program (at September 30, 2017) • Solid LT equity capitalization2 4
Slide 17: 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, 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 million
Slide 18: 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 the Sept. 30 true-up period (through Sept. 30, 2017 true-up period) Spire Missouri ‒ Combined rate base grew $100 million East West Total ‒ Utility capital structure at 54% equity Rate
Slide 19: Driving continued growth
Driving continued growth Capital expenditures forecast (Millions) 5-year forecast: $2.3B $510 $485 • FY17 capital spend up ~50% ($145 million) $438 70 95 $420 $430 25 • FY18 spend forecast is $485 million 113 105 100 105 110 – $415 million for utilities – $70 million for STL Pipeline 300 310 315 315
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 p i r e | Y e a r E n d F Y 1 7 E a r n i n g s C o n f e r e n c e C a l l
Slide 21: Appendix
Appendix 21 Spire | Year End FY17 Earnings Conference Call
Slide 22: 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 23: 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 Three Months Ended September 30, 2017 Net Income (Loss) (GAAP) $ (6.5) $ 1.5 $ (8.3) $ (13.3) $ (0.28) Adjustments, pre-tax: Unrealized loss on energy-related
Slide 24: 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) (GAAP) $ 321.6 $ 5.2 $ (5.1) $ - $ 321.7 Operation and maintenance expenses 409.1 5.9 11.8 (5.5) 421.3 Depreciation and amo
Slide 25: 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