Slide 1: Delivering essential energy: Second quarter fiscal 2023 update
Delivering essential energy Second quarter fiscal 2023 update May 3, 2023
Slide 2: Participants on today's call
Participants on today’s call Suzanne Sitherwood Steven L. Lindsey Steven P. Rasche President and Executive Vice President Executive Vice President Chief Executive Officer and Chief Operating Officer and Chief Financial Officer 2 Spire | Second quarter fiscal 2023 update
Slide 3: Our future is bright
Our future is bright • Natural gas is ensuring a safe, reliable, affordable and sustainable energy future • As an industry, we’re focused on – Protecting the people – Preserving the planet – Picturing the potential • Spire continues to invest in growth, infrastructure, innovation and energy efficien
Slide 4: Capital investment
Capital investment Capital expenditures (Millions) • 1H FY23 capex totaled $308M $308 $276 17 driven by gas utility investment 10 – Gas Utility spend up 9% – More than $200M for infrastructure 291 266 upgrades and new business • Midstream 1H FY23 supporting the Spire Storage expansion 1H FY23 1H FY2
Slide 5: Gas Utilities
Gas Utilities • Solid operating performance • Improved earnings and cash flow versus last year • Benefitting from new rates in MO and AL, offset by the headwinds of – Weather and usage • 21% warmer than normal weather • Partially effective weather mitigation in Alabama – Higher interest costs (gas c
Slide 6: Midstream
Midstream • Spire Storage expansion – Targeted $195M investment through 2024 increasing capacity by 16 Bcf to 39 Bcf – Project remains on track – Strong market interest in first phase of expanded capacity • Salt Plains storage acquired on April 1, 2023 – N. Oklahoma facility with ~10 Bcf of working
Slide 7: Previewing our 2022 Sustainability Report
Previewing our 2022 Sustainability Report Utility methane emissions reduction (From 2005 levels by calendar year ) • Protecting the environment 26% – Reduced methane emissions by 50% 43% 50% – Reduced leaks per 1,000 system miles 60% by 19%+ in fiscal 2022 73% • Caring for people 2015 2020 20221 202
Slide 8: Q2 FY23 net economic earnings
Q2 FY23 net economic earnings Per diluted Millions common share Three months ended March 31, 2023 2022 2023 2022 Net Income [GAAP] $ 179.2 $ 173.6 $ 3.33 $ 3.27 Adjustments1 20.0 7.4 0.37 0.15 Net Economic Earnings (NEE)2 $ 199.2 $ 181.0 $ 3.70 $ 3.42 NEE by segment Gas Utility $ 183.9 $ 169.2 Gas M
Slide 9: Key quarterly variances
Key quarterly variances Adjustments (Millions) As reported Fair value Net Three Months ended March 31, 2023 2022 NCS reclass and timing variance 1 Contribution Margin $ 476.7 $ 437.0 $ ―$ 16.2 $ 55.9 Operation and Maintenance Gas Utility $ 119.3 $ 104.2 $ (2.7) $ ―$ 12.4 $6M Missouri overheads expen
Slide 10: Liquidity and interest
Liquidity and interest 1 Increasing EBITDA (Millions) $600 • Cash flow improvement tied to new rates and initial recovery of gas costs $400 • Actively managing short-term debt $548 balances $200 $460 – Down roughly $665M this quarter – Reflecting operating cash flow $0 1H FY22 1H FY23 • Issued $550M
Slide 11: Outlook
Outlook • Re-affirming long-term 5-7% NEEPS1 NEE by segment (Millions) growth, based on FY23 Target – Original FY23 guidance midpoint ($4.15) Original Revised – Annual 7-8% utility rate base growth Gas Utility $225 − $235 $210 − $220 – Reaffirming capital spend targets of $700M Gas Marketing 25 − 30
Slide 12: Natural gas is a vital part of an affordable and sustainable energy future
Natural gas is a vital part of an affordable and sustainable energy future. As an essential energy provider, we’ll keep stepping forward, deepening relationships with our customers and innovating for a better tomorrow. 12 Spire | Second quarter fiscal 2023 update
Slide 13: Appendix
Appendix 13 Spire | Second quarter fiscal 2023 update
Slide 14: 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 15: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Employees1 1,009 127 39 2,347 Customers1 430,100 84,200 18,400 1,199,900 Pipeline miles ~24,400 ~4,200 ~1,200 ~31,400 Rate base (Millions) $6342 $1172 $493 Return on equity 9.70%4 9.9
Slide 16: Growing our dividend
Growing our dividend Annualized common stock dividend per share Dividend yield 4.1%1 $2.882 $2.74 $2.60 Dividend per share $2.49 $2.37 $2.25 2018 2019 2020 2021 2022 2023 • Annualized 2023 common stock dividend increased 5.1% to $2.88 per share • Supported by long-term earnings growth • 2023 marks 2
Slide 17: Q2 NEE reconciliation to GAAP
Q2 NEE reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Midstream Other Total common share2 Three months ended March 31, 2023 Net Income (Loss) [GAAP] $ 183.5 $ 2.2 $ 4.2 $ (10.7) $ 179.2 $ 3.33 Adjustments, pre-tax: Fair value and timing adjustments
Slide 18: Q2 contribution margin reconciliation to GAAP
Q2 contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Midstream Other Eliminations Consolidated Three months ended March 31, 2023 Operating Income (Loss) [GAAP] $ 251.3 $ 2.4 $ 7.5 $ (0.9) $ ⎯ $ 260.3 Operation and maintenance 119.3 5.7 6.2 4.9 (4.0) 132.1 Depreciation a
Slide 19: EBITDA [Non-GAAP] reconciliation
EBITDA1 [Non-GAAP] reconciliation Six Months Ended March 31, (Millions) 2023 2022 Net Income [GAAP] $ 270.2 $ 229.3 Add back: Interest charges 90.8 56.1 Income tax expense 62.5 59.1 Depreciation and amortization 124.7 115.8 EBITDA [non-GAAP] $ 548.2 $ 460.3 1EBITDA is earnings before interest, incom