Slide 1: Moving forward confidently
Moving forward confidently Investor Presentation August 2018
Slide 2: Spire | Investor Presentation | August 2018
2 Spire | Investor Presentation | August 2018
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: At Spire, we’re connecting people and energy
At Spire, we’re connecting people and energy Our mission Answer every challenge, advance every community and enrich every life through the strength of our energy. Transforming our company • Growing organically • Investing in infrastructure • Acquiring and integrating • Innovation and technology 4 Sp
Slide 5: We’re expanding to serve more customers and markets
We’re expanding to serve more customers and markets • We’ve transformed our company by increasing our geographic footprint • Our gas companies now serve 1.7 million homes and businesses across Alabama, Mississippi and Missouri • We are advancing our other businesses – Spire Marketing – Spire Storage
Slide 6: Moving forward confidently
Moving forward confidently • Gaining regulatory certainty – Missouri rate cases and Alabama RSE resets – Weather normalization across all our utilities – Reduced all customer rates as a result of tax reform • Executing on our organic growth initiatives and capital investment plan • Moving forward wi
Slide 7: Growing organically
Growing organically Total utility customers1 (Millions) 1.8 1.68 1.69 1.55 1.57 1.5 • Targeting programs that add 1.2 1.12 customers and increase utility margin 0.9 0.63 – Enhanced new business approach 0.6 – More focused economic development 0.3 • Seizing market opportunities through 0 2012 2013 20
Slide 8: Investing for LT growth
Investing for LT growth Capital expenditures forecast (Millions) 5-year forecast: ~$2.5B+ • FY18 capex forecast of $500M $590 – $15M of Pipeline spend shifted to FY19; utility $500 $490 $500 140 $475 spend increased by like amount 10 10 60 10 70 70 70 60 70 – $80M for utility new business investment
Slide 9: Moving forward with Spire STL Pipeline
Moving forward with Spire STL Pipeline • Received FERC approval on August 3, 2018 • Completing land acquisition and pre-construction activities • Evaluating construction schedule and overall timeline • Targeting late calendar 2019 in-service date • Total project investment increased to $210 - $225 m
Slide 10: Spire Marketing is expanding its reach
Spire Marketing is expanding its reach • Positioning Spire Marketing for continued growth and success – Named industry veteran, Pat Strange, to lead the business and grow the team – Expanding geographically with Houston business center – Strengthening our strategic position • Strong YTD FY18 results
Slide 11: We’re investing in natural gas storage
We’re investing in natural gas storage • Acquired Wyoming storage facilities – Acquired majority interest in large facility in Wyoming in late December ‒ Recently acquired a smaller adjacent facility • Spire Storage positioned to serve multiple regions and customers – utilities, power generators, ma
Slide 12: We delivered solid FY18 year-to-date performance
We delivered solid FY18 year-to-date performance Net economic earnings per share1 $4.30 $4.00 $3.82 0.37 • NEE per share up $0.48 or 18% 0.08 • Both segments benefited from return $3.00 of normal winter weather $2.00 3.72 3.92 • Gas Utility up $0.24 per share $1.00 – Higher volumes, increased ISRS r
Slide 13: Spire | Investor Presentation | August 2018
13 Spire | Investor Presentation | August 2018
Slide 14: We affirmed our FY18 earnings guidance
We affirmed our FY18 earnings guidance Net economic earnings per share $4.25 $0.30 ($0.10) ($0.31) $4.00 $0.31 ($0.06) $3.75 $3.70 $3.56 $3.50 $3.25 $3.00 $2.75 2017 actual 1H operating Tax reform MO rate case Rate design Equity 2018 midpoint results write-offs offering • 2018 NEEPS targeted at $3.6
Slide 15: Targeting long-term earnings growth of 4%-7%
Targeting long-term earnings growth of 4%-7% Net economic earnings per share 1 • Long-term NEEPS growth target ‒ Base year is 2018 run-rate earnings ‒ Frames both annual and long-term expectations • Driven by rate base growth and our $2.5 billion capex forecast • Anticipate growing contribution from
Slide 16: Strengthening our financial position
Strengthening our YTD adjusted EBITDA1 (Millions) financial position $500 1 $450 • YTD FY18 adjusted EBITDA of $400 $467 million, up 6% from last year $350 • Ample liquidity provided by our $467 $440 $300 $975 million credit facility and $250 commercial paper program $200 2 • LT equity capitalizatio
Slide 17: Growing our dividend
Growing our dividend Annualized dividends per share +7.1% $2.30 $2.251 Dividend Yield +7.1% 3.2%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 • Board declared quarterly dividend of $0.5625 per share, payable October 2 •
Slide 18: Moving forward confidently
Moving forward confidently • Growing our gas utilities through organic initiatives and further investment • Moving forward with Spire STL Pipeline • Advancing our other non-utility businesses • Strengthening our financial position with the recent equity offering • Affirming our guidance and outlook
Slide 19: We’re bringing people and energy together
We’re bringing people and energy together in ways that enrich the lives of those we serve and add value for our stakeholders. 19 Spire | Investor Presentation | August 2018
Slide 20: Appendix
Appendix 20 Spire | Investor Presentation | August 2018
Slide 21: Spire leadership team
Spire leadership team A. Suzanne Sitherwood B. Steven P. Rasche President and Executive Vice President, Chief Executive Officer Chief Financial Officer A B C. Steven L. Lindsey D. Mark C. Darrell Executive Vice President, Chief Senior Vice President, Operating Officer of Distribution General Counsel
Slide 22: Solid year-to-date performance
Solid year-to-date performance Nine months ended June 30, (Millions, except earnings per share) 2018 2017 Earnings by Segment Gas Utility $ 208.1 187.3 Gas Marketing 18.2 3.7 Other (16.0) (12.9) Net Economic Earnings (non-GAAP)1 $ 210.3 $ 178.1 Net Economic Earnings Per Share (non-GAAP)1 $ 4.30 $ 3.
Slide 23: Delivering earnings growth YTD in FY18
Delivering earnings growth YTD in FY18 • Net economic earnings1 (NEE) $210.3 million, up $32.2 million or 18% • Gas Utility: NEE $208.1 million (+$20.8 million) ‒ Contribution margin2 +$18.3 million • Higher demand (+$28.7 million) due to the return of normal weather • Higher MO ISRS, customer growt
Slide 24: Missouri rate cases
Missouri rate cases • New rates went into effect on April 19 – Reflect ~$70 million in cost savings from our transformative growth – Authorized 9.8% ROE, utility LT capital structure and $2.0B rate base Impact (Millions) Customer rates Earnings Base rate increase $66.2 $66.2 Rate reduction for tax b
Slide 25: Tax Cuts and Jobs Act
Tax Cuts and Jobs Act • We lowered customer rates for all utilities as a result of tax reform • 1H financial results include impacts based on the available guidance, including – Lowering our effective tax expense by $14.4 million, reflecting lower federal income taxes, net of amounts reflected in lo
Slide 26: Income tax expense
Income tax expense Nine months ended June 30, Quarter ended June 30, (Millions) 2018 2017 2018 2017 GAAP income tax (benefit) expense $ (8.5) $ 84.3 $ 5.7 $ 8.7 Add: Benefit from Revaluation of net deferred tax liabilities (TCJA) Balance at 12/31/17 50.0 — — — Adjustment due to the Missouri rate cas
Slide 27: S p t i o n | A u
27 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 1 8
Slide 28: Our Spire utility portfolio
Our Spire utility portfolio Missouri Alabama East 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 826 1,670 579 1631 Customers 421,000 651,000 513,000 84,900
Slide 29: Pipeline replacement program
Pipeline replacement program Robust infrastructure replacement programs with lives up to ~20 years Estimated replacement miles As of 12/31/17 Vintage Est. years to 1 Steel Cast iron plastic Total completion Missouri 1,750 800 - 2,550 16-18 Alabama 550 650 250 1,450 18-20 Total 2,300 1,450 250 4,000
Slide 30: 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 31: Legislative update
Legislative update • The Rate Case Modernization Act, Missouri SB 730 and HB 1878 – Sought to improve rate stability using annual rate reviews – Encouraged performance-based incentives and cost accountability • Positive progress last session – Regulatory reform bills for electric and water utilities
Slide 32: 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 33: 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 34: Growing Spire Marketing
Growing Spire Marketing • Provides wholesale services to diverse Spire Marketing’s operational reach customer base • Optimizes portfolio of commodity, transportation and storage contracts • Operates on 20+ pipelines • Average sales of 1.2 Bcf/d in FY18 • 7.2 Bcf of leased storage • Core operating fo
Slide 35: 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 (0.04) (0.
Slide 36: Net economic earnings (non-GAAP) reconciliation
Net economic earnings (non-GAAP) reconciliation Gas Gas Per Diluted 2 (Millions, except per share amounts) Utility Marketing Other Total Share Nine Months Ended June 30, 2018 Net Income (GAAP) $ 166.2 $ 20.0 $ 53.9 $ 240.1 $ 4.91 Adjustments, pre-tax: Missouri regulatory adjustments 30.6 - - 30.6 0.
Slide 37: Contribution margin (non-GAAP) reconciliation
Contribution margin (non-GAAP) reconciliation Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Nine Months Ended June 30, 2018 Operating income (loss) (GAAP) $ 279.5 $ 27.7 $ (7.9) $ - $ 299.3 Operation and maintenance 353.5 5.1 17.8 (7.5) 368.9 Depreciation and amortization 121.
Slide 38: Adjusted EBITDA and adjusted long-term capitalization reconciliation
Adjusted EBITDA1 (non-GAAP) reconciliation Nine Months Ended June 30, (Millions) 2018 2017 Net Income $ 240.1 $ 174.9 Add back: Interest charges 74.0 66.2 2 Regulatory asset writeoffs 38.4 - Income tax (benefit) expense (8.5) 84.3 Depreciation & amortization 122.9 114.4 Adjusted EBITDA $ 466.9 $ 439