Slide 1: Energy that advances
Energy that advances Third quarter fiscal 2020 update August 5, 2020
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 | Third quarter fiscal 2020 update
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: Reflecting on our beliefs, values and behaviors
Reflecting on our beliefs, values and behaviors • We’re guided by our mission and values – To answer every challenge, advance every community and enrich every life through the strength of our energy – Focused on safety, inclusion and integrity 4 Spire | Third quarter fiscal 2020 update
Slide 5: 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 6: Delivering on our promises
Delivering on our promises • Delivered Q3 NEE per share of $0.07, comparable to last year • Launched FY20 NEE per share guidance of $3.70 - $3.75 • Continued robust capital investment program 6 Spire | Third quarter fiscal 2020 update
Slide 7: 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 8: 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 9: 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 10: Net economic earnings
Net economic earnings Per diluted Millions common share Three months ended June 30, 2020 2019 2020 2019 Net Loss [GAAP] $ (92.3) $ (3.0) $ (1.87) $ (0.09) Impairments 148.6 - 2.89 - MO ISRS provision (4.8) - (0.09) - All other adjustments2 (44.2) 8.0 (0.86) 0.16 Net Economic Earnings (NEE)1 $ 7.3 $
Slide 11: 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 12: 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 13: 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 14: 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% 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 – Focused on pipeline up
Slide 15: For more than 160 years, there has been one constant— 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. 15 Spire | Third quarter fiscal 2020 update
Slide 16: Appendix
Appendix 16 Spire | Third quarter fiscal 2020 update
Slide 17: 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 18: Growing the dividend
Growing the dividend Annualized common stock dividend per share Dividend $2.70 yield 3.5%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 19: 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 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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