Spire Inc. · NYSE:SR
Spire — AGA Financial Forum 2023
29 slides from Spire's conference presentation, May 21, 2023
Slide 1: Delivering essential energy
Delivering essential energy Investor Presentation AGA Financial Forum May 21-23, 2023
Slide 2: Spire at a glance
Spire at a glance • We’re a growing, financially strong natural gas company • Creating value through a diverse portfolio of gas-related businesses, in three segments – Gas Utility – Gas Marketing – Midstream • One of the largest publicly traded gas utilities serving 1.7M homes and businesses in AL,
Slide 3: Spire is a compelling investment
Spire is a compelling investment $ 7.0B 20 90%+ regulated Robust 10-year 5-7% long-term Growing Strong ESG business mix capex plan EPS growth dividend for performance; 20 consecutive commitment to 7-8% annual years carbon neutral rate base by midcentury growth Attractive yield of 4.1%1 1Based on $2.
Slide 4: 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 – Ensuring the safety and security of our operations, service and communities – Reducing methane emissions – Innovating for a cleaner energy future • Spire is
Slide 5: Spire's utility portfolio
Spire’s utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Customers1 430,100 84,200 18,400 1,199,900 Pipeline miles ~24,400 ~4,200 ~1,200 ~31,400 Rate base (Millions) $6782 $1272 $473 $3,4134 Return on equity 9.70%5 9.95%6 9.83% Equity capital
Slide 6: Advancing our environmental sustainability
Advancing our environmental sustainability • Established Scope 1 and Scope 2 emissions baseline • Evaluating renewable energy resources (RNG), focusing on – Exploring RNG opportunities, including methane capture from wastewater treatment plants as well as landfills and agricultural operations (anima
Slide 7: Gas Utilities Q2 FY23 update
Gas Utilities Q2 FY23 update • Solid operating performance • Improved earnings and cash flow • 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 AL – Higher interest costs (gas cost bal
Slide 8: 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 in Q2 FY23 – Reflecting operating cash flow $0 1H FY22 1H FY23 • Issued $550M i
Slide 9: Spire Marketing
Spire Marketing • Provides natural gas marketing services throughout N. America – Relationship-driven business delivering ~1.75 Bcf/d (2022) – 1,100+ customers – 28 Bcf of storage under contract for Winter 22/23 – Firm transport capacity of 1 Bcf/d – Active marketer of RNG and RSG • Optimizes commod
Slide 10: Spire STL Pipeline
Spire STL Pipeline • 65-mile pipeline provides safe reliable and economical energy to eastern Missouri • Strong performance since start of commercial operation in Nov. 2019 – Critical energy source during extreme weather (Winter Storm Uri - Feb. ’21) – Supports improved system reliability across St.
Slide 11: Spire Storage
Spire Storage • Spire Storage expansion – 23 Bcf facility in Wyoming with five interconnects serving Western U.S. – Storage essential for balancing heating loads and to support renewables – $195M planned investment to increase capacity to 39 Bcf over 2023-24 seasons – Strong market interest in first
Slide 12: FY23 capital investment
FY23 capital investment Capital expenditures (Millions) $308 17 $276 • 1H FY23 capex totaled $308M 10 driven by gas utility investment – Gas Utility spend up 9% 291 266 – More than $200M for infrastructure upgrades and new business • Midstream 1H FY23 capex 1H FY23 1H FY22 supporting Spire Storage e
Slide 13: Capex and financing outlook
Capex and financing outlook Capital expenditures forecast ~$7.0B • Capital investment of $7.0B planned (Millions) $780 over 10 years (through FY32) $720 $740 $760 $700 $700 – Focused on our gas utilities for pipeline $660 $660 $680 $640 upgrades, technology and new business 150 50 770 – Drives rate
Slide 14: Outlook
Outlook • Long-term annual 5-7% NEEPS1 NEE by segment (Millions) growth, based on FY23 Target – Original FY23 guidance midpoint ($4.15) Original Revised – Capex plans that drive rate base growth Gas Utility $225 − $235 $210 − $220 • FY23 NEEPS target range narrowed Gas Marketing 25 − 30 43 − 48 to $
Slide 15: Appendix
Appendix 15 Spire | Investor presentation – AGA Financial Forum – May 2023
Slide 16: 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 17: 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 18: 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 18 Spire | Investor presentation – AGA Financial Forum – May 2023
Slide 19: 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 20: The case for natural gas
The case for natural gas • America’s natural gas utilities have a proven track record of providing safe, The U.S. has 3,368 Tcf of future natural gas supply, The U.S. natural gas transmission and distribution Direct use of natural gas is a more efficient energy: 92% vs 38% for reliable and affordabl
Slide 21: Driving resilience, safety, system integrity and sustainability
Driving resilience, safety, system integrity and sustainability Employee safety Damage rate (OSHA – Days Away, Restricted or Transferred rate) (Per 1,000 locates) 4.78 3.22 4.24 3.89 3.87 3.74 3.67 2.63 1.88 1.56 1.51 1.19 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Leaks Utility met
Slide 22: 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 23: Alabama regulatory summary
Alabama regulatory summary • Top-rated regulatory jurisdiction by RRA • Rate Stabilization and Equalization (RSE) annual rate-setting process – RSE parameters evaluated 3-4 four years – Rates set based on forward-year budget, retained shareholders’ equity, and current recovery of planned capex • Spi
Slide 24: 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 25: 1H FY23 net economic earnings
1H FY23 net economic earnings Per diluted Millions common share Six months ended March 31, 2023 2022 2023 2022 Net Income [GAAP] $ 270.2 $ 229.3 $ 4.99 $ 4.28 All other adjustments1 14.1 14.3 0.27 0.28 2 Net Economic Earnings (NEE) $ 284.3 $ 243.6 $ 5.26 $ 4.56 NEE by segment Gas Utility $ 246.8 $ 2
Slide 26: Key quarterly variances
Key quarterly variances Adjustments (Millions) As reported Fair value Net Six months ended March 31, 2023 2022 NSC reclass and timing variance Contribution Margin1 841.1 721.3 $ - $ 4.7 115.1 Operation and Maintenance Gas Utility 239.2 211.5 (0.7) 27.0 Gas Marketing 12.0 5.9 6.1 Midstream 12.0 11.6
Slide 27: 1H NEE reconciliation to GAAP
1H NEE reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Midstream Other Total common share2 Six months ended March 31, 2023 Net Income (Loss) [GAAP] $ 246.4 $ 33.8 $ 8.0 $ (18.0) $ 270.2 $ 4.99 Adjustments, pre-tax: Fair value and timing adjustments 0
Slide 28: 1H contribution margin reconciliation to GAAP
1H contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Midstream Other Eliminations Consolidated Six months ended March 31, 2023 Operating Income (Loss) [GAAP] $ 353.2 $ 43.8 $ 14.6 $ (1.1) $ ⎯ $ 410.5 Operation and maintenance 239.2 12.0 12.0 8.9 (7.9) 264.2 Depreciation
Slide 29: EBITDA 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