Slide 1: Energizing the future: Second quarter fiscal 2022 update
Energizing the future Second quarter fiscal 2022 update May 6, 2022
Slide 2: 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 3: Participants on today's call
Participants on today’s call Steven L. Lindsey Scott B. Carter Steven P. Rasche Executive Vice President President Executive Vice President and Chief Operating Officer Spire Missouri and Chief Financial Officer 3 Spire | Second quarter fiscal 2022 update
Slide 4: Energizing the future
Energizing the future • Maintaining focus on our strategy and commitments – Continuing strong capital investment in organic growth, infrastructure upgrades and technology – Strengthening our operating performance – Enhancing our sustainability – Advancing on our commitment to be a carbon neutral com
Slide 5: Missouri 2022 rate case filing
Missouri 2022 rate case filing 25% • On April 1, Spire Missouri filed a new general rate case, seeking recovery of: 45% – Our full, updated cost of service, including deferred non-operational 30% overhead costs – Increased capital investment • Filing also seeks opportunity to earn Overheads recovery
Slide 6: Missouri regulatory update
Missouri regulatory update Actuals through FY22 (Millions) Future recovery 3/31/22 estimates Costs to be capitalized Depreciation $6.6 $21.0 Costs to be expensed Cost of service $5.9 $15.0 ISRS overheads Cost of service $5.0 $5.0 • Total regulatory deferral at March 31 is $17.5M • Future recovery wi
Slide 7: Investing in growth
Investing in growth Capital expenditures (Millions) $304 $300 23 $276 • 1H FY22 capex totaled $276M 11 $250 – Driven by gas utility investment $200 • $129M infrastructure upgrades $150 281 265 • $67M new business $100 – Lower non-utility spend $50 • FY22 forecast updated to $540M $0 1H FY21 1H FY22
Slide 8: Our sustainability commitment
Our sustainability commitment Methane emission reduction (From 2005 levels) • Protecting the environment 26% – Reduced methane emissions by 46% 43% 46% – Established team to lead environmental 59% commitment efforts 73% – Created baseline for Scope 1 and 2 emissions 2015 2020 2021 2025 2035 Target T
Slide 9: Spire STL Pipeline
SLL Spire STL Pipeline • On Dec. 3, the FERC issued a new temporary operating certificate • Allows pipeline to continue operating indefinitely during remand process • As part of remand process currently underway, FERC – Is considering a new permanent operating certificate – Will prepare an Environme
Slide 10: Net economic earnings
Net economic earnings Per diluted Millions common share Three months ended March 31, 2022 2021 2022 2021 Net Income [GAAP] $ 173.6 $ 187.4 $ 3.27 $ 3.55 Missouri regulatory adjustment — (9.0) — (0.17) All other adjustments1 7.4 17.2 0.15 0.33 Net Economic Earnings (NEE)2 $ 181.0 $ 195.6 $ 3.42 $ 3.7
Slide 11: Net economic earnings by segment
Net economic earnings by segment Three months ended March 31, (Millions) 2022 2021 Gas Utility $ 169.2 $ 159.7 Gas Marketing 14.4 39.8 Other (2.6) (3.9) $ 181.0 $ 195.6 • Gas Utility earnings rose $9.5M in Q2 (including prior year Uri benefit) – Rate increases in both Spire Missouri and the Southeas
Slide 12: Key quarterly variances
Key quarterly variances As reported Adjustments (Millions) Net Net Three months ended March 31, 2022 2021 regulatory NSC reclass variance Operation and Maintenance Gas Utility $ 104.2 $ 104.0 $ (8.0) $ 3.1 $ (4.7) Gas Marketing 3.2 7.1 (3.9) Other and eliminations 5.8 7.9 (2.1) Depreciation and Amor
Slide 13: Outlook
Outlook FY22 guidance • LT NEEPS growth target of 5%–7% 0.30 • FY22 NEEPS guidance of 0.20 $3.95 $3.75–$3.95 $4.18 0.05 – MO rate of return impact $3.75 – Anticipated growth – Forecast adjustments based on YTD FY21 MO 5%-7% Gas Utility Marketing results offset by cost control Run Rate Rate of Growth
Slide 14: Energizing the future
Energizing the future Our energy warms homes, fuels businesses and advances communities. As we step forward, we’re laying the groundwork for an innovative, resilient and sustainable energy future. 14 Spire | Second quarter fiscal 2022 update
Slide 15: Appendix
Appendix 15 Spire | Second quarter fiscal 2022 update
Slide 16: Growing our dividend
Growing our dividend Annualized common stock dividend per share Dividend yield 3.8%2 $2.90 1 $2.74 $2.70 $2.60 $2.49 $2.50 $2.37 Dividend per share $2.30 $2.25 $2.10 $2.10 $1.96 $1.90 $1.70 $1.50 $1.30 2016 2017 2018 2019 2020 2021 2022 • Annualized 2022 common stock dividend increased 5.4% to $2.74
Slide 17: Financially strong
Financially strong 1 Adjusted EBITDA (Millions) • Solid EBITDA despite headwinds $500 • Ample liquidity ~$360M at 3/31/22 – Supported by credit facility and commercial paper program $490 $460 – Supports credit metrics targets ▪ FFO/debt4: 15-16% $300 ▪ Holdco debt: below 20% 1H FY21 1H FY22 • Balanc
Slide 18: Adjusted EBITDA reconciliation to GAAP; Long-term capitalization
Adjusted EBITDA1 reconciliation to GAAP Six months ended March 31, (Millions) 2022 2021 Net Income [GAAP] $ 229.3 $ 276.3 Add back: Missouri regulatory adjustment — (9.0) Interest charges 56.1 51.5 Income tax expense 59.1 68.6 Depreciation and amortization 115.8 102.3 Adjusted EBITDA [non-GAAP] $ 46
Slide 19: QTD net economic earnings reconciliation to GAAP
QTD net economic earnings reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Other Total common share2 Three months ended March 31, 2022 Net Income (Loss) [GAAP] $ 169.2 $ 7.0 $ (2.6) $ 173.6 $ 3.27 Adjustments, pre-tax: Fair value and timing adjustment