Slide 1: Stepping forward: Second quarter fiscal 2021 update
Stepping forward Second quarter fiscal 2021 update May 7, 2021
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 2021 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: Stepping forward
Stepping forward • Spire delivered essential energy during the Feb. cold weather event – We worked diligently to ensure customers were well served, safe and warm – We were well positioned with supply, transportation and storage resources – Spire STL Pipeline played a key supply role – Spire Marketin
Slide 5: Progressing on our ESG efforts
Progressing on our ESG efforts Methane emission reduction (from 2005 levels) • Spire’s 2020 Corporate Social Responsibility (CSR) report 26% to be issued May 10 43% 57% – Updates our progress on environmental 73% commitments, including methane emissions – Highlights further improvements in system in
Slide 6: Operational resilience
Operational resilience • Delivering on our commitments during February cold weather event – Well positioned via thoughtful planning – Met customer demand while managing gas costs – Net gas costs expected to be ~$110M based on projected offsets • Investing in our operations, growth and service to our
Slide 7: Investing in growth
Investing in growth Capital expenditures (Millions) $400 • 1H FY21 capital spend of $304M $350 $346 67 $304 – Gas utility capex includes $300 23 • $148M – pipeline replacement $250 • $75M – new business $200 $150 – Lower spend for Spire STL Pipeline 279 281 (placed in service Q1 FY20) $100 $50 • On
Slide 8: Moving forward with our Missouri rate review
Moving forward with our Missouri rate review • Primary focus of rate review is recovery of capital investment – $850M+ since 2018 to make our system more safe, reliable, resilient and clean – Implementing service enhancements customers want – Proposing new programs – voluntary carbon neutral program
Slide 9: Growing net economic earnings
Growing net economic earnings Per diluted Millions common share Three months ended March 31, 2021 2020 2021 2020 Net Income [GAAP] $ 187.4 $ 133.6 $ 3.55 $ 2.54 Provision for ISRS rulings ― 2.2 ― 0.04 Missouri regulatory adjustment (9.0) ― (0.17) ― All other adjustments1 17.2 8.2 0.33 0.17 Net Econo
Slide 10: Increasing contribution margins
Increasing contribution margins Millions Three months ended March 31, 2021 2020 Change Operating Revenues $ 1,104.9 $ 715.5 $ 389.4 54% 1 Contribution Margin Gas Utility $ 391.8 $ 369.8 $ 22.0 6% Gas Marketing 39.5 (0.5) 40.0 Other and eliminations 12.3 11.2 1.1 10% $ 443.6 $ 380.5 $ 63.1 17% • Gas
Slide 11: Key quarterly variances
Key quarterly variances Three months ended March 31, Adjustments As reported Pension MO (Millions) 2021 2020 Variance reclass regulatory Variance Natural gas $ 619.1 $ 297.1 $ 322.0 $ 322.0 Operation and Maintenance Gas Utility $ 104.0 $ 95.8 $ 8.2 $ (19.1) $ 9.0 $ (1.9) Gas Marketing 7.1 3.6 3.5 3.
Slide 12: Enhancing our financial position
Enhancing our financial 2 Adjusted EBITDA position (Millions) • Robust and growing EBITDA $600 • Balanced long-term capitalization $400 Issued $175M of equity units in February 2021 $490 $200 $400 7.50% yield 3-year conversion at up to 22.5% $0 premium1 1H FY20 1H FY21 • ~$675M available liqui
Slide 13: Updating guidance
Updating guidance Capital expenditures (Millions) 5-year forecast: ~$3.0B • FY21 NEEPS guidance range $625 $610 increased to $4.30-$4.50 given $590 $600 $580 $590 Q2 results • 5-7%1 LT annual NEEPS growth 590 600 • $3.0B capex plan through 2025 560 570 580 remains on track – Focused on infrastructur
Slide 14: Spire is a compelling investment
Spire is a compelling investment 90%+ regulated Robust 5-year 5-7% long-term Growing Strong ESG business mix capex plan EPS growth dividend for performance 18 consecutive including 7-8% annual years environmental rate base sustainability growth Attractive yield of 3.6%1 1Based on $2.60 per share div
Slide 15: Energy keeps our world turning, moving us forward.
Energy keeps our world turning, moving us forward. As an essential energy provider, we’ll keep stepping forward, advancing and innovating for a better tomorrow. 15 Spire | Second quarter fiscal 2021 update
Slide 16: Appendix
Appendix 16 Spire | Second quarter fiscal 2021 update
Slide 17: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Employees1 947 123 34 2,424 Customers1 424,800 84,400 18,400 1,186,500 Pipeline miles ~24,300 ~4,300 ~1,200 ~31,100 Rate base (Millions) $5882 $1082 $383 $2,7804 Return on equity 10.4
Slide 18: Equity Units detail
Equity Units detail February Pricing 2021 February 1 Equity Units offered 3,500,000 Settlements Stated amount per unit $50.00 Week of February 15 ($ Millions) Aggregate offering amount $175.0 Net proceeds $169.3 March Purchase contract settlement 2024 March 1 Interest rate on notes 0.75% Contract ad
Slide 19: Growing our dividend
Growing our dividend Annualized common stock dividend per share Dividend yield 3.6%2 $2.70 $2.60 1 80% $2.49 $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 60% $1.70 $1.50 $1.30 50% 2016 2017 2018 2019 2020 2021 • Annualized 2021 co
Slide 20: Year-to-date results
Year-to-date results Per diluted Millions common share1 Six months ended March 31, 2021 2020 2021 2020 Gas Utility $ 236.1 $ 213.4 Gas Marketing 43.1 11.2 Other (6.7) (8.8) Net Economic Earnings (NEE) $ 272.5 $ 215.8 $ 5.12 $ 4.06 Adjustment pre-tax: Missouri regulatory adjustment 9.0 0.18 Misso
Slide 21: Q2 FY21 NEE reconciliation to GAAP
Q2 FY21 NEE reconciliation to GAAP Gas Gas Per diluted 2 (Millions, except per share amounts) Utility Marketing Other Total common share Three months ended March 31, 2021 Net Income (Loss) [GAAP] $ 166.4 $ 24.9 $ (3.9) $ 187.4 $ 3.55 Adjustments, pre-tax: Fair value and timing adjustments 0.2 19.9 ―
Slide 22: Q2 FY21 contribution margin reconciliation to GAAP
Q2 FY21 contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Three months ended March 31, 2021 Operating Income [GAAP] $ 224.0 $ 31.7 $ 1.7 $ ― $ 257.4 Operation and maintenance 104.0 7.1 11.1 (3.2) 119.0 Depreciation and amortization 49.5 0
Slide 23: 1H FY21 contribution margin reconciliation to GAAP
1H FY21 contribution margin reconciliation to GAAP Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Six months ended March 31, 2021 Operating Income [GAAP] $ 330.8 $ 52.0 $ 7.5 $ ― $ 390.3 Operation and maintenance 207.0 10.4 19.7 (6.5) 230.6 Depreciation and amortization 98.1 0.
Slide 24: Adjusted EBITDA reconciliation to GAAP; Long-term capitalization
Adjusted EBITDA1 reconciliation to GAAP Six months ended March 31, (Millions) 2021 2020 Net Income [GAAP] $ 276.3 $ 200.6 Add back: Provision for ISRS rulings 4.8 Missouri regulatory adjustment (9.0) Interest charges 51.5 53.9 Income tax expense 68.6 44.5 Depreciation and amortization 102.3 96.7