Slide 1: Energy in motion
Energy in motion First quarter fiscal 2019 February 6, 2019
Slide 2: Participants on today's call
Participants on today’s call • Suzanne Sitherwood President and Chief Executive Officer • Steven P. Rasche Executive Vice President and Chief Financial Officer 2 Spire | First quarter fiscal 2019 earnings results
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: Putting our energy in motion
Putting our energy in motion Our mission Answer every challenge, advance every community and enrich every life through the strength of our energy. Transforming our company 1. Growing organically 2. Investing in infrastructure 3. Acquiring and integrating 4. Innovation and technology 4 Spire | First
Slide 5: Building on our momentum
Building on our momentum • Posted strong Q1 net economic earnings of $1.30 per share, up 9% from a year ago • Grew utility earnings per share by over 7% this quarter • Delivered improved operating results across our gas utilities • Began construction of Spire STL Pipeline • Received FERC approval to
Slide 6: Growing our gas utilities
Growing our gas utilities • Driving organic growth – Enhancing our new business processes, driving residential and commercial growth – New business capital investment of $27M, up 19% – 9% growth in new meters (over last year’s record pace) • Increasing capital investment – Q1 utility capital expendi
Slide 7: Enhancing our operating performance
Enhancing our operating performance • Investment in infrastructure upgrades, technology and our people is driving operating performance • Continuing to see positive results – Reduced employee injury rates and improved overall safety – Further enhanced system integrity – Reduced maintenance costs – I
Slide 8: Inspiring innovation through technology
Inspiring innovation through technology • Technology is helping us connect with and better serve customers • We are seeing increased levels of engagement via My Account ‒ Serving more than 680,000 homes and businesses ‒ Increased enrollment in paperless billing, budget billing and AutoPay ‒ Greater
Slide 9: Building Spire STL Pipeline
Building Spire STL Pipeline • We’ve received required approvals, permits and land rights • Construction is now underway • Total project investment estimated at $210-$225 million • The 65-mile pipeline will bring new gas supply to the St. Louis region • Targeting in-service date by the end of our fis
Slide 10: Advancing our other gas-related businesses
Advancing our other gas-related businesses • Positioning Spire Marketing for further growth and success ‒ Adding talent and building the team in Houston ‒ Scaling the business by expanding geographic reach and customer base ‒ We achieved strong Q1 performance with NEEPS of $0.16 • Building Spire Sto
Slide 11: Growing the dividend
Growing the dividend Annualized dividends per share Dividend Yield 3.1%2 1 Dividend payout ratio Dividends per share Dividend payout ratio • Board declared quarterly dividend of $0.5925, payable April 2 • 16 consecutive years of increases; 74 years of continuous payment • Dividend growth (5.3% in 20
Slide 12: We're driving earnings growth
We’re driving earnings growth First quarter ended December 31, Millions Per diluted share 2018 2017 2018 2017 Gas Utility $ 66.4 $ 59.5 $ 1.31 $ 1.22 Gas Marketing 8.3 3.6 0.16 0.08 Other (8.8) (5.2) (0.17) (0.11) 1 Net Economic Earnings (NEE) $ 65.9 $ 57.9 $ 1.30 $ 1.19 Effect of TCJA2 59.9 1.2
Slide 13: Increasing revenues and margin
Increasing revenues and margin First quarter ended December 31, Millions Change 2018 2017 $ % Operating Revenues Gas Utility $ 575.2 $ 542.0 $ 33.2 6% Gas Marketing 25.8 19.6 6.2 32% Other and eliminations 1.0 0.2 0.8 $ 602.0 $ 561.8 $ 40.2 7% 1 Contribution Margin Gas Utility $ 257.5 $ 255.5 $ 2.0
Slide 14: Expenses
Expenses First quarter ended December 31, Millions Change 2018 2017 $ % Gas Utility Natural and propane gas $ 251.7 $ 240.8 $ 10.9 5% Operation and maintenance (O&M) 102.5 99.0 3.5 4% Depreciation and amortization 43.7 40.3 3.4 8% Taxes, other than income taxes 39.2 36.7 2.5 7% Gas Marketing and oth
Slide 15: Investing for long-term growth
Investing for Capital expenditures long-term growth (Millions) $250 • Q1 FY19 capital spend of $207M $200 • FY19 forecasted spend of $650M $150 – $475M for gas utilities $100 $207 – Includes majority of total project spend $111 $50 for Spire STL Pipeline – Refining development plan for Spire $0 Q1 F
Slide 16: Strengthening our financial position
Strengthening our EBITDA 1 financial position (Millions) $160 1 $152 • Q1 FY19 EBITDA of $152M, up 3% $148 • Ample liquidity at the peak of our $140 seasonal borrowing $120 • Solid LT equity capitalization2 51.3%, up 190 basis points from a year ago $100 • Planned financings on track Q1 FY18 Q1 FY19
Slide 17: Affirming our earnings guidance
Affirming our earnings guidance • FY19 NEEPS range of $3.70-$3.80 • Long-term NEEPS growth target of 4%-7% Net economic earnings per share 1 1Run-rate adjustment is an estimate of Spire Marketing results of $0.17 in 2018 not anticipated to recur. 17 S p i r e | F i r s t q u a r t e r f i s c a l 2
Slide 18: At Spire, we're always in motion
At Spire, we’re always in motion, using our energy to get the job done today while exploring new and innovative ideas for tomorrow. 18 S p i r e | F i r s t q u a r t e r f i s c a l 2 0 1 9 e a r n i n g s r e s u l t s
Slide 19: Appendix
Appendix 19 Spire | First quarter fiscal 2019 earnings results
Slide 20: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi MO East MO West Founded 1852 1836 1933 1857 1867 Primary office Birmingham Mobile Hattiesburg St. Louis Kansas City Employees1 861 123 33 1,721 600 Customers1 420,600 83,900 18,500 653,600 516,300 Pipeline miles ~23,000 ~4,300 ~1,200 ~16,000 ~14,0
Slide 21: Gaining regulatory certainty
Gaining regulatory certainty • 2018 marked the completion of regulatory resets across our footprint • The last major component was the reset of Spire Alabama’s Rate Stabilization and Equalization (RSE) metrics • As expected, we reset ROEs and CCM benefit sharing and harmonized capital structures acr
Slide 22: 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 Three months ended December 31, 2018 Net Income (Loss) [GAAP] $ 66.4 $ 10.0 $ (9.1) $ 67.3 $ 1.32 Adjustments, pre-tax: Unrealized gain on energy-related der
Slide 23: Contribution margin [non-GAAP] reconciliation
Contribution margin [non-GAAP] reconciliation Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Three months ended December 31, 2018 Operating income (loss) [GAAP] $ 95.6 $ 12.5 $ (3.0) $ 105.1 Operation and maintenance 104.9 2.6 7.4 (2.7) 112.2 Depreciation and amortization 43.
Slide 24: EBITDA reconciliation
EBITDA1 [non-GAAP] reconciliation Three months ended December 31, (Millions) 2018 2017 Net Income $ 67.3 $ 116.0 Add back: Interest charges 25.9 24.4 Income tax expense (benefit) 14.7 (33.1) Depreciation & amortization 44.2 40.4 EBITDA $ 152.1 $ 147.7 Adjusted long-term capitalization reconciliation