Slide 1: It’s a promise. Investor Presentation September 2017
It’s a promise. Investor Presentation September 2017
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: We’ve transformed our company through increasing our scale and expanding our geographic footprint
We’ve transformed our company through increasing our scale and expanding our geographic footprint. • We operate natural gas companies across Alabama, Mississippi and Missouri • Since 2012: – Homes and businesses served increased by 1.1 million – Enterprise value more than quadrupled to $6.1 billion*
Slide 4: Delivering on our promises
Delivering on our promises • Solid performance year-to-date in FY17 ‒ Growth in net economic earnings per share ‒ Continued improvements in safety, customer service and system operations • We are executing on our growth plans ‒ Growing organically ‒ Investing in infrastructure ‒ Acquiring and integr
Slide 5: When we replace pipe, install meters or help a customer grow their business
When we replace pipe, install meters or help a customer grow their business, we’re honoring our commitment to the people we serve, including the financial community. 5 S pire | Investor Present at ion – S ept emb e r 2017
Slide 6: We’re doing what we said we would do
We’re doing what we said we would do • Driving growth – Increasing customers and margins – On track with FY17 guidance and long-term EPS growth target of 4% - 6% – Raised calendar 2017 dividend by 7.1% • Increased our capital spending for both FY17 and our five-year outlook • Progressing on Spire ST
Slide 7: Serving more people and communities better than ever
Serving more people and Total homes and businesses served communities better than ever (Millions) • Growing organically to achieve 1.8 1.68 – Customer growth across our gas companies 1.57 1.6 1.55 – Increasing revenues and margins – Better efficiency via scale and shared services 1.4 • Seizing marke
Slide 8: Investment in growth remains a top priority
Capital expenditures Investment in growth (Millions) remains a top priority + 53% • YTD FY17 capital spend up $104 million – $75 million increase at the Spire MO and Spire AL utilities driven by $299 • Infrastructure upgrades $195 • New business investment – EnergySouth1 added $11 million – Spire ST
Slide 9: Investing in infrastructure to bring new energy to St. Louis
Investing in infrastructure to bring new energy to St. Louis • Spire STL Pipeline improves our supply diversity, reliability and resiliency ‒ 65-mile pipeline will connect to Rockies Express to access lower-cost shale gas ‒ Capacity of 400 MMcf/d ‒ Spire Missouri East to be foundation shipper (350 M
Slide 10: Working with our communities to modernize the business environment in Missouri
As we have been growing and acquiring gas companies, we’ve been working with our communities to modernize the business environment in Missouri. 10 S pire | Investor Present at ion – S ept emb e r 2017
Slide 11: We see potential for regulatory change in Missouri
We see potential for regulatory change in Missouri • New Republican governor with party majority in House and Senate, focused on reforms to ‒ Improve business environment ‒ Support economic development ‒ Promote more efficient government • We are pursuing changes to improve regulatory approach throu
Slide 12: We’re moving Missouri’s energy forward
We’re moving Missouri’s energy forward • Filed our first base rate increase request in four years on April 11 ‒ MO East: net $25.5 million (+4%) ‒ MO West: net $34.0 million (+8%) ‒ Net requests reflect additional $3 million ISRS for both Missouri utilities, effective June 1 • As proposed, Missouri
Slide 13: New rates allow us to better serve our customers
New rates allow us to better serve our customers • Filed rate base of $2.0 billion ‒ Spire Missouri East: $1,232 million (6.4% CAGR) ‒ Spire Missouri West: $793 million (9.6% CAGR) ‒ Anticipate ~$100 million growth at update • Spire Missouri capital structure and 10.35% ROE ‒ Equity at Dec. 31, 2016
Slide 14: Innovation and technology better connect us to the people we serve
Innovation and technology better connect us to the people we serve • Technology upgrades underway to improve customer service experience ‒ Enhanced connectivity, so our customers can reach us when and how they want ‒ Improved online data and resources to enable our customers to get the job done ‒ En
Slide 15: We’re maximizing all of our businesses
We’re maximizing all of our businesses • Spire Marketing provides wholesale services to diverse customer base • It optimizes a portfolio of commodity, transportation and storage contracts ‒ Operated on 30 interstate and intrastate pipelines in FY16 ‒ 5.4 Bcf of leased storage • Its core operating fo
Slide 16: We’re working to build a better natural gas company
We’re working to build a better natural gas company • Spire is more than a name. It’s a promise to champion people by delivering energy that inspires. • On Sept. 25, 1.7 million homes and businesses will come to know us as Spire • We’re using our combined strength to create a better customer experie
Slide 17: We use our deep business knowledge to drive financial performance
We use our deep business knowledge to drive financial performance and deliver shareholder value. 17 S pire | Investor Present at ion – S ept emb e r 2017
Slide 18: We’re driving earnings growth
We’re driving earnings growth • FY16 NEE per share grew by 7.2% • 5-year growth in Gas Utility earnings of 9.7% • FY17 YTD NEE per share of $3.82, on track with full-year growth expectation Gas Utility Gas Marketing Other2 Net economic earnings per share1 $4.00 $3.74 $3.82 $3.42 0.10 0.08 $3.05 $3.1
Slide 19: We’re maintaining strong cash flow and financial position
We’re maintaining strong cash YTD EBITDA1 (Millions) flow and financial position • YTD EBITDA1 of $440 million, +11% • Solid LT capitalization2 of 51.3% equity, +150bp from year end $396 $440 ‒ Recent capital raises added equity and decreased LT debt by ~$143 million • $170 million Spire Missouri de
Slide 20: Dividends continue to increase
Dividends continue to increase Annualized dividends per share +7.1% Dividend Yield $2.20 +6.5% $2.101 2.8%2 $2.00 +4.5% $1.96 +2.4% +3.5% $1.84 $1.80 $1.76 $1.70 $1.66 $1.60 $1.40 $1.20 2012 2013 2014 2015 2016 2017 • Board declared quarterly per share dividend of 52.5¢, payable Oct. 3 • 2017 annual
Slide 21: Our outlook focuses on growth
Our outlook focuses on growth Capital expenditure by jurisdiction (Millions) • We expect FY17 NEE share to be in $510 $485 the upper half of our $3.50 - $3.60 $445 75 95 $420 $430 25 per range given stronger Q3 results 135 130 130 135 135 • Long-term annual NEE per share 130 135 140 140 145 growth t
Slide 22: Spire stands for the energy we deliver and what that energy makes possible
Spire stands for the energy we deliver and what that energy makes possible. We remain committed to providing safe, reliable energy, but we are now redefining what it means to serve. 22 S pire | Investor Present at ion – S ept emb e r 2017
Slide 23: 23 S pire | Investor Present at ion – S ept emb e r
23 S pire | Investor Present at ion – S ept emb e r 2017
Slide 24: Appendix
Appendix 24 S pire | Investor Present at ion – S ept emb e r 2017
Slide 25: Spire leadership team
Spire leadership team A. Suzanne Sitherwood B. Steven P. Rasche President and Executive Vice President and Chief Executive Officer Chief Financial Officer A B C. Steven L. Lindsey D. Mark C. Darrell Executive Vice President and Senior Vice President, Chief Operating Officer, General Counsel and Dist
Slide 26: In 2017, 1.7 million homes and businesses will come to know us as Spire
In 2017, 1.7 million homes and businesses will come to know us as Spire. MO EAST (Laclede Gas) MO WEST (MGE) ALABAMA (Alagasco) MISSISSIPPI (Willmut) GULF COAST (Mobile Gas) • We operate natural gas companies across Alabama, Mississippi and Missouri • Since 2012: – Homes and businesses served increa
Slide 27: Our Spire utility portfolio
Our Spire utility portfolio Alabama MO East MO West Gulf Coast Mississippi (Alagasco) (Laclede Gas) (MGE) (Mobile Gas) (Willmut Gas) Founded 1852 1857 1867 1836 1933 Primary Office Birmingham St. Louis Kansas City Mobile Hattiesburg Employees 825 1,665 564 2421 Customers 420,500 647,000 508,100 84,5
Slide 28: Missouri regulatory summary
Missouri regulatory summary • Below-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
Slide 29: Missouri rate case highlights
Missouri rate case highlights Rate base growth (Millions) ($ millions, except customer impact) MO East MO West $2,500 Gross base rate increase $ 58.1 $ 50.4 $2.025B ~$2.1B ISRS rider included above 32.6 16.4 $2,000 Net change in customer rates $ 25.5 $ 34.0 $1.495B $1,500 Approx. impact on avg. resi
Slide 30: Alabama regulatory summary
Alabama regulatory summary • Top-rated regulatory jurisdiction by RRA • Progressive approach using forward year budget • Rate Stabilization and Equalization (RSE) ‒ Annual rate-setting process with quarterly reviews for potential rate reductions ‒ Rates set based on retained shareholders’ equity • A
Slide 31: Mississippi regulatory summary
Mississippi regulatory summary • Above-average rated regulatory jurisdiction by RRA • Rate Stabilization Adjustment (RSA) ‒ Filing by September 15th with rates effective November 1st (June 30th test year) ‒ Provides for annual rate performance reviews rather than periodic rate cases • Formulaic appr
Slide 32: We delivered solid year-to-date FY17 performance
We delivered solid year-to-date1 FY17 performance (Millions, except earnings per share) FY17 FY16 Earnings by Segment Gas Utility $ 187.3 $ 170.5 Gas Marketing 3.7 4.5 Other (12.9) (11.8) Net Economic Earnings (non-GAAP)2 $ 178.1 $ 163.2 Net Economic Earnings Per Share (non-GAAP)2 $ 3.82 $ 3.74 Othe
Slide 33: Our nine months FY17 earnings growth driven by Gas Utility
Our nine months FY17 earnings growth driven by Gas Utility • Net economic earnings1 (NEE) $178.1 million, up $14.9 million (9%) • NEE per share $3.82 (+$0.08 or 2%), reflecting 6% share increase from issuances ‒ In May 2016 for EnergySouth acquisition, and ‒ April 2017 upon maturity of equity units
Slide 34: We’ve been active in the capital markets, as planned
We’ve been active in the capital markets, as planned 2017 February March April April-September • Spire issued • Spire redeemed at • Spire issued • Spire Missouri first $150 million 3.54% par $250 million 2,504,700 mortgage bonds senior notes due floating-rate notes common shares, to fund by Sept. 15
Slide 35: Net economic earnings per share (non-GAAP) reconciliation
Net economic earnings per share (non-GAAP) reconciliation Fiscal Years Ended September 30, 2011 2012 2013 2014 2015 2016 Total Spire Diluted Earnings per Share (GAAP) $ 2.86 $ 2.79 $ 2.02 $ 2.35 $ 3.16 $ 3.24 Adjustments, pre-tax: Unrealized (gain) loss on energy-related derivatives (0.11) (0.02) 0.
Slide 36: Net economic earnings (non-GAAP) reconciliation
Net economic earnings (non-GAAP) reconciliation Gas Gas Per Diluted (Millions, except per share amounts) Utility Marketing Other Total Share2 Nine Months Ended June 30, 2017 Net Income (Loss) (GAAP) $ 187.0 $ 1.9 $ (14.0) $ 174.9 $ 3.75 Adjustments, pre-tax: Unrealized loss on energy-related derivat
Slide 37: Contribution margin (non-GAAP) reconciliation
Contribution margin (non-GAAP) reconciliation Gas Gas (Millions) Utility Marketing Other Eliminations Consolidated Nine Months Ended June 30, 2017 Operating income (loss) (GAAP) $ 320.3 $ 2.9 $ (3.4) $ - $ 319.8 Operation and maintenance 301.7 4.4 8.4 (3.9) 310.6 Depreciation and amortization 114.0
Slide 38: EBITDA and adjusted long-term capitalization reconciliation
EBITDA1 (non-GAAP) reconciliation Nine Months Ended June 30, (Millions) 2017 2016 Net Income $ 174.9 $ 158.4 Add back: Interest Charges 66.2 57.7 Income Tax Expense 84.3 77.7 Depreciation & Amortization 114.4 102.0 EBITDA $ 439.8 $ 395.8 Adjusted long-term capitalization reconciliation As of June 30