energy that advances...2019/05/18 · energy that advances •executing on our value-creation...

Investor PresentationAGA Financial ForumMay 18-19, 2020

Energy that advances

S p i r e | I n v e s t o r p r e s e n t a t i o n – M a y 2 0 2 02

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. Forward-looking statements are typically

identified by words such as, but not limited to: “estimates,” “expects,” “anticipates,” “intends,” and similar expressions. Although our forward-looking

statements are based on reasonable assumptions, various uncertainties and risk factors may cause future performance or results to be different than

those anticipated. More complete descriptions and listings of these uncertainties and risk factors can be found in our annual (Form 10-K) and

quarterly (Form 10-Q) filings with the Securities and Exchange Commission.

This presentation also includes “net economic earnings,” “net economic earnings per share,” “contribution margin,” “EBITDA,” “adjusted EBITDA,”

and “adjusted long-term capitalization,” non-GAAP measures used internally by management when evaluating the Company’s performance and

results of operations. Net economic earnings exclude from net income the after-tax impacts of fair-value accounting and timing adjustments associated

with energy-related transactions, the impacts of acquisition, divestiture, and restructuring activities and the largely non-cash impacts of other non-

recurring or unusual items such as certain regulatory, legislative, or GAAP standard-setting actions. Beginning with the fourth quarter of fiscal 2019

and continuing into fiscal 2020, these items include the ISRS rulings provisions. The fair value and timing adjustments, which primarily impact the

Gas Marketing segment, include net unrealized gains and losses on energy-related derivatives resulting from the current changes in fair value of

financial and physical transactions prior to their completion and settlement, lower of cost or market inventory adjustments, and realized gains and

losses on economic hedges prior to the sale of the physical commodity. Management believes that excluding these items provides a useful

representation of the economic impact of actual settled transactions and overall results of ongoing operations. Contribution margin is defined as

operating revenues less natural and propane gas costs and gross receipts tax expense, which are directly passed on to customers and collected through

revenues. Adjusted long-term capitalization treats preferred stock as 50% debt and 50% equity, as rating agencies would treat preferred stock.

EBITDA is earnings before interest, income taxes, depreciation and amortization. Management believes EBITDA provides a helpful additional

measure of core results of Spire Storage. Adjusted EBITDA is earnings before interest, income taxes, depreciation and amortization, plus the non-cash

Missouri ISRS rulings provision. These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than,

GAAP measures such as operating income, net income or earnings per share. Reconciliations of net income to net economic earnings and of

contribution margin to operating income are contained in our SEC filings and in the Appendix to this presentation. Reconciliations of adjusted

EBITDA to net income, Storage EBITDA to net income and of adjusted long-term capitalization to capitalization per balance sheet are also contained

in the Appendix.

Note: Years shown in this presentation are fiscal years ended September 30.

Investor Relations contact:

Scott W. Dudley Jr.Managing Director, Investor Relations314-342-0878 | [email protected]

Forward-looking statements and use of non-GAAP measures

3

Energy that advances

• Executing on our value-creation strategy

– Growing organically

– Investing in infrastructure

– Advancing through innovation

• Delivering results

– Strong Q1

– Q2 results below plan due to weather

• Maintaining strong operating performance

• Strengthening our financial position

• Pursuing favorable regulatory outcomes

• Making and meeting our ESG performance commitments


We’re a growing, financially strong natural gas company

Delivering growth

• 5-year capex target of $2.8B focused on infrastructure upgrades

• Growing organically across our utility and gas-related businesses

• Targeting 4-7% annual long-term EPS growth

Financial strength

• Strong and growing cash flow; FY19 EBITDA $517M (up 5%); YTD FY20 $401M

• Solid equity capitalization and ample liquidity via $975M credit facility

• Investment grade credit ratings with improving metrics

Superior investorreturns

• Delivering average total shareholder return of 17% per year1

• Growing dividend with attractive 3.4% yield2

• Increasing market capitalization 4 since 2012

1For the five years ended September 30, 2019.2Based on SR average stock price for the two months March and April 2020.



Our mission:

Answer every challenge,advance every community andenrich every life through thestrength of our energy.

• Protecting the health and safetyof our employees, customers and communities is our core value

• How we have responded

– Activated our Incident Support andCrisis Management teams

– Established standing communications and updates for employees, leaders and our customers

– Following CDC guidelines and other health and safety best practices

– Planning for the next stepin this journey

Addressing the coronavirus challenge


• Donating $250k to local area food pantries and meal programs in our communities

• Donated and set up laptops for children in limited-income schools and for community organizations

• Coordinating with state and local governments and healthcare community to support coronavirus response

Community

• Continuing to provide safe and reliable service

• Suspended disconnections and late payment fees

• Postponing work that’s not time critical to reduce customer contact

• Expanding customer assistance through LIHEAP and other programs, including DollarHelp

• Spire donated $500kas a matching gift for theDollarHelp program

Customers

• Employing healthy practices (hand washing, social distancing)

• New emergency leave and other work policies for employees dealing with coronavirus

• Extra safety precautions forfield workers

• Work-from-home startingmid-March

• Eliminated all non-essential travel and group gatherings

• Enhanced cleaning of facilities

Employees

Steps we’ve taken to address coronavirus

Coronavirus – financial impacts and mitigation

• Residential customers represent ~70% of utility revenues and margins

• A majority of our earnings come during the winter heating season

• Monitoring our commercial and industrial customers, especially smaller firms, that will be impacted by economic slowdown

• We are tracking the incremental costs incurred

– Costs of PPE, enhanced facility cleaning

– Employee costs for time off and other operational expenses

– Bad debt expenses

• Forecasting the potential financial impact – key assumptions

– Downturn continues through June 2020

– Begin to see commercial rebound in June/July, but the ramp-up will be slow, resultingin low growth through the remainder of calendar 2020

– Suspension of disconnects and late payment fees is currently scheduled to end on May 31

– Minimal disruptions for infrastructure upgrade projects


Coronavirus – financial impacts and mitigation

• Other direct costs are being tracked, as well as savings from lower travel and other costs that would naturally be lower

• We have opportunities to offset the headwinds of coronavirus

– Additional operational efficiencies

– MoPSC opened working case to consider recovery of COVID-related costs

• Riders in Alabama that cover large decrease in C&I usage

– Spire Alabama revenue variance of more than $350k

– Spire Gulf revenue variance of more than $100k


Forecasted FY20 impacts

($ Millions) EBIT EPS EBIT sensitivity

Lost fees ($1.9) ($0.03) $0.5M/month

Lower margins

Residential ⎯ ⎯ $0.1M/month per 1% change in margin thru FYE

Commercial & industrial (2.2) (0.03) $0.2M/month per 1% change in C&I margin thru FYE

Higher bad debt expense (3.5) (0.05) $1.7M per 10 bp change in bad debt % above 2007-09 levels


• Alabama

– Phased re-opening started May 1

–


Missouri

• Legislation to clarify ISRS statute passed and sent to Governor for signing

– Helps inform legislative intent for current and future cases

– Defines pipeline upgrades eligible for ISRS recovery based on materials, which are known to be leak prone due to deterioration, not the age or condition of the pipe

• Annual increase of $11.1M granted in our February ISRS filing

– Approved by MoPSC effective May 25

– Reflects agreement reached in April between Spire, MoPSC Staff and OPC

• MoPSC decision due July 16 on 2016, 2017 and 2018 remanded ISRS cases

Alabama

• Off-system sales and capacity release program in effect since Dec. 1

• Earned 10 bp ROE incentive under AIM for FY20; on track with FY21 incentive

Pursuing favorable regulatory outcomes

ISRS update


(a) Annualized; MO-E and MO-W information combined.(b) Amount not authorized in prior filing including disallowed plastic material; in addition to the $11.8 million, the February 2020 filing includes a refiling of $5.3 million related to these disallowed plastics.(c) $13.7M authorized through the 2016 and 2017 ISRS filings was placed into rates through the 2018 rate case.

(Millions) RequestedPlastics not

authorized Authorized

FY 2019 and

YTD FY 2020

Subject to

ISRS ruling

Subject to ISRS

ruling

Currently under

appeal Note

September 2016effective: 1/28/2017 $8.0 $ ─ $7.7 $ ─ $3.1

February 2017

effective: 6/1/2017 6.0 ─ 6.0 ─ 1.1

June 2018

effective: 10/8/18 12.1 4.1 8.0 12.2 12.2 $8.0

January 2019

effective: 5/25/2019 14.2 1.0 12.4 10.8 ─ $12.4

July 2019

effective: 11/16/2019 10.2 0.9 8.8 2.9 NA 7.3

February 2020

effective: 5/25/2020 11.8 11.1

TOTAL $62.3 $6.0 $54.0 $25.9 $16.4 $8.0 $19.7

Interest accrued 0.5

Total ISRS provision at 3/31/20 $16.9

MoPSC approved $11.1M effective 5/25/20.

Missouri Court of Appeals for the Western District

response brief due by 6/10/20.

MoPSC requested and authorized

revenues(a)

ISRS revenues

collected

FY 2020 estimated ISRS

revenues

Missouri Court of Appeals for the Western District

reply briefs due by 6/4/20.

Opinion by Missouri Court of Appeals for the

Western District issued 11/19/19.

Now on remand to the MoPSC awaiting final

disposition.

(b)

(c)

12Pipelines, storage and otherGas Utility

$610

540 560

70 80

$0

$100

$200

$300

$400

$500

$600

$700

Prior Updated

$640

(Millions)FY20 forecast

Pipelines, storage and otherGas Utility

$346

255 279

122 67

$0

$100

$200

$300

$400

FY19 FY20

$377

(Millions) 1H actuals

Capital expenditures

• Furthering utility organic growth

– $53M new business investment YTD

– New business spend and new meter additions on pace with last year

• YTD spend on track with plans

– $279M utility spend focused on upgrades and new business

– $45M investment in STL Pipeline

– $20M for Spire Storage

• FY20 capex increased to $640M

– Utility spend up $20M to $560M

– 88% of capex earmarked for utilities

Expanding capital investment



*Debt issuance net of maturities.

$50-100 $100-150 $100-150

$410$150-250 $150-250

FY20 FY21 FY22

($ Millions)

Long-term financing forecast*

Common and preferred equity Operating company long-term debt

Gas Utility Pipelines, storage and other

$540$530$520$530

$640

560 500 510 520 530

80

30 10 10 10

FY20 FY21 FY22 FY23 FY24

5-year forecast: $2.8B

(Millions)

Capital expenditures

• 5-year capex plan updated through 2024 to $2.8B

– Driven by utility spend (95% of total)

– Focused on pipeline upgrade program extending over next 8-10 years

– Investment diversified across our utility jurisdictions

– Utility spend ~80% recovered with minimal lag or reflected in earnings

– Delivers rate base growth of 7-8% over the forecast period

• Long-term annual NEEPS growth target remains 4-7%

• Financing plans on track

– Long-term debt issued in Q1 FY20

– FFO/debt targeted at 15-16%

– Holdco debt percentage target

Enhancing stakeholder value

Growing organically

• Strong focus on new business

• Greater engagement on economic development

• Driving margin via customer growth and supportive regulatory outcomes

Advancing through innovation

• Building on legacy of continually improving service, efficiency and cost

• Formalizing approach to innovation with structure and processes

• Leveraging technology

• Controlling costs across our utilities

O&M expenses per customer2

1See Contribution margin reconciliation to GAAP in the Appendix.2Operation and maintenance (O&M) expenses and customers for Spire Missouri,Spire Alabama and Spire Gulf for all years. Expenses in orange for 2018 and 2019exclude Missouri rate case items and the mix of service and non-service postretirement benefit costs transferred below the operating income line.

Contribution margin1

– Gas Utility

$939 $948$967

700

800

900

1,000

2017 2018 2019

(Millions)

$270

$252

$244$241

$256 $256

$251

$230

$240

$250

$260

$270

2014 2015 2016 2017 2018 2019

$247


$413 $401

$0

$100

$200

$300

$400

$500

1H FY19 1H FY20

15

Maintaining solid liquidity and financial position

• Funded a $150M, 364-day term loan on March 26

• Maintain significant liquidity in revolver and CP program, with $661M available at March 31

• Robust YTD EBITDA

• Issued 113k shares under our ATM program; $9.7M in gross proceeds

• Balanced long-term capitalization (49.4% equity at March 31)

1Adjusted EBITDA is earnings before interest, income taxes, depreciation andamortization, plus the non-cash Missouri ISRS rulings provisions in FY20, see Appendix.2See Adjusted long-term capitalization reconciliation to GAAP in the Appendix.

Adjusted EBITDA1

(Millions)

49.4% 50.6%Equity

Debt

Adjusted long-term capitalization2

(at March 31, 2020)


Growing the dividend


1Quarterly dividend of $0.6225 per share effective January 2, 2020, annualized.2Based on $2.49 per share dividend and SR average stock price of $73.50 for the two months of March and April 2020.

• Annualized common stock dividend increased 5.1% to $2.49 per share for 2020

– Supported by our long-term earnings growth targets and conservative payout ratio(target range of 55-65%)

– 17 consecutive years of increases; 75 years of continuous payment

• Quarterly preferred stock dividend of $0.36875 declared, payable August 17, 2020

Dividend yield 3.4%2

Div

iden

d p

ayo

ut

rati

o

Div

iden

d p

er s

har

e

Annualized common stock dividend per share

Dividend payout ratio

1

$1.84

$1.96

$2.10

$2.25

$2.37

$2.49

50%

60%

70%

80%

$1.30

$1.50

$1.70

$1.90

$2.10

$2.30

$2.50

$2.70

2015 2016 2017 2018 2019 2020

The case for natural gas

$879Families using natural gas for heating, cooking and drying

clothes, rather than electricity, save $879 per year

Direct use of natural gas is a more efficient energy: 91% vs

36% for generation from converting natural gas or

other fossil fuels to electricity

The U.S. natural gas transmission and distribution

system (2.6M miles of underground pipeline) is the safest and most reliable way

to deliver energy

Increased use of natural gas is the main driver of the power

sector’s CO2 emissions reaching a 25-year low

The cost of electrification to the U.S. economy through

2035 is $590B - $1.2T

The U.S. has 3,374 Tcf of future natural gas supply,

more than 110 years worth

110+ years

Residential natural gas accounts for only 4% of total

U.S. GHG emissions

4% 53%REDUCTIONSwitching from coal to natural

gas for electric generation reduces GHG emissions by

53% on average

Abundant and domestic

Safe and reliable

Efficient and economical

Better for the environment

Forced electrification could increase average U.S.

household energy costs by $750-$910 per year



Read our 2019 CSR Report at CSRReport.SpireEnergy.com

• Experienced manage-ment with deep bench

• Robust governance and risk oversight culture

• Strong, independent and diverse Board with significant relevant experience and backgrounds

– Average tenure 10 years

– 8 of 9 members are independent including Chairman

– Significant racial/ ethnic and gender diversity

• Inspiring future leaders via training, career development and educational opportunities

• Driving improved employee health and well-being through training and enhanced safety protocols

• Increasing employee engagement and driving a strong, supportive and inclusive corporate culture

• Supporting our communities through financial contributions and volunteering

• Focusing on health and human services, community develop-ment, education, environment and disaster relief

• Growing our economies through economic development

• Building tomorrow’s workforce via education and training

• Ongoing investment in pipeline upgrades and system integrity

• Achieving 39% reduction in methane emissions since 2005

• Driving energy efficiency programs

• Managing resources responsibly (water usage, waste streams)

• Adopting LEED building standards

• Deploying innovative technologies to reduce environmental impact

Our commitment to Corporate Social Responsibility (CSR)

Environment Communities People Leadership

Upgrading our infrastructure and reducing methane

• Achieved a 39% reduction in greenhouse gas emissions since 2005

• Committed to

– 53% reduction in methane emissionsby 2025 from 2005 base

– Achieving carbon neutrality by midcentury

Estimated replacement miles remainingAs of 12/31/19

Miles of pipeline replaced

19 S p i r e | I n v e s t o r p r e s e n t a t i o n – M a y 2 0 2 0

*Completion expected in 8-10 years.1Includes bare steel mains and services; threaded and coupled steel main.

Methane reductionsMetric tons/year

*Value represents a projection based on current efforts.

174.0141.9

99.775.6

60.4

2015 2016 2017 2018 2019

Strengthening system integrityLeaks per 1,000 system miles

Delivering strong operating performance

3.66 3.653.22

2.63

1.88

2015 2016 2017 2018 2019

Reducing employee injuriesOSHA DART1 rate

4.84 4.76 4.784.24

3.87

2015 2016 2017 2018 2019

Improving pipeline safetyDamages per 1,000 locates

32.428.9 28.4 26.8 25.2

2015 2016 2017 2018 2019

Enhancing service and safetyAverage leak response time (minutes)

1Days away, restricted or transferred.



For more than 160 years, there has been one constant—we serve people.

As we continue to focus on the future, we’re committed to growing, innovating and doing all we can to advance people, performance and possibilities.


Supplemental material• Spire leadership

• Our business and operating footprint

• Additional gas utility information

• Our gas-related businesses

• Financial performance

• Other financial information

Spire executive leadership team

SuzanneSitherwood

President andChief Executive Officer

B

SteveLindsey

Executive Vice President, Chief Operating Officer

SteveRasche

Executive Vice President, Chief Financial Officer

MarkDarrell

Senior Vice President,Chief Legal and Compliance

Officer

MikeGeiselhart

Senior Vice President,Chief Strategy and Corporate

Development Officer


Spire business unit presidents

Scott Carter

President, Spire Missouri

Joe Hampton

President, Spire Alabamaand Mississippi

Scott Smith

President, Spire STL Pipelineand Spire Storage

Pat Strange

President, Spire Marketing


• We’re the fifth largest publicly traded natural gas company serving 1.7 million homes and businesses across Alabama, Mississippi and Missouri

• We are developing and growing our gas-related businesses

– Spire Marketing– Spire STL Pipeline– Spire Storage

We’ve expanded to serve more customers and markets


Additional gas utilityinformation


Our Spire utility portfolio


Alabama Gulf Mississippi Missouri

Primary office Birmingham Mobile Hattiesburg St. Louis

Employees1 941 119 35 2,389

Customers1 420,600 83,900 18,500 1,169,900

Pipeline miles ~23,000 ~4,300 ~1,200 ~30,000

Rate base (Millions) $5092 $922 $293 $2,2174

Return on equity 10.40%5 10.70% 9.73% 9.80%

Equity capitalization 55.5%5 55.5% 50.0% 54.2%

1Employees and customers as of 9/30/19.2The Rate Stabilization and Equalization (RSE) mechanism uses avg common equity for year ended 9/30/19, rather than rate base, for ratemaking purposes. 3Mississippi net assets less deferred taxes for Rate Stabilization Adjustment (RSA) purposes as of 8/30/19 filing.4Estimated FY18 year-end rate base at Spire Missouri reflecting growth since amended MoPSC order dated 3/7/18, establishing rate base in MO East of $1,221 million and MO West of $807 million. Growth in rate base subject to prudence review.5Terms of renewed RSE, effective 10/1/18 through 9/30/22. For 2020, Spire Alabama qualified for a 10 bp increase in its allowed ROE to 10.5%, based on exceeding the threshold number of miles of pipeline replaced in 2019 under the Accelerated Infrastructure Modernization (AIM) mechanism.

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 mechanisms to address purchased gas costs, pensions and energy efficiency investments

• Next rate case must be filed by October 2021; can be sooner if we choose

• Infrastructure System Replacement Surcharge (ISRS)

– Enables recovery of (and on) infrastructure investment with minimal regulatory lag

– In effect since 2003

• Missouri Public Service Commission – five members appointed by Governor (also appoints the Chairman)

– William P. Kenney (R) – Jan. 2019 – Ryan A. Silvey (R), Chair – Jan. 2024

– Scott T. Rupp (R) – Apr. 2020 – Jason R. Holsman (D) – Jan. 2025

– Maida J. Coleman (D) – Aug. 2021

1RRA is Regulatory Research Associates.


Alabama regulatory summary

• Top-rated regulatory jurisdiction by RRA

• Rate Stabilization and Equalization (RSE) annual rate-setting process

– RSE parameters evaluated every four years (last set in 2018)

– Uses forward-year budget and quarterly reviews

– Rates set based on retained shareholders’ equity

• Spire Alabama: 10.40% allowed ROE and 55.5% equity ratio

• Spire Gulf: 10.7% allowed ROE and 55.5% equity ratio

– Includes current recovery on planned capital spend

• Cost Control Measurement (CCM)

– Incentive to manage O&M costs relative to target benchmark

– Sharing with customers outside of band

• Good recovery mechanisms

– Gas costs, weather normalization and certain other non-recurring costs

– Opportunity for enhanced return for pipeline replacement (Spire Alabama’s AIM)and certain infrastructure investments (Spire Gulf’s CIMFR)

– Spire Alabama Off-System Sales and Capacity Release – 75%/25% value sharing with customers

• Alabama Public Service Commission – commissioners elected to 4-year term

– Twinkle Andress Cavanaugh, President (R) – 2020 – Chris “Chip” Beeker (R) – 2022

– Jeremy H. Oden (R) – 2022

Spire Alabama


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 when ROE is outside a 1% band of allowed ROE (currently 10.36%)

‒ 50% of the amount over the allowed return going to a rate reduction, or

‒ 75% of the deficiency toward a rate increase

– Fixed rate structure and weather normalization mechanism effective with 2018-19 heating season

• Supplemental Growth (SG) Rider

– Program through Oct. 2021 for up to $5M in investment

– Qualified industrial development projects earn a 10-year supplemental return at 12.0% ROE

• Mississippi Public Service Commission – commissioners elected to 4-year term

– Dane Maxwell, Chair (R) – 2023 (Southern District)

– Brandon Presley (D) – 2023 (Northern District)

– Brent Bailey (R) – 2023 (Central District)


Our gas-related businesses



Growing Spire Marketing

Spire Marketing’s operational reach• Provides gas marketing servicesin the central and southern U.S.

• Mostly wholesale services to munis, producers, power generators, storage operators, pipelines and utilities

• Utilities account for majority of customers (by net dollar exposure)

• We’re a logistics-based business providing physical delivery of gas

– Optimizing our portfolio of commodity, transportation and storage contracts

– Operating with a strong team in Houston

– Expanding geographically and increasing customer base and volumes

• Delivering solid performance

– FY19 NEE of $19.4M

– YTD FY20 NEE of $11.2M


Spire STL Pipeline completed and placed into service

• Began commercial operation in mid-November 2019

• The 65-mile pipeline is providinga new gas supply to the St. Louis region

– Enhances diversity, reliability and resiliency

– Capacity of 400 MMcf/day withSpire Missouri contracted for350 MMcf/day

– Actively seeking to contractremaining capacity of 50 MMcf/day

• Total project cost ~$265M


Developing Spire Storage

• Solid operations during winter season, meeting customers’ needs

• Disciplined approach to project development and capital deployment

– Completed several capital projectsto ensure reliable winter operations

– YTD FY20 capex $20M; Q3 FY20 targeted investment $10M

– Total investment to date1 of $168M, including $56M in base gas

• Engaging with current and prospective customers to better understand their needs and assess market opportunities

• Building the team

• YTD FY20 EBITDA loss of $2.9M; expect positive EBITDA by year end

1Through March 2020 .

Financial results for YTD and Q2 FY20 ending March 31


Year-to-date FY20 earnings

• Net economic earnings up $2.0M

‒ Gas Utility essentially equal to last year as higher margins were offset by higher operating and employee related costs

‒ Gas Marketing decrease due to higher volumes more than offset by less favorable market conditions and higher costs

‒ Improved other costs reflect earnings from Spire STL Pipeline that went into service in calendar 2019 and improved Spire Storage results

• EPS reflects impact of preferred and common stock issued in last 12 months of $0.17per share

1See Net economic earnings reconciliation to GAAP later in Appendix.2All other adjustments include recurring NEE adjustments for fair value, acquisition, and income tax effect.

Six months ended March 31, 2020 2019 2020 2019

Gas Utility 213.4$ 213.1$

Gas Marketing 11.2 14.5

Other (8.8) (13.8)

Net Economic Earnings (NEE)1

215.8$ 213.8$ 4.06$ 4.20$

MO ISRS provision (4.8) - (0.09) -

All other adjustments2

(10.4) 8.1 (0.20) 0.16

Net Income [GAAP] 200.6$ 221.9$ 3.77$ 4.36$

Average shares outstanding 51.1 50.8

MillionsPer diluted

common share


1See Net economic earnings reconciliation to GAAP later in Appendix.2See Adjusted EBITDA reconciliation to GAAP later in Appendix.3See Adjusted long-term capitalization reconciliation to GAAP later in Appendix.

Year-to-date FY20 financial summary

(Millions, except earnings per share)

Earnings by Segment

Gas Utility $ 213.4 $ 213.1 Gas Marketing 11.2 14.5 Other (8.8) (13.8)

Net Economic Earnings (non-GAAP)1 $ 215.8 $ 213.8

Net Economic Earnings Per Share (non-GAAP)1 $ 4.06 $ 4.20

Other Key Metrics

EBITDA2 $ 400.5 $ 412.6 Capital Expenditures 346.1 376.8 Long-Term Debt (incl. current portion) 2,490 2,257 Total Debt 3,051 2,769

% Equity to Adjusted LT Capitalization3 49.4% 51.6%

Average Shares Outstanding - Diluted 51.1 50.8

Six months ended

March 31,

2020 2019



1See Net economic earnings reconciliation to GAAP in the Appendix.2All other includes recurring NEE adjustments for fair value, acquisition, and income tax effects of all NEE adjustments.

• Gas Utility NEE down $2.4M

– Lower utility contribution margin due to warmer weather

– Decreased value of investments in certain employee benefit plans

• Gas Marketing NEE down $1.1M

– Higher volumes from our continued expansion

– Offset by less favorable market conditions and higher costs

• Improved performance at Spire STL Pipeline and Spire Storage, offset by higher corporate costs

• Impact of preferred and common stock issued in last 12 months = $0.08 per share

Three months ended March 31, 2020 2019 2020 2019

Gas Utility 144.3$ 146.7$ Gas Marketing 5.1 6.2 Other (5.4) (5.0)

Net Economic Earnings (NEE)1

144.0$ 147.9$ 2.75$ 2.90$

MO ISRS provision (2.2) - (0.04) -All other adjustments

2(8.2) 6.7 (0.17) 0.14

Net Income [GAAP] 133.6$ 154.6$ 2.54$ 3.04$

MillionsPer diluted

common share

Delivering solid Q2 net economic earnings

Q2 revenues and contribution margin

• Gas Utility

‒ Operating revenues down, reflecting lower gas cost and lower usage due to milder weather

‒ Higher year-over-year contribution margin due to:

• Added ISRS revenues at Spire Missouri

• Higher RSE annual rate renewal at Spire Alabama

• Partially offset by lower usage due to milder weather, net of weather mitigation

• Gas Marketing

‒ Revenue increase reflects higher volumes partially offset by lower commodity prices

‒ Margin (excluding the change in fair value adjustments of $20.3M) was essentially flat with the prior year, as higher volumes were offset by higher costs for incremental transportation capacity and unfavorable market conditions

1Contribution margin is operating revenues less gas costs and gross receipts taxes. See Contribution margin reconciliation to GAAP in the Appendix.

Three months ended March 31, 2020 2019 $ %

Operating Revenues

Gas Utility 679.0$ 776.8$ (97.8)$ -13%

Gas Marketing 33.3 25.5 7.8 31%

Other and eliminations 3.2 1.2 2.0

715.5$ 803.5$ (88.0)$ -11%

Contribution Margin1

Gas Utility 369.8$ 366.7$ 3.1$ 1%

Gas Marketing (0.5) 19.7 (20.2) -103%

Other and eliminations 11.2 0.9 10.3

380.5$ 387.3$ (6.8)$ -2%

Millions Change


Contribution margin is operating revenues less gas costs and gross receipts taxes. See Contribution margin reconciliation to GAAP in the Appendix.

• Compared to last year – lower weather-driven demand was largely offset by

‒ Missouri

• Residential largely offset by higher net ISRS revenues

• C&I margins reflect full weather impact

‒ AL, Gulf and MS: weather offset by annual rate increases as weather mostly mitigated

• Missouri margins fell well short of our expectation of normal weather

‒ Residential volumetric margins were ~$5M lower, as Weather Normalization Adjustment Rider (introduced in our last rate case) was 6% ineffective

‒ Commercial and industrial margins (not weather-mitigated) were ~$2M short due to lower weather-driven demand

Q2 utility contribution margin

($ Millions) 2020 2019 Change % Change Weather in Q2 FY 20

Missouri

Residential volumetric (WNAR) 84.8$ 85.4$ (0.6)$ -1%

C&I (no mitigation) 29.2 34.5 (5.3) -15%

All other revenues 93.7 90.8 2.9 3%

Missouri total 207.7$ 210.7$ (3.0)$ -1%

Alabama, Gulf, and Mississippi 162.1$ 156.0$ 6.1$ 4%

Total utility 369.8$ 366.7$ 3.1$ 1%

Actual

11% warmer than normal;

19% warmer than 2019

26% warmer than normal;

6% warmer than 2019



• Q2 pension plan re-measurement expense was recorded in Other; the regulatory deferral (benefit) lands in O&M

• Run-rate O&M (removing this adjustment) reflects

– Higher utility employee costs

– Operating expenses from the Spire STL Pipeline and higher corporate costs

• Other Expense (Income) was up $6.5M on a run rate basis, reflecting

– $3.6M decrease in value of investments for certain benefit plans

– $2.0M lower STL Pipeline AFUDC

Other key Q2 variances

($ Millions) 2020 2019 Variance

Pension

adjustment Variance

O&M

Gas Utility $ 95.8 $ 112.0 $ (16.2) $ 19.1 $ 2.9

Spire Marketing 3.6 2.7 0.9 0.9

All Other 6.3 3.6 2.7 2.7

Total $ 105.7 $ 118.3 $ (12.6) $ 6.5

Other Expense (Income) $ 19.5 $ (6.1) $ 25.6 $ (19.1) $ 6.5

As reported

Operating expense detail


1Represents quarter-over-quarter change in pension expense reclass.

• Lower gas costs reflect lower commodity costs and lower volumes

• Increased depreciation and amortization due to higher investment levels

• Gas Marketing, net of intercompany adjustments, up $14.1M reflecting higher gas costs (volume) and cost of new transportation capacity

• Other includes an increase for STL Pipeline operating expenses and higher corporate costs

2019

(Millions)

As

reported

Pension

reclass

Pro forma

run rate

As

reported

Operating Expenses

Gas Utility

Natural & propane gas 249.0$ $ ⎯ 249.0$ 337.4$

Operation and maintenance (O&M) 93.1 19.1 112.2 109.5

Depreciation and amortization 47.0 ⎯ 47.0 44.4

Taxes, other than income taxes 51.7 ⎯ 51.7 57.4

Gas Marketing 52.1 ⎯ 52.1 38.0

Other 12.1 ⎯ 12.1 7.3

Other Income (Expense), Net (19.5) (19.1) (0.4) 6.1

Interest Expense 27.2 ⎯ 27.2 27.6

Three months ended March 31,2020

1

Other financial information


Net economic earnings reconciliation to GAAP

46

1Income tax effect is calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items and then adding any estimated effects of enacted state or local income tax laws for periods before the related effective date.2Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation, which includes reductions for cumulative preferred dividends and participating shares.


(Millions, except per share amounts)

Gas

Utility

Gas

Marketing Other Total

Per diluted

common share2

Three months ended March 31, 2020

Net Income (Loss) [GAAP] 142.3$ (3.3)$ (5.4)$ 133.6$ 2.54$

Adjustments, pre-tax:

Provision for ISRS rulings 2.2 ⎯ ⎯ 2.2 0.04

Unrealized loss on energy-related derivatives 0.4 11.2 ⎯ 11.6 0.23

Income tax effect of adjustments1

(0.6) (2.8) ⎯ (3.4) (0.06)

Net Economic Earnings (Loss) [Non-GAAP] 144.3$ 5.1$ (5.4)$ 144.0$ 2.75$


Net Income (Loss) [GAAP] 146.7$ 12.9$ (5.0)$ 154.6$ 3.04$


Unrealized gain on energy-related derivatives ⎯ (9.1) ⎯ (9.1) (0.18)


⎯ 2.4 ⎯ 2.4 0.04



1Income taxes are calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items and then adding any estimated effects of enacted state or local income tax laws for periods before related effective date.2Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation, which includes reductions for cumulative preferred dividends and participating shares.

Net economic earnings reconciliation to GAAP

(Millions, except per share amounts)

Gas

Utility

Gas

Marketing Other Total

Per diluted

common share2

Six months ended March 31, 2020

Net Income (Loss) [GAAP] 209.4$ $ ⎯ (8.8)$ 200.6$ 3.77$


Provision for ISRS rulings 4.8 ⎯ ⎯ 4.8 0.09

Unrealized loss on energy-related derivatives 0.4 14.9 ⎯ 15.3 0.30


(1.2) (3.7) ⎯ (4.9) (0.10)



Net Income (Loss) [GAAP] 213.1$ 22.9$ (14.1)$ 221.9$ 4.36$


Unrealized gain on energy-related derivatives ⎯ (11.3) ⎯ (11.3) (0.22)

Acquisition, divestiture and restructuring activities ⎯ ⎯ 0.4 0.4 0.01


⎯ 2.9 (0.1) 2.8 0.05


Contribution margin reconciliation to GAAP


(Millions)

Gas

Utility

Gas

Marketing Other Eliminations Consolidated


Operating income (Loss) [GAAP] 212.9$ (4.4)$ 2.0$ $ ⎯ 210.5$

Operation and maintenance 95.8 3.6 9.6 (3.3) 105.7

Depreciation and amortization 47.0 0.1 2.1 ⎯ 49.2

Taxes, other than income taxes 51.7 0.4 0.9 ⎯ 53.0

Less: Gross receipts tax expense (37.6) (0.2) (0.1) ⎯ (37.9)

Contribution margin [Non-GAAP] 369.8 (0.5) 14.5 (3.3) 380.5

Natural and propane gas costs 271.6 33.6 0.1 (8.2) 297.1

Gross receipts tax expense 37.6 0.2 0.1 ⎯ 37.9

Operating revenues 679.0$ 33.3$ 14.7$ (11.5)$ 715.5$


Operating income (Loss) [GAAP] 196.3$ 16.8$ (3.6)$ $ ⎯ 209.5$


Depreciation and amortization 44.4 ⎯ 0.5 ⎯ 44.9


Less: Gross receipts tax expense (43.4) (0.1) ⎯ ⎯ (43.5)

Contribution margin [Non-GAAP] 366.7 19.7 3.8 (2.9) 387.3


Gross receipts tax expense 43.4 0.1 ⎯ ⎯ 43.5

Operating revenues 776.8$ 25.5$ 4.3$ (3.1)$ 803.5$


Contribution margin reconciliation to GAAP

(Millions)

Gas

Utility

Gas

Marketing Other Eliminations Consolidated


Operating income [GAAP] 309.2$ $ ⎯ 3.6$ $ ⎯ 312.8$


Depreciation and amortization 93.4 0.1 3.2 ⎯ 96.7


Less: Gross receipts tax expense (62.2) (0.2) (0.1) ⎯ (62.5)

Contribution margin [non-GAAP] 634.4 7.3 25.5 (6.3) 660.9


Gross receipts tax expense 62.2 0.2 0.1 ⎯ 62.5

Operating revenues 1,209.7$ 65.6$ 25.8$ (18.7)$ 1,282.4$


Operating income (Loss) [GAAP] 291.9$ 29.3$ (6.6)$ $ ⎯ 314.6$


Depreciation and amortization 88.1 ⎯ 1.0 ⎯ 89.1


Less: Gross receipts tax expense (69.3) (0.1) ⎯ ⎯ (69.4)

Contribution margin [non-GAAP] 624.2 35.0 9.1 (5.6) 662.7


Gross receipts tax expense 69.3 0.1 ⎯ ⎯ 69.4

Operating revenues 1,352.0$ 51.3$ 9.7$ (7.5)$ 1,405.5$

Adjusted EBITDA1 reconciliation to GAAP

50

Spire Storage EBITDA2 reconciliation to GAAP

1Adjusted EBITDA is earnings before interest, income taxes, depreciation and amortization, plus the non-cash Missouri ISRS rulings provision in FY20.2EBITDA is earnings before interest, income taxes, depreciation and amortization.


(Millions) 2020 2019 2020 2019

Net Loss [GAAP] (3.3)$ (4.9)$ (5.2)$ (7.8)$

Add back:

Interest charges 1.3 1.3 2.6 1.9

Income tax benefit (0.9) (1.3) (1.4) (2.1)

Depreciation and amortization 0.6 0.4 1.1 0.8

EBITDA [Non-GAAP] (2.3)$ (4.5)$ (2.9)$ (7.2)$

Three months ended March 31, Six months ended March 31,

(Millions) 2020 2019

Net Income [GAAP] 200.6$ 221.9$

Add back:

MO ISRS provision 4.8 ⎯

Interest charges 53.9 53.5

Income tax expense 44.5 48.1

Depreciation and amortization 96.7 89.1

Adjusted EBITDA [Non-GAAP] 400.5$ 412.6$

Six months ended March 31,

Adjusted long-term capitalization reconciliation to GAAP

51

1Includes temporary equity of $3.9 million and $3.4 million as of March 31, 2020 and September 30, 2019, respectively.


(Millions) Equity1 Debt Total Equity1 Debt Total

Capitalization 2,669.5$ 2,484.8$ 5,154.3$ 2,546.4$ 2,082.6$ 4,629.0$

Current portion of long-term debt — 5.4 5.4 — 40.0 40.0

Long-term Capitalization [GAAP] 2,669.5$ 2,490.2$ 5,159.7$ 2,546.4$ 2,122.6$ 4,669.0$

Reclassify 50% of preferred stock (121.0) 121.0 — (121.0) 121.0 —

Adjusted Long-term Capitalization [Non-GAAP] 2,548.5$ 2,611.2$ 5,159.7$ 2,425.4$ 2,243.6$ 4,669.0$

% of adjusted long-term capitalization 49.4% 50.6% 100.0% 51.9% 48.1% 100.0%

March 31, 2020 September 30, 2019

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