Moving forward confidently Investor Presentation September 2018
2 2 Spire | Investor Presentation | September 2018 Spire | Investor Presentation | September 2018
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. Forward-looking statements are typically identified by words such as, but not limited to: “estimates,” “expects,” “anticipates,” “intends,” and similar expressions. A lthough 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. For a more complete description of these uncertainties and risk factors, see our Form 10-K for the fiscal year ended September 30, 2017 as filed with the Securities and Exchange Commission (SEC). This presentation also includes “net economic earnings,” “net economic earnings per share,” “contribution margin,” “adjusted EBI TDA,” 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. In fiscal 2018, these items include the revaluation of deferred tax assets and liabilities due to the federal Tax Cuts and Jobs Act and write-off of certain long-standing assets related to pension costs and property sold as a result of disallowances in our Missouri rate proceedings. 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 by facilitating comparisons of year-over-year results. 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. These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than, GAAP measures such as operating income or net income. Adjusted EBITDA is earnings before interest, income taxes, depreciation and amortization, plus largely non-cash write-offs related to Missouri rate cases. 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 and of capitalization per balance sheet to adjusted long-term capitalization are also contained in the Appendix. Note: Years shown in this presentation are fiscal years ended September 30, unless otherwise indicated. Investor Relations contact Scott W. Dudley Jr. Managing Director, Investor Relations 314-342-0878 Scott.Dudley@SpireEnergy.com 3 Spire | Investor Presentation | September 2018
At Spire, we’re connecting people and energy Our mission Answer every challenge, advance every community and enrich every life through the strength of our energy. Transforming our company • Growing organically • Investing in infrastructure • Acquiring and integrating • Innovation and technology 4 4 Spire | Investor Presentation | September 2018
We’re expanding to serve more customers and markets • We’ve transformed our company by increasing our geographic footprint • Our gas companies now serve 1.7 million homes and businesses across Alabama, Mississippi and Missouri • We are advancing our other businesses – Spire Marketing – Spire Storage – Spire STL Pipeline 5 Spire | Investor Presentation | September 2018
Moving forward confidently • Gaining regulatory certainty – Missouri rate cases and Alabama RSE resets – Weather normalization across all our utilities – Reduced all customer rates as a result of tax reform • Executing on our organic growth initiatives and capital investment plan • Moving forward with Spire STL Pipeline • Advancing our other non-utility businesses • Strengthening our financial position • Delivering solid year-to-date results • Affirming FY18 earnings and capex guidance 6 Spire | Investor Presentation | September 2018
Growing organically Total utility customers 1 (Millions) 1.68 1.69 1.8 1.57 1.55 1.5 • Targeting programs that add 1.12 1.2 customers and increase utility margin 0.9 0.63 – Enhanced new business approach 0.6 – More focused economic development 0.3 • Seizing market opportunities through 0 2012 2013 2014 2015 2016 2017 – Strategic line extensions providing 1 Rolling 12- month average customers for all gas utilities for period of Spire’s natural gas to growing communities ownership and average customers of acquired utilities for period of ownership in the year of acquisition. – Pursuit of multi-family segment O&M expenses per customer 2 • Year-to-date in FY18 we have $300 $285 – Increased new business spend ~34% $276 $270 $275 – Installed 5.7% more new meters on top $252 $244 $241 of last year’s record -setting pace $250 • Managing O&M expenses $225 $200 2012 2013 2014 2015 2016 2017 2 Operation and maintenance (O&M) expenses and customers for Spire Missouri, Spire Alabama and Spire Gulf for all years. 7 Spire | Investor Presentation | September 2018
Investing for LT growth Capital expenditures forecast (Millions) 5-year forecast: ~$2.5B+ • FY18 capex forecast of $500M $590 – $15M of Pipeline spend shifted to FY19; utility $500 $500 $490 140 $475 spend increased by like amount 10 10 60 10 70 70 70 70 60 – $80M for utility new business investment • FY19 increased to $590M reflecting change in Pipeline schedule and budget 420 410 395 380 380 • 5-year capital spend forecast $2.5B+ – Up to 20 yrs. of utility infrastructure upgrades 2018 2019 2020 2021 2022 – ~85% recovered with minimal lag or reflected Utility, with minimal lag Other Pipelines and new business utility and storage in earnings • Expect annual rate base growth ~6% Rate base 1 growth (Billions) • Balanced 5 yr. spending $2.6 Missouri East 29% Missouri West 29% Alabama/Mississippi 33% Pipelines and 9% storage 2017 2018 2019 2020 2021 2022 1 Rate base for Missouri utilities per order authorized 2/21/18 for cases C-GR-2017-0215 and C-GR-2017- 0216, plus retained shareholders’ equity for Spire Alabama and Spire Gulf per current RSE effective 12/1/17, and Spire Mississippi rate base per stipulation 4/10/18. 8 Spire | Investor Presentation | September 2018
Moving forward with Spire STL Pipeline • Received FERC approval on August 3, 2018 • Completing land acquisition and pre-construction activities • Evaluating construction schedule and overall timeline • Targeting late calendar 2019 in-service date • Total project investment increased to $210 - $225 million • Evaluating other opportunities in Missouri and Alabama 9 Spire | Investor Presentation | September 2018
Growing Spire Marketing • Solid business model supported by Spire Marketing’s operational reach strong risk management protocols – Provides wholesale services to diverse customer base – Physically delivers gas on 20+ pipelines – Optimizes portfolio of commodity, transportation and storage contracts • Positioning Spire Marketing for continued growth and success – Named industry veterans to lead the business and grow the team – Expanding geographically with Houston business center – Strengthening our strategic position • Strong YTD FY18 results driven by – Improved market conditions – Wider regional basis differentials – Greater storage and transport optimization 10 Spire | Investor Presentation | September 2018
We’re investing in natural gas storage • Established Spire Storage – Acquired majority interest in large Wyoming storage facility and recently added a smaller adjacent facility – Investing to expand capacity and improve operating performance – Hired team that brings extensive experience in storage • Well-positioned to serve multiple regions and customers: utilities, power generators, marketers and pipelines • Expected to add to FY19 earnings per share 11 Spire | Investor Presentation | September 2018
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