Moving forward confidently AGA Financial Forum May 20-22, 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. 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. 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,” “contributionmargin,” “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. 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. Contributionmargin 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 contributionmargin 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 capitalizationper 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 2 S pire | AGA Financial Fo ru m | May 20-22, 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 3 3 S pire | AGA Financial Fo ru m | May 20-22, 2018
We’re expanding to serve more customers and markets • We’ve transformed our company by increasing our geographic footprint • Our gas companies serve 1.7 million homes and businesses across Alabama, Mississippi and Missouri • We are advancing our other businesses – Expanding into gas storage – Pursuing Spire STL Pipeline – Opening a business center in Houston to support Spire Marketing 4 S pire | AGA Financial Fo ru m | May 20-22, 2018
Moving forward confidently • Moving forward with clarity after regulatory reset • Executing on our strategy with confidence • Driving regulated growth • Advancing our non-regulated businesses • Strengthening our financial position 5 S pire | AGA Financial Fo ru m | May 20-22, 2018
Regulatory certainty offers clarity • Missouri rate cases finalized, parameters set – Rate base, ROE, equity capitalization, cost of service – Rate design harmonized across Spire Missouri – ISRS reset and renewed • Finalized RSE reset for Spire Gulf and updated Spire Mississippi rates • Spire Alabama RSE parameters under review • Weather normalization across all our utilities • Reduced all customer rates as a result of tax reform 6 S pire | AGA Financial Fo ru m | May 20-22, 2018
We continue to drive earnings growth • Growing Gas Utility earnings after rate regulatory resets, a normal part of being a public utility • FY18 net economic earnings per share (NEEPS) guidance of $3.65 - $3.75 • Long-term annual NEEPS growth target of 4%-7% Gas Utility Gas Marketing Other 2 Net economic earnings per share 1 $4.00 $3.65 - $3.75 $3.56 $3.42 $3.19 0.14 $3.05 0.15 $2.87 0.10 $2.79 $3.00 0.31 0.39 0.55 $2.00 3.46 3.33 3.14 2.83 2.51 2.14 $1.00 $0.00 3 3 3 2012 2013 2014 2015 2016 2017 2018 guidance 1 See Net economicearnings(non-GAAP)reconciliationin Appendix. 2 Negativeamountsnot shown: ($0.03)in 2013, ($0.09) in 2014, ($0.05) in 2015, ($0.06) in 2016 and ($0.04) in 2017. 3 Interestexpenseassociatedwith the Spire Alabamaand Spire EnergySouthacquisitions(normallyreportedin Other) is includedin Gas Utility. That interestexpense totaled $14.2 million ($0.33 per share) in 2015, $14.7 million ($0.34 per share) in 2016 and $19.4 million ($0.40 per share) in 2017. 7 S pire | AGA Financial Fo ru m | May 20-22, 2018
We continue to drive growth in our regulated businesses. 8 S pire | AGA Financial Fo ru m | May 20-22, 2018
We are building rate base Capital expenditures forecast (Millions) 5-year forecast: $2.5B $560 • 2018 capex forecast now $500M $500 $500 $490 110 $475 10 10 10 75 70 70 70 – Higher utility spend of $425M 70 60 – $80M for new business investment • Increased our 5-year capital spend 420 410 395 380 365 forecast to $2.5 billion – Supported by utility infrastructure 2018 2019 2020 2021 2022 upgrade programs with lives up to Utility, with minimal lag Other Pipelines 20 years and new business utility and storage – Utility spend balanced across Rate base 1 growth jurisdictions (Billions) • Expect annual rate base growth ~6% $2.6 • ~85% recovered with minimal lag or reflected in earnings 2017 2018 2019 2020 2021 2022 1 Rate base for Missouri utilitiesper order authorized2/21/18 for cases C-GR-2017-0215and C-GR-2017-0216,plus retainedshareholders’equity for Spire Alabamaand Spire Gulf per current RSE effective12/1/17,and Spire Mississippirate base per stipulation4/10/18. 9 S pire | AGA Financial Fo ru m | May 20-22, 2018
We’re growing organically Total utility customers 1 (Millions) 1.69 1.68 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 Rolling12-monthaveragecustomersfor all gas utilitiesfor period of Spire’s natural gas to growing communities ownershipand average customersof acquiredutilitiesfor period of ownership in the year of acquisition. – Pursuit of multi-family segment O&M expenses per customer 2 • Year-to-date in fiscal 2018 we have $300 $285 – Increased new business spend ~40% $276 $270 $275 – Installed 5% more new meters $252 $244 $241 $250 • Managing O&M expenses $225 $200 2012 2013 2014 2015 2016 2017 2 Operationand maintenance(O&M) expensesand customersfor Spire Missouri, Spire Alabamaand Spire Gulf for all years. 10 S pire | AGA Financial Fo ru m | May 20-22, 2018
We continue to invest in pipelines • Progressing on Spire STL Pipeline – Anticipate FERC approval in 2018 – Ready to begin construction • 65-mile pipeline connecting to REX to bring shale gas to Missouri East • Targeting 2019 in-service date and investment of $190 - $210 million • Evaluating other opportunities in Missouri and Alabama 11 S pire | AGA Financial Fo ru m | May 20-22, 2018
12 12 2018 S pire | AGA Financial Fo ru m | May 20-22, 2018
We also continue to advance our non-regulated businesses to drive earnings growth. 13 S pire | AGA Financial Fo ru m | May 20-22, 2018
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