We are energy in motion Investor presentation September 2019 - PowerPoint PPT Presentation

We are energy in motion Investor presentation September 2019

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. 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,” “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 included the revaluation of deferred tax assets and liabilities due to the Tax Cuts and Jobs Act, and the write-off of certain long-standing assets 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 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 Spire | Investor presentation – September 2019

Our energy is in motion Our mission Answer every challenge, advance every community and enrich every life through the strength of our energy. Our strategic priorities • Growing organically • Investing in infrastructure • Acquiring and integrating • Innovating and advancing technology 3 3 Spire | Investor presentation – September 2019

We’ve expanded to serve more customers and markets • 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 4 Spire | Investor presentation – September 2019

We’re a growing, financially strong company • 5-year capital investment of $2.9B focused on infrastructure upgrades Delivering • Growing organically across our utility and gas-related businesses growth Targeting 4 - 7% annual long-term EPS growth • • Strong and growing cash flow Financial • Solid capitalization (53.1% equity) and ample liquidity via $975M credit facility strength • Solid investment grade credit ratings • Delivering total shareholder return of 142% 1 Superior investor • Growing dividend with attractive 2.8% yield returns Increasing market capitalization 4  since 2012 • 1 For FY17 through first half FY19. 5 Spire | Investor presentation – September 2019

We continue to drive consistent growth in our gas utilities. 6 Spire | Investor presentation – September 2019

Growing organically New premise activations 11,397 11,159 12,000 10,937 9,498 8,167 8,141 • Enhancing our approach to new 8,000 business and economic development • Increasing spend on new business 4,000 – YTD FY19 new business investment up $10M (~19%) from a year ago 0 1 2014 2015 2016 2017 2018 2019 – Growing new premise activations – Expanding into new service areas O&M expenses per customer 2 • Increasing margin via $270 – Customer growth $270 $263 – Balanced and constructive $260 $255 regulatory outcomes $252 $250 • Controlling costs across our utilities $244 $253 $241 $250 $240 $230 1 2014 2015 2016 2017 2018 2019 1 12-months ending June 2019. 2 Operation and maintenance (O&M) expenses and customers for Spire Missouri, Spire Alabama and Spire Gulf for all years. Expenses in orange for 2018 and 2019 exclude Missouri rate case items. 7 Spire | Investor presentation – September 2019

Increasing our capital Capital expenditures investment (Millions) $780 $750 250 • Focus on infrastructure upgrades $499 – Pipeline upgrades over next 15-18 years $500 100 43 63 – Drives 6% long-term rate base growth – Utility spend ~80% recovered with $250 430 393 minimal lag or reflected in earnings • FY19E capital spend raised to $780M $0 FY18 actual FY19 forecast – Up $40M to reflect higher utility spend (Millions) – $25M incremental Storage spend 5-year forecast: $2.9B $780 – $25M for Pipeline pushed to FY20 • 5-year capex target increased to $2.9B 250 $560 $520 $520 $515 (thru 2023) from $2.6B (thru 2022) 75 10 30 10 100 100 100 90 90 – Higher investment across all businesses – Diversified across our utilities 430 405 410 395 400 2019 2020 2021 2022 2023 Utility, with minimal lag Other utility Pipelines and storage and new business 8 Spire | Investor presentation – September 2019

Inspiring innovation through technology • Completing our companywide information technology modernization • Leveraging technology and robust databases for – New business development – Targeting growth opportunities – Improving workload planning • Providing customers better ways to connect with Spire via My Account • Deploying robotic technology to inspect/repair distribution pipelines • Exploring gas detection technology • Opened our new Innovation Center 9 Spire | Investor presentation – September 2019

Improving operating performance Investment in infrastructure upgrades, technology and our people are driving improved safety, system integrity and service. Reducing employee injuries Improving pipeline safety OSHA DART 1 rate Damage rate per 1,000 locates 4.84 4.78 4.76 3.66 3.65 4.24 3.22 3.84 2.63 2.00 2 2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Enhancing service and safety Strengthening system integrity Average leak response time (minutes) Leaks per 1,000 system miles 174.0 32.4 28.9 141.9 28.4 26.8 25.2 99.7 75.6 63.0 2 2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1 Days away, restricted time. 2 Twelve-months ending June 2019. 10 Spire | Investor presentation – September 2019

Progressing on regulatory initiatives • Reauthorizes Pipeline and Hazardous Material Safety Administration (PHMSA) Renewal of Pipeline • Focus on safety standards and mandates for system integrity Safety Act Congress will address later this year • • Working with Governor and state leaders to drive economic development • Recovering pipeline upgrade investments via ISRS – Current ISRS annualized revenues of $8M effective October 18 Missouri – Additional ISRS revenues of $13.2M authorized on May 3 – On July 15 requested $11M and $3.4M for disputed plastic materials • On track for AIM target for 2019, which would increase ROE to 10.5% in 2020 Alabama • Passage of 811 (“call before you dig”) legislation to bolster enforcement 11 Spire | Investor presentation – September 2019

We continue to develop our gas-related businesses to drive earnings growth. 12 Spire | Investor presentation – September 2019