Energy that advances Investor presentation March 2020 - - PowerPoint PPT Presentation

Energy that advances

Investor presentation March 2020

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. 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 in 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

• perating 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 Relations 314-342-0878 | Scott.Dudley@SpireEnergy.com

3 Spire | Investor presentation – March 2020

4

Energy that advances

• Creating enhanced value for all
• ur stakeholders by

– Growing organically – Investing in infrastructure – Advancing through innovation

• Delivering results

– Off to a strong start in FY20 – Higher Q1 NEE per share of $1.33 – Continued strong operating performance

• Advancing our gas-related businesses
• Strengthening our financial position
• Explore OurStory.SpireEnergy.com to

see how we’re using our energy to continue to advance people, performance and possibilities

Spire | Investor presentation – March 2020

We’re a growing, financially strong natural gas company

Delivering growth

• 5-year capital investment target of $3.0B 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; $517M of EBITDA in FY19, up 5%
• Solid equity capitalization and ample liquidity via $975M credit facility
• Investment grade credit ratings with improving metrics

Superior investor returns

• Delivering average total shareholder return of 17% per year1
• Growing dividend with attractive 3.2% yield2
• Increasing market capitalization 4.6 since 2012

1For the five years ended September 30, 2019. 2Based on SR average stock price for the 30 days ended March 17, 2020.

5 Spire | Investor presentation – March 2020

Investing in growth

• Q1 FY20 capital spend of $192M

– Gas utility up $15M, focused on pipeline upgrades and new business – Midstream spend

• $29.5M for Spire STL Pipeline
• $10.3M for Spire Storage
• FY20 capex target raised to $610M

– $540M for gas utilities, driving 7%-8% rate base growth – $50M for Spire STL Pipeline – $20M for Storage and other

• 5-year spend remains $3.0B

– More than $500M/year for gas utilities – Modest spend for the other businesses

(Millions)

137 152 70 40

$0 $50 $100 $150 $200 $250 Q1 FY19 Q1 FY20

Capital expenditures

$207 $192

575 540 500 505 515 248 70 30 10 10

FY19 FY20 FY21 FY22 FY23 5-year forecast: $3.0B Gas Utility Pipelines, storage and other

$823 $610 $530 $515 $525

6 Spire | Investor presentation – March 2020

Growing organically

• Strong focus on new business
• Greater engagement on economic

development

• Driving margin via customer growth

and supportive regulatory outcomes

O&M expenses per customer2

1See Contribution margin [non-GAAP] reconciliation 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 2019 exclude 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

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

Enhancing stakeholder value

7 Spire | Investor presentation – March 2020

Advancing our midstream operations

• Industry veteran Scott Smith joined Oct. 2019 to lead midstream operations
• Spire STL Pipeline completed and placed into service

– Began commercial operation in mid-November 2019 – Provides a reliable, more diverse and resilient energy supply to Spire MO East – Total project cost of ~$265M

• Developing Spire Storage

– Near-term focus on operations for the winter – Disciplined approach to investment, development and commercial strategy – Targeting $10M capital investment in Q2 FY20 – Expect to achieve positive EBITDA contribution by end of FY20

8 Spire | Investor presentation – March 2020

Regulatory update

Missouri

• Jason Holsman (D) joined the Missouri Public Service Commission on Jan. 16
• Pursuing resolution of ISRS recovery in dispute

– Judicial: March 17 – Missouri Supreme Court denied requests by Spire and the MoPSC to review MO Appeals Court orders and remanded case to MoPSC – Legislative: legislation introduced to clarify language in ISRS statute

• House Bill #1992 – floor debate postponed; House in recess until at least March 30
• Senate Bill #618 – passed on March 9
• Spire filed an ISRS request on Feb. 3 that included $13.4M of new recovery for

infrastructure upgrades

Alabama

• 2020 rates effective Dec. 1

– Includes the launch of Spire Alabama’s off-system sales/capacity release program – Spire Alabama rates reflect a 10bp ROE increase for achieving the AIM pipeline replacement target in 2019

9 Spire | Investor presentation – March 2020

ISRS: Court and legislative timeline

2020 2021

Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Missouri Supreme Court Missouri Appeals Court MoPSC Legislation March 17 – Supreme Court denies request to review Missouri Appeals Court orders Appeals Court may act on January and July 2019 ISRS appeals Spire files new ISRS request on Feb 3 MoPSC makes a determination upon remand for initial ISRS rulings Spire could file an early MO rate case after 60-days notice If successful, settles future ISRS filings and may inform legislative intent ISRS legislation introduced in House and Senate Reintroduce legislation in 2021 If unsuccessful

Judicial and regulatory actions Spire’s actions Legislation

10 Spire | Investor presentation – March 2020

ISRS update

11

(a) Annualized; MO-E and MO-W information combined. (b) Amount not authorized in prior filing including disallowed plastic material; in addition to the $13.4 million, the January 2020 filing includes a refiling of $5.3 million related to these disallowed plastics. (c) Provision for interest due on refunds, if any, on the entirety of the disputed ISRS revenue.

Spire | Investor presentation – March 2020

(Millions)

Requested Amount not authorized (b) Authorized FY 2019 Q1 FY 2020 Subject to ISRS ruling Subject to ISRS ruling Currently under appeal Other ISRS revenue

Note

Prior to 2017 Rate Case

September 2016

effective: 1/28/2017

3.1 $ February 2017

effective: 6/1/2017

1.1

New ISRS

June 2018

effective: 10/8/2018

12.1 $ 4.1 $ 8.0 $ 8.0 $ 2.1 $ 10.1 8.0 $ $ ─ $ ─ January 2019

effective: 5/25/2019

14.2 1.0 12.4 4.6 3.1 ─ ─ 12.4 ─ July 2019

effective: 11/16/2019

10.2 0.9 8.8 ─ 1.0 ─ ─ 7.3 ─

January 2020

filed: 2/3/2020

13.4 ─ TBD ─ ─ ─ ─ ─ TBD Total Revenues 49.9 $ 6.0 $ 29.2 $ 12.6 $ 6.2 $ 14.3 $ 8.0 $ 19.7 $ $ ─ Interest Accrual (c) 0.5 Total ISRS Provision 14.8 $ Appellate Court initial briefs due

• approx. 4/10/20

MoPSC requested and authorized revenues (a) ISRS revenues collected FY 2020 estimated ISRS revenues

MO Supreme Court denied motions for transfer on 3/17/20 Appellate Court initial briefs filed 2/18/20 Opinion by Missouri Court of Appeals for the Western District (Appellate Court) issued 11/19/19

$152.1 $158.1 $0 $50 $100 $150 $200 Q1 FY19 Q1 FY20

12

Maintaining solid financial position

• Robust adjusted EBITDA in Q1 FY20
• Capitalization2 of 48.2% equity reflecting

$410M long-term net debt financing

– Spire Missouri issued $275M of 2.84%, 10-yr. bonds in Nov.; repaid $100M term loan – Spire Alabama funded $100M of 2.88%, 10-yr. notes in Dec. – Spire STL Pipeline funded $135M of 2.95%, 15-yr. notes in Dec.

– Proceeds used to repay short-term debt

• Ample liquidity with credit facility,

commercial paper program and debt financing

1Adjusted EBITDA is earnings before interest, income taxes, depreciation and

amortization, 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)

48.2% 51.8%

Equity Debt

Adjusted long-term capitalization2

(at December 31, 2019)

Spire | Investor presentation – March 2020

Growing the dividend

13

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 $78.76 for 30 days ended March 17, 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 May 15, 2020

Dividend yield 3.2%2

Dividend payout ratio Dividend per share

Annualized common stock dividend per share

Dividend payout ratio

1

$1.84 $1.96 $2.10 $2.25 $2.37 $2.49 50% 55% 60% 65% 70% $1.30 $1.50 $1.70 $1.90 $2.10 $2.30 $2.50 $2.70 2015 2016 2017 2018 2019 2020

Spire | Investor presentation – March 2020

14

Our guidance

• Long-term annual NEEPS growth target

remains 4%-7%

• FY20 NEEPS guidance to be launched

after more clarity on ISRS rulings

• 5-year capex plan remains $3.0B
• FY20 spend increased to $610M on higher

gas utility investment

• Financing plans on track

– FFO/debt targeted at 15-16% – Holdco debt percentage target <20%

Capital expenditures

575 540 500 505 515 248 70 30 10 10

FY19 FY20 FY21 FY22 FY23 5-year forecast: $3.0B

Gas Utility Pipelines, storage and other

$823 $610 $530 $515 $525

Long-term financing forecast

Common and preferred equity

(Millions) (Millions)

270 50-100 100-150 100-150 55 410 150-250 150-250

FY19 FY20 FY21 FY22

Note: Debt issuance net of maturities. Operating company long-term debt

Spire | Investor presentation – March 2020

The case for natural gas

$879

Families 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

• ther 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%

REDUCTION

Switching 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

15 Spire | Investor presentation – March 2020

Our commitment to Corporate Social Responsibility (CSR)

People

• Recruiting and training
• ur people to safely

deliver excellent service

• Embracing our Values

– Safety – Inclusion – Integrity

• Living Spire Behaviors

– We collaborate – We care – We advance – We have perspective

Environment

• Robust investment in

pipeline upgrades and system integrity to reduce methane emissions

• Managing resources

responsibly (water usage and waste streams)

• Adopting LEED

standards in our buildings

• Deploying innovative

technologies to reduce

• ur environmental

impact Communities

• Supporting our

communities through financial contributions, volunteering, leadership

• Focusing on

– Health/human services – Civic and community development – Education – Environment

Leadership

• Experienced manage-

ment team 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 – 4 of 9 are female – 2 of 9 are racially or ethnically diverse

See our 2018 CSR Report at CSRReport2018.SpireEnergy.com

16 Spire | Investor presentation – March 2020

Reducing methane emissions

• Spire has achieved a 39% reduction in greenhouse gas emissions since 2005
• We’re committed to a 5% annual reduction in aging infrastructure under the

EPA’s Natural Gas STAR Methane Challenge Program

22,532 17,789 17,275 16,667 15,969 15,532 14,854 14,484 13,637 13,715 2005 2011 2012 2013 2014 2015 2016 2017 2018 2019

Spire methane reduction

Metric tons/year

17 Spire | Investor presentation – March 2020

Appendix

19 Spire | Investor presentation – March 2020

Spire executive leadership team

Suzanne Sitherwood

President and Chief Executive Officer

B

Steve Lindsey

Executive Vice President, Chief Operating Officer

Steve Rasche

Executive Vice President, Chief Financial Officer

Mark Darrell

Senior Vice President, Chief Legal and Compliance Officer

Mike Geiselhart

Senior Vice President, Chief Strategy and Corporate Development Officer

20 Spire | Investor presentation – March 2020

Spire business unit presidents

Scott Carter

President, Spire Missouri

Joe Hampton

President, Spire Alabama and Mississippi

Scott Smith

President, Spire STL Pipeline and Spire Storage

Pat Strange

President, Spire Marketing

21 Spire | Investor presentation – March 2020

• 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
• ur gas-related businesses

– Spire Marketing – Spire STL Pipeline – Spire Storage

We’ve expanded to serve more customers and markets

22 Spire | Investor presentation – March 2020

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%5 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 Spire Alabama and 10/1/17 through 9/30/21 for Spire Gulf. For 2020, Spire Alabama qualified for a 10 bp increase

in its allowed ROE to 10.5%, by exceeding the threshold number of miles of pipeline replaced in 2019 under the Accelerated Infrastructure Modernization (AIM) mechanism.

23 Spire | Investor presentation – March 2020

Growing Spire Marketing

• Gas marketing services primarily in

central and southern U.S.

• Mostly wholesale services to munis,

producers, power generators, storage

• perators, pipelines, and utilities
• 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 – Increasing customer base and volumes

• We’ve delivered solid performance

– FY19 NEE of $19.4M – Q1 FY20 NEE of $6.1M

Developing Spire Storage

• Disciplined approach to project

development and capital deployment

– Several targeted capital projects to ensure reliable operations during winter – Total investment to date1 of $157M, including $56M in base gas

• Engaging with current and prospective

customers to better understand their needs and assess market opportunities

• Building the team
• Q1 FY20 EBITDA loss of $0.5M;

expect positive EBITDA contribution by end of FY20

1Through December 2019.

24 Spire | Investor presentation – March 2020

Upgrading our infrastructure over the next 15+ years

Estimated replacement miles remaining

As of 12/31/19

Steel Cast iron Vintage plastic Total replacement miles Missouri 1,6521 630  2,282 Alabama 518 483 274 1,275 Mississippi 442   442 Total 2,612 1,113 274 3,999 % of total 65% 28% 7% 100%

1Includes bare steel mains and services; threaded and coupled steel main.

191 247 243 294 356 382 359 100 200 300 400 2013 2014 2015 2016 2017 2018 2019

Miles of pipeline replaced

26 Spire | Investor presentation – March 2020

174.0 141.9 99.7 75.6 60.4 2015 2016 2017 2018 2019

Strengthening system integrity

Leaks per 1,000 system miles

Delivering strong operating performance

3.66 3.65 3.22 2.63 1.88 2015 2016 2017 2018 2019

Reducing employee injuries

OSHA DART1 rate 4.84 4.76 4.78 4.24 3.87 2015 2016 2017 2018 2019

Improving pipeline safety

Damages per 1,000 locates 32.4 28.9 28.4 26.8 25.2 2015 2016 2017 2018 2019

Enhancing service and safety

Average leak response time (minutes)

1Days away, restricted or transferred.

27 Spire | Investor presentation – March 2020

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.

28 Spire | Investor presentation – March 2020

Missouri ISRS rulings

• On November 19, the Missouri Court of Appeals for the Western District issued

three opinions in ISRS-related appeals

– 2016/2017 rulings on intermittent plastics – 2018 ruling on evidentiary standard for cast iron and bare steel

• No debate on the prudence of investment, but qualification for ISRS recovery
• We plan to continue the appeals process which stays effectiveness of rulings

Spire’s infrastructure upgrade program in Missouri

• Infrastructure System Replacement Surcharge program has been a key part
• f our pipeline upgrade program for >15 years
• ISRS-type infrastructure upgrade programs are widely deployed across the U.S.
• We have invested $1.2B and replaced >2,500 miles of pipeline under ISRS
• Missouri customer bills are ~20% lower than when ISRS program began
• We prioritize upgrade program via Distribution Integrity Management Plan
• ISRS requests reviewed and approved by MoPSC twice per year
• ISRS program has been effective at balancing stakeholder interests

29 Spire | Investor presentation – March 2020

Missouri ISRS rulings

Intermittent plastics /2016 and 2017 appeals

• The original appeals related to Spire’s practice of including the replacement of

incidental material (mostly plastics installed to make main repairs prior to full replacement) as part of total cast iron and bare steel main upgrade

• Court concluded in original appeals that plastic not eligible for ISRS
• On remand the MoPSC

– Approved a methodology for determining how much plastic was replaced – But concluded the appeal was moot because the ISRS rates were rolled into the new base rates in the 2018 rate case

• Spire appealed methodology and the OPC appealed determination of mootness
• Court ruled the matter was not moot and ordered the refund of Spire’s recovery
• f revenue related to the replacement of incidental plastics because they were not

deemed to be “worn out or in a deteriorated condition”

30 Spire | Investor presentation – March 2020

Missouri ISRS rulings

Evidentiary standard /2018 appeal

• Appeal of first ISRS determination by MoPSC after the last general rate case
• The MoPSC authorized ISRS revenue collection after adjusting for exclusion of

incidental plastics in accordance with 2016 remand proceeding methodology

• Spire appealed seeking the amount excluded relating to incidental plastics
• The Office of Public Counsel appealed everything authorized by the MoPSC

because of insufficient evidence that the pipe being replaced was “worn out

• r in a deteriorated condition”
• The Court reversed the MoPSC’s order to the extent it allowed ISRS recovery of

infrastructure that was not shown to be “worn out or in a deteriorated condition” (including cast iron and bare steel)

• “Nothing in this opinion should be construed as expressing any view on the

Commission’s consideration of those costs in the context of a general ratemaking case”

31 Spire | Investor presentation – March 2020

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

32 Spire | Investor presentation – March 2020

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)

33 Spire | Investor presentation – March 2020

1See Net economic earnings (non-GAAP) reconciliation in Appendix. 2See Adjusted EBITDA (non-GAAP) reconciliation in Appendix. 3See Adjusted long-term capitalization reconciliation in Appendix.

Q1 FY20 financial summary

(Millions, except earnings per share)

Earnings by Segment Gas Utility

$ 69.1 66.4

Gas Marketing

6.1 8.3

Other

(3.4) (8.8)

Net Economic Earnings (non-GAAP)1

$ 71.8 $ 65.9

Net Economic Earnings Per Share (non-GAAP)1

$ 1.33 $ 1.30

Other Key Metrics EBITDA2

$ 158.1 $ 152.1

Capital Expenditures

192.3 206.8

Long-Term Debt (incl. current portion)

2,530 2,167

Total Debt

3,049 2,793

% Equity to Adjusted LT Capitalization3

48.2% 51.3%

Average Shares Outstanding - Diluted

51.1 50.8

Three months ended December 31,

2019 2018

34 Spire | Investor presentation – March 2020

1See Net economic earnings (non-GAAP) reconciliation later in Appendix. 2See Contribution margin (non-GAAP) reconciliation later in Appendix.

Q1 FY20 earnings growth

• Net economic earnings1 (NEE) $71.8M (+$5.9M)
• NEE per share $1.33 (+2%) reflecting

– Improved results from Gas Utility – Solid performance from Gas Marketing (strong performance in year-ago period) – Higher earnings from Spire STL Pipeline (entered service during quarter) – Dilution of $0.08 per share from preferred stock dividends

• Gas Utility: NEE $69.1M (+$2.7M)

– Contribution margin2 +$7.1M

• Prior year $3.9M RSE give back at Spire Alabama did not recur
• Higher Spire Missouri ISRS of $2.2M
• Modest customer growth

– O&M expenses up $3.5M due to field distribution, maintenance and bad debt expense

• Gas Marketing: NEE $6.1M (-$2.2M) reflecting higher volumes more than offset

by higher costs and narrower basis differentials in the market

• Other: Loss improved $5.4M reflecting higher income from Spire STL Pipeline,

lower corporate interest costs, and a reduction in the loss from Spire Storage

35 Spire | Investor presentation – March 2020

Net economic earnings reconciliation to GAAP

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 First quarter ended December 31, 2019 Net Income (loss) [GAAP] 67.1 $ 3.3 $ (3.4) $ 67.0 $ 1.24 $ Adjustments, pre-tax: Provision for ISRS rulings 2.6   2.6 0.05 Unrealized loss on energy-related derivatives  3.7  3.7 0.07 Income tax effect of adjustments1 (0.6) (0.9)  (1.5) (0.03) Net Economic Earnings (Loss) [Non-GAAP] 69.1 $ 6.1 $ (3.4) $ 71.8 $ 1.33 $ First quarter ended December 31, 2018 Net Income (loss) [GAAP] 66.4 $ 10.0 $ (9.1) $ 67.3 $ 1.32 $ Adjustments, pre-tax: Unrealized gain on energy-related derivatives  (2.2)  (2.2) (0.04) Acquisition, divestiture and restructuring activities   0.4 0.4 0.01 Income tax effect of adjustments1  0.5 (0.1) 0.4 0.01 Net Economic Earnings (Loss) [Non-GAAP] 66.4 $ 8.3 $ (8.8) $ 65.9 $ 1.30 $ 36 Spire | Investor presentation – March 2020

Contribution margin reconciliation to GAAP

(Millions)

Gas Utility Gas Marketing Other Eliminations Consolidated

First quarter ended December 31, 2019 Operating income [GAAP]

96.3 $ 4.4 $ 1.6 $ $  102.3 $

Operation and maintenance

108.6 3.1 7.9 (3.0) 116.6

Depreciation and amortization

46.4  1.1  47.5

Taxes, other than income taxes

37.9 0.3 0.4  38.6

Less: Gross receipts tax expense

(24.6)    (24.6)

Contribution margin [Non-GAAP]

264.6 7.8 11.0 (3.0) 280.4

Natural and propane gas costs

241.5 24.5 0.1 (4.2) 261.9

Gross receipts tax expense

24.6    24.6

Operating revenues

530.7 $ 32.3 $ 11.1 $ (7.2) $ 566.9 $

First quarter ended December 31, 2018 Operating income (loss) [GAAP]

95.6 $ 12.5 $ (3.0) $ $  105.1 $

Operation and maintenance

104.9 2.6 7.4 (2.7) 112.2

Depreciation and amortization

43.7  0.5  44.2

Taxes, other than income taxes

39.2 0.2 0.4  39.8

Less: Gross receipts tax expense

(25.9)    (25.9)

Contribution margin [Non-GAAP]

257.5 15.3 5.3 (2.7) 275.4

Natural and propane gas costs

291.8 10.5 0.1 (1.7) 300.7

Gross receipts tax expense

25.9    25.9

Operating revenues

575.2 $ 25.8 $ 5.4 $ (4.4) $ 602.0 $

37 Spire | Investor presentation – March 2020

Adjusted EBITDA1 reconciliation to GAAP 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)

2019 2018 Net Loss [GAAP] (1.9) $ (2.9) $ Add back: Interest charges 1.3 0.6 Income tax benefit (0.5) (0.8) Depreciation and amortization 0.6 0.4 EBITDA [Non-GAAP] (0.5) $ (2.7) $ First quarter ended December 31,

(Millions)

2019 2018 Net Income [GAAP] 67.0 $ 67.3 $ Add back: MO ISRS provision 2.6  Interest charges 26.7 25.9 Income tax expense 14.3 14.7 Depreciation and amortization 47.5 44.2 Adjusted EBITDA [Non-GAAP] 158.1 $ 152.1 $ First quarter ended December 31,

38 Spire | Investor presentation – March 2020

Adjusted long-term capitalization reconciliation to GAAP

1Includes temporary equity of $4.1 million and $3.4 million as of December 31, 2019 and September 30, 2019, respectively.

(Millions)

Equity1 Debt Total Equity1 Debt Total Capitalization 2,590.1 $ 2,484.4 $ 5,074.5 $ 2,546.4 $ 2,082.6 $ 4,629.0 $ Current portion of long-term debt — 45.3 45.3 — 40.0 40.0 Long-term Capitalization [GAAP] 2,590.1 $ 2,529.7 $ 5,119.8 $ 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] 2,469.1 $ 2,650.7 $ 5,119.8 $ 2,425.4 $ 2,243.6 $ 4,669.0 $ % of adjusted long-term capitalization 48.2% 51.8% 100.0% 51.9% 48.1% 100.0% December 31, 2019 September 30, 2019

39 Spire | Investor presentation – March 2020