[PPT] - Second Quarter 2016 Earnings Conference Call May 4, 2016 PowerPoint Presentation

SLIDE 1

Second Quarter 2016

Earnings Conference Call

May 4, 2016

SLIDE 2

Participants on today’s call

Steven L. Lindsey

Executive Vice President and Chief Operating Officer, Distribution Operations

Steven P. Rasche

Executive Vice President, Chief Financial Officer

Suzanne Sitherwood

President and Chief Executive Officer

Spire | 2 nd Quarter Earnings Conference Call 2

SLIDE 3

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, 2015 filed with the Securities and Exchange Commission (SEC) and our Form 10-Q for the quarter ended March 31, 2016 to be filed with the SEC later today. This presentation also includes “net economic earnings,” “net economic earnings per share,” “operating margin,” and “EBITDA,” 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, as well as the after-tax impacts related to acquisition, divestiture, and restructuring activities, including costs related to the acquisition and integration of Missouri Gas Energy (MGE) and the acquisition of Alabama Gas Corporation (Alagasco). Operating margin adjusts operating income to include only those costs that are directly passed on to customers and collected through revenues, which are the wholesale cost of natural gas and propane, and gross receipts taxes. 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. EBITDA is earnings before interest, taxes, depreciation and amortization. A reconciliation of net income to net economic earnings is contained in the Company’s SEC filings, and a summary reconciliation is contained in the appendix to this presentation. A reconciliation of EBITDA to Net Income and of operating margin to operating income can be found in the appendix to this presentation. 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

Spire | 2 nd Quarter Earnings Conference Call 3

SLIDE 4

We are Spire

Spire | 2 nd Quarter Earnings Conference Call 4

SpireEnergy.com

SLIDE 5

We are Spire

Spire better reflects the growing

company we have become

It will unite our natural gas

companies as we migrate to one brand in 2017

We are about:

‒ Bringing people and energy together ‒ Championing people by delivering energy that inspires

We have been on a transformational

journey, guided by a well-articulated growth strategy

Over the last three years we have:

– Significantly increased our scale – Expanded our geographic footprint – Added nearly one million customers – Quadrupled our enterprise value

Spire | 2 nd Quarter Earnings Conference Call 5

SLIDE 6

Successfully executing on our growth strategy

Growing our gas utility business Acquiring and integrating gas utilities Modernizing

ur gas assets

Investing in innovation

Spire | 2 nd Quarter Earnings Conference Call 6

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7 Spire | 2 nd Quarter Earnings Conference Call

Second quarter highlights

Higher second quarter net economic

earnings¹ per share of $2.37, driven by Gas Utility

We continue to execute on our

growth strategy:

‒ Acquisition of Mobile Gas and Willmut Gas ‒ Moving forward with our STL Pipeline to modernize our gas assets ‒ Focus on organic growth initiatives and infrastructure investment

1See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix.

SLIDE 8

8 Spire | 2 nd Quarter Earnings Conference Call

Mobile Gas and Willmut Gas

A strategic acquisition that delivers

many benefits:

‒ Grows our gas utility business by adding 104,000 customers ‒ Delivers safe, reliable and efficient service to customers while continuing our commitment to civic involvement and community support ‒ Expands Southern footprint in highly rated regulatory environments ‒ Adds to earnings and cash flow

$344 million price represents

11.3 times LTM Adjusted EBITDA

Targeting close in 2016, subject to

customary closing conditions and regulatory approvals

SLIDE 9

STL Pipeline

Supports strategy to modernize our

gas assets to:

‒ Achieve more diverse supply portfolio ‒ Improve reliability and resiliency ‒ Access lower cost shale gas

Gives our eastern Missouri

distribution system access to shale gas from Marcellus and Utica

– 100% Spire ownership – FERC regulated – Laclede Gas expected to be foundation shipper

60-mile pipeline with capacity of 400 MMcf/d Connects to Rockies Express and Panhandle Eastern pipelines Project investment of $170 - $200 million 30-36 months from open season to in-service date

9 Spire | 2 nd Quarter Earnings Conference Call

SLIDE 10

Net economic earnings

Net economic earnings (NEE) per share up $0.12 (5.3%) to $2.37
Strong quarterly performance was broad-based

‒ Solid Gas Utility earnings, as the mild winter weather pressured margins and lowered expenses ‒ Improved Gas Marketing earnings

Other expenses were up slightly reflecting higher corporate costs and interest

1See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix.

Spire | 2 nd Quarter Earnings Conference Call 10

Net Economic Earnings1 FY16 FY15 FY16 FY15 Gas Utility 102.5 $ 96.5 $ 2.35 $ 2.22 $ Gas Marketing 3.0 2.1 0.07 0.05 Other (2.0) (1.0) (0.05) (0.02) 103.5 $ 97.6 $ 2.37 $ 2.25 $ Second Quarter Ended March 31 Per Diluted Share $ in Millions

SLIDE 11

Operating revenues and margin

Mild winter weather across our service territories

– Temperatures were ~20% warmer than last year and 16% warmer than normal – Second warmest winter on record in Missouri

Gas Utility margin, after removing the $3.9 million favorable decrease in RSE

adjustment, decreased $2.2 million due to lower demand

– Weather related decreases of $6.1 million – Offset, in part by higher ISRS revenues of $3.9 million

Gas Marketing margin up, reflecting favorable impact of storage services

1Operating margin is operating revenues less gas costs and gross receipts taxes. See Operating Margin (Non-GAAP) Reconciliation in Appendix.

Spire | 2 nd Quarter Earnings Conference Call 11

FY16 FY15 $ % Operating Revenues Gas Utility 611.5 $ 847.0 $ (235.5) $

28%

Gas Marketing & Other (2.2) 30.4 (32.6)

107%

609.3 $ 877.4 $ (268.1) $

31%

Operating Margin1 Gas Utility 307.5 305.8 1.7 1% Gas Marketing 3.9 2.1 1.8 86% Other and Eliminations 0.6 0.5 0.1 20% 312.0 $ 308.4 $ 3.6 $ 1% Change

Second Quarter Ended March 31

$ in Millions

SLIDE 12

Commodity and volume based tax expenses lower, consistent with lower demand
Operating expenses were favorably impacted by the mild weather, as well as cost

efficiencies and favorable timing of expenses

Depreciation up $1.6 million reflecting increased capital investment
Gas Marketing costs lower reflecting primarily lower commodity costs and a higher mix of

trading revenues (recorded net), partially offset by higher volumes

Spire | 2 nd Quarter Earnings Conference Call 12

Expenses

FY16 FY15 $ % Operating Revenues 609.3 $ 877.4 $ (268.1) $

31%

Operating Expenses Gas Utility Natural & propane gas 261.1 482.8 (221.7)

46%

Other operation & maintenance 94.3 103.8 (9.5)

9%

Depreciation & amortization 33.8 32.2 1.6 5% Taxes, other than income taxes 43.9 55.7 (11.8)

21%

Gas Marketing & Other 8.5 45.2 (36.7)

81%

Operating Income 167.7 157.7 10.0 6% Other Income 0.8 0.7 0.1 14% Interest Expense 19.3 19.1 0.2 1% Income Tax Expense 48.4 44.9 3.5 8% Change

Second Quarter Ended March 31

$ in Millions

SLIDE 13

Year-to-date highlights

1See Net Economic Earnings (Non-GAAP) Reconciliation in Appendix.

Gas Utility earnings +$6.2 million, reflecting consistent themes with Q2

– Lower operating margin (weather and lower demand), partially offset by ISRS revenues and lower RSE reset in Alabama – Lower operating costs due to milder weather, cost efficiencies and timing of expenses

Gas Marketing earnings up $0.2 million from prior year
Other expenses were up slightly reflecting interest and other corporate costs

Spire | 2 nd Quarter Earnings Conference Call 13

Net Economic Earnings1 FY16 FY15 FY16 FY15 Gas Utility 152.5 $ 146.3 3.50 $ 3.38 $ Gas Marketing 2.7 2.5 0.07 0.06 Other (6.6) (5.5) (0.16) (0.13) 148.6 $ 143.3 3.41 $ 3.31 $

First Half Ended March 31

$ in Millions Per Diluted Share

SLIDE 14

$311.8 $324.5 $0 $100 $200 $300 1st Half FY15 1st Half FY16

Spire | 2 nd Quarter Earnings Conference Call 14

Strong cash flow, capital structure and liquidity

YTD EBITDA1 of $325 million up 4%

from last year

Long-term capitalization stands at

~52% equity

Significant liquidity: nearly $500

million of capacity

Funding for Mobile Gas and Willmut

Gas acquisition (totaling $323 million cash)

– New equity of $130 - $150 million – New long-term debt of $150 - $170 million – Corporate cash or existing credit facilities – Bridge commitment of $275 million expected to be retired with the permanent financing later in 2016

1EBITDA is Earnings Before Interest, Taxes, and Depreciation and Amortization.

See EBITDA (Non-GAAP) Reconciliation in Appendix.

EBITDA1

($ in millions)

51.7% 48.3%

Equity Debt

Long-term capitalization2

(at March 31, 2016)

2See Adjusted Long-term Capitalization Reconciliation in Appendix

SLIDE 15

Spire | 2 nd Quarter Earnings Conference Call 15

Higher capital investment

FY16 capital forecast increased to

$320 million, reflecting STL Pipeline

Five year forecast raised to $1.8

billion from $1.6 billion

Additional upside from Mobile Gas

and Willmut Gas upon closing

– Run-rate ~$17 million (not in forecast) – Opportunity to increase investment in prudent infrastructure upgrades

67% of FY16 utility capital spend

recoverable in rates with minimal regulatory lag

Latest ISRS update

– Increase of $9.0 million has been recommended by MoPSC staff – If approved by the Commission, annual run rate would increase to $35.3 million

($ in millions)

$129.5 $121.8 $0 $50 $100 $150 1st Half FY15 1st Half FY16

99 194 212 215 220 225 225 72 96 98 110 110 110 110 10 40 40 95

$0 $100 $200 $300 $400 2014 2015 2016E 2017E 2018E 2019E 2020E

$171 $430 $370 $290 $335 $320 $365 Utility, with Minimal Lag Other Utility and Non-Utility

($ in millions)

5-year forecast: $1.8B+

STL Pipeline

SLIDE 16

$1.62 $1.66 $1.70 $1.76 $1.84 $1.961 $1.40 $1.60 $1.80 $2.00 2011 2012 2013 2014 2015 2016

Annualized dividends per share

Strong dividend track record

Increase accelerated to 6.5 percent in 2016 based on our growing earnings
13 years of consecutive increases; 71 years of continuous payment
Conservative payout ratio within 55% - 65% targeted range

1Quarterly dividend of $0.49 per share, annualized. 2Based on $1.96 per share dividend and SR average closing stock price of $66.00 for month of April 2016.

Dividend Yield 3.0%2

Spire | 2 nd Quarter Earnings Conference Call 16

SLIDE 17

17 Spire | 2 nd Quarter Earnings Conference Call

Outlook for growth

NEEPS target remains $3.34 - $3.44,

a growth of 5 - 8% over 2015

Capital spend raised to $320 million

including STL Pipeline

Mobile and Willmut anticipated to

add to NEEPS in fiscal 20181

STL Pipeline targeted for 2019 in

service date

Long-term annual NEEPS growth

target remains 4% - 6%

1Consistent with past practice, expenses and financing impacts will be excluded

from NEEPS prior to closing the acquisition.

SLIDE 18

The Spire journey

We continue on our journey of

transformation, now as Spire

Journey continues to be driven by:

– Organic growth – Adding Mobile Gas and Willmut Gas – STL Pipeline

We look forward to providing you

with further Spire journey updates as the year unfolds

FPO – IMAGE MAY CHANGE

Spire | 2 nd Quarter Earnings Conference Call 18

SLIDE 19

Appendix

Spire | 2 nd Quarter Earnings Conference Call 19

SLIDE 20

Net economic earnings (Non-GAAP) reconciliation

(1) Amounts presented net of income taxes. Income 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. (2) Net economic earnings per share (EPS) is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation.

Spire | 2 nd Quarter Earnings Conference Call 20

($ in millions, except per share amounts)

Gas Utility Gas Marketing Other Total Per Share Amounts (2) Three Months Ended March 31, 2016 Net Income (Loss) (GAAP)

102.4 $ 1.5 $ (3.1) $ 100.8 $ 2.31 $

Unrealized gain on energy-related derivatives (1)

0.1 1.7

1.8

0.04

Lower of cost or market inventory adjustments (1)

0.2
0.2
Realized gain on economic hedges prior to the sale of the

physical commodity (1)

(0.4)
(0.4)

(0.01)

Acquisition, divestiture and restructuring activities (1)

1.1

1.1 0.03

Net Economic Earnings (Loss) (Non-GAAP)

102.5 $ 3.0 $ (2.0) $ 103.5 $ 2.37 $

Diluted EPS (GAAP)

2.34 $ 0.04 $ (0.07) $ 2.31 $

Net Economic EPS (Non-GAAP) (2)

2.35 $ 0.07 $ (0.05) $ 2.37 $

Three Months Ended March 31, 2015 Net Income (Loss) (GAAP)

96.2 $ 0.3 $ (2.1) $ 94.4 $ 2.18 $

Unrealized (gain) loss on energy-related derivatives (1)

(0.1) 2.7

2.6

0.06

Lower of cost or market inventory adjustments (1)

(1.0)
(1.0)

(0.02)

Realized loss on economic hedges prior to the sale of the physical commodity (1)

0.1
0.1
Acquisition, divestiture and restructuring activities (1)

0.4

1.1

1.5 0.03

Net Economic Earnings (Loss) (Non-GAAP)

96.5 $ 2.1 $ (1.0) $ 97.6 $ 2.25 $

Diluted EPS (GAAP)

2.22 $ 0.01 $ (0.05) $ 2.18 $

Net Economic EPS (Non-GAAP) (2)

2.22 $ 0.05 $ (0.02) $ 2.25 $

SLIDE 21

Net economic earnings (Non-GAAP) reconciliation

(1) Amounts presented net of income taxes. Income 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. (2) Net economic earnings per share (EPS) is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation.

Spire | 2 nd Quarter Earnings Conference Call 21

(In Millions, except per share amounts)

Gas Utility Gas Marketing Other Total Per Share Amounts (2) Six Months Ended March 31, 2016 Net Income (Loss) (GAAP) 151.7 $ 3.8 $ (7.8) $ 147.7 $ 3.39 $ Unrealized gain on energy-related derivatives (1)

(1.2)
(1.2)

(0.03) Lower of cost or market inventory adjustments (1)

0.5
0.5

0.01 Realized gain on economic hedges prior to the sale of the physical commodity (1)

(0.4)
(0.4)

(0.01) Acquisition, divestiture and restructuring activities (1) 0.8

1.2

2.0 0.05 Net Economic Earnings (Loss) (Non-GAAP) 152.5 $ 2.7 $ (6.6) $ 148.6 $ 3.41 $ Diluted EPS (GAAP) 3.48 $ 0.09 $ (0.18) $ 3.39 $ Net Economic EPS (Non-GAAP) (2) 3.50 $ 0.07 $ (0.16) $ 3.41 $ Six Months Ended March 31, 2015 Net Income (Loss) (GAAP) 145.8 $ 2.5 $ (6.8) $ 141.5 $ 3.26 $ Unrealized gain on energy-related derivatives (1) (0.1) (0.3)

(0.4)

(0.01) Lower of cost or market inventory adjustments (1)

0.2
0.2

0.01 Realized loss on economic hedges prior to the sale of the physical commodity (1)

0.1
0.1
Acquisition, divestiture and restructuring activities (1)

0.6

1.3

1.9 0.05 Net Economic Earnings (Loss) (Non-GAAP) 146.3 $ 2.5 $ (5.5) $ 143.3 $ 3.31 $ Diluted EPS (GAAP) 3.36 $ 0.06 $ (0.16) $ 3.26 $ Net Economic EPS (Non-GAAP) (2) 3.38 $ 0.06 $ (0.13) $ 3.31 $

SLIDE 22

Operating margin (Non-GAAP) reconciliation

Spire | 2 nd Quarter Earnings Conference Call 22 (In Millions)

Gas Utility Gas Marketing Other Eliminations Consolidated

Three Months Ended March 31, 2016 Operating revenues

612.7 $ 8.0 $ 0.9 $ (12.3) $ 609.3 $

Natural and propane gas expense

273.0 4.0

(12.0)

265.0

Gross receipts tax expense

32.2 0.1

32.3

Operating margin (non-GAAP)

307.5 3.9 0.9 (0.3) 312.0

Depreciation and amortization

33.8

0.1
33.9

Other operating expenses

106.3 1.4 3.0 (0.3) 110.4

Operating income (loss) (GAAP)

167.4 $ 2.5 $ (2.2) $

$

167.7 $

Three Months Ended March 31, 2015 Operating revenues

849.0 $ 44.1 $ 0.9 $ (16.6) $ 877.4 $

Natural and propane gas expense

499.1 42.0 0.1 (16.3) 524.9

Gross receipts tax expense

44.1

44.1

Operating margin (non-GAAP)

305.8 2.1 0.8 (0.3) 308.4

Depreciation and amortization

32.2 0.1 0.2

32.5

Other operating expenses

115.6 1.4 1.5 (0.3) 118.2

Operating income (loss) (GAAP)

158.0 $ 0.6 $ (0.9) $

$

157.7 $

SLIDE 23

EBITDA1 (Non-GAAP) reconciliation

1EBITDA is Earnings Before Interest, Income Taxes, and Depreciation and Amortization.

Spire | 2 nd Quarter Earnings Conference Call 23

Adjusted long-term capitalization reconciliation

(In Millions)

FY16 FY15 Net Income 147.7 $ 141.5 $ Add back: Interest Charges 38.3 38.3 Income Tax Expense 70.9 67.3 Depreciation & Amortization 67.6 64.7 EBITDA 324.5 $ 311.8 $ First Half Ended March 31

($ in millions)

Equity Debt Total Capitalization per balance sheet

1,681.4 $ 1,851.6 $ 3,533.0 $

Reclassify equity units

143.8 (143.8)

Adjusted long-term capitalization

1,825.2 $ 1,707.8 $ 3,533.0 $

SLIDE 24

STL Pipeline to access shale plays

Niobrara

Marcellus/Utica

REX/PEPL New Lateral

Missouri Rockies Express Panhandle MoGas Southern Star

Enable MRT

Spire | 2 nd Quarter Earnings Conference Call 24