We are Spire Investor Presentation February 2017
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-Q for the quarter ended December 31, 2016 filed with the Securities and Exchange Commission. This presentation also includes “net economic earnings,” “net economic earnings per share,” “operating margin,” “EBITDA,” and “adjusted long-term capitalization,” non - GAAP measures used internally by management when evaluating the Company’s performance and results of operat ions. 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 in the fiscal year in which they occur, including costs, financing impacts and operating results in fiscal 2016 related to the acquisition of EnergySouth, as well as overall integration activities. Management believes that this presentation provides a useful representation of operating performance by facilitating comparisons of year- over-year results. 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 our SEC filings, and a summary reconciliation is contained in the Appendix to this presentation. Reconciliations of EBITDA to net income, of operating margin to operating income, and of capitalization per balance sheet to adjusted long-term capitalization are 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 – February 2017
We are Spire • We became Spire in April 2016 to better reflect the growing company we have become • Our transformation has been driven by successful execution of our strategy – Growing our gas utility business – Acquiring and integrating gas utilities – Modernizing our gas assets – Investing in innovation 3 Spire | Investor Presentation - February 2017
At our core, we are a gas company • Focused on enriching our customers lives through the strength of our energy • We operate five gas utilities across Missouri, Alabama and Mississippi serving nearly 1.7 million homes and businesses • Since 2012: – Customers increased by 1.1 million – EV more than quadrupled to $5.4 billion – Market Cap. more than tripled to $2.9 billion 4 Spire | Investor Presentation - February 2017
Recent highlights For Fiscal 2017 • Raised dividend by 7.1% • Initiated net economic earnings (NEE) guidance of $3.50 - $3.60 per share • Planned capital spend of $410 million; 5-year plan of $2.0+ billion • Reported Q1 NEE per share and capital spend in line with full-year targets • On track with integrations of Alagasco and EnergySouth • Filed for approval of Spire STL Pipeline For Fiscal 2016 • Reported NEE 1 per share growth of 7.2% • Completed EnergySouth acquisition • Invested record $293 million in capital 1 See Net economic earnings (non-GAAP) reconciliation in Appendix. 5 Spire | Investor Presentation - February 2017
Growing organically Total utility customers (Millions) 1.8 1.68 • Increasing revenues and margins 1.57 1.55 1.6 – Growing customers and improving retention – Increasing penetration 1.4 – Achieving operating efficiencies • Seizing market opportunities 1.2 1.12 – Pursuing line extensions in Missouri 1.0 – Developing other products and services – Evaluating municipal utility acquisitions 0.8 • Achieving growth .63 0.6 – Increased customers for second straight year across all of our utilities 0.4 – Increased commercial and industrial load 0.2 0.0 2012 2013 2014 2015 2016 Rolling 12-month average gas utility customers for all utilities for Spire’s period of ownership. 6 Spire | Investor Presentation - February 2017
Increasing capital investment Capital expenditures – First quarter (Millions) $100 • Q1 capital spend up $27 million (43%) $75 – $21 million increase at the Missouri Utilities and Alagasco driven by $50 $89 Infrastructure upgrades, aided by weather • $62 $25 • New business investment – $3 million for EnergySouth $0 Q1 FY16 Q1FY17 – $3 million for Spire STL Pipeline Capital expenditures forecast • 2017 target remains $410 million 5-year forecast: $2.0B + – $370 million for Gas Utility; > 70% (Millions) $485 recoverable with minimal regulatory lag $440 $410 95 $400 65 $400 35 – $35 million for Spire STL Pipeline 90 90 90 95 $293 $290 • 2016 – 2020: at least $2.0 billion $300 68 96 $200 $171 305 295 280 275 72 223 $100 194 99 $0 2014 2015 2016 2017E 2018E 2019E 2020E Other Utility Utility, with Minimal Lag Spire STL Pipeline Non-Utility 7 Spire | Investor Presentation – February 2017
SS Managing regulatory matters across jurisdictions • Annual rate filings in Alabama ‒ New rates were effective December 1 ‒ Based on 2017 budget and authorized ROEs (10.8% for Mobile Gas; 10.85% for Alagasco) • ISRS increases for our Missouri Utilities effective Jan. 28 ‒ +$4.5 million for Laclede Gas ‒ +$3.2 million for MGE ‒ Annualized run-rate now $43.0 million • On schedule for filing concurrent Laclede Gas and MGE rate cases in Missouri in April 2017 8 Spire | Investor Presentation – February 2017
SS Legislative and regulatory initiatives in Missouri • New Republican governor with Republican majority in House and Senate • Governor focused on reforms to strengthen state, improve efficiency • Senate interim committee report recommended legislation be filed to improve utility regulatory process • SB 242 and HR 747 bills introduced to: ‒ Enable more timely and efficient rate-setting with better matching of revenues and costs (reduce regulatory lag) ‒ Encourage infrastructure investment ‒ Establish performance-based ratemaking with accountability and incentives to produce mutual benefit • We are positioned this year for positive change in Missouri 9 Spire | Investor Presentation – February 2017
Progressing with our Spire STL Pipeline project • Diversifying our gas supply portfolio to improve reliability and resiliency ‒ ~70-mile pipeline with capacity of 400 MMcf/d ‒ Connects to Rockies Express pipeline to access lower-cost shale gas • Filed for FERC approval on Jan. 26 • Laclede Gas signed precedent agreement to be foundation shipper (350 MMcf/d) • We are on track with our plans: ‒ Investment of $190 million - $210 million ‒ Expect fiscal 2019 in-service date 10 Spire | Investor Presentation - February 2017
Delivering services through Spire Marketing • Provides wholesale services to a diverse, sophisticated customer base • Operates primarily in central U.S. • Optimizes portfolio of commodity, transportation and storage contracts – Operated on 30 interstate and intrastate pipelines in FY16 – 5.4 Bcf of leased storage • FY16 NEE 1 of $6.4 million 1 See Net economic earnings (non-GAAP) reconciliation in Appendix. 11 Spire | Investor Presentation - February 2017
Delivering shareholder value • Driving earnings growth through gas utilities • Maintaining strong cash flow, capital structure and liquidity • Increasing dividends 12 Spire | Investor Presentation - February 2017
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