First quarter fiscal 2018

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1 First quarter fiscal 2018 Earnings conference call February 1, 2018

Operating Officer, Distribution Operations

2 Participants on today s call Suzanne Sitherwood President and Chief Executive Officer Steven L. Lindsey Executive Vice President and Chief Operating Officer, Distribution Operations and Gas Utilities Steven P. Rasche Executive Vice President and Chief Financial Officer 2

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 Our forwardlooking 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-Q for the quarter ended December 31, 2017 to be filed with the Securities and Exchange Commission later today. This presentation also includes net economic earnings, net economic earnings per share, contribution margin, EBITDA, and adjusted longterm 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, as well as acquisition, divestiture, and restructuring activities. 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. Beginning in the first quarter of fiscal 2018, net economic earnings also exclude the largely non-cash earnings impacts of the recently enacted Tax Cuts and Jobs Act including amounts subject to regulatory treatment. Management believes that excluding the impacts of tax reform provides visibility into the true run-rate earnings of the Company. Contribution 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, income 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 contribution 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. 3 Investor Relations contact Scott W. Dudley Jr. Managing Director, Investor Relations Scott.Dudley@SpireEnergy.com

4 We are Spire 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 Technology and innovation 4

5 Delivering on our promises Delivered solid Q1 earnings of $1.19 per share Continuing our commitment to organic growth and investing in our utility business Pursuing opportunities in interstate and intrastate pipelines and storage Seeking reasonable regulatory outcomes while pursuing change legislatively 5

Investing in pipelines Progressing on Spire STL Pipeline Expect to receive FERC approval in early 2018 Land acquisition and construction planning

6 Investing in pipelines Progressing on Spire STL Pipeline Expect to receive FERC approval in early 2018 Land acquisition and construction planning continues On track for mid-fy19 in-service date and investment of $190 - $210 million Assessing additional opportunities in Missouri and Alabama 6

Investing in gas storage Acquired majority interest in Ryckman Creek Resources Natural gas storage facility in Wyoming Certificated at 35 Bcf of working gas Interconnects with five interstate pipes

7 Investing in gas storage Acquired majority interest in Ryckman Creek Resources Natural gas storage facility in Wyoming Certificated at 35 Bcf of working gas Interconnects with five interstate pipes and has access to REX Positioned to serve multiple customer groups and geographic markets Growing investment that will support our long-term growth targets $26 million purchase price Plan to upgrade infrastructure over the next two years (~$15 million) Expect earnings accretion in FY19; excluded from FY18 NEE as we integrate 7

Growing our dividend Annualized dividends per share $2.30 $2.10 $1.90 $1.70 +2.4 % +3.5 % +4.5 % $1.76 $1.70 $1.66 $1.84 +6.5 % +7.1% $1.96 $2.10 +7.1 % $2.

5625 per share, payable April 3 15 years of consecutive dividend increases (+7.

8 Growing our dividend Annualized dividends per share $2.30 $2.10 $1.90 $ % +3.5 % +4.5 % $1.76 $1.70 $1.66 $ % +7.1% $1.96 $ % $ Dividend Yield 3.2% 2 $1.50 $ Board declared quarterly dividend of $ per share, payable April 3 15 years of consecutive dividend increases (+7.1% the last two years) 73 years of continuous payment Supported by a conservative payout ratio (target range of 55% - 65%) 1 Quarterly dividend of $ per share effective January 3, 2018, annualized. 2 Based on $2.25 per share dividend and SR average closing price of $69.97 for calendar 2018 YTD through Jan

Maintaining positive momentum in operations Further growing customers and margins Increased investment in infrastructure upgrades, new business and technology $55 million for pipeline replacement $22

9 Maintaining positive momentum in operations Further growing customers and margins Increased investment in infrastructure upgrades, new business and technology $55 million for pipeline replacement $22 million in new business spend Tracking against our targets to further improve operating performance Reducing employee injuries Enhancing system operations and reliability Delivering on our commitment to everimproving customer service 9

Legislative update Filed Missouri Senate Bill 730, The Rate Case Modernization Act Improves rate stability by establishing annual rate reviews Encourages performance-based incentives and cost

10 Legislative update Filed Missouri Senate Bill 730, The Rate Case Modernization Act Improves rate stability by establishing annual rate reviews Encourages performance-based incentives and cost accountability Voted out of committee on January 24 Companion legislation in the House (HB 1878), is currently in committee Supporting damage prevention through One Call legislation in Alabama 10

11 Regulatory update Ryan Silvey (R) joined the MoPSC in January Former state senator and Chair - Committee on Commerce, Consumer Protection, Energy and the Environment Replaces Commissioner Stoll (D) whose term ended in December 2017 Seeking fair and reasonable outcomes in our Missouri rate cases Our cases show we have transformed our business for the benefit of our customers Recent MoPSC deliberations send a concerning message regarding capital structure and cost of service, including those costs incurred to deliver ~$70 million in customer benefits New rates will go into effect in March, 30 days after the final order Working with state regulators to determine how to return the benefit of tax reform to customers 11

12 Benefiting from normal weather First Quarter Ended December 31 Millions Per Diluted Share Net Economic Earnings Gas Utility $ 59.5 $ 51.8 $ 1.22 $ 1.13 Gas Marketing Other (5.2) (5.7) (0.11) (0.12) $ 57.9 $ 47.5 $ 1.19 $ 1.04 Net Economic Earnings (NEE) excludes the largely non-cash impact of tax reform, giving Transparency into the run-rate earnings Improved comparability to prior year s results 2018 NEE growth is largely tied to the return of more normal weather, which benefitted both our Gas Utility and Gas Marketing businesses Q1 FY18 NEE per share of $1.19 also reflects a 6% higher share count from FY17 equity unit conversion 1 See Net economic earnings (non-gaap) reconciliation in Appendix. 12

13 Revenues and margin (Millions) $ % Operating Revenues Gas Utility $ $ $ % Gas Marketing (2.1) -10% Other and Eliminations 0.2 (3.3) 3.5 n/m Contribution Margin 1 Revenues increased on higher weather-related demand and higher commodity costs Gas Utility contribution margin increased $12.3 million, or 5% $7.9 million directly tied to the return of normal weather $3.4 million higher ISRS 2 at Spire Missouri First Quarter Ended December 31 Millions $ $ $ % $1.0 million due to customer growth and other revenues Change Gas Utility $ $ $ % Gas Marketing n/m Other and Eliminations (0.2) -33% $ $ $ % Gas Marketing margin up $6.4 million, reflecting improved market conditions and increased storage optimization 1 Contribution margin is operating revenues less gas costs and gross receipts taxes. See Contribution margin (non-gaap) reconciliation in Appendix. 2 Infrastructure System Replacement Surcharge. 13

14 Expenses (Millions) $ % Operating Expenses Gas Utility First Quarter Ended December 31 Millions Change Natural & propane gas $ $ $ % Operation and maintenance (O&M) (1.5) -2% Depreciation & amortization % Taxes, other than income taxes % Gas Marketing and Other (0.7) -2% Operating Income % Other Income, Net % Interest Expense % Higher fuel costs resulted from increased weather-driven demand O&M expenses declined slightly, as higher employee-related costs and bad debt expense (both weather driven) were more than offset by lower maintenance costs Higher depreciation and tax expenses reflect increased capital investment Interest expense was higher due to the Spire Missouri debt funded in September as well as higher rates on short-term debt 1 Includes Gas Marketing and other segment eliminations. 14

15 Financially strong EBITDA 1 (Millions) Q1 FY18 EBITDA 1 of $148 million, up 16% from last year Ample liquidity at the peak of our seasonal borrowing Solid LT equity capitalization %, up 0.7% from last quarter Spire Alabama completed issuance of $75 million in Senior Notes $150 $100 $127 Q1 FY17 Long-term capitalization 2 (at December 31, 2017) $148 Q1 FY18 Amount Term Coupon Issued $30 million 40 years 4.02% Dec. 1, 2017 $45 million 30 years 3.92% Jan. 12, 2018 Equity Debt 49.4% 50.6% 1 EBITDA is Earnings before interest, income taxes, depreciation and amortization. See EBITDA (non-gaap) reconciliation in Appendix. 2 See Adjusted long-term capitalization reconciliation in Appendix. 15

16 Tax Cuts and Jobs Act Tax reform improves U.S. competitiveness, benefits our customers by lowering their energy bills and driving economic growth All companies will see their tax rate decrease Since regulated entities recover tax expense as part of cost of service, we expect to pass the benefits of tax reform to our customers Q1 GAAP financials include impacts based on the available guidance, including Changes to our effective GAAP tax rate Re-measurement of deferred tax accounts Q1 income tax expense includes a benefit to reflect the new lower statutory rate NEE removes this largely non-cash benefit to provide better comparability Income tax (benefit) expense Quarter Ended December 31 Millions (Millions) GAAP (benefit) expense $ (33.1) $ 22.3 Tax Cuts and Jobs Act impact NEE expense $ 26.8 $

17 Tax reform going forward 2018 impacts appear minimal No change to 2018 plans assuming fair and reasonable regulatory treatment Already engaging with our state regulators to pass the benefits to our customers Cash flow will be reduced due to lower tax collections from customers Interest deductibility will likely be retained due to our Largely regulated mix Strong and growing EBITDA from our non-regulated businesses Assessing the impacts and opportunities of tax reform beyond 2018 Increased growth given the Boost to overall economic activity and business investment Elimination of bonus depreciation Changes to capital spending, financing plans and credit metrics Look for updates as we refine our assessment 17

18 Investing in future growth Q1 FY18 capital spend up ~24% FY18 forecasted spend of $490 million $415 million investment for gas utilities $70 million for Spire STL Pipeline $5 million for storage 5-year capital spend of $2.3 billion Driven by utility infrastructure upgrade programs with lives of roughly 20+ years Over 80% recovered with minimal regulatory lag or reflected in earnings Next outlook update anticipated on our second quarter earnings call Capital expenditures First quarter (Millions) $125 $100 $75 $111 $50 $89 $25 $0 Q1 FY17 Q1 FY18 Capital expenditure forecast $ year forecast: $2.3B $490 $ $420 $ Utility, with Minimal Lag Other Utility 18 Pipelines and Storage

19 We re bringing people and energy together in ways that enrich the lives of those we serve and add value for our stakeholders. 19

20 Appendix 20

21 Tax Cuts and Jobs Act Signed into law on December 22, 2017 Generally effective beginning January 1, 2018 Key overall corporate provisions include Reduces the statutory rate from 35% to 21% Immediate expensing of capital investment Limits certain deductions for compensation and interest Adjusts utilization of net operating losses Regulated entities provided certain protections Full interest deductibility Ability to elect normal/accelerated depreciation Retains favorable dividend taxability for individuals 21

22 Net economic earnings (non-gaap) reconciliation (Millions, except per share amounts) Gas Utility Gas Marketing Other Total Per Diluted Share 2 Three Months Ended December 31, 2017 Net Income (GAAP) $ 45.2 $ 3.5 $ 67.3 $ $ 2.39 Adjustments, pre-tax: Unrealized loss (gain) on energy-related derivatives Realized gain on economic hedges prior to the sale of the physical commodity - (0.1) - (0.1) - Acquisition, divestiture and restructuring activities Income tax effect of adjustments 1 - (0.2) (0.4) (0.6) (0.02) Effects of the Tax Cuts and Jobs Act 14.3 (0.4) (73.8) (59.9) (1.24) Net Economic Earnings (Loss) (Non-GAAP) $ 59.5 $ 3.6 $ (5.2) $ 57.9 $ 1.19 Diluted EPS (GAAP) $ 0.93 $ 0.07 $ 1.39 $ 2.39 Net Economic EPS (Non-GAAP) 2 $ 1.22 $ 0.08 $ (0.11) $ 1.19 Three Months Ended December 31, 2016 Net Income (Loss) (GAAP) $ 51.7 $ (0.8) $ (5.7) $ 45.2 $ 0.99 Adjustments, pre-tax: Unrealized loss on energy-related derivatives Lower of cost or market inventory adjustments - (0.1) - (0.1) - Realized gain on economic hedges prior to the sale of the physical commodity - (0.1) - (0.1) - Acquisition, divestiture and restructuring activities Income tax effect of adjustments 1 - (1.4) - (1.4) (0.03) Net Economic Earnings (Loss) (Non-GAAP) $ 51.8 $ 1.4 $ (5.7) $ 47.5 $ 1.04 Diluted EPS (GAAP) $ 1.13 $ (0.02) $ (0.12) $ 0.99 Net Economic EPS (Non-GAAP) 2 $ 1.13 $ 0.03 $ (0.12) $ 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 is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation. 22

23 Contribution margin (non-gaap) reconciliation (Millions) Gas Utility Gas Marketing Other Eliminations Consolidated Three Months Ended December 31, 2017 Operating income (loss) (GAAP) $ $ 5.0 $ (1.7) $ - $ Operation and maintenance (2.3) Depreciation and amortization Taxes, other than income taxes Less: Gross receipts tax expense (23.1) (23.1) Contribution margin (non-gaap) (2.3) Natural and propane gas costs (0.3) Gross receipts tax expense Operating revenues $ $ 19.6 $ 2.8 $ (2.6) $ Three Months Ended December 31, 2016 Operating income (loss) (GAAP) $ 90.6 $ (1.3) $ (0.2) $ - $ 89.1 Operation and maintenance (1.2) Depreciation and amortization Taxes, other than income taxes Less: Gross receipts tax expense (19.0) (19.0) Contribution margin (non-gaap) (1.2) Natural and propane gas costs (3.9) Gross receipts tax expense Operating revenues $ $ 21.7 $ 1.8 $ (5.1) $

24 EBITDA 1 (non-gaap) reconciliation Three Months Ended December 31, (Millions) Net Income $ $ 45.2 Add back: Interest charges Income tax (benefit) expense (33.1) 22.3 Depreciation & amortization EBITDA $ $ Adjusted long-term capitalization reconciliation As of December 31, 2017 As of September 30, 2017 (Millions) Equity Debt Total Equity Debt Total Capitalization per balance sheet $ 2,085.7 $ 2,030.0 $ 4,115.7 $ 1,991.3 $ 1,995.0 $ 3,986.3 Current portion of long-term debt Adjusted long-term capitalization $ 2,085.7 $ 2,135.5 $ 4,221.2 $ 1,991.3 $ 2,095.0 $ 4,086.3 % of Total 49.4% 50.6% 100.0% 48.7% 51.3% 100.0% 1 EBITDA is earnings before interest, income taxes, depreciation and amortization. 24

Year end fiscal Earnings conference call. November 15, 2017

Year end fiscal Earnings conference call. November 15, 2017 Year end fiscal 2017 Earnings conference call November 15, 2017 Participants on today s call Suzanne Sitherwood President and Chief Executive Officer Steven L. Lindsey Executive Vice President and Chief