Spire Inc. · NYSE:SR
Spire — Investor Presentation (October 2022)
34 slides from Spire's investor presentation, October 2022
Slide 1: Energizing the future
Energizing the future Investor Presentation October 2022
Slide 2: Spire is a compelling investment
Spire is a compelling investment 90%+ regulated Robust 5-year 5-7% long-term Growing Strong ESG business mix capex plan EPS growth dividend for performance; 19 consecutive commitment to 7-8% annual years carbon neutral rate base by midcentury growth Attractive yield of 3.7%1 1Based on $2.74 per shar
Slide 3: Energizing the future
Energizing the future • We remain focused on our growth strategy and commitments – Investing in infrastructure upgrades, new business and technology – Enhancing operating and service performance – Advancing on environmental sustainability to become a carbon neutral company by midcentury – Achieving
Slide 4: Our sustainability commitment
Our sustainability commitment Methane emission reduction (From 2005 levels) 26% • Protecting the environment 43% 46% – Established team to lead environmental 59% commitment efforts 73% – Reduced methane emissions by 46% 2015 2020 2021 2025 2035 • Caring for people Target Target – Driving a strong sa
Slide 5: Advancing our environmental sustainability
Advancing our environmental sustainability • Established Scope 1 and Scope 2 emissions baseline • Evaluating renewable energy resources (RNG), focusing on – Exploring RNG opportunities, including methane capture from wastewater treatment plants as well as landfills and agricultural operations (anima
Slide 6: Progressing on regulatory matters
Progressing on regulatory matters Missouri rate case – procedural schedule issued May 18 Third-party testimony due AUG. 31 SEPT. 9 FEB. 28 (revenue (cost of Latest date requirement) service) rates effective AUG SEPT OCT NOV DEC JAN FEB Public Hearings MoPSC Hearings OCT. 12-18 NOV. 28-DEC. 9 Missour
Slide 7: Spire MO 2022 rate case
Spire MO 2022 rate case 25% • On April 1, Spire Missouri filed a new 45% general rate case, seeking recovery of: – Our full, updated cost of service, 30% including deferred overhead costs – Increased capital investment Overheads recovery • Filing seeks fair and reasonable rate Rate of return of retu
Slide 8: Missouri overhead cost deferrals
Missouri overhead cost deferrals Actuals through FY22 (Millions) Future recovery 6/30/22 estimates Costs to be capitalized Depreciation $12.5 $21.0 Costs to be expensed Cost of service $12.9 $15.0 ISRS overheads Cost of service $5.0 $5.0 • Cost buckets identified and being tracked • Recovery will be
Slide 9: Spire | Investor presentation – October 2022
9 Spire | Investor presentation – October 2022
Slide 10: Spire Marketing
Spire Marketing • Provides logistical services – Wholesale services to utilities, producers, power generation, storage and pipelines – Focused on physical delivery of gas – Allows for optimizing commodity, transportation and storage portfolio • Positioning is key to meet customer needs and take adva
Slide 11: Spire STL Pipeline
Spire STL Pipeline • On Dec. 3, the FERC issued a new temporary operating certificate • Allows pipeline to continue operating indefinitely during FERC remand process currently underway – FERC is considering a new permanent operating certificate – We expect remand process to continue into early calen
Slide 12: Spire Storage
Spire Storage • Operations have been greatly improved to deliver reliable service and breakeven results • Storage is essential to balance seasonal gas heating demand and support intermittent renewables • Strategy is to expand capacity to meet growing storage demand – Minimal new storage capacity has
Slide 13: Spire Storage expansion project
Spire Storage expansion project • Capital investment of $195M – Construction over next two years’ construction seasons (April – October) – Addition of injection/withdrawal wells, compression, pipeline infrastructure and gas processing equipment • When completed, working gas capacity increased to 39
Slide 14: Investing in growth
Investing in growth Capital expenditures (Millions) $500 $463 • YTD FY22 capex totaled $403M, $400 29 $403 driven by gas utility investment 12 $300 – $196M pipeline upgrades – $89M new business $200 434 391 • 5-year capex remains $3.1B $100 – Driven by utility pipeline replacement $0 9 mos. FY21 9 m
Slide 15: Outlook
Outlook FY22 guidance • LT NEEPS growth target of 5-7% 0.30 • FY22 NEEPS of $3.75-$3.95 $3.95 0.20 • Financing forecast unchanged $4.18 0.05 – New credit facility in July 2022 $3.75 • Expanded to $1.3B • Extended through July 2027 FY21 MO 5%-7% Gas Utility Marketing Run Rate Rate of Growth & Other •
Slide 16: Appendix
Appendix 16 Spire | Investor presentation – October 2022
Slide 17: Forward-looking statements and use of non-GAAP measures
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.
Slide 18: Spire executive leadership team
Spire executive leadership team B Suzanne Steve Steve Mark Mike Sitherwood Lindsey Rasche Darrell Geiselhart President and Executive Vice President, Executive Vice President, Senior Vice President, Senior Vice President, Chief Executive Officer Chief Operating Officer Chief Financial Officer Chief L
Slide 19: Spire business unit presidents
Spire business unit presidents Scott Carter Joe Hampton Scott Smith Pat Strange President, Spire Missouri President, Spire Alabama President, Spire STL Pipeline President, Spire Marketing and Mississippi and Spire Storage 19 Spire | Investor presentation – October 2022
Slide 20: Our Spire utility portfolio
Our Spire utility portfolio Alabama Gulf Mississippi Missouri Primary office Birmingham Mobile Hattiesburg St. Louis Employees1 993 127 41 2,489 Customers1 428,400 84,300 18,400 1,194,781 Pipeline miles ~24,100 ~4,300 ~1,200 ~31,100 Rate base (Millions) $6342 $1172 $443 $2,8994 Return on equity 10.4
Slide 21: We’re a growing, financially strong natural gas company
We’re a growing, financially strong natural gas company • 5th largest publicly traded natural gas company serving 1.7 million homes and businesses across Alabama, Mississippi and Missouri • Executing on our value- creation strategy – Growing organically – Investing in infrastructure – Innovating thr
Slide 22: The case for natural gas
The case for natural gas Abundant and domestic The U.S. has 3,368 Tcf of The U.S. natural gas Direct use of natural gas is a more future natural gas supply, transmission and distribution efficient energy: 91% vs 36% for 100 years worth1 system (2.6M miles of generation from converting natural underg
Slide 23: Upgrading our infrastructure and reducing methane emissions
Upgrading our infrastructure and reducing methane emissions Estimated replacement miles remaining Miles of pipeline replaced (As of 12/31/21) (By fiscal year) Total 400 356 382 362 Bare Cast Vintage replacement steel1 iron1 plastic miles 322 297 300 Missouri 1,4922 481 — 1,973 Alabama 478 370 271 1,
Slide 24: Sustainability – 2021 highlights
Sustainability – 2021 highlights Environment .. .. .. .. .. .. .. .. .. Established a dedicated team .. .. .. .. Created a baseline for .. .. to lead our environmental .. .. .. commitment efforts .. Scope 1 and 2 emissions .. .. .. .. .. .. .. .. . .. .. Became a founding limited partner .. .. .. of
Slide 25: Sustainability – 2021 highlights
Sustainability – 2021 highlights People Governance .. .. .. Measured our workforce .. Formally assigned oversight of sustainability to specific committees of our .. Continued to develop new and demographics to establish a .. .. Board of Directors to monitor strategy and plans, and ensure that progre
Slide 26: Missouri regulatory summary
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 me
Slide 27: Alabama regulatory summary
Alabama regulatory summary • Top-rated regulatory jurisdiction by RRA • Rate Stabilization and Equalization (RSE) annual rate-setting process – RSE parameters evaluated 3-4 four years • Spire Alabama RSE reset – Q1 FY23 • Spire Gulf RSE reset – Q1 FY22 Spire Alabama – Rates set based on forward-year
Slide 28: Mississippi regulatory summary
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
Slide 29: Other financial information
Other financial information 29 S p i r e | I n v e s t o r p r e s e n t a t i o n – O c t o b e r 2 0 2 2
Slide 30: Strong financial position
Strong financial position 1 Adjusted EBITDA (Millions) • Solid adjusted EBITDA $600 • Ample liquidity at 6/30/22 $400 • Supported by credit facility and $575 $547 commercial paper program $200 • Balanced long-term capitalization – Spire MO $300M floater issued $0 9 mos. FY21 9 mos. FY22 Dec. 2021 –
Slide 31: Dividend per share
Growing our dividend Annualized common stock dividend per share Dividend yield 3.7%2 $2.90 1 $2.74 $2.70 $2.60 $2.49 $2.50 $2.37 Dividend per share $2.30 $2.25 $2.10 $2.10 $1.96 $1.90 $1.70 $1.50 $1.30 2016 2017 2018 2019 2020 2021 2022 • Annualized 2022 common stock dividend increased 5.4% to $2.74
Slide 32: YTD net economic earnings
YTD net economic earnings Per diluted Millions common share Nine months ended June 30, 2022 2021 2022 2021 Net Income [GAAP] $ 227.9 $ 281.6 $ 4.16 $ 5.23 All other adjustments1 19.8 (2.2) 0.38 (0.05) Net Economic Earnings (NEE)2 $ 247.7 $ 279.4 $ 4.54 $ 5.18 By segment Gas Utility $ 240.6 $ 248.4 G
Slide 33: YTD net economic earnings reconciliation to GAAP
YTD net economic earnings reconciliation to GAAP Gas Gas Per diluted (Millions, except per share amounts) Utility Marketing Other Total common share2 Nine months ended June 30, 2022 Net Income (Loss) [GAAP] $ 236.5 $ (0.4) $ (8.2) $ 227.9 $ 4.16 Adjustments, pre-tax: Fair value and timing adjustment
Slide 34: Adjusted EBITDA reconciliation to GAAP; Long-term capitalization
Adjusted EBITDA1 reconciliation to GAAP Nine months ended June 30, (Millions) 2022 2021 Net Income [GAAP] $ 227.9 $ 281.6 Add back: Missouri regulatory adjustment - (9.0) Interest charges 85.4 78.4 Income tax expense 57.0 68.6 Depreciation and amortization 176.2 155.4 Adjusted EBITDA [non-GAAP] $ 54