INFORMATION BY OPERATING SEGMENT

9 Months Ended

Jun. 30, 2017

The Company has two reportable segments: Gas Utility and Gas Marketing. The Gas Utility segment is the aggregation of the regulated operations of the Utilities. The Gas Marketing segment includes the results of Spire Marketing, a subsidiary engaged in the non-regulated marketing of natural gas and related activities, including utilizing natural gas storage contracts for providing natural gas sales. In addition, other non-utility activities of the Company include:


•	unallocated corporate costs, including certain debt and associated interest costs;


•	Spire STL Pipeline LLC, a subsidiary of Spire planning construction of a proposed 65-mile Federal Energy Regulatory Commission (FERC)-regulated pipeline to deliver natural gas into eastern Missouri; and


•	Spire’s subsidiaries engaged in the operation of a propane pipeline, compression of natural gas and risk management, among other activities. All subsidiaries are wholly owned.

Accounting policies are described in Note 1, Summary of Significant Accounting Policies. Intersegment transactions include sales of natural gas from Spire Marketing to Laclede Gas and from Laclede Gas to Spire Marketing, insurance services provided by Laclede Insurance Risk Services to Laclede Gas and Alagasco, and propane transportation services provided by Laclede Pipeline Company to Laclede Gas.

Management evaluates the performance of the operating segments based on the computation of net economic earnings. Net economic earnings exclude from reported net income the after-tax impacts of net unrealized gains and losses and other timing differences associated with energy-related transactions. Net economic earnings also exclude the after-tax impacts related to acquisition, divestiture, and restructuring activities.



	Gas Utility		Gas Marketing			Other			Eliminations			Consolidated
Three Months Ended June 30, 2017
Operating Revenues:
Revenues from external customers	$	305.1	$	17.9		$	0.5		$	—		$	323.5
Intersegment revenues	1.5		—			1.6			(3.1		)	—
Total Operating Revenues	306.6		17.9			2.1			(3.1		)	323.5
Operating Expenses:
Gas Utility
Natural and propane gas	88.7		—			—			(12.0		)	76.7
Operation and maintenance	101.9		—			—			(1.1		)	100.8
Depreciation and amortization	38.4		—			—			—			38.4
Taxes, other than income taxes	30.5		—			—			—			30.5
Total Gas Utility Operating Expenses	259.5		—			—			(13.1		)	246.4
Gas Marketing and Other	—		12.0			4.8			10.0			26.8
Total Operating Expenses	259.5		12.0			4.8			(3.1		)	273.2
Operating Income (Loss)	$	47.1	$	5.9		$	(2.7	)	$	—		$	50.3
Net Economic Earnings (Loss)	$	23.3	$	2.3		$	(4.0	)	$	—		$	21.6

Three Months Ended June 30, 2016
Operating Revenues:
Revenues from external customers	$	253.2	$	(4.3	)	$	0.4		$	—		$	249.3
Intersegment revenues	0.1		6.6			0.5			(7.2		)	—
Total Operating Revenues	253.3		2.3			0.9			(7.2		)	249.3
Operating Expenses:
Gas Utility
Natural and propane gas	61.1		—			—			(7.0		)	54.1
Operation and maintenance	91.9		—			—			(0.1		)	91.8
Depreciation and amortization	34.2		—			—			—			34.2
Taxes, other than income taxes	27.4		—			—			—			27.4
Total Gas Utility Operating Expenses	214.6		—			—			(7.1		)	207.5
Gas Marketing and Other	—		3.9			2.7			(0.1		)	6.5
Total Operating Expenses	214.6		3.9			2.7			(7.2		)	214.0
Operating Income (Loss)	$	38.7	$	(1.6	)	$	(1.8	)	$	—		$	35.3
Net Economic Earnings (Loss)	$	18.0	$	1.8		$	(5.2	)	$	—		$	14.6




	Gas Utility		Gas Marketing			Other			Eliminations			Consolidated
Nine Months Ended June 30, 2017
Operating Revenues:
Revenues from external customers	$	1,419.1	$	61.8		$	1.1		$	—		$	1,482.0
Intersegment revenues	7.9		—			4.6			(12.5		)	—
Total Operating Revenues	1,427.0		61.8			5.7			(12.5		)	1,482.0
Operating Expenses:
Gas Utility
Natural and propane gas	578.8		—			—			(54.0		)	524.8
Operation and maintenance	301.7		—			—			(3.1		)	298.6
Depreciation and amortization	114.0		—			—			—			114.0
Taxes, other than income taxes	112.2		—			—			—			112.2
Total Gas Utility Operating Expenses	1,106.7		—			—			(57.1		)	1,049.6
Gas Marketing and Other	—		58.9			9.1			44.6			112.6
Total Operating Expenses	1,106.7		58.9			9.1			(12.5		)	1,162.2
Operating Income (Loss)	$	320.3	$	2.9		$	(3.4	)	$	—		$	319.8
Net Economic Earnings (Loss)	$	187.3	$	3.7		$	(12.9	)	$	—		$	178.1

Nine Months Ended June 30, 2016
Operating Revenues:
Revenues from external customers	$	1,263.5	$	(6.7	)	$	1.2		$	—		$	1,258.0
Intersegment revenues	2.0		29.8			1.4			(33.2		)	—
Total Operating Revenues	1,265.5		23.1			2.6			(33.2		)	1,258.0
Operating Expenses:
Gas Utility
Natural and propane gas	496.0		—			—			(32.3		)	463.7
Operation and maintenance	278.4		—			—			(0.7		)	277.7
Depreciation and amortization	101.5		—			—			—			101.5
Taxes, other than income taxes	99.5		—			—			—			99.5
Total Gas Utility Operating Expenses	975.4		—			—			(33.0		)	942.4
Gas Marketing and Other	—		18.4			7.4			(0.2		)	25.6
Total Operating Expenses	975.4		18.4			7.4			(33.2		)	968.0
Operating Income (Loss)	$	290.1	$	4.7		$	(4.8	)	$	—		$	290.0
Net Economic Earnings (Loss)	$	170.5	$	4.5		$	(11.8	)	$	—		$	163.2

The Company’s total assets by segment were as follows:



	June 30,			September 30,			June 30,
	2017			2016			2016
Total Assets:
Gas Utility	$	5,323.1		$	5,184.7		$	4,646.9
Gas Marketing	223.6			205.0			167.8
Other	2,171.8			1,836.6			1,592.6
Eliminations	(1,420.3		)	(1,161.9		)	(1,108.3		)
Total Assets	$	6,298.2		$	6,064.4		$	5,299.0

The following table reconciles the Company’s net economic earnings to net income.



	Three Months Ended June 30,						Nine Months Ended June 30,
	2017			2016			2017			2016
Net Income	$	21.7		$	10.7		$	174.9		$	158.4
Adjustments, pre-tax:
Unrealized (gain) loss on energy-related derivative contracts	(2.2		)	4.9			3.2			2.9
Lower of cost or market inventory adjustments	—			(0.1		)	—			0.6
Realized gain on economic hedges prior to sale of the physical commodity	—			(0.3		)	(0.2		)	(0.9		)
Acquisition, divestiture and restructuring activities	1.9			1.8			2.1			5.1
Income tax effect of adjustments	0.2			(2.4		)	(1.9		)	(2.9		)
Net Economic Earnings	$	21.6		$	14.6		$	178.1		$	163.2