INFORMATION BY OPERATING SEGMENT

6 Months Ended

Mar. 31, 2018

The Company has two reportable segments: Gas Utility and Gas Marketing. The Gas Utility segment is the aggregation of the 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. Other includes:


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


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


•	physical natural gas storage operations, include the acquisition of an 80% voting interest in Ryckman Creek Resources, LLC, in December 2017; and


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

Accounting policies are described in Note 1, Summary of Significant Accounting Policies. Intersegment transactions include sales of natural gas from Spire Marketing to Spire Missouri, sales of natural gas from Spire Missouri to Spire Marketing, propane transportation services provided by Spire NGL Inc. to Spire Missouri, and propane storage services provided by Spire Missouri to Spire NGL Inc.

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 impacts of fair value accounting and timing adjustments associated with energy-related transactions, the impacts of acquisition, divestiture and restructuring activities, and the largely non-cash impacts of other non-recurring or unusual items such as certain regulatory, legislative, or GAAP standard-setting actions. In fiscal 2018, these items include the revaluation of deferred tax assets and liabilities due to the federal Tax Cuts and Jobs Act (see Note 11, Income Taxes) and the write-off of certain long-standing assets as a result of our Missouri rate proceedings (see Note 3, Regulatory Matters).



	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Three Months Ended March 31, 2018
Operating Revenues:
Revenues from external customers	$	790.6	$	21.3	$	1.5		$	—		$	813.4
Intersegment revenues	0.2		—		2.9			(3.1		)	—
Total Operating Revenues	790.8		21.3		4.4			(3.1		)	813.4
Operating Expenses:
Gas Utility
Natural and propane gas	403.2		—		—			(19.5		)	383.7
Operation and maintenance	145.8		—		—			(2.2		)	143.6
Depreciation and amortization	41.1		—		—			—			41.1
Taxes, other than income taxes	58.0		—		—			—			58.0
Total Gas Utility Operating Expenses	648.1		—		—			(21.7		)	626.4
Gas Marketing and Other	—		20.2		6.4			18.6			45.2
Total Operating Expenses	648.1		20.2		6.4			(3.1		)	671.6
Operating Income (Loss)	$	142.7	$	1.1	$	(2.0	)	$	—		$	141.8
Net Economic Earnings (Loss)	$	131.7	$	10.2	$	(4.7	)	$	—		$	137.2



	Gas Utility		Gas Marketing			Other			Eliminations			Consolidated
Three Months Ended March 31, 2017
Operating Revenues:
Revenues from external customers	$	641.1	$	22.2		$	0.1		$	—		$	663.4
Intersegment revenues	2.6		—			1.7			(4.3		)	—
Total Operating Revenues	643.7		22.2			1.8			(4.3		)	663.4
Operating Expenses:
Gas Utility
Natural and propane gas	275.6		—			—			(21.3		)	254.3
Operation and maintenance	99.3		—			—			(0.9		)	98.4
Depreciation and amortization	37.9		—			—			—			37.9
Taxes, other than income taxes	48.3		—			—			—			48.3
Total Gas Utility Operating Expenses	461.1		—			—			(22.2		)	438.9
Gas Marketing and Other	—		23.9			2.3			17.9			44.1
Total Operating Expenses	461.1		23.9			2.3			(4.3		)	483.0
Operating Income (Loss)	$	182.6	$	(1.7	)	$	(0.5	)	$	—		$	180.4
Net Economic Earnings (Loss)	$	112.2	$	—		$	(3.2	)	$	—		$	109.0




	Gas Utility		Gas Marketing			Other			Eliminations			Consolidated
Six Months Ended March 31, 2018
Operating Revenues:
Revenues from external customers	$	1,332.5	$	40.9		$	1.8		$	—		$	1,375.2
Intersegment revenues	0.3		—			5.4			(5.7		)	—
Total Operating Revenues	1,332.8		40.9			7.2			(5.7		)	1,375.2
Operating Expenses:
Gas Utility
Natural and propane gas	666.6		—			—			(42.1		)	624.5
Operation and maintenance	245.6		—			—			(4.1		)	241.5
Depreciation and amortization	81.4		—			—			—			81.4
Taxes, other than income taxes	94.7		—			—			—			94.7
Total Gas Utility Operating Expenses	1,088.3		—			—			(46.2		)	1,042.1
Gas Marketing and Other	—		34.8			10.9			40.5			86.2
Total Operating Expenses	1,088.3		34.8			10.9			(5.7		)	1,128.3
Operating Income (Loss)	$	244.5	$	6.1		$	(3.7	)	$	—		$	246.9
Net Economic Earnings (Loss)	$	191.2	$	13.8		$	(9.9	)	$	—		$	195.1

Six Months Ended March 31, 2017
Operating Revenues:
Revenues from external customers	$	1,113.4	$	43.9		$	1.2		$	—		$	1,158.5
Intersegment revenues	7.0		—			2.4			(9.4		)	—
Total Operating Revenues	1,120.4		43.9			3.6			(9.4		)	1,158.5
Operating Expenses:
Gas Utility
Natural and propane gas	490.1		—			—			(42.0		)	448.1
Operation and maintenance	199.8		—			—			(2.0		)	197.8
Depreciation and amortization	75.6		—			—			—			75.6
Taxes, other than income taxes	81.7		—			—			—			81.7
Total Gas Utility Operating Expenses	847.2		—			—			(44.0		)	803.2
Gas Marketing and Other	—		46.9			4.3			34.6			85.8
Total Operating Expenses	847.2		46.9			4.3			(9.4		)	889.0
Operating Income (Loss)	$	273.2	$	(3.0	)	$	(0.7	)	$	—		$	269.5
Net Economic Earnings (Loss)	$	164.0	$	1.4		$	(8.9	)	$	—		$	156.5

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



	March 31,			September 30,			March 31,
	2018			2017			2017
Total Assets:
Gas Utility	$	5,484.3		$	5,551.2		$	5,290.8
Gas Marketing	208.6			246.2			218.2
Other	2,211.9			2,239.5			2,199.1
Eliminations	(1,318.0		)	(1,490.2		)	(1,451.4		)
Total Assets	$	6,586.8		$	6,546.7		$	6,256.7

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



	Three Months Ended March 31,						Six Months Ended March 31,
	2018			2017			2018			2017
Net Income	$	98.2		$	108.0		$	214.2		$	153.2
Adjustments, pre-tax:
Missouri regulatory adjustments	30.6			—			30.6			—
Unrealized loss on energy-related derivative contracts	11.8			1.6			12.6			5.4
Lower of cost or market inventory adjustments	—			0.1			—			—
Realized gain on economic hedges prior to sale of the physical commodity	(0.2		)	(0.1		)	(0.3		)	(0.2		)
Acquisition, divestiture and restructuring activities	2.0			0.1			3.7			0.2
Income tax effect of adjustments	(11.1		)	(0.7		)	(11.7		)	(2.1		)
Effects of the Tax Cuts and Jobs Act	5.9			—			(54.0		)	—
Net Economic Earnings	$	137.2		$	109.0		$	195.1		$	156.5