Information by Operating Segment

6 Months Ended

Mar. 31, 2020

9. INFORMATION BY OPERATING SEGMENT

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 components of the Company’s consolidated information include:

•

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

•

Spire STL Pipeline, a subsidiary of Spire which has constructed and, as of November 2019, operates a 65-mile FERC-regulated pipeline to deliver natural gas into eastern Missouri;

•

Spire Storage, a subsidiary of Spire providing physical natural gas storage services; and

•

Spire’s subsidiaries engaged in the operation of a propane pipeline, the 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 and Spire Alabama, 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 after-tax 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 2020, this includes provisions for the ISRS rulings discussed in Note 4, Regulatory Matters.

	Gas Utility			Gas Marketing			Other			Eliminations			Consolidated
Three Months Ended March 31, 2020
Operating Revenues:
Revenues from external customers	$	679.1		$	33.3		$	3.1		$	—		$	715.5
Intersegment revenues		(0.1	)		—			11.6			(11.5	)		—
Total Operating Revenues		679.0			33.3			14.7			(11.5	)		715.5
Operating Expenses:
Gas Utility
Natural and propane gas		271.6			—			—			(22.6	)		249.0
Operation and maintenance		95.8			—			—			(2.7	)		93.1
Depreciation and amortization		47.0			—			—			—			47.0
Taxes, other than income taxes		51.7			—			—			—			51.7
Total Gas Utility Operating Expenses		466.1			—			—			(25.3	)		440.8
Gas Marketing and Other		—			37.7			12.7			13.8			64.2
Total Operating Expenses		466.1			37.7			12.7			(11.5	)		505.0
Operating Income	$	212.9		$	(4.4	)	$	2.0		$	—		$	210.5
Net Economic Earnings (Loss)	$	144.3		$	5.1		$	(5.4	)	$	—		$	144.0

	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Three Months Ended March 31, 2019
Operating Revenues:
Revenues from external customers	$	776.7	$	25.4	$	1.4		$	—		$	803.5
Intersegment revenues		0.1		0.1		2.9			(3.1	)		—
Total Operating Revenues		776.8		25.5		4.3			(3.1	)		803.5
Operating Expenses:
Gas Utility
Natural and propane gas		366.7		—		—			(29.3	)		337.4
Operation and maintenance		112.0		—		—			(2.5	)		109.5
Depreciation and amortization		44.4		—		—			—			44.4
Taxes, other than income taxes		57.4		—		—			—			57.4
Total Gas Utility Operating Expenses		580.5		—		—			(31.8	)		548.7
Gas Marketing and Other		—		8.7		7.9			28.7			45.3
Total Operating Expenses		580.5		8.7		7.9			(3.1	)		594.0
Operating Income (Loss)	$	196.3	$	16.8	$	(3.6	)	$	—		$	209.5
Net Economic Earnings (Loss)	$	146.7	$	6.2	$	(5.0	)	$	—		$	147.9

	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Six Months Ended March 31, 2020
Operating Revenues:
Revenues from external customers	$	1,209.7	$	65.6	$	7.1		$	—		$	1,282.4
Intersegment revenues		—		—		18.7			(18.7	)		—
Total Operating Revenues		1,209.7		65.6		25.8			(18.7	)		1,282.4
Operating Expenses:
Gas Utility
Natural and propane gas		513.1		—		—			(49.5	)		463.6
Operation and maintenance		204.4		—		—			(5.3	)		199.1
Depreciation and amortization		93.4		—		—			—			93.4
Taxes, other than income taxes		89.6		—		—			—			89.6
Total Gas Utility Operating Expenses		900.5		—		—			(54.8	)		845.7
Gas Marketing and Other		—		65.6		22.2			36.1			123.9
Total Operating Expenses		900.5		65.6		22.2			(18.7	)		969.6
Operating Income (Loss)	$	309.2	$	—	$	3.6		$	—		$	312.8
Net Economic Earnings (Loss)	$	213.4	$	11.2	$	(8.8	)	$	—		$	215.8

	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Six Months Ended March 31, 2019
Operating Revenues:
Revenues from external customers	$	1,350.5	$	51.2	$	3.8		$	—		$	1,405.5
Intersegment revenues		1.5		0.1		5.9			(7.5	)		—
Total Operating Revenues		1,352.0		51.3		9.7			(7.5	)		1,405.5
Operating Expenses:
Gas Utility
Natural and propane gas		658.5		—		—			(69.4	)		589.1
Operation and maintenance		216.9		—		—			(4.9	)		212.0
Depreciation and amortization		88.1		—		—			—			88.1
Taxes, other than income taxes		96.6		—		—			—			96.6
Total Gas Utility Operating Expenses		1,060.1		—		—			(74.3	)		985.8
Gas Marketing and Other		—		22.0		16.3			66.8			105.1
Total Operating Expenses		1,060.1		22.0		16.3			(7.5	)		1,090.9
Operating Income (Loss)	$	291.9	$	29.3	$	(6.6	)	$	—		$	314.6
Net Economic Earnings (Loss)	$	213.1	$	14.5	$	(13.8	)	$	—		$	213.8

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

	March 31,			September 30,			March 31,
	2020			2019			2019
Total Assets:
Gas Utility	$	6,311.6		$	6,094.6		$	5,850.1
Gas Marketing		159.3			212.3			366.7
Other		2,214.7			2,692.7			2,396.8
Eliminations		(667.6	)		(1,380.4	)		(1,340.0	)
Total Assets	$	8,018.0		$	7,619.2		$	7,273.6

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

	Three Months Ended March 31,						Six Months Ended March 31,
	2020			2019			2020			2019
Net Income	$	133.6		$	154.6		$	200.6		$	221.9
Adjustments, pre-tax:
Provision for ISRS rulings		2.2			—			4.8			—
Unrealized loss (gain) on energy-related derivatives		11.6			(9.1	)		15.3			(11.3	)
Acquisition, divestiture and restructuring activities		—			—			—			0.4
Income tax effect of adjustments		(3.4	)		2.4			(4.9	)		2.8
Net Economic Earnings	$	144.0		$	147.9		$	215.8		$	213.8