Information by Operating Segment

12 Months Ended

Sep. 30, 2019

14. 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:

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

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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;

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

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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, 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 2019, this included impacts from ISRS rulings against Spire Missouri. In fiscal 2018, these items included the revaluation of deferred tax assets and liabilities due to the Tax Cuts and Jobs Act and the write-off of certain long-standing assets as a result of disallowances in our Missouri rate proceedings.

2019	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Revenues from external customers	$	1,859.2	$	83.7	$	9.5		$	—		$	1,952.4
Intersegment revenues		1.6		—		12.0			(13.6	)		—
Total Operating Revenues		1,860.8		83.7		21.5			(13.6	)		1,952.4
Operating Expenses
Gas Utility
Natural and propane gas		794.6		—		—			(96.4	)		698.2
Other operation and maintenance		441.7		—		—			(9.4	)		432.3
Depreciation and amortization		179.4		—		—			—			179.4
Taxes, other than income taxes		151.7		—		—			—			151.7
Total Gas Utility Operating Expenses		1,567.4		—		—			(105.8	)		1,461.6
Gas Marketing and Other *		—		60.5		35.8			92.2			188.5
Total Operating Expenses		1,567.4		60.5		35.8			(13.6	)		1,650.1
Operating Income (Loss)	$	293.4	$	23.2	$	(14.3	)	$	—		$	302.3
Net Economic Earnings (Loss)	$	199.8	$	19.4	$	(24.1	)	$	—		$	195.1
Capital Expenditures	$	565.4	$	3.1	$	254.8		$	—		$	823.3

2018	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Revenues from external customers	$	1,888.0	$	71.6	$	5.4		$	—		$	1,965.0
Intersegment revenues		0.4		—		11.1			(11.5	)		—
Total Operating Revenues		1,888.4		71.6		16.5			(11.5	)		1,965.0
Operating Expenses
Gas Utility
Natural and propane gas		842.6		—		—			(72.5	)		770.1
Other operation and maintenance		449.7		—		—			(8.5	)		441.2
Depreciation and amortization		167.0		—		—			—			167.0
Taxes, other than income taxes		152.5		—		—			—			152.5
Total Gas Utility Operating Expenses		1,611.8		—		—			(81.0	)		1,530.8
Gas Marketing and Other *		—		37.8		32.8			69.5			140.1
Total Operating Expenses		1,611.8		37.8		32.8			(11.5	)		1,670.9
Operating Income (Loss)	$	276.6	$	33.8	$	(16.3	)	$	—		$	294.1
Net Economic Earnings (Loss)	$	183.1	$	22.9	$	(22.3	)	$	—		$	183.7
Capital Expenditures	$	457.7	$	—	$	41.7		$	—		$	499.4

2017	Gas Utility		Gas Marketing		Other			Eliminations			Consolidated
Revenues from external customers	$	1,660.0	$	79.3	$	1.4		$	—		$	1,740.7
Intersegment revenues		7.9		—		6.3			(14.2	)		—
Total Operating Revenues		1,667.9		79.3		7.7			(14.2	)		1,740.7
Operating Expenses
Gas Utility
Natural and propane gas		645.9		—		—			(75.4	)		570.5
Other operation and maintenance		389.9		—		—			(4.1	)		385.8
Depreciation and amortization		153.5		—		—			—			153.5
Taxes, other than income taxes		137.8		—		—			—			137.8
Total Gas Utility Operating Expenses		1,327.1		—		—			(79.5	)		1,247.6
Gas Marketing and Other *		—		74.1		12.8			65.3			152.2
Total Operating Expenses		1,327.1		74.1		12.8			(14.2	)		1,399.8
Operating Income (Loss)	$	340.8	$	5.2	$	(5.1	)	$	—		$	340.9
Net Economic Earnings (Loss)	$	181.5	$	6.8	$	(20.7	)	$	—		$	167.6
Capital Expenditures	$	412.6	$	—	$	25.5		$	—		$	438.1

*	Operating Expenses for “Gas Marketing and Other” include depreciation and amortization for Gas Marketing ($0.1 for 2019, $0.0 for 2018, and $0.1 for 2017) and for Other ($2.2 for 2019, $1.4 for 2018, and $0.5 for 2017).

Total Assets at End of Year	2019			2018			2017
Gas Utility	$	6,094.6		$	5,606.7		$	5,551.2
Gas Marketing		212.3			295.3			246.2
Other		2,692.7			2,508.0			2,239.5
Eliminations		(1,380.4	)		(1,566.4	)		(1,490.2	)
Total Assets	$	7,619.2		$	6,843.6		$	6,546.7

Reconciliation of Consolidated Net Income to Consolidated Net Economic Earnings	2019			2018			2017
Net Income	$	184.6		$	214.2		$	161.6
Adjustments, pre-tax:
Provision for ISRS rulings	12.2				—			—
Missouri regulatory adjustments		—			30.6			—
Unrealized loss (gain) on energy-related derivatives		1.2			(4.0	)		6.0
Realized gain on economic hedges prior to the sale of the physical commodity		—			(0.3	)		(0.3	)
Acquisition, divestiture and restructuring activities		0.4			13.6			4.0
Income tax effect of adjustments		(3.3	)		(10.3	)		(3.7	)
Effect of the Tax Cuts and Jobs Act		—			(60.1	)		—
Net Economic Earnings	$	195.1		$	183.7		$	167.6