Discussion and analysis by the management of SPIRE INC of the financial situation and operating results (form 10-K)

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(In millions of dollars, except amounts per share and per unit)

INTRODUCTION

This section analyzes the financial condition and results of operations of Spire
Inc. (the "Company"), Spire Missouri Inc., and Spire Alabama Inc. Spire
Missouri, Spire Alabama and Spire EnergySouth are wholly owned subsidiaries of
the Company. Spire Missouri, Spire Alabama and the subsidiaries of Spire
EnergySouth are collectively referred to as the "Utilities." The subsidiaries of
Spire EnergySouth are Spire Gulf and Spire Mississippi. This section includes
management's view of factors that affect the respective businesses of the
Company, Spire Missouri and Spire Alabama, explanations of financial results
including changes in earnings and costs from the prior periods, and the effects
of such factors on the Company's, Spire Missouri's and Spire Alabama's overall
financial condition and liquidity. Unless otherwise indicated, references to
years herein are references to the fiscal years ending September 30 for the
Company and its subsidiaries.

Reference is made to "Item 1A. Risk Factors" and "Forward-Looking Statements,"
which describe important factors that could cause actual results to differ from
expectations and non-historical information contained herein. In addition, the
following discussion should be read in conjunction with the audited financial
statements and accompanying notes thereto of Spire, Spire Missouri and Spire
Alabama included in "Item 8. Financial Statements and Supplementary Data."

PREVIEW

The Company has two reportable segments: Gas Utility and Gas Marketing. Nearly
all of Spire's earnings are derived from its Gas Utility segment, which reflects
the regulated activities of the Utilities. Due to the seasonal nature of the
Utilities' business and the Spire Missouri rate design, earnings of Spire and
each of the Utilities are typically concentrated during the heating season of
November through April each fiscal year.

Gas Service – Missouri Spire

Spire Missouri is Missouri's largest natural gas distribution utility and is
regulated by the MoPSC. Spire Missouri serves St. Louis, Kansas City, and other
areas throughout the state. Spire Missouri purchases natural gas in the
wholesale market from producers and marketers and ships the gas through
interstate pipelines into its own distribution facilities for sale to
residential, commercial and industrial customers. Spire Missouri also transports
gas through its distribution system for certain larger customers who buy their
own gas on the wholesale market. Spire Missouri delivers natural gas to
customers at rates and in accordance with tariffs authorized by the MoPSC. The
earnings of Spire Missouri are primarily generated by the sale of heating
energy.

Gas Service – Spire Alabama

Spire Alabama is the largest natural gas distribution utility in the state of
Alabama and is regulated by the APSC. Spire Alabama's service territory is
located in central and northern Alabama. Among the cities served by Spire
Alabama are Birmingham, the center of the largest metropolitan area in the
state, and Montgomery, the state capital. Spire Alabama purchases natural gas
through interstate and intrastate suppliers and distributes the purchased gas
through its distribution facilities for sale to residential, commercial, and
industrial customers and other end-users of natural gas. Spire Alabama also
transports gas through its distribution system for certain large commercial and
industrial customers for a transportation fee. Effective December 1, 2020, for
most of these transportation service customers, Spire Alabama will also purchase
gas on the wholesale market for sale to the customer upon delivery to the Spire
Alabama distribution system. All Spire Alabama services are provided to
customers at rates and in accordance with tariffs authorized by the APSC.

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Gas service – Spire EnergySouth

Spire Gulf and Spire Mississippi are utilities engaged in the purchase, retail
distribution and sale of natural gas to approximately 100,000 customers in
southern Alabama and south-central Mississippi. Spire Gulf is regulated by the
APSC, and Spire Mississippi is regulated by the MSPSC.

Gas marketing

Spire Marketing is engaged in the marketing of natural gas and related
activities on a non-regulated basis and is reported in the Gas Marketing
segment. Spire Marketing markets natural gas across the central and southern
U.S. It holds firm transportation and storage contracts in order to effectively
manage its transactions with counterparties, which primarily include producers,
municipalities, electric and gas utility companies, and large commercial and
industrial customers.

Other

The other elements of the Company’s consolidated information include:

• unallocated business items, including certain debts and associated interest

costs;

• Spire STL Pipeline, a subsidiary of Spire supplying interstate natural gas

pipeline transport services;

• Spire Storage, a subsidiary of Spire providing interstate natural gas storage

services; and

• The subsidiaries of Spire engaged in the operation of a propane pipeline, the

natural gas compression and risk management, among other activities.


Business Evaluation Factors

Based on the nature of the business of the Company and its subsidiaries, as well
as current economic conditions, management focuses on several key variables in
evaluating the financial condition and results of operations and managing the
business.

For the gas utilities segment, these are:

   • the Utilities' ability to recover from their customers the costs of
     purchasing and distributing natural gas;

• the impact of weather conditions and other factors, such as customer retention, on

income and expenses;

• changes in the regulatory environment at federal, state and local level

levels, as well as the decisions of regulators, which have an impact on Utilities

ability to achieve the allowable rate of return and to recover prudent costs by

each of the service territories they serve;

• the ability of public services to access credit markets and maintain working capital

     sufficient to meet operating requirements;


  • the effect of natural gas price volatility on the business; and

• the ability to manage costs, integrate and standardize operations, and

upgrade infrastructure.

In the gas marketing segment, these include:

  • the risks of competition;


  • fluctuations in natural gas prices;


  • the changing flow and availability of natural gas;


  • new national infrastructure projects;

• the ability to procure firm transportation and warehousing services at a reasonable price

     rates;


  • credit and/or capital market access;


  • counterparty risks; and


  • the effect of natural gas price volatility on the business.

Further information on how management seeks to manage these key variables is presented below.

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Gas service

The Utilities seek to provide reliable natural gas services at a reasonable
cost, while maintaining and building secure and dependable infrastructures. The
Utilities' strategies focus on improving both performance and the ability to
recover their authorized distribution costs and rates of return. The Utilities'
distribution costs are the essential, primarily fixed, expenditures they must
incur to operate and maintain more than 60,000 miles of mains and services
comprising their natural gas distribution systems and related storage
facilities.

The Utilities' distribution costs include wages and employee benefit costs,
depreciation and maintenance expenses, and other regulated utility operating
expenses, excluding natural and propane gas expense. Distribution costs are
considered in the rate-making process, and recovery of these types of costs is
included in revenues generated through the Utilities' tariff rates. Spire
Missouri's tariff rates are approved by the MoPSC, whereas Spire Alabama's
tariff rates are approved by the APSC. Spire Gulf and Spire Mississippi have
tariff rates that are approved by the APSC and MSPSC, respectively.

Spire Missouri and Spire Alabama also have off-system sales and capacity release
income streams that are regulated by tariff but remain subject to fluctuations
in market conditions. Some of the factors impacting the level of off-system
sales include the availability and cost of Spire's natural gas supply, the
weather in its service areas and the weather in other markets. When Spire's
service areas experience warmer-than-normal weather while other markets
experience colder weather or supply constraints, some of Spire's natural gas
supply is available for sale to third parties not on Spire's system.

The Utilities work actively to reduce the impact of wholesale natural gas price
volatility on their costs by strategically structuring their natural gas supply
portfolios to increase their gas supply availability and pricing alternatives.
They may also use derivative instruments to hedge against significant changes in
the commodity price of natural gas. Nevertheless, the overall cost of purchased
gas remains subject to fluctuations in market conditions. The Purchased Gas
Adjustment (PGA) clause of Spire Missouri, Spire Gulf and Spire Mississippi and
the Gas Supply Adjustment (GSA) rider of Spire Alabama allow the Utilities to
flow through to customers, subject to prudence review by the public service
commissions, the cost of purchased gas supplies, including costs, cost
reductions and related carrying costs associated with the use of derivative
instruments to mitigate volatility in the cost of natural gas. As of September
30, 2021, Spire Missouri had active derivative positions, but Spire Alabama has
had no gas supply derivative instrument activity since 2010. Except in certain
situations discussed under the caption "-The Utilities' ability to meet their
customers' natural gas requirements may be impaired if contracted gas supplies,
interstate pipeline and/or storage services are not available or delivered in a
timely manner" under Item 1A, Risk Factors, and in   Note 15  , Regulatory
Matters, of the Notes to Financial Statements in Item 8, the Utilities believe
they will continue to be able to obtain sufficient gas supply. The price of
natural gas supplies and other economic conditions may affect sales volumes, due
to the conservation efforts of customers, and cash flows associated with the
timing of collection of gas costs and related accounts receivable from
customers.

The Utilities rely on short-term credit and long-term capital markets, as well
as cash flows from operations, to satisfy their seasonal cash requirements and
fund their capital expenditures. The Utilities access the commercial paper
market through a program administered by the holding company, which then loans
borrowed funds to the Utilities. The Utilities directly access the long-term
bond market. Access to debt markets is dependent on current conditions in the
credit and capital markets. Management focuses on maintaining a strong balance
sheet and believes the Utilities currently have adequate access to credit and
capital markets and will have sufficient capital resources to meet their
foreseeable obligations. See the "Capital Resources" section for additional
information.

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Gas marketing

Spire Marketing is engaged in the marketing of natural gas and related services
throughout the United States, which includes customers within and outside of the
Utilities' service areas. Spire Marketing utilizes its natural gas supply
agreements, transportation agreements, park and loan agreements, storage
agreements and other executory contracts to support a variety of services to its
customers at competitive prices. It closely monitors and manages the natural gas
commodity price and volatility risks associated with providing such services to
its customers through the use of a variety of risk management activities,
including the use of exchange-traded/cleared derivative instruments and other
contractual arrangements. Spire Marketing is committed to managing commodity
price risk while it seeks to expand the services that it now provides.
Nevertheless, income from the Gas Marketing operations is subject to more
fluctuations in market conditions than the Utilities' operations.

The Gas Marketing business is directly impacted by the effects of competition in
the marketplace, the impacts of new infrastructure, surplus natural gas
supplies, and the addition of new demand from exports, power generation and
industrial load. Spire Marketing's management expects a growing need for
marketing services across the country as customers manage seasonal variability
and marketplace volatility.

In addition to its operating cash flows, Spire Marketing relies on Spire's
parental guaranties to secure its purchase and sales obligations of natural gas,
and it also has access to Spire's liquidity resources. A large portion of Spire
Marketing's receivables are from customers in the energy industry. It also
enters into netting arrangements with many of its energy counterparties to
reduce overall credit and collateral exposure. On a net dollar exposure basis,
the majority of Spire Marketing's customers are utilities or utility affiliates.
Although Spire Marketing's uncollectible amounts are closely monitored and have
not been significant, increases in uncollectible amounts from customers are
possible and could adversely affect Spire Marketing's liquidity and results of
operations.

Spire Marketing carefully monitors the creditworthiness of counterparties to its
transactions. It performs in-house credit reviews of potential customers and may
require credit assurances such as prepayments, letters of credit or parental
guaranties when appropriate. Credit limits for customers are established and
monitored.

Spire Marketing cannot be certain that all of its wholesale purchase and sale
transactions will settle physically. As such, these transactions are designated
as trading activities for financial reporting purposes, due to their settlement
characteristics. Results of operations from trading activities are reported on a
net basis in natural gas expenses.

In the course of its business, Spire Marketing enters into commitments
associated with the purchase or sale of natural gas. In accordance with U.S.
GAAP, some of its purchase and sale transactions are not recognized in earnings
until the natural gas is physically delivered, while other energy-related
transactions, including those designated as trading activities, are required to
be accounted for as derivatives with the changes in their fair value
(representing unrealized gains or losses) recorded in earnings in periods prior
to settlement. Because related transactions of a purchase and sale strategy may
be accounted for differently, there may be timing differences in the recognition
of earnings under GAAP and economic earnings realized upon settlement. The
Company reports both GAAP and net economic earnings (non-GAAP), as discussed in
the section "Non-GAAP Measures".

COVID-19[feminine

The outbreak of COVID-19 has adversely impacted economic activity and conditions
worldwide. We are continuing to assess the developments involving our workforce,
customers and suppliers, as well as the response of federal and state
authorities, our regulators and other business and community leaders. The
Company has implemented what we believe to be appropriate procedures and
protocols to ensure the safety of our customers, suppliers and employees. These
actions include activating incident management procedures, work-from-home for
our office-based employees, limiting direct contact with our customers, and
suspending disconnections and late payment fees for our utility customers for
several months in 2020.

Nous avons subi des impacts sur nos résultats d’exploitation de la COVID-19, notamment :

• les frais de retard de paiement perdus en raison d’un moratoire de fin mars à mi-juin

2020 ;

• impact mineur sur la marge nette de la baisse des volumes commerciaux et industriels compensé

      by additional residential fixed charges;


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• les créances irrécouvrables augmentent en raison des pertes de crédit supplémentaires attendues sur

      accounts receivable balances; and


   •  net other direct cost reductions due to lower travel, meals and

divertissement et formation compensés par des coûts accrus pour un nettoyage amélioré

et équipements de protection individuelle pour nos installations et le personnel de terrain

par rapport aux niveaux normaux et attendus.


Spire Missouri received an Accounting Authority Order from the MoPSC to defer
certain costs incurred through March 31, 2021, and has recorded a related
regulatory asset of $6.2 as of September 30, 2021. Even with the cost increases
and lost revenues, Spire Alabama exceeded the allowed return and recorded a Rate
Stabilization and Equalization giveback in September 2020 and in January 2021,
so there was no bottom-line impact of these COVID-19 effects.

An extended slowdown of the United States' economy, changes in commodity costs
and/or significant changes in policy and regulation could result in lower demand
for natural gas as well as negatively impact the ability of our customers,
contractors, suppliers and other business partners to remain in business or
return to operating health. These could have a material adverse effect on our
results of operations, financial condition, liquidity and prospects.

The Company is participating in the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) provisions allowing for a payroll tax deferral which
does not have an impact on our results of operations but defers the payment of
the Company's portion of certain payroll taxes until later in fiscal 2021 and
2022. Although the Company does not currently expect to seek relief under any
other CARES Act provisions, we will continue to monitor all pending and future
federal, state and local efforts related to the COVID-19 health crisis and
assess our need and, as applicable, eligibility for any such relief.

MESURES NON GAAP

Net income, earnings per share and operating income reported by Spire, Spire
Missouri and Spire Alabama are determined in accordance with GAAP. Spire, Spire
Missouri and Spire Alabama also provide the non-GAAP financial measures of net
economic earnings, net economic earnings per share and contribution margin.
Management and the Board of Directors use non-GAAP financial measures, in
addition to GAAP financial measures, to understand and compare operating results
across accounting periods, for financial and operational decision making, for
planning and forecasting, to determine incentive compensation and to evaluate
financial performance. These non-GAAP operating metrics should not be considered
as alternatives to, or more meaningful than, the related GAAP measures.
Reconciliations of non-GAAP financial measures to the most directly comparable
GAAP measures are provided on the following pages.

Bénéfice économique net et bénéfice économique net par action

Net economic earnings and net economic earnings per share are non-GAAP measures
that exclude from 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 impairments and other non-recurring or unusual items such as certain
regulatory, legislative or GAAP standard-setting actions. In addition, net
economic earnings per share would exclude the impact, in the fiscal year of
issuance, of any shares issued to finance acquisitions that have yet to be
included in net economic earnings.

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The fair value and timing adjustments are made in instances where the accounting
treatment differs from what management considers the economic substance of the
underlying transaction, including the following:

• Gains et pertes nets non réalisés sur les dérivés liés à l’énergie qui sont

requis par la comptabilisation à la juste valeur GAAP associée aux changements actuels dans le

juste valeur des transactions financières et physiques avant leur réalisation

et règlement. Ces gains et pertes latents résultent principalement de deux

sources:

1) variations des justes valeurs des dérivés physiques et/ou financiers avant

         to the period of settlement; and


      2) ineffective portions of accounting hedges, required to be recorded in

bénéfices avant règlement, en raison des différences de prix des matières premières

changements entre les emplacements de l’achat ou de la vente physique prévu

les transactions et les emplacements des instruments de couverture sous-jacents ;

• Réduction du coût ou des ajustements du marché à la valeur comptable de la marchandise

stocks résultant de la baisse de la valeur nette de réalisation de la marchandise

     below its original cost, to the extent that those commodities are
     economically hedged; and

• Gains et pertes réalisés résultant du règlement des couvertures économiques

avant la vente de la marchandise physique.


These adjustments eliminate the impact of timing differences and the impact of
current changes in the fair value of financial and physical transactions prior
to their completion and settlement. Unrealized gains or losses are recorded in
each period until being replaced with the actual gains or losses realized when
the associated physical transactions occur. Management believes that excluding
the earnings volatility caused by recognizing changes in fair value prior to
settlement and other timing differences associated with related purchase and
sale transactions provides a useful representation of the economic effects of
only the actual settled transactions and their effects on results of operations.
While management uses these non-GAAP measures to evaluate all of its businesses,
the net effect of these fair value and timing adjustments on the Utilities'
earnings is minimal because gains or losses on their natural gas derivative
instruments are deferred pursuant to state regulation.

Marge de contribution

In addition to operating revenues and operating expenses, management also uses
the non-GAAP measure of contribution margin when evaluating results of
operations. Contribution margin is defined as operating revenues less natural
gas costs and gross receipts tax expense. The Utilities pass to their customers
(subject to prudence review by, as applicable, the MoPSC, APSC or MSPSC)
increases and decreases in the wholesale cost of natural gas in accordance with
their PGA clauses or GSA riders. The volatility of the wholesale natural gas
market results in fluctuations from period to period in the recorded levels of,
among other items, revenues and natural gas cost expense. Nevertheless,
increases and decreases in the cost of gas associated with system gas sales
volumes and gross receipts tax expense (which are calculated as a percentage of
revenues), with the same amount (excluding immaterial timing differences)
included in revenues, have no direct effect on operating income. Therefore,
management believes that contribution margin is a useful supplemental measure,
along with the remaining operating expenses, for assessing the Company's and the
Utilities' performance.

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GAINS

This section contains discussion and analysis of the results for the year ended
September 30, 2021 compared to the results for the year ended September 30,
2020. The discussion and analysis of the results for the year ended September
30, 2020 compared to the results of the year ended September 30, 2019 can be
found in Part II, Item 7 of Spire Inc.'s fiscal 2020 Annual Report on Form 10-K,
filed with the U.S. Securities and Exchange Commission (SEC) on November 18,
2020.

Spire

Revenu net (perte) et bénéfice économique net (perte)

Les tableaux suivants rapprochent le bénéfice économique net de la société avec le chiffre GAAP le plus comparable, le bénéfice net.

                                                                                                  Per
                                         Gas            Gas                       Consol-       Diluted
                                       Utility       Marketing       Other        idated        Share**
Year Ended September 30, 2021
Net Income (Loss) [GAAP]              $ 237.2     $ 44.8     $ (10.3)   $ 271.7     $ 4.96
Adjustments, pre-tax: Missouri regulatory adjustments (9.0) - - (9.0) (0.17) Fair value and timing adjustments 0.3 3.0 - 3.3 0.06 Acquisition, divestiture and restructuring activities - - (1.3) (1.3) (0.02) Income tax effect of adjustments * 2.1 (0.8) 0.3 1.6 0.03 Net Economic Earnings (Loss)
[Non-GAAP]                            $ 230.6     $ 47.0     $  

(11.3) $ 266.3 $ 4.86

Year Ended September 30, 2020
Net Income (Loss) [GAAP]              $   213.6     $       7.0     $ (132.0 )   $    88.6     $    1.44
Adjustments, pre-tax:
Impairments                                   -               -        148.6         148.6          2.89
Fair value and timing adjustments          (0.3 )           2.8            -           2.5          0.05
Income tax effect of adjustments*           0.1            (0.7 )      (31.3 )       (31.9 )       (0.62 )
Net Economic Earnings (Loss)
[Non-GAAP]                            $   213.4     $       9.1     $  

(14.7) $ 207.8 $ 3.76

Year Ended September 30, 2019
Net Income (Loss) [GAAP]              $   190.5     $      18.5     $  (24.4 )   $   184.6     $    3.52
Adjustments, pre-tax:
Provision for ISRS rulings                 12.2               -            -          12.2          0.23
Fair value and timing adjustments             -             1.2            -           1.2          0.03
Acquisition, divestiture and
restructuring activities                      -               -          0.4           0.4          0.01
Income tax effect of adjustments*          (2.9 )          (0.3 )       (0.1 )        (3.3 )       (0.06 )
Net Economic Earnings (Loss)
[Non-GAAP]                            $   199.8     $      19.4     $  (24.1 )   $   195.1     $    3.73





* The effect of income tax is calculated by applying federal, state and local revenues

tax rates applicable to ordinary income at pre-tax tax amounts

reconcile the elements, then add all the estimated effects of the adopted state or

local tax laws for periods prior to the corresponding effective date.

** The net economic result per share is calculated by replacing the consolidated net result

result with consolidated net economic result in diluted GAAP income

per share calculation, which includes discounts for

dividends and participating shares.

Consolidated

Spire's net income was $271.7 in fiscal 2021, compared with $88.6 in fiscal
2020. Basic and diluted earnings per share were $4.97 and $4.96, respectively,
for fiscal 2021 compared with basic and diluted earnings per share of $1.44 for
fiscal 2020.

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The prior year amount reflects the impact of the third quarter 2020 impairment
charge of $148.6 ($117.3 after tax). Excluding this charge, net income increased
$65.8, driven by increases of $37.8 and $23.6 in Gas Marketing and Gas Utility,
respectively, combined with a $4.4 improvement in results from Other.

Net economic earnings were $266.3 ($4.86 per diluted share) for the twelve
months ended September 30, 2021, compared to $207.8 ($3.76 per diluted share)
for the same period last year, reflecting earnings improvements in both the Gas
Marketing and Gas Utility segments, as well as Other. These variances are
discussed in greater detail below.

Gas service

Gas Utility net income increased by $23.6 from the prior year. The Gas Utility
segment is higher due principally to a $24.1 increase in contribution margin
resulting from higher off-system sales in the second quarter of the current
year. This increase was a result of managing our gas inventory levels to serve
our customers during the cold weather events in February 2021 and allowed Spire
Missouri to capitalize on gas flow disruptions resulting in increased off-system
sales which also benefited our customers. The current year also benefited from a
$15.9 increase in Spire Missouri ISRS revenues (including the impact of a
prior-year provision of $2.2 related to the ISRS ruling settled in the year),
$9.8 in net favorable rate adjustments under the RSE mechanism at Spire Alabama,
the Missouri Supreme Court ruling that partially reversed 2018 rate case pension
cost disallowances totaling $9.0 ($6.8 after tax), and $6.3 higher contribution
margin due to the impacts of colder weather in the second quarter of the current
year. These positive impacts were partially offset by higher run-rate operating
costs and a $14.7 increase in depreciation and amortization reflecting increased
capital investment and a disallowed meter cost recovery in Spire Missouri.

Net economic earnings in the current year were $230.6, an increase of $17.2 over
the same period in the prior year. The increase was primarily driven by higher
contribution margin that was only partly offset by an increase in depreciation
and amortization and higher run-rate operating expenses, after reclassification
of certain postretirement benefit costs to other income and expense (no impact
on net income) ("Nonservice Cost Transfer") and the Missouri Supreme Court
ruling that partially reversed 2018 rate case pension cost disallowances. These
impacts are described in further detail below.

Gas marketing

The Gas Marketing segment reported net income totaling $44.8 for the twelve
months ended September 30, 2021, versus net income of $7.0 during the same
period last year. Net economic earnings for the twelve months ended September
30, 2021, was $47.0, an increase of $37.9 from the same period last year. Both
net income and net economic earnings reflect strong operating results in the
current year, driven by storage positions established last year and the
resulting optimization of market conditions in the second fiscal quarter due to
extreme weather as a result of Winter Storm Uri.

Other

The Company's other non-utility activities generated a net loss of $10.3 for
fiscal 2021, compared to a net loss of $132.0 for the same period last year.
Fiscal 2020 reflects the $117.3 after-tax impairment charge previously
mentioned. Net economic loss was $11.3 for fiscal 2021, an improvement of $3.4
compared to fiscal 2020. The improvement was driven primarily by a smaller loss
from Spire Storage.

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Operating income and operating expenses

Reconciliations of contribution margin to the most directly comparable GAAP
measure are shown below.



                                         Gas            Gas
                                       Utility       Marketing       Other       Eliminations       Consolidated
Year Ended September 30, 2021
Operating Income                      $   374.0     $      58.5     $   17.7     $           -     $        450.2
Operation and maintenance expenses        422.2            17.1         40.2             (13.7 )            465.8
Depreciation and amortization             204.4             1.2          7.5                 -              213.1
Taxes, other than income taxes            157.0             0.9          2.2                 -              160.1

Less: Tax charge on gross revenue (93.9) (0.1) –

                 -              (94.0 )
Contribution Margin [Non-GAAP]          1,063.7            77.6         67.6             (13.7 )          1,195.2
Natural gas costs                         961.7            18.8          0.1             (34.3 )            946.3
Gross receipts tax expense                 93.9             0.1            -                 -               94.0
Operating Revenues                    $ 2,119.3     $      96.5     $   67.7     $       (48.0 )   $      2,235.5




                                         Gas            Gas
                                       Utility       Marketing       Other       Eliminations       Consolidated
Year Ended September 30, 2020
Operating Income (Loss)               $   334.3     $       9.3     $ (137.2 )   $           -     $        206.4
Operation and maintenance expenses        421.3            11.8         38.2             (12.7 )            458.6
Depreciation and amortization             189.7             0.6          7.0                 -              197.3
Taxes, other than income taxes            146.5             1.1          0.8                 -              148.4
Impairment loss                               -               -        148.6                 -              148.6

Less: Tax charge on gross revenue (91.1) (0.4) –

                 -              (91.5 )
Contribution Margin [Non-GAAP]          1,000.7            22.4         57.4             (12.7 )          1,067.8
Natural gas costs                         660.2            65.1          0.4             (29.6 )            696.1
Gross receipts tax expense                 91.1             0.4            -                 -               91.5
Operating Revenues                    $ 1,752.0     $      87.9     $   57.8     $       (42.3 )   $      1,855.4




                                         Gas            Gas
                                       Utility       Marketing       Other       Eliminations       Consolidated
Year Ended September 30, 2019
Operating Income (Loss)               $   293.4     $      23.2     $  (14.3 )   $           -     $        302.3
Operation and maintenance expenses        441.7            11.7         31.6             (10.9 )            474.1
Depreciation and amortization             179.4             0.1          2.2                 -              181.7
Taxes, other than income taxes            151.7             0.8          1.5                 -              154.0

Less: Tax charge on gross revenue (99.1) (0.2) –

                 -              (99.3 )
Contribution Margin [Non-GAAP]            967.1            35.6         21.0             (10.9 )          1,012.8
Natural gas costs                         794.6            47.9          0.5              (2.7 )            840.3
Gross receipts tax expense                 99.1             0.2            -                 -               99.3
Operating Revenues                    $ 1,860.8     $      83.7     $   21.5     $       (13.6 )   $      1,952.4


Consolidated

Spire's operating revenues increased by $380.1, driven by higher revenues across
all segments, net of intercompany eliminations. Both the Gas Utility and Gas
Marketing segments saw their favorable results driven principally by the extreme
weather experienced as a result of Winter Storm Uri in February of the current
year. Specifically, the Gas Utility increase was $367.3, Spire Marketing
increased $8.6, while Other (net of intercompany eliminations) increased $4.2,
reflecting higher combined revenues from both Spire Storage and Spire STL
Pipeline (which entered service in late calendar 2019).

                                       36

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Spire's contribution margin increased $127.4 compared with the same twelve-month
period last year, with all segments reporting increases. The Gas Utility
contribution margin increased $63.0, primarily driven by the $51.2 increase from
Spire Missouri and the $10.8 increase at Spire Alabama. The $55.2 increase in
Gas Marketing reflects very favorable weather and market conditions in the
current year second quarter. Higher contribution margins at Spire STL Pipeline
are consistent with its in-service date early in fiscal 2020, and Spire
Storage's improvement reflects higher utilization of its storage capacity.

Depreciation and amortization expenses were higher in the Gas Utility segment,
due principally to higher capital investments. Gas Utility O&M expenses were
$0.9 higher in the current year, largely due to the Missouri Supreme Court
ruling that partially reversed 2018 rate case pension cost disallowances
totaling $9.0 offset by Nonservice Cost Transfer of $2.1. These fluctuations are
described in more detail below.

Gas service

Operating revenues – Gas utilities operating revenues for fiscal 2021 increased
$ 367.3 compared to fiscal 2020, and is attributable to the following factors:



Spire Missouri - Higher PGA gas cost recoveries                    $        

183.2

Arrow Missouri and Spire Alabama – Off-System Sales and Capacity Release

113.0

Arrow Missouri and Spire Alabama – Volumetric Usage (net of weather attenuation)

31.9

Arrow Missouri – Superior SSRI (including SSRI adjustment decisions from the previous year)

15.9

Spire Alabama - RSE: net adjustments                                          9.4
Spire EnergySouth growth                                                      5.3
All other factors                                                             8.6
Total Variation                                                    $        367.3




As shown in the table above, the increase in revenues was driven primarily by a
$183.2 increase in Spire Missouri gas costs (including $195.8 of cover charges
and OFO penalties to certain wholesale customers), a $113.0 increase in
off-system sales, and higher weather/volumetric impacts of $31.9. The segment
also benefited from a $15.9 increase of Spire Missouri ISRS, a $9.4 increase due
to Spire Alabama's rate adjustments under the RSE mechanism, and $5.3 growth
from Spire EnergySouth.

Contribution margin – The gas company’s contribution margin was $ 1,063.7 for fiscal year 2021, a $ 63.0 increase over the same period last year. This increase is explained by the following factors:

Arrow Missouri and Spire Alabama – Off-System Sales and Capacity Release $ 24.1
Spire Missouri – Superior SSRIs (including previous year’s SSRI decisions)

15.9

Spire Alabama - RSE: net adjustments                                        

9.8

Spire Missouri and Spire Alabama - Volumetric usage                           6.3
All other factors                                                             6.9
Total Variation                                                            $ 63.0


The contribution margin increase resulted primarily from higher off-system
sales, Missouri ISRS (net of ISRS ruling provisions), Spire Alabama rate
adjustments under the RSE mechanism, and higher volumetric margins. The higher
off-system sales and volumetric impacts were primarily the result of the extreme
weather conditions from Winter Storm Uri in February of the current year.

Operating Expenses - O&M expenses in fiscal 2021 increased by $0.9 million
compared to the prior-year period. This variance reflects the Nonservice Cost
Transfer of $2.1 and the $9.0 decrease attributable to the Missouri Supreme
Court ruling that partially reversed 2018 rate case pension cost disallowances.
Excluding these impacts, O&M expenses increased by $7.8 due primarily to higher
employee-related costs and $3.7 due to one-time cost adjustments relating to
stipulations settled in the current Spire Missouri rate case. Depreciation and
amortization expenses for the twelve months ended September 30, 2021 increased
$14.7 from the same period last year, principally the result of continued
infrastructure capital spending, with $11.2 of the increase attributable to
Spire Missouri and $2.8 attributable to Spire Alabama. Included in the Spire
Missouri increase is a $3.4 charge pertaining to meter cost recovery that was
disallowed by the MoPSC.

                                       37
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Gas marketing

Operating Revenues - Gas Marketing operating revenue for the year ended
September 30, 2021 increased $8.6 from the prior year. The variance in revenues
reflects higher volumes and pricing, combined with the monetizing of incremental
storage capacity.

Contribution Margin - Gas Marketing contribution margin during the twelve months
ended September 30, 2021, increased $55.2 from the same period last year, driven
principally by strong second quarter results in the current year. During the
second quarter, the February 2021 cold weather events drove significantly higher
regional basis differentials and volumes.

Spire Marketing, along with many natural gas industry participants, faced the
unprecedented effects of Winter Storm Uri. Numerous natural gas producers and
midstream operators were unable to deliver natural gas to market as they
experienced wellhead freeze-offs, power outages and equipment failure from the
extreme weather. These events resulted in supply curtailments, and related
notices of force majeure to excuse performance, from and to certain
counterparties. Further, these events have made Spire Marketing subject to
various commercial disputes (including regarding force majeure) and a regulatory
dispute regarding tariff obligations as a shipper on an interstate pipeline. As
such, Spire Marketing recorded an estimate of potential liabilities for damages
based on the facts and circumstances surrounding each counterparty transaction
as of March 31, 2021. During the subsequent two quarters, a number of these
disputes have been resolved and/or exposures clarified based on further
communication with the counterparties. It is expected that the estimate will
change as new facts emerge or further settlements are reached, and it is
possible that final settlement amounts may materially differ from the current
estimate.

Other

Other operating revenue increased $9.9 for the year ended September 30, 2021
compared to 2020, driven principally by Spire Storage and Spire STL Pipeline
that was placed in service in November of 2019. Other operating expenses were
$2.0 higher than the prior year reflecting higher activity levels at Spire
Storage and Spire STL Pipeline FERC Certificate defense costs.

Interest charges

Consolidated interest charges during the year ended September 30, 2021 increased
$1.1 versus the prior year. The increase was primarily driven by net long-term
debt issuances in the current year and the prior year benefiting from Allowance
for Funds Used in Construction (AFUDC) non-cash income at Spire STL Pipeline.
The current year also benefited from lower interest rates that were only
slightly offset by higher levels of average short-term borrowings. Short-term
rates averaged 0.4% in the current year versus 1.7% for the prior year and, for
the years ended September 30, 2021 and 2020, average short-term borrowings were
$610.5 and $576.2, respectively.

Income taxes

Consolidated income tax expense during the year ended September 30, 2021 was
$68.5, compared to $12.4 for fiscal 2020. This increase of $56.1 is primarily
the result of the $31.3 tax benefit relating to the impairment loss recorded in
the third quarter of fiscal 2020, combined with higher pre-tax book income this
year and a higher effective rate due to mix of earnings among entities in the
current year.

                                       38
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Spire Missouri

Summary Operating Results



                                       Year ended September 30,
                                         2021              2020
Operating Income                     $       228.6       $   205.6
Operation and maintenance expenses           261.1           251.0
Depreciation and amortization                129.2           118.0
Taxes, other than income taxes               110.9           103.2
Less: Gross receipts tax expense             (64.3 )         (63.5 )
Contribution Margin [Non-GAAP]               665.5           614.3
Natural gas costs                            786.8           515.8
Gross receipts tax expense                    64.3            63.5
Operating Revenues                   $     1,516.6       $ 1,193.6
Net Income                           $       144.1       $   130.2




Operating revenues during the twelve months ended September 30, 2021, increased
$323.0 from the same period last year primarily due to a $183.2 increase
attributable to higher gas costs (including $195.8 of cover charges and OFO
penalties to certain wholesale customers), a $110.6 increase due to higher
off-system sales, $15.9 higher ISRS, and a $6.7 increase in volumetric impacts
(net of weather mitigation) relating to colder weather conditions primarily in
the second quarter of the current year.

Contribution margin increased $51.2 versus the same period in the prior year.
The variance was attributable to a $22.9 increase in off-system sales and $6.5
higher volumetric margins (both principally due to the extreme weather in
February of the current year), as well as the previously mentioned $15.9
increase in ISRS, and $1.3 related to customer growth.

O&M expenses during the twelve months ended September 30, 2021, increased $10.1
from the same period last year. Excluding the Nonservice Cost Transfer of $5.0
and the Missouri Supreme Court ruling totaling $9.0 discussed above, O&M was
higher by $14.1, reflecting higher employee-related expenses and $3.7 relating
to cost adjustments relating to stipulations settled in the current Spire
Missouri rate case. Depreciation increased by $11.2 as a result of continuing
capital investment and a $3.4 charge pertaining to disallowed meter cost
recovery by the MoPSC.

Spire Missouri's other expense increased $0.2 versus the comparable prior-year
period. Removing the impact of the Nonservice Cost Transfer of $5.0, other
expense increased $5.2, primarily due to higher charitable contributions in the
current year only being partly offset by increases in the value of investments
associated with non-qualified employee benefit plans reflecting market
conditions.

Net income for the twelve months ended September 30, 2021, increase $ 13.9
compared to the same period of the previous year.

Temperatures in Spire Missouri's service areas during the twelve months ended
September 30, 2021, were 2.1% warmer than the same period last year and 4.0%
warmer than normal. Despite the slightly warmer overall period temperatures, the
Spire Missouri total system therms sold and transported were 1,700.2 million for
the twelve months ended September 30, 2021, compared with 1,684.0 million for
the same period last year. The increase was entirely due to the February cold
weather events in the second quarter of the current year. Total off-system
therms sold and transported were 22.4 million for the twelve months ended
September 30, 2021, compared with 30.6 million for the same period last year.
The 29.7% year-over-year increase in the second quarter of this year resulting
from the February cold weather events was more than offset by lower therms
transported in all remaining quarters of the current year.

                                       39

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Spire Alabama

Summary Operating Results



                                        Year ended September 30,
                                         2021               2020
Operating Income                     $      117.0       $      102.9
Operation and maintenance expenses          132.5              139.1
Depreciation and amortization                62.1               59.3
Taxes, other than income taxes               37.1               34.8
Less: Gross receipts tax expense            (25.1 )            (23.3 )
Contribution Margin [Non-GAAP]              323.6              312.8
Natural gas costs                           145.3              118.9
Gross receipts tax expense                   25.1               23.3
Operating Revenues                   $      494.0       $      455.0
Net Income                           $       73.8       $       65.7


Operating revenues for the twelve months ended September 30, 2021, increased
$39.0 from the same period last year. The change was principally driven by a
$25.2 increase in weather and usage impacts (net of weather mitigation) and $9.4
higher net rate adjustments under the RSE mechanism. Off-system sales in the
current year contributed $2.4 to revenue growth, as off-system sales only
commenced in the fourth quarter of fiscal 2020.

Contribution margin increased $10.8, which was principally a result of the rate
adjustments under the RSE mechanism of $9.8 and $1.2 related to higher
off-system sales. O&M expenses for the twelve months ended September 30, 2021,
decreased $6.6 from the same period last year. Excluding the impact of the
Nonservice Cost Transfer of $2.4, the decrease of $4.2 was primarily driven by
lower operations and employee-related costs.

Net income for the twelve months ended September 30, 2021, increase $ 8.1 compared to the same period of the previous year.

Temperatures in Spire Alabama's service area during the twelve months ended
September 30, 2021, were 12.0% colder than the same period last year but 6.4%
warmer than normal. Spire Alabama's total system therms sold and transported
were 1,029.6 million for the twelve months September 30, 2021, compared with
1,034.8 million for the same period last year. Off-system sales, and related
therms sold totaled 48.4 million, versus 54.3 million in the prior year.

LIQUIDITY AND CAPITAL RESOURCES

Recent cash flows

                                              2021         2020         

2019

Net cash provided by operating activities   $  249.8     $  469.9     $  450.9
Net cash used in investing activities         (622.0 )     (631.6 )     (838.3 )
Net cash provided by financing activities      379.4        160.0        371.8


Net cash provided by operating activities decreased $220.1 from 2020 to 2021 and
increased $19.0 from 2019 to 2020. Principally, these changes were related to
regulatory timing and fluctuations in working capital items, as discussed below
in the Future Cash Requirements section. More specifically, when looking at the
change from 2020 to 2021, the large increase in accounts receivable was due to
the February 2021 cold weather event and the related delayed collections. In
addition, this significant cold weather event impacted other areas, including
increased inventories to ensure supply and increased accounts payable as related
gas costs had risen. For more information, see the discussion of Spire
Missouri's Operational Flow Order in   Note 15  , Regulatory Matters, of the
Notes to Financial Statements in Item 8.

In fiscal 2021, the Company used $9.6 less cash in investing activities than in
fiscal 2020, primarily driven by a $13.6 decrease in capital expenditures. The
primary driver of the lower capital expenditures was a $53.3 decline related to
Spire STL Pipeline and Spire Storage, largely offset by a $42.6 capital spending
increase at Gas Utility, where the focus remained on infrastructure upgrades and
new business development.

                                       40
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In fiscal 2020, the Company used $206.7 less cash in investing activities than
in fiscal 2019. The major driver of the reduction was lower capital
expenditures, down $184.9 versus the prior year. The Spire STL Pipeline, which
was placed into service in the first fiscal quarter of 2020, accounted for $97.4
of the reduction, and expenditures at Spire Storage were $59.6 below prior year
levels. Capital expenditures at the Utilities were down $29.1.

Net cash provided by financing activities was up $219.4 when comparing fiscal
2021 to fiscal 2020. Current year long-term debt issuances were $629.1, or
$119.1 higher than in fiscal 2020, and the combination of lower net repayments
of both long-term and short-term debt in fiscal 2021 contributed $150.8 to the
year-over-year increase. Partially offsetting these increases was a $40.1
decline in cash generated from common stock issuances and $5.2 higher common
stock dividend payments.

Net cash provided by financing activities declined $211.8 in fiscal 2020 versus
fiscal 2019, the major driver being the prior year issuance of preferred stock
that generated $242.0 in proceeds. Year-over-year net debt issuance increased by
$32.3, and the issuance of common stock generated $21.6 more cash in fiscal 2020
than in fiscal 2019. These increases in cash were only partly offset by a $20.4
increase in common and preferred stock dividends in fiscal 2020 versus fiscal
2019.

Future Cash Requirements

The Company's short-term borrowing requirements typically peak during colder
months when the Utilities borrow money to cover the lag between when they
purchase natural gas and when their customers pay for that gas. Changes in the
wholesale cost of natural gas (including cash payments for margin deposits
associated with Spire Missouri's use of natural gas derivative instruments),
variations in the timing of collections of gas cost under the Utilities' PGA
clauses and GSA riders, the seasonality of accounts receivable balances, and the
utilization of storage gas inventories cause short-term cash requirements to
vary during the year and from year to year, and may cause significant variations
in the Company's cash provided by or used in operating activities.

Speyer’s significant cash flow needs in September 30, 2021, relate to capital expenditures, principal and interest payments on long-term debt, natural gas purchase obligations and dividends.

Total company capital expenditure should be $ 570 for fiscal year 2022, although Spire has purchase commitments for only a small portion of these as of
September 30, 2021.

As detailed in   Note 6  , Long-Term Debt, of the Notes to Financial Statements
in Item 8, $55.8 of the total $3,014.6 principal amount is due in fiscal 2022.
Using each long-term debt instrument's stated maturity and fixed rates or
variable rates as of September 30, 2021, interest payments are projected to
total $1,645.7, of which $108.3 is due in fiscal 2022.

Spire's natural gas purchase obligations totaled $1,889.0, including $759.1 for
fiscal 2022, representing the minimum payments required under existing natural
gas transportation and storage contracts and natural gas supply agreements. The
amounts reflect fixed obligations as well as obligations to purchase natural gas
at future market prices, calculated using forward market prices as of September
30, 2021. Each of the Utilities generally recovers costs related to its
purchases, transportation and storage of natural gas through the operation of
its PGA clause or GSA rider, subject to prudence review by the appropriate
regional public service commission. Additional contractual commitments are
generally entered into prior to or during the heating season.

Spire dividends declared and payable as of September 30, 2021, totaled $39.4,
while annualized dividends based on the regular quarterly amounts declared on
November 11, 2021, are estimated at $156.

Source of funds

It is management's view that the Company, Spire Missouri and Spire Alabama have
adequate access to capital markets and will have sufficient capital resources,
both internal and external, to meet anticipated requirements.

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The Company's, Spire Missouri's and Spire Alabama's access to capital markets,
including the commercial paper market, and their respective financing costs, may
depend on the credit rating of the entity that is accessing the capital markets.
Their debt is rated by two rating agencies: Standard & Poor's Corporation
("S&P") and Moody's Investors Service ("Moody's"). As of September 30, 2021, the
debt ratings of the Company, Spire Missouri and Spire Alabama, shown in the
following table, remain at investment grade with a stable outlook.



                                                S&P    Moody's

Spire inc. BBB + long-term unsecured senior debt Baa2 Spire Inc. preferred stock

                      BBB      Ba1
Spire Inc. short-term debt                      A-2      P-2

Arrow Missouri senior guaranteed long-term debt A A1 Spire Alabama senior unsecured long-term debt A- A2

Cash and cash equivalents

Bank deposits were used to meet the working capital needs of the business. Spire had no temporary cash investments at September 30, 2021 or 2020.

Short term debt

The Utilities' short-term borrowing requirements typically peak during the
colder months, while most of the Company's other needs are less seasonal. These
short-term cash requirements can be met through the sale of commercial paper or
the use of a revolving credit facility. For information about these resources,
see   Note 7  , Notes Payable and Credit Agreements, of the Notes to Financial
Statements in Item 8 and "Interest Rate Risk" under "Market Risk" below.

Long-term debt and equity

At September 30, 2021, including the current portion but excluding unamortized
discounts and debt issuance costs, Spire had long-term debt totaling $3,014.6,
of which $1,348.0 was issued by Spire Missouri, $625.0 was issued by Spire
Alabama, and $211.6 was issued by other subsidiaries. For more information about
long-term debt, see   Note 6   of the Notes to Financial Statements in Item 8
and "Interest Rate Risk" under "Market Risk" below.

On December 15, 2020, Spire Alabama issued and sold to certain institutional
investors in a private placement $150.0 of 2.04% Series 2020 Senior Notes due
December 15, 2030. Interest is payable semi-annually. The notes are senior
unsecured obligations of Spire Alabama and rank equal in right to payment with
all its other senior unsecured indebtedness. Spire Alabama used the proceeds to
repay short-term debt.

In February 2021, Spire issued 3.5 million equity units for an aggregate stated
amount of $175.0, resulting in net proceeds of $169.3 after underwriting fees
and other issuance costs. See   Note 5  , Shareholders' Equity, of the Notes to
Financial Statements in Item 8 for additional discussion of these equity units.

On May 20, 2021, pursuant to its registration statement on Form S-3 filed with
the SEC, Spire Missouri issued $305.0 of 3.30% first mortgage bonds due June 1,
2051, secured equally with all its other first mortgage bonds. Interest is
payable semi-annually. Spire Missouri used the proceeds to redeem $55.0
principal amount of 3.00% first mortgage bonds due March 15, 2023, and to repay
short-term debt.

Spire Missouri was authorized by the MoPSC to issue registered securities (first
mortgage bonds, unsecured debt and preferred stock), common stock, and private
placement debt in an aggregate amount of up to $660.0 for financings placed any
time before September 30, 2023. As of September 30, 2021, $355.0 remained
available under this authorization. Spire Alabama has no standing authority to
issue long-term debt and must petition the APSC for each planned issuance.

Spire has a shelf registration statement on Form S-3 on file with the SEC for
the issuance and sale of up to 250,000 shares of common stock under its Dividend
Reinvestment and Direct Stock Purchase Plan. There were 182,689 and 177,295
shares at September 30, 2021 and November 12, 2021, respectively, remaining
available for issuance under this Form S-3. Spire and Spire Missouri also have a
universal shelf registration statement on Form S-3 on file with the SEC for the
issuance of various equity and debt securities, which expires on May 14, 2022.

                                       42

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On February 6, 2019, Spire entered into an "at-the-market" equity distribution
agreement, supplemented as of May 14, 2019, pursuant to which the Company may
offer and sell, from time to time, shares of its common stock having an
aggregate offering price of up to $150.0. Those shares are issued pursuant to
Spire's universal shelf registration statement referenced above and a prospectus
supplement dated May 14, 2019. Under this program, a total of 626,249 shares
were issued in fiscal 2019 and 2020, and as of September 30, 2021, Spire can
still issue shares having an aggregate offering price of up to $102.2.

Including the current portion of long-term debt, the Company's long-term
consolidated capitalization consisted of 47% equity at September 30, 2021 and
50% equity at September 30, 2020. For more information about equity, see   Note
5   of the Notes to Financial Statements in Item 8.

ENVIRONMENTAL ISSUES

The Utilities and other Spire subsidiaries own and operate natural gas
distribution, transmission and storage facilities, the operations of which are
subject to various environmental laws, regulations and interpretations. While
environmental issues resulting from such operations arise in the ordinary course
of business, such issues have not materially affected the Company's, Spire
Missouri's or Spire Alabama's financial position and results of operations. As
environmental laws, regulations and their interpretations change, however, the
Company and the Utilities may be required to incur additional costs. For
information relative to environmental matters, see Contingencies in   Note 16
of the Notes to Financial Statements in Item 8.

REGULATORY ISSUES

In May and July 2021, the U.S. Department of Homeland Security's Transportation
Security Administration issued security directives that included several new
cybersecurity requirements for critical pipeline owners and operators. Among
these requirements is the implementation of specific mitigation measures to
protect against ransomware attacks and other known threats to information and
operational technology systems; development and implementation of a
cybersecurity contingency and recovery plan; and performance of a cybersecurity
architecture design review. We are currently implementing several of these
directives and evaluating the potential effect of several others on our
operations and facilities, as well as the potential cost of implementation, and
will continue to monitor for any clarifications or amendments to these
directives. We are also engaged in a continuous program of testing and updating
our cybersecurity measures.

For discussions of other regulatory matters for Spire, Spire Missouri and Spire Alabama, see Note 15, Regulatory matters, of the accompanying notes to the financial statements in Item 8.

ACCOUNTING POSITIONS

The Company, Spire Missouri and Spire Alabama have evaluated or are in the
process of evaluating the impact that recently issued accounting standards will
have on their financial position or results of operations upon adoption. For
disclosures related to the adoption of new accounting standards, see the New
Accounting Pronouncements section of   Note 1   of the Notes to Financial
Statements in Item 8.

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition, results of operations,
liquidity and capital resources are based upon our financial statements, which
have been prepared in accordance with GAAP, which requires that we make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. We evaluate our estimates on an ongoing basis. We base our
estimates on historical experience and on various other assumptions that we
believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates. We believe the following represent the more significant items
requiring the use of judgment and estimates in preparing our financial
statements:

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Regulatory Accounting - The Utilities account for their regulated operations in
accordance with FASB Accounting Standards Codification Topic 980, Regulated
Operations. The provisions of this accounting guidance require, among other
things, that financial statements of a rate-regulated enterprise reflect the
actions of regulators, where appropriate. These actions may result in the
recognition of revenues and expenses in time periods that are different than
non-rate-regulated enterprises. When this occurs, costs are deferred as assets
in the balance sheet (regulatory assets) and recorded as expenses when those
amounts are reflected in rates. Also, regulators can impose liabilities upon a
regulated company for amounts previously collected from customers and for
recovery of costs that are expected to be incurred in the future (regulatory
liabilities). Management believes that the current regulatory environment
supports the continued use of these regulatory accounting principles and that
all regulatory assets and regulatory liabilities are recoverable or refundable
through the regulatory process. For Spire Missouri and Spire Alabama, management
believes the following represent the more significant items recorded through the
application of this accounting guidance:

PGA Clause - Spire Missouri's PGA clauses allows it to flow through to
customers, subject to a prudence review by the MoPSC, the cost of purchased gas
supplies, including the costs, cost reductions and related carrying costs
associated with the use of natural gas derivative instruments to hedge the
purchase price of natural gas. The difference between actual costs incurred and
costs recovered through the application of the PGA clauses are recorded as
regulatory assets and regulatory liabilities that are recovered or refunded in a
subsequent period. The PGA clauses also permit the application of carrying costs
to all over- or under-recoveries of gas costs, including costs and cost
reductions associated with the use of derivative instruments, and also provide
for a portion of income from off-system sales and capacity release revenues to
be flowed through to customers.

GSA Rider - Spire Alabama's rate schedules for natural gas distribution charges
contain a GSA rider, established in 1993, which permits the pass-through to
customers of changes in the cost of gas supply. Spire Alabama's tariff provides
a temperature adjustment mechanism, also included in the GSA, that is designed
to moderate the impact of departures from normal temperatures on Spire Alabama's
earnings. The temperature adjustment applies primarily to residential, small
commercial and small industrial customers. Other non-temperature weather related
conditions that may affect customer usage are not included in the temperature
adjustment. In prior years, Spire Alabama entered into cash flow derivative
commodity instruments to hedge its exposure to price fluctuations on its gas
supply. Spire Alabama recognizes all derivatives at fair value as either assets
or liabilities on the balance sheet. Any realized gains or losses are passed
through to customers using the mechanisms of the GSA rider in accordance with
Spire Alabama's APSC approved tariff and are recognized as a regulatory asset or
regulatory liability. All derivative commodity instruments in a gain position
are valued on a discounted basis incorporating an estimate of performance risk
specific to each related counterparty. Derivative commodity instruments in a
loss position are valued on a discounted basis incorporating an estimate of
performance risk specific to Spire Alabama. Spire Alabama currently has no
active gas supply derivative positions.

ISRS -The ISRS allows Spire Missouri expedited recovery for its investment to
upgrade its infrastructure and enhance its safety and reliability without the
necessity of a formal rate case. Spire Missouri records ISRS revenues as
authorized by the MoPSC and estimates the probability and amount of any refunds
based on commission precedent, current legal rulings, the opinion of legal
counsel, and other considerations.

For more information, see Note 15, Regulatory matters, of the notes to the financial statements in item 8.

Employee Benefits and Postretirement Obligations - Pension and postretirement
obligations are calculated by actuarial consultants that utilize several
statistical factors and other assumptions provided by management related to
future events, such as discount rates, returns on plan assets, compensation
increases, and mortality rates. For the Utilities, the amount of expense
recognized and the amounts reflected in other comprehensive income are dependent
upon the regulatory treatment provided for such costs, as discussed further
below. Certain liabilities related to group medical benefits and workers'
compensation claims, portions of which are self-insured and/or contain
"stop-loss" coverage with third-party insurers to limit exposure, are
established based on historical trends.

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The amount of net periodic pension and other postretirement benefit costs
recognized in the financial statements related to the Utilities' qualified
pension plans and other postretirement benefit plans is based upon allowances,
as approved by the MoPSC (for Spire Missouri) and as approved by the APSC (for
Spire Alabama). The allowances have been established in the rate-making process
for the recovery of these costs from customers. The differences between these
amounts and actual pension and other postretirement benefit costs incurred for
financial reporting purposes are deferred as regulatory assets or regulatory
liabilities. GAAP also requires that changes that affect the funded status of
pension and other postretirement benefit plans, but that are not yet required to
be recognized as components of pension and other postretirement benefit costs,
be reflected in other comprehensive income. For the Utilities' qualified pension
plans and other postretirement benefit plans, amounts that would otherwise be
reflected in other comprehensive income are deferred with entries to regulatory
assets or regulatory liabilities.

For more information, see Note 13, Pension plans and other post-retirement benefits, of the accompanying notes to the financial statements in item 8.

The tables below reflect the sensitivity of Spire's plans to potential changes
in key assumptions:



Pension Plan Benefits:                                Estimated Increase/           Estimated Increase/
                                   Increase/        (Decrease) to Projected         (Decrease) to Annual
   Actuarial Assumptions           (Decrease)         Benefit Obligation             Net Pension Cost*
Discount Rate                         0.25 %             $   (19.5 )                 $          0.4
                                     (0.25 )%                 20.6                             (0.5 )
Expected Return on Plan
Assets                                0.25 %                     -                             (1.1 )
                                     (0.25 )%                    -                              1.1
Rate of Future Compensation
Increase                              0.25 %                   1.3                              0.3
                                     (0.25 )%                 (1.3 )                           (0.2 )




Postretirement Benefits:                                  Estimated
Increase/               Estimated Increase/
                                                        (Decrease) to Projected             (Decrease) to Annual
                                    Increase/                Postretirement                  Net Postretirement
   Actuarial Assumptions            (Decrease)             Benefit Obligation                  Benefit Cost*
Discount Rate                          0.25 %             $           (4.8 )                 $          0.1
                                      (0.25 )%                         4.9                             (0.1 )
Expected Return on Plan Assets         0.25 %                            -                             (0.7 )
                                      (0.25 )%                           -                              0.7




   *  Excludes the impact of regulatory deferral mechanism. See   Note 13  ,

Pension plans and other post-retirement benefits, Notes to

Declarations in point 8 for information regarding the regulatory treatment of

these fees.


Impairment of Long-lived Assets - Long-lived assets classified as held and used
are evaluated for impairment when events or changes in circumstances indicate
that the carrying value of such assets may not be recoverable. Whether
impairment has occurred is determined by comparing the estimated undiscounted
cash flows attributable to the assets with the carrying value of the assets. If
the carrying value exceeds the undiscounted cash flows, the Company recognizes
an impairment charge equal to the amount of the carrying value that exceeds the
estimated fair value of the assets. In the period in which the Company
determines an asset meets held-for-sale criteria, an impairment charge is
recorded to the extent the book value exceeds its fair value less cost to sell.

                                       45

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On July 1, 2020, Spire's Board of Directors, based upon the recommendation of
senior management, revised the development plan for Spire Storage, resulting in
an impairment charge of $140.8 related to Spire Storage assets in the quarter
ended June 30, 2020. The revision was driven by the realization that a longer
time horizon will be required for optimization and positioning of the storage
facility to serve energy markets in the western United States. Among other
factors, evaluations of the continuing evolution of market dynamics in the
region led management to update models of various development alternatives.
Separately in the quarter ended June 30, 2020, Spire recorded impairment charges
totaling $7.8 related to two commercial compressed natural gas fueling stations
as a result of revised projections reflecting lower diesel prices and slower
conversions of Class 8 vehicles. The fair values used in measuring the
impairment charges were determined with an expected present value technique
using a discounted cash flow method under an income approach. Our impairment
loss calculations required management to make assumptions and to apply judgment
in order to estimate fair values of the assets. This involved estimating cash
flows, useful lives, and current market value for similar assets and selecting a
discount rate that reflects the risk inherent in future cash flows. Cash flow
projections were based on assumptions about future market demand and achievement
of certain operational capabilities. Assumptions were selected from a range of
reasonably possible amounts and were supported by relevant and reliable data.
However, if actual results are not consistent with our estimates and
assumptions, we may be exposed to additional impairments that could be material.
We do not believe there is a reasonable likelihood that there will be a material
change in the estimates or assumptions we use to calculate asset impairment
losses.

Income Taxes - Income tax calculations require estimates due to book-tax
differences, estimates with respect to regulatory treatment of certain items,
and uncertainty in the interpretation of tax laws and regulations. Critical
assumptions and judgments also include projections of future taxable income to
determine the ability to utilize net operating losses and credit carryforwards
prior to their expiration. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
Management regularly assesses financial statement tax provisions to identify any
change in regulatory treatment or tax related estimates and assumptions that
could have a material impact on cash flows, financial position and/or results of
operations. For more information, see   Note 12  , Income Taxes, of the Notes to
Financial Statements in Item 8.

For more details on significant accounting policies, see Note 1, Summary of significant accounting policies, of the notes to the financial statements in item 8.

MARKET RISK

Commodity Price Risk

Gas Utility

The Utilities' commodity price risk, which arises from market fluctuations in
the price of natural gas, is primarily managed through the operation of Spire
Missouri's PGA clauses and Spire Alabama's GSA rider. The PGA clauses and GSA
rider allows the Utilities to flow through to customers, subject to prudence
review by the MoPSC and APSC, the cost of purchased gas supplies. Spire Missouri
is allowed the flexibility to make up to three discretionary PGA changes during
each year, in addition to its mandatory November PGA change, so long as such
changes are separated by at least two months. Spire Missouri is able to
mitigate, to some extent, changes in commodity prices through the use of
physical storage supplies and regional supply diversity. The Utilities also have
risk management policies that allow for the purchase of natural gas derivative
instruments with the goal of managing its price risk associated with purchasing
natural gas on behalf of its customers. These policies prohibit speculation. As
of September 30, 2021, Spire Missouri had active natural gas derivative
positions, but Spire Alabama did not. Costs and cost reduction, including
carrying costs, associated with the use of natural gas derivative instruments
are allowed to be passed on to customers through the operation of the PGA
clauses or GSA rider. Accordingly, the Utilities do not expect any adverse
earnings impact as a result of the use of these derivative instruments. However,
the timing of recovery for cash payments related to margin requirements may
cause short-term cash requirements to vary. For more information about the
Utilities' natural gas derivative instruments, see   Note 10  , Derivative
Instruments and Hedging Activities, of the Notes to Financial Statements in Item
8.

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Gas marketing

In the course of its business, Spire's non-regulated gas marketing subsidiary,
Spire Marketing, enters into contracts to purchase and sell natural gas at fixed
prices and natural gas index-based prices. Commodity price risk associated with
these contracts has the potential to impact earnings and cash flows. To minimize
this risk, Spire Marketing has a risk management policy that provides for daily
monitoring of a number of business measures, including fixed price commitments.
In accordance with the risk management policy, Spire Marketing manages the price
risk associated with its fixed price commitments. This risk is currently managed
either by closely matching the offsetting physical purchase or sale of natural
gas at fixed-prices or through the use of natural gas futures, options and swap
contracts traded on or cleared through the New York Mercantile Exchange (NYMEX)
and Intercontinental Exchange (ICE) to lock in margins. At September 30, 2021
and 2020, Spire Marketing's unmatched fixed-price positions were not material to
Spire's financial position or results of operations.

As mentioned above, Spire Marketing uses natural gas futures, options and swap
contracts traded on or cleared through the NYMEX and ICE to manage the commodity
price risk associated with its fixed-price natural gas purchase and sale
commitments. These derivative instruments may be designated as cash flow hedges
of forecasted purchases or sales. Such accounting treatment, if elected,
generally permits a substantial portion of the gain or loss to be deferred from
recognition in earnings until the period that the associated forecasted purchase
or sale is recognized in earnings. To the extent a hedge is effective, gains or
losses on the derivatives will be offset by changes in the value of the hedged
forecasted transactions. Information about the fair values of Spire Marketing's
exchange-traded/cleared natural gas derivative instruments is presented below:



                                                 Derivative                      Derivatives
                                                    Fair            Cash          and Cash
                                                   Values          Margin          Margin
Net balance of derivative assets at September
30, 2020                                        $        5.7     $     (0.4 )   $         5.3
Changes in fair value                                   77.5              -              77.5
Settlements/purchases - net                            (31.1 )            -             (31.1 )
Changes in cash margin                                     -          (38.9 )           (38.9 )
Net balance of derivative assets at September
30, 2021                                        $       52.1     $    (39.3 )   $        12.8




                                                          As of September 30, 2021
Maturity by Fiscal Year                Total         2022         2023         2024         2025
Fair values of
exchange-traded/cleared natural gas
  derivatives - net                   $   59.3     $   51.0     $    7.9     $    0.3     $    0.1
Fair values of basis swaps - net           1.7          1.1          0.5          0.1            -

Fair values ​​of puts and calls – net (8.3) (8.2) (0.1)

         -            -

Position volumes:
MMBtu - net (short) long
futures/swap/option positions             61.9         41.5         18.4          1.8          0.2
MMBtu - net (short) long basis swap
positions                                  0.1          2.4         (1.9 )       (0.4 )          -
MMBtu - net (short) puts and calls
positions                                 (2.4 )       (2.4 )          -            -            -




Certain of Spire Marketing's physical natural gas derivative contracts are
designated as normal purchases or normal sales, as permitted by GAAP. This
election permits the Company to account for the contract in the period the
natural gas is delivered. Contracts not designated as normal purchases or normal
sales, including those designated as trading activities, are accounted for as
derivatives with changes in fair value recognized in earnings in the periods
prior to settlement.

Below is a reconciliation of the opening and closing balances of physical natural gas contracts accounted for as derivatives, none of which will be settled beyond fiscal year 2022:

Net balance of derivative liabilities at September 30, 2020 $ (7.4)
Changes in fair value

                                           (50.8 )
Settlements                                                      (3.3 )

Net balance of derivative liabilities at September 30, 2021 $ (61.5)



                                       47
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For more details on Spire Marketing’s derivatives and hedging activities, see note 10, Derivatives and hedging activities, of the notes to the financial statements in section 8.

Counterparty credit risk

Spire Marketing has concentrations of counterparty credit risk in that a
significant portion of its transactions are with energy producers, utility
companies and pipelines. These concentrations of counterparties have the
potential to affect the Company's overall exposure to credit risk, either
positively or negatively, in that each of these three groups may be affected
similarly by changes in economic, industry or other conditions. Spire Marketing
also has concentrations of credit risk with certain individually significant
counterparties. To the extent possible, Spire Marketing enters into netting
arrangements with its counterparties to mitigate exposure to credit risk. It is
also exposed to credit risk associated with its derivative contracts designated
as normal purchases and normal sales. Spire Marketing closely monitors its
credit exposure and, although uncollectible amounts have not been significant,
increased counterparty defaults are possible and may result in financial losses
and/or capital limitations. For more information on these and other
concentrations of credit risk, including how Spire Marketing manages these
risks, see   Note 11  , Concentrations of Credit Risk, of the Notes to Financial
Statements in Item 8.

Interest Rate Risk

The Company is subject to interest rate risk associated with its short-term debt
issuances. Based on average short-term borrowings during fiscal 2021, an
increase of 100 basis points in the underlying average interest rate for
short-term debt would have caused an increase in interest expense (and a
decrease in pre-tax earnings and cash flows) of approximately $6.1 on an annual
basis. Portions of such an increase may be offset through the Utilities'
application of PGA and GSA carrying costs. At September 30, 2021, Spire had
fixed-rate long-term debt totaling $3,014.6, of which $1,348.0 was issued by
Spire Missouri, $625.0 was issued by Spire Alabama, and $1,041.6 was issued by
Spire and other subsidiaries. While the long-term debt issues are fixed-rate,
they are subject to changes in fair value as market interest rates change.
However, increases or decreases in fair value would impact earnings and cash
flows only if the Company were to reacquire any of these issues in the open
market prior to maturity. Under GAAP applicable to the Utilities' regulated
operations, losses or gains on early redemptions of long-term debt would
typically be deferred as regulatory assets or regulatory liabilities and
amortized over a future period.

Refer to Note 10, Derivatives and Hedging Activities, of the Notes to Financial Statements in Section 8 for further details on the Company’s interest rate swap transactions.

Article 7A. Quantitative and qualitative information on market risk

For this discussion, see “Market risk” in Section 7, Management’s Discussion and Analysis and Analysis of Financial Condition and Results of Operations.

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