Ameren Corporation · NYSE:AEE
Ameren — Q1 2020 Earnings Presentation
31 slides from Ameren's earnings presentation, May 12, 2020
Slide 1: Customers at the Center: First Quarter 2020 Earnings
Customers at the Center First Quarter 2020 Earnings May 12, 2020
Slide 2: Cautionary Statements
Cautionary Statements Forward-looking Statements Statements in this presentation not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking s
Slide 3: Business Update
Business Update Warner Baxter Chairman, President and Chief Executive Officer, Ameren Corp.
Slide 4: COVID-19 Update
COVID-19 Update Significant actions taken to address COVID-19 • Focused on safety of co-workers, customers and communities – Crisis management team activated in late January; pandemic response plan implemented • Established travel restrictions and transitioned large portion of workforce to work from
Slide 5: Earnings and Guidance Summary
Earnings and Guidance Summary • Remain focused on safety and executing strategic plan Diluted EPS • Key Q1 earnings variance drivers Q1 2019 vs. Q1 2020 ↑ Earnings on increased infrastructure investments across all business segments $0.78 ↓ Lower Ameren Missouri weather-driven electric retail sales
Slide 6: Expect to Deliver Strong Long-Term EPS Growth
Expect to Deliver Strong Long-Term EPS Growth • Remain on track to deliver strong long-term Long-Term EPS Growth and earnings growth 2020E EPS Guidance – Affirm 6% to 8% EPS CAGR from 2020-2024 2024 • Using 2020 EPS guidance range midpoint of $3.50 as the base – Driven by continued execution of our
Slide 7: Executing Our Strategy
Executing Our Strategy Our Strategic Plan • Investing in and operating our utilities in a manner consistent with existing regulatory frameworks Capital Expenditures YTD Mar. 31, 2020 • Enhancing regulatory frameworks and advocating for responsible energy and economic policies ($ millions) $632 • Cre
Slide 8: Executing Our Strategy – Regulatory and Legislative Initiatives
Executing Our Strategy – Regulatory and Legislative Initiatives Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Illinois Electric Distribution • Downstate Clean Energy Affordability Act1 (HB 5673/SB 3977) introduced in Feb. 2020 – Allows utility-own
Slide 9: Executing Our Strategy – Regulatory and Legislative Initiatives, Cont'd
Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d Enhancing regulatory frameworks and advocating for responsible energy and economic policies • In Nov. 2019, FERC issued order related to first and second MISO complaint cases – Established new base ROE methodology and set new ba
Slide 10: Executing Our Strategy – Renewable Energy Investments
Executing Our Strategy – Renewable Energy Investments Creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment • Build-transfer agreements in place for 700 MW of wind generation in Missouri, ~$1.2 billion investment, to comply with
Slide 11: Robust Investment Opportunities Across All Businesses Over Next Decade
Robust Investment Opportunities Across All Businesses Over Next Decade Modernizing grid and investing in cleaner generation for the long-term benefit of customers, shareholders and the environment Investment Plan 2020-2024 Investment Opportunities 2025-2029 $36B+ ($ billions) $20+ Strong Pipeline of
Slide 12: Long-Term Total Return Outlook
Long-Term Total Return Outlook • Remain on track to deliver strong long-term earnings growth 2019 to 2024E Regulated Five-Year Rate Infrastructure Rate Base1 Base CAGR – Affirm expected 6% to 8% EPS CAGR from 2020-2024 • Using 2020 EPS guidance range midpoint of $3.50 as a base ($ billions) – Expect
Slide 13: Financial Update
Financial Update Michael Moehn Executive Vice President and Chief Financial Officer, Ameren Corp.
Slide 14: 2020 First Quarter Earnings Analysis
2020 First Quarter Earnings Analysis Key Earnings Variance Drivers ↓ Ameren Missouri earnings — Lower electric retail sales: ~($0.05) Diluted EPS • Weather vs. prior year: ~$(0.06); vs. normal ~$(0.03) Q1 2019 vs. Q1 2020 — Absence of energy efficiency performance incentives: $(0.06) — Higher other
Slide 15: Regulatory Mechanisms that Address COVID-19 Uncertainties
Regulatory Mechanisms that Address COVID-19 Uncertainties % 2019 Regulated Sales Bad Debt Pension2 EPS1 • ~97% of margins related to electric • Pension and OPEB tracker in • No electric revenue decoupling • No tracker or rider electric business • Electric margins are ~50% res., ~40% com., • Ability
Slide 16: 2020 EPS Guidance and Select Balance of the Year Considerations
2020 EPS Guidance and Select Balance of the Year Considerations • Affirm 2020 diluted EPS guidance range of $3.40 to $3.60 – Expect lower Ameren Missouri sales due to COVID-19: ~$(0.10) Ameren Missouri Weather-Normalized Sales vs. Prior Year (Excluding impacts of MEEIA) 2020E Period Res. Com. Ind. T
Slide 17: Select Regulatory Matters – Ameren Missouri
Select Regulatory Matters – Ameren Missouri Missouri Electric Rate Review Update • In Mar. 2020, MoPSC approved $32 million annual revenue decrease; ~1% decrease in customer rates – Implicit ROE range of 9.40% to 9.80%; AFUDC rate 9.53% – Rate base and common equity ratio not specified – Decreased n
Slide 18: Financing and Liquidity Update
Ameren Credit Ratings Financing and Liquidity Update and External Debt Balances1 Debt Financing • On Mar. 20, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due 2030 As of Mar. 31, 2020 $ in millions Moody's S&P – Proceeds used to repay short-term debt, including short-term debt A
Slide 19: Select Regulatory Matters – Ameren Illinois
Select Regulatory Matters – Ameren Illinois Electric Distribution • In Apr. 2020, requested $45 million base rate decrease from ICC in annual formula update – Expect ICC decision by Dec. 2020, with new rates effective in Jan. 2021 – If approved, all-in 2021 residential electric rates, for customers
Slide 20: Summary
Summary Expect to deliver strong earnings growth in 2020 with guidance in a range of $3.40 to $3.60 per diluted share • Actions taken to mitigate expected COVID-19 financial impacts Successfully executing our strategy; well positioned for future growth Strong long-term growth outlook • Affirm expect
Slide 21: Appendix
APPENDIX
Slide 22: Four Constructive Regulatory Frameworks
Four Constructive Regulatory Frameworks FERC-regulated: Formula ratemaking Ameren • Allowed ROE is 10.38%1, includes MISO participation adder of 50 basis points; ~54% average equity ratio Transmission • Rates reset each Jan. 1 based on forward-looking calculation with annual reconciliation ICC-regul
Slide 23: Long-Term Debt Maturities Outlook
Long-Term Debt Maturities Outlook • Ameren Missouri Senior Secured Notes – $47 million of 1.60% due Dec. 1, 2022 Long-term Debt Maturities Outlook – $350 million of 3.50% due Apr. 15, 2024 As of Mar. 31, 2020 ($ in millions) • Ameren Illinois Senior Secured Notes $900 – $400 million of 2.70% due Sep
Slide 24: Ameren Missouri Smart Energy Plan filed with MoPSC
Ameren Missouri Smart Energy Plan filed with MoPSC on Feb. 26 Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • $1.0 billion invested in 2019 to improve reliability and provide clean energy to the customers and communities we serve – Significant in
Slide 25: Executing Our Strategy – Investing in the Energy Grid
Executing Our Strategy – Investing in the Energy Grid Creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and environment • Investing to modernize energy grid – Provide a more safe, reliable, resilient and secure energy grid – Enable two-way energ
Slide 26: Building a Brighter and Cleaner Energy Future
Building a Brighter and Cleaner Energy Future Innovative Programs to Meet Customer Needs and Rising Expectations Utility-owned solar Subscription program generation facilities for MO available to MO residential non-residential customer Neighborhood Community and small business parking lots, open lan
Slide 27: ESG: Environmental Focus – Achieving Balance Responsibly
ESG: Environmental Focus – Achieving Balance Responsibly • Transitioning Ameren Missouri’s generation to a cleaner, more diverse portfolio in a responsible fashion – 2017 preferred plan1 includes addition of 700 MW of wind generation by Ameren’s Planned CO2 Emissions 2020 and 100 MW of solar generat
Slide 28: ESG: Social and Governance Focus – Culture of Sustainability
ESG: Social and Governance Focus – Culture of Sustainability • Diverse Board of Directors focused on strong accountability and governance Hyperlinked below – Board committed to maintaining a balance of perspectives, qualifications, qualities and skills • ~55% women or minorities • Average tenure of
Slide 29: Investor Relations Calendar
Investor Relations Calendar MAY 2020 JUNE 2020 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 1 2 3 4 5 6 Q1 Quiet Period, Cont’d 3 4 5 6 7 8 9 7 8 9 10 11 12 13 Virtual Annual Shareholder Meeting 10 11 12 13 14 15 16 14 15 16 17 18 19 20 JP Q1 2020 Morgan Earnings Vir
Slide 30: Select Regulatory Matters
Select Regulatory Matters Missouri Public Service Commission • Order approving electric rate review settlement: Docket No. ER-2019-0335 • Smart Energy Plan filing: Docket No. EO-2019-0044 • Order approving request regarding Callaway Energy Center outage expenses: Docket No. EU-2020-0114 • Order appr
Slide 31: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction IRP – Integrated resource plan ATXI – Ameren Transmission Company of Illinois ISRS – Infrastructure System Replacement Surcharge B – Billion M – Million bps – Basis points MEEIA – Missouri Energy Efficiency Inve