Ameren Corporation · NYSE:AEE
Ameren — Q4 2022 Earnings Presentation
47 slides from Ameren's earnings presentation, Feb 16, 2023
Slide 1: Powering a Smart, Sustainable Tomorrow
Powering a Smart, Sustainable Tomorrow Fourth Quarter 2022 Earnings Feb. 16, 2023
Slide 2: Cautionary Statements
Cautionary Statements Use of Non-GAAP Financial Measures In this presentation, Ameren has presented weather-normalized and core earnings per share and operations and maintenance expenses excluding COLI, which are non-GAAP financial measures and may not be comparable to those of other companies. A re
Slide 3: Strategic and Business Update
Strategic and Business Update Marty Lyons President and Chief Executive Officer, Ameren Corp. Ameren Missouri’s Montgomery Community Solar Energy Center in service March 2022
Slide 4: Our Strategic Plan
Our Strategic Plan INVEST ENHANCE OPTIMIZE Enhance regulatory Invest in rate regulated Optimize operating frameworks and advocate energy infrastructure performance for responsible policies To capitalize on opportunities to benefit our customers, shareholders and the environment 2022 Results and Guid
Slide 5: Successfully Executed Our Strategic Plan in 2022
Successfully Executed Our Strategic Plan in 2022 Delivered strong 8% earnings per share growth in 2022 over 2021 Invest • $3.4 billion capital invested benefiting our customers and communities Increased Customer – Continued robust investment in electric, natural gas and transmission infrastructure D
Slide 6: Strong Track Record of EPS and Dividend Growth
Strong Track Record of EPS and Dividend Growth Weather-Normalized Core Dividends Paid per Share3 Total Shareholder Earnings per Diluted Share1 and Payout as a % of WN EPS Return $4.50 $4.25 +92% or $2.60 ~+48% 2013 to 2022 $4.35 ~7.5% CAGR $2.52 | 58% $2.40 2013 to 2022 $4.00 2013 to 2022 $4.00 $2.3
Slide 7: Our Sustainability Value Proposition
Our Sustainability Value Proposition ENVIRONMENTAL STEWARDSHIP SOCIAL IMPACT • Accelerating transition to a cleaner and more diverse portfolio • Delivered value to customers in 2022 while focused on safety ‒ Target carbon reductions from 2005 levels: 60% by 2030; 85% by 2040; net ‒ On average, Amere
Slide 8: 2023 Strategic Business Objectives
2023 Strategic Business Objectives Invest • Continue robust infrastructure investment in electric, natural gas and transmission infrastructure projects • Submit bids for MISO LRTP Tranche 1 competitive projects and support analysis for potential Tranche 2 projects Enhance • Constructively conclude A
Slide 9: Expect to Deliver Strong Long-Term EPS and Dividend Growth
Expect to Deliver Strong Long-Term EPS and Dividend Growth • Expect 2023 EPS in a range of $4.25 to $4.45 – Midpoint represents 7% EPS growth compared to 2022 original guidance midpoint of $4.05 Long-Term EPS Growth and 2023E EPS Guidance • Remain on track to deliver strong long-term earnings growth
Slide 10: Executing Our Strategy in 2023 and Beyond
Executing Our Strategy in 2023 and Beyond Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment • Constructive frameworks for investment in all business segments 2022-2027E Regulated Five-Year Rate • Expect ~8% rate base CAGR from 2022-2027 Infr
Slide 11: Investing in the Energy Grid
Investing in the Energy Grid • Investing to modernize energy grid, making it cleaner, safer, more reliable, resilient and secure – Ameren Missouri Smart Energy Plan and Ameren Illinois MYRP filed with the MoPSC and ICC, respectively, supporting infrastructure investment to modernize the grid 2022-20
Slide 12: Robust Investment Opportunities Across All Businesses Over Next Decade
Robust Investment Opportunities Across All Businesses Over Next Decade Modernizing the grid and investing in cleaner generation Investment Plan 2023-2027 $48B+ ($ billions) Strong Pipeline of Regulated $19.7 Infrastructure Investments $3.8 2023-2032 $1.9 • Modernize electric and gas transmission and
Slide 13: Ameren Missouri Solar Project Acquisitions
Ameren Missouri Solar Project Acquisitions Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment Huck Finn Solar Project – 200 MW • BTA Execution Date: June 2022 • CCN Filed with MoPSC: July 2022 • CCN Approved by MoPSC: Feb. 2023 • Targeted In-
Slide 14: MISO Long-Range Transmission Planning Roadmap
MISO Long-Range Transmission Planning Roadmap Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment • In late July 2022, MISO approved Tranche 1 projects which it estimated to cost ~$10 billion – Projects assigned to Ameren totaling ~$1.8 billio
Slide 15: Focused on Disciplined Cost Management to Drive Affordability
Focused on Disciplined Cost Management to Drive Affordability Optimize operating performance to benefit of our customers, shareholders and the environment • Track record of disciplined cost management – Expect flat operations and maintenance expenses in 2023 as compared to 2022 – Target flat operati
Slide 16: Our Value Proposition for Customers, Shareholders and the Environment
Our Value Proposition for Customers, Shareholders and the Environment Attractive dividend Strong long-term and long-term dividend growth Attractive total growth outlook outlook return potential • Expect 6% to 8% EPS CAGR 2023-20271 • Annualized equivalent dividend rate of • Track record of deliverin
Slide 17: Financial Update
Financial Update Michael Moehn Senior Executive Vice President and Chief Financial Officer, Ameren Corp.
Slide 18: 2022 Earnings Analysis Key Variance Drivers
2022 Earnings Analysis Key Variance Drivers1 ↑ Ameren Missouri earnings — Higher electric retail sales: ~+$0.18 • Weather vs. 2021: ~+$0.13; vs. normal ~+$0.14 • WN sales vs. 2021 (excl. MEEIA): Res.: ~+0.5%, Com.: ~+1.5%, Ind.: ~(1.5)%, Total: ~+0.5% — New electric service rates effective Feb. 28,
Slide 19: Strong Rate Base Growth in All Regulatory Jurisdictions
Strong Rate Base Growth in All Regulatory Jurisdictions Increased five-year infrastructure investment plan by $2.4B reflecting increased investment in all segments1 $19.7 Billion of Regulated Infrastructure Investment 2022 to 2027E Regulated Five-Year Rate 2023-2027 Infrastructure Rate Base2 Base CA
Slide 20: Expected 2023-2027 Funding Plan
Expected 2023-2027 Funding Plan • Cash from Operations – Return of capital through depreciation in rates – Return on equity-financed portion of rate base – ~$1.2 to $1.3 billion of income tax deferrals and tax asset utilization • Income tax deferrals driven primarily by capital expenditures • Includ
Slide 21: 2023 Earnings Guidance: Key Drivers and Assumptions
2023 Earnings Guidance: Key Drivers and Assumptions1 Midpoint represents 7% EPS growth compared to 2022 original guidance midpoint of $4.05 ↑ New electric service rates effective July 1, 2023 — Reflecting new infrastructure investments primarily driven by Smart Energy Plan 2023 ↑ Higher investments
Slide 22: 2023 Earnings Guidance: Key Drivers and Assumptions
2023 Earnings Guidance: Key Drivers and Assumptions Midpoint represents 7% EPS growth compared to 2022 original guidance midpoint of $4.05 ↑ Higher estimated year-end rate base reflecting infrastructure investments: ~$4.6 Ameren Illinois billion compared to ~$4.2 billion in 2022 2023 Electric ↑ Allo
Slide 23: Missouri Electric Rate Review
Missouri Electric Rate Review • In Aug. 2022, filed $316 million annual revenue increase request with MoPSC – Annual revenue increase drivers • Increased investments made under the Smart Energy Plan, including increased cost of capital and Procedural Schedule depreciation expense1 (Docket No.: • Inc
Slide 24: Illinois Multi-Year Rate Plan
Illinois Multi-Year Rate Plan Electric Distribution • Multi-Year Rate Plan (MYRP) filed in Jan. 2023 with ICC – Requested annual revenue increases driven by infrastructure investment and cost of capital – ICC to approve return on equity and cost of debt Procedural Schedule • 7 performance metrics pr
Slide 25: Illinois Regulatory Matters, Cont'd
Illinois Regulatory Matters, Cont’d Electric Distribution • In Dec. 2022, ICC approved a $61 million base rate increase in electric formula rates effective Jan. 2023 – Represents ~1.6% rate increase1 – Based on a 50% equity ratio – 2023 electric distribution earnings are a function of the rate formu
Slide 26: Federal Energy Legislation
Federal Energy Legislation • Inflation Reduction Act enacted in Aug. 2022 – Enhances affordability of the clean energy transition for customers in Missouri and Illinois • Ameren Missouri customers expected to save ~$1.3 billion by 2032, or an average ~4.5% per year, compared to what would have been
Slide 27: Summary
Summary Expect to deliver strong earnings growth in 2023 with guidance in a range of $4.25 to $4.45 per diluted share Successfully executing our strategy; well-positioned for future growth • Focused on delivering a cleaner and sustainable energy future in a responsible manner Strong long-term growth
Slide 28: Appendix
APPENDIX
Slide 29: Four Constructive Regulatory Frameworks
Four Constructive Regulatory Frameworks FERC-regulated: Formula ratemaking Ameren • Allowed ROE is 10.52%, includes MISO participation adder of 50 basis points; ~56% average equity ratio Transmission • Rates reset each Jan. 1 based on forward-looking calculation with annual reconciliation ICC-regula
Slide 30: Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics
Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics Adjustment / Metric Description Incentive (+/- bps) Improve System Average Interruption Duration Index (SAIDI) systemwide; improve interruption and 1. Reliability duration outages (SAIDI, SAIFI, CEMI, and CELID) in enviro
Slide 31: Ameren Missouri Smart Energy Plan
Ameren Missouri Smart Energy Plan filed with MoPSC on Feb. 16 Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment • $1.6 billion invested in 2022 to support reliability, address aged infrastructure and provide clean energy to the customers and
Slide 32: Our Focus on Delivering a Cleaner Energy Future Responsibly
Our Focus on Delivering a Cleaner Energy Future Responsibly While providing safe, reliable and affordable energy to customers • Climate risk management and mitigation – Targeting significant reductions in greenhouse gases – Implementing robust customer energy efficiency programs – Investing to moder
Slide 33: Proposed 2022 Change to the 2020 Missouri IRP
Proposed 2022 Change to the 2020 Missouri IRP1 2 2 2 Key outcomes meet customers’ rising needs and expectations for reliable, affordable and clean energy sources • Targets substantial reductions in carbon emissions2; 60% by 2030, 85% by 2040 and net-zero by 2045 • All coal-fired energy centers retir
Slide 34: Missouri IRP Preferred Plans
Missouri IRP Preferred Plans Key Actions 2020 IRP 2022 IRP Specifics Carbon Emission Reduction1 50% by 2030 60% by 2030 • Includes both Scope 1 and 2 emissions including other 85% by 2040 85% by 2040 greenhouse gas emissions of methane, nitrous oxide and Net Zero by 2050 Net Zero by 2045 sulfur hexa
Slide 35: Rush Island Energy Center
Rush Island Energy Center Ameren Missouri • In 2021, the U.S. Court of Appeals ordered installation of a scrubber at the Rush Island Energy Center; Ameren Missouri subsequently announced its intent to retire the energy center • In June 2022, Ameren Missouri proposed limiting operations until energy
Slide 36: 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 in MO that available to MO residential benefits diverse Neighborhood Community and small business communities with jobs training, solar
Slide 37: FERC Regulatory Matters
FERC Regulatory Matters Ameren Transmission • In Apr. 2021, FERC issued supplemental NOPR that would remove incentive adder for utilities that have been members of an RTO for three years or more – Current allowed base ROE of 10.02% (10.52% including 50 bps RTO participation adder) – 50 bps change in
Slide 38: Ameren Organizational Structure and External Debt Balances
Ameren Organizational Structure and External Debt Balances1 $ in millions as of Dec. 31, 2022 All Moody’s and S&P outlooks “Stable” Ameren Corporation (Baa1/BBB+) Sr. Unsecured (Baa1/BBB) - $2,550 Commercial Paper (P-2/A-2) - $477 Ameren Missouri Ameren Illinois ATXI (Baa1/BBB+) (A3/BBB+) (A2/-) Sr.
Slide 39: Interest Rates
Interest Rates Long-Term Debt Maturities Remaining Through 2027 Issuer 20231 2024 2025 2026 2027 $450 million 2.50% $350 million 3.65% $500 million 1.95% Ameren Corp. senior unsecured notes senior unsecured notes senior unsecured notes $350 million 3.50% $400 million 2.95% Ameren Missouri senior sec
Slide 40: 2023 Capital Expenditures
2023 Capital Expenditures 2023E Capital Expenditures $3,485M Ameren Illinois Ameren Illinois Natural Gas Electric Distribution $375M 11% $645M 18% $750M 22% Ameren $1,705M Transmission 49% Ameren Missouri 2022 Results and Guidance | Feb. 16, 2023 40
Slide 41: Solid Sustainability Ratings
Solid Sustainability Ratings AAA 0 A Oct. 2022 July 2022 Dec. 2022 29.4 A- Water A Medium Risk Dec. 2021 Water: A- May 2021 Dec. 2021 29.1 A C Climate Dec. 2021 Climate: B Range: Range: Range: A-F AAA-CCC 0-100 (A is best) (AAA is best) (Lower is better) CCC 100 F Ameren Corp. 97.1 Trendsetter 2022
Slide 42: Ameren's Estimated Coal-Related Revenues in 2022
Ameren’s Estimated Coal-Related Revenues in 2022 Return on Investment Revenues Cost Recovery3 Revenues $2B1 x ($99M x $475M + 52% x $2B1 x 48% 25%) / (1 $168M x $138M + 9.50%2 = x 3.91% = - 25%) 20%1 = $171M = $99M $38M $33M $34M $784M $7,966M 12% Return on Interest Tax Expense Property Fuel, other
Slide 43: GAAP to Core Earnings Per Share Reconciliations
GAAP to Core Earnings Per Share Reconciliations Year Ended Dec. 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 GAAP Earnings / Diluted EPS $1.18 $2.40 $2.59 $2.68 $2.14 $3.32 $3.35 $3.50 $3.84 $4.14 Exclude results from discontinued operations 0.87 — (0.01) — — — — — — — Less: Income tax bene
Slide 44: Weather-Normalized Earnings per Share Reconciliations
Weather-Normalized Earnings per Share Reconciliations Year Ended Dec. 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Core1 Diluted EPS $2.10 $2.40 $2.56 $2.68 $2.83 $3.37 $3.35 $3.50 $3.84 $4.14 Ameren Missouri weather impact included in margins 0.03 0.05 (0.04) 0.16 (0.07) 0.43 0.04 (0.05) 0
Slide 45: Investor Relations Calendar
Investor Relations Calendar LATE FEBRUARY / MARCH 2023 APRIL 2023 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 26 27 28 1 2 3 4 1 Morgan Stanley BofA Conf. Conf. 5 6 7 8 9 10 11 2 3 4 5 6 7 8 JPM Equity & Credit Conf. 12 13 14 15 16 17 18 9 10 11 12 13 14 15 Europe Q1 Qu
Slide 46: Select Regulatory and Legislative Matters
Select Regulatory and Legislative Matters Missouri Public Service Commission • Pending electric rate review filling: Docket No. ER-2022-0337 • Pending request for Certificate of Convenience and Necessity for Boomtown Solar Project: Docket No. EA-2022-0245 • Smart Energy Plan filing: Docket No. EO-20
Slide 47: 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 LRTP – Long Range Transmission Planning bps – Basis points M – Million