Ameren Corporation · NYSE:AEE
Ameren — Q3 2022 Earnings Presentation
40 slides from Ameren's earnings presentation, Nov 4, 2022
Slide 1: Transforming For Our Future: Third Quarter 2022 Earnings
Transforming For Our Future Third Quarter 2022 Earnings Nov. 4, 2022
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 Marty Lyons President and Chief Executive Officer, Ameren Corp. Ameren Missouri’s 400 MW High Prairie Renewable Energy Center
Slide 4: Earnings and Guidance Summary
Earnings and Guidance Summary • Remain focused on safety and executing strategic plan Diluted EPS • Key Q3 earnings variance drivers 2021 vs. 2022 ↑ Earnings on increased infrastructure investments across all business segments $3.51 $3.36 ↑ Higher electric service rates at Ameren Missouri ↑ Higher a
Slide 5: Our Strategic Plan
Our Strategic Plan • Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • Enhancing regulatory frameworks and advocating for responsible energy and economic policies • Creating and capitalizing on opportunities for investment for the benefit of our cu
Slide 6: Executing Our Strategy
Executing Our Strategy Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • Significant infrastructure investments in each Capital Expenditures YTD Sep. 2022 business segment are delivering value ($ millions) • Regulatory rate review filings $2,432 –
Slide 7: Federal Energy Legislation
Federal Energy Legislation Enhancing regulatory frameworks and advocating for responsible energy and economic policies • Inflation Reduction Act enacted in Aug. 2022 – Ameren actively advocated in support of the Act individually and through our work with EEI – Provides tax credits for wind, solar, a
Slide 8: Missouri Energy Legislation
Missouri Energy Legislation Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Missouri • Governor signed SB 745 into law; effective Aug. 28 – Bill enhances and extends current Smart Energy Plan legislation • Modifies rate cap from current all-in 2.85%
Slide 9: Illinois Energy Legislation
Illinois Energy Legislation Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Illinois Electric Distribution • Illinois Energy Transition Legislation (SB 2408) enacted in 2021 – Allows for electric utility to opt-in to four-year plan (Multi-Year Rate
Slide 10: MISO Long-Range Transmission Planning Roadmap
MISO Long-Range Transmission Planning Roadmap Creating and capitalizing on opportunities for investment for the benefit of 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 total
Slide 11: Robust Investment Opportunities Across All Businesses Over Next Decade
Robust Investment Opportunities Across All Businesses Over Next Decade Investing in a smart, safe, clean, reliable and resilient grid Investment Plan 2022-20261 $48B+ ($ billions) Strong Pipeline of Regulated $17.3 Infrastructure Investments $3.5 2022-20312 $1.8 • Modernize electric and gas transmis
Slide 12: 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 2021 while focused on safety ‒ Target carbon reductions from 2005 levels: 60% by 2030; 85% by 2040; net ‒ Improved reliabil
Slide 13: Long-term Total Return Outlook
Long-term Total Return Outlook • Remain on track to deliver strong long-term earnings growth – Expect 6% to 8% EPS CAGR from 2022-20261 • Using 2022 original EPS guidance range midpoint of $4.05 as the base – Expect ~7% rate base CAGR from 2021-20261,2 2021-2026E Regulated Five-Year Rate • Infrastru
Slide 14: Financial Update
Financial Update Michael Moehn Executive Vice President and Chief Financial Officer, Ameren Corp.
Slide 15: 2022 Third Quarter Earnings Analysis – Key Drivers
2022 Third Quarter Earnings Analysis – Key Drivers ↑ Ameren Missouri earnings — Higher electric service rates effective Feb. 28, 2022: ~+$0.10 Diluted EPS — Higher electric retail sales: ~+$0.02 Q3 2021 vs. Q3 2022 • Weather vs. 2021: ~$0.00; vs. normal ~+$0.02 — Higher other operations and maintena
Slide 16: 2022 EPS Guidance and Select Balance of the Year Considerations
2022 EPS Guidance and Select Balance of the Year Considerations • Expect 2022 diluted EPS guidance range of $4.00 to $4.15 2022E • Select considerations for Q4 2022 EPS compared to Q4 2021 EPS Diluted EPS – Ameren Missouri return to normal weather in 2022: ~+$0.02 $4.15 – Ameren Missouri higher ener
Slide 17: Missouri Electric Rate Review Filing
Missouri Electric Rate Review Filing • $316 million annual revenue increase request filed Aug. 1, 2022 with MoPSC – ROE: 10.2% and equity ratio: 51.9% Procedural Schedule (Docket No.: ER-2022-0337) – Rate base: $11.6 billion (Dec. 31, 2022 estimate) Jan. 10, 2023 – Test year ended Mar. 31, 2022, wit
Slide 18: Illinois Regulatory Matters
Illinois Regulatory Matters Electric Distribution • Requesting $84 million annual performance-based rate update from ICC; ~2.25% rate increase request1 – In Aug., ICC Staff recommended $61 million base rate increase; variance driven primarily by a difference in proposed capital structure common equi
Slide 19: 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 more than $1 billion by 2032, or an average of more than ~4% per year, compared to wha
Slide 20: Financing: Ameren Credit Ratings and External Debt Balances
Financing Ameren Credit Ratings Debt Financing • On Apr. 1, 2022, Ameren Missouri issued $525 million of 3.90% green first and External Debt Balances2 mortgage bonds due 2052 – Proceeds used to fund capital expenditures and repay ST debt; amount equal to proceeds allocated to sustainable projects me
Slide 21: Interest Rates
Interest Rates Long-Term Debt Maturities Remaining Through 2026 Issuer 20221 20231 2024 2025 2026 $450 million 2.50% $350 million 3.65% Ameren Corp. senior unsecured notes senior unsecured notes $47 million 1.60% 1992 $350 million 3.50% Ameren Missouri Series bonds senior secured notes $100 million
Slide 22: 2022-2023 Winter Season and Natural Gas Prices
2022-2023 Winter Season and Natural Gas Prices Working to keep bills as low as possible Working to help customers manage bills • Energy efficiency programs available to customers in Missouri and Illinois • Low Income Home Energy Assistance Program (LIHEAP) grants and other energy assistance funds av
Slide 23: Select 2023 Earnings Considerations Compared to 2022
Select 2023 Earnings Considerations Compared to 20221 ↑ New electric service rates effective late Feb. 2022: ~$0.01 ↑ New electric service rates expected to be effective by July 2023 Ameren ↑ Higher investments in infrastructure eligible for PISA Missouri ↓ Lower energy efficiency performance incent
Slide 24: Summary
Summary Expect to deliver strong earnings growth in 2022 with guidance in a range of $4.00 to $4.15 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 25: Appendix
APPENDIX
Slide 26: 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 27: 2022 Earnings Analysis for Nine Months Ended Sep. 30
2022 Earnings Analysis for Nine Months Ended Sep. 30 ↑ Ameren Illinois Electric Distribution earnings — Increased investments in infrastructure; higher allowed ROE ↑ Ameren Transmission earnings — Increased investments in infrastructure Diluted EPS — Absence of FERC order addressing the historical r
Slide 28: 2022 Change to the 2020 Missouri IRP
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 retired by 204
Slide 29: 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 hex
Slide 30: CCNs filed with MoPSC for two Solar Project Acquisitions
CCNs filed with MoPSC in July for two Solar Project Acquisitions Boomtown Solar Project – 150 MW • Location: White County, IL • BTA Execution Date: Feb. 2022 • Projected In-Service Date: Q4 2024 Huck Finn Solar Project – 200 MW • Location: Audrain and Ralls Counties, MO • BTA Execution Date: June 20
Slide 31: 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 32: 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 July 2022, MISO issued final Attachment Y report – Designated both Ru
Slide 33: 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 34: Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics
Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics Adjustments Metric Description (+/- bps) Improve System Average Interruption Duration Index (SAIDI) system wide; improve interruption and 1. Reliability duration outages (SAIDI, SAIFI, CEMI and CELID) in environmental jus
Slide 35: Working to Keep Missouri Customer Bills Low
Working to Keep Missouri Customer Bills Low • Ameren Missouri works to keep rates stable and affordable for customers, with residential rates more than 20% below national Ameren Missouri and Midwest averages1 Electric Rates3 – Expect to remain well below the Midwest average after the completion of t
Slide 36: Investing in the Energy Grid
Investing in the Energy Grid • Investing to modernize energy grid, making it smarter, cleaner, safer, more reliable, resilient and secure 2021-2026E Regulated – Expect greater transmission investments to support additional renewable generation Infrastructure Rate Base3,5 – Provide customers with new
Slide 37: Ameren's Estimated Coal-Related Revenues in 2021
Ameren’s Estimated Coal-Related Revenues in 2021 Return on Investment Revenues Cost Recovery3 Revenues $2.1B1 x $2.1B1 x ($103M $423M + 52% x 48% x x 25%) / $161M x $147M + 9.53%2 = 4.5% = (1 - 25%) 26%1 = $154M = $103M $45M $34M $42M $724M $6,394M 15% Return on Interest Tax Expense Property Fuel, o
Slide 38: Investor Relations Calendar
Investor Relations Calendar NOVEMBER 2022 JANUARY 2023 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 4 5 1 2 3 4 5 6 7 Q3 Quiet Q3 Period Earnings Cont’d Conf. Call 6 7 8 9 10 11 12 8 9 10 11 12 13 14 Q4 Quiet Evercore Period ISI Conf. Begins 13 14 15 16 17 18 19 15
Slide 39: Select Regulatory and Legislative Matters
Select Regulatory and Legislative Matters Missouri Public Service Commission • Pending electric rate review filling: Docket No. ER-2022-0337 • Order approving natural gas rate review filing: Docket No. GR-2021-0241 • Smart Energy Plan filing: Docket No. EO-2019-0044 • 2020 Integrated Resource Plan:
Slide 40: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction IETL – Illinois Energy Transition Legislation ATXI – Ameren Transmission Company of Illinois IRP – Integrated resource plan bps – Basis points LRTP – Long Range Transmission Planning BTA – Build-Transfer agreeme