Ameren Corporation · NYSE:AEE
Ameren — Evercore ISI Virtual Utility Conference 2021
35 slides from Ameren's conference presentation, Jan 14, 2021
Slide 1: Customers at the Center
Customers at the Center Evercore ISI Virtual Utility Conference Jan. 14-15, 2021
Slide 2: Cautionary Statements
Cautionary Statements Use of Non-GAAP Financial Measures In this presentation, Ameren has presented core earnings per share, which is a non-GAAP financial measure and may not be comparable to that of other companies. A reconciliation of GAAP to non-GAAP information is included in this presentation.
Slide 3: Company Description
Company Description Fully rate-regulated electric and natural gas utility Ameren Businesses 2.4M Corporate Headquarters electric Ameren Missouri customers Electric Service Territory • Electric transmission, distribution, and generation business Electric & Natural Gas Territory and a natural gas dist
Slide 4: Delivering Strong Value to Our Customers
Delivering Strong Value to Our Customers Increased Customer Improved Reliability1 Affordable Rates2 Outage JD Power Satisfaction3 Duration (min) ¢/KWh Score 300 +43% 15 750 +17% Better Better 725 734 276 731 250 13.08 12.84 723 10 700 10.22 200 10.02 690 675 150 663 157 5 650 651 100 625 628 50 0 60
Slide 5: Strong Track Record of EPS and Dividend Growth
Strong Track Record of EPS and Dividend Growth Weather-Normalized Core Dividends Paid per Share3 Weather-Normalized Earnings per Diluted Share1 Dividend Payout Ratio +60% or $2.00 +20% 80% 2013 to 2019 $2.00 $3.50 ~8% CAGR $3.52 75% 2013 to 2019 $1.92 $3.32 $3.10 $1.85 $3.05 70% $1.75 $1.78 $2.88 65
Slide 6: Our Value Proposition for Customers, Shareholders and the Environment
Our Value Proposition for Customers, Shareholders and the Environment Strong long-term Attractive Attractive total growth outlook dividend return potential • Expect 6% to 8% EPS CAGR from • Annualized equivalent dividend rate • Track record of delivering strong 2020-20241,2 of $2.06 per share provid
Slide 7: Our Sustainability Value Proposition
Our Sustainability Value Proposition ENVIRONMENTAL SOCIAL GOVERNANCE • Accelerating transition to a cleaner and • Delivering value to our customers while • Diverse BOD focused on strong oversight more diverse portfolio focused on safety-first work culture – 57% women or people of color – Target carb
Slide 8: 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 9: 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; ~54% average equity ratio Transmission • Rates reset each Jan. 1 based on forward-looking calculation with annual reconciliation ICC-regula
Slide 10: Expect to Deliver Strong Long-Term EPS Growth
Expect to Deliver Strong Long-Term EPS Growth • Expect 2020 EPS in a range of $3.40 to $3.551 – Actions taken to mitigate expected financial impacts from COVID-19 2020 Initial EPS Guidance and Long-Term EPS Growth2 • Expect 6% to 8% EPS CAGR from 2020-20242 2024 – Using 2020 initial EPS guidance ran
Slide 11: Strong Rate Base Growth in All Regulatory Jurisdictions
Strong Rate Base Growth in All Regulatory Jurisdictions1 Increased five-year infrastructure investment plan by $2.7B reflecting increased investment in all segments2 $16 Billion of Regulated Infrastructure Investment 2019 to 2024E Regulated Five-Year Rate 2020-20241 Infrastructure Rate Base1,3 Base
Slide 12: Expected 2020-2024 Funding Plan
Expected 2020-2024 Funding Plan1 • Cash from Operations – Return of capital through depreciation in rates – Return on equity-financed portion of rate base – Expect income tax payments totaling ~$150 to ~$200 million from 2020-2024 • ~$1.6 to $1.7 billion of income tax deferrals and tax asset utiliza
Slide 13: Ameren Missouri Generation Transformation
Ameren Missouri Generation Transformation Transition to a cleaner and more diverse portfolio in a responsible fashion 1 50% CARBON EMISSIONS 85% CARBON EMISSIONS NET-ZERO CARBON REDUCTION2 REDUCTION2 EMISSIONS2 • Ameren Missouri filed its preferred Integrated Resource Plan with the MoPSC in Sep. 202
Slide 14: Target to Achieve Net-Zero Carbon Emissions by 2050
Target to Achieve Net-Zero Carbon Emissions by 2050 Executing on transformation that will ultimately replace fossil fuels with clean sources of energy Ameren Missouri's Sources of Energy from 2020 IRP Current 2030 2040 2050 12% 3% 25% 25% 27% 17% 46% 5% 30% 58% 69% 25% 1% 53% 4% Coal Gas Renewables
Slide 15: Ameren Missouri Generation Updates
Ameren Missouri Generation Updates Renewable Energy Investments • Build-transfer agreements for 700 MW of wind generation in Missouri, ~$1.1 billion investment, to comply with Missouri’s RES – Acquired 400 MW High Prairie wind facility in Dec. 2020 – Expect to acquire 300 MW Atchison wind facility i
Slide 16: 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 the environment • Investing to modernize energy grid – Provide a safer, more reliable, resilient and secure energy grid – Enable two-way
Slide 17: 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 for the long-term benefit of customers, shareholders and the environment Investment Plan 2020-20241 Additional Investment Opportunities 2020-20292 $39B+ ($ billions) Strong
Slide 18: 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 19: Our Focus on Delivering a Cleaner Energy Future Responsibly
Our Focus on Delivering a Cleaner Energy Future Responsibly • Climate risk management and mitigation – Targeting significant reductions in greenhouse gases Target to Achieve Net-Zero – Implementing robust customer energy efficiency programs Carbon Emissions by 2050 – Investing to modernize the energ
Slide 20: Summary
Summary Expect to deliver strong earnings growth in 2020 with guidance in a range of $3.40 to $3.55 per diluted share1 Successfully executing our strategy; well-positioned for future growth Strong long-term growth outlook • Expect 6% to 8% compound annual EPS growth from 2020-20242,3 • Expect ~8.7%
Slide 21: Financial and Regulatory Update
Financial and Regulatory Update 21
Slide 22: 2020 Earnings Analysis for Nine Months Ended Sep. 30
2020 Earnings Analysis for Nine Months Ended Sep. 30 Key Earnings Variance Drivers ↑ Ameren Transmission earnings — Increased infrastructure investments Diluted EPS — Impact of FERC order addressing MISO allowed base ROE: +$0.04 YTD Sep. 2019 vs. YTD Sep. 2020 ↑ Ameren Illinois Natural Gas earnings
Slide 23: 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 • No tracker or rider • Pension and OPEB tracker in • No electric revenue decoupling • AAO requests filed with MoPSC on electric business • Electric margins a
Slide 24: 2020 EPS Guidance and Select Balance of the Year Considerations
2020 EPS Guidance and Select Balance of the Year Considerations1 • Expect 2020 diluted EPS guidance range of $3.40 to $3.55 • Select considerations for Q4 2020 EPS compared to Q4 2019 EPS 2020E – Ameren Missouri expected lower sales driven by COVID-19: ~$(0.01) Diluted EPS Ameren Missouri Weather-No
Slide 25: Select 2021 Earnings Considerations Compared to 2020
Select 2021 Earnings Considerations Compared to 20201 ↑ 700 MW wind generation investment of ~$1.1 billion; 400 MWs in-service at the end of 2020; 300 MWs expected to be in-service in 2021 Ameren ↑ New electric service rates effective Apr. 1, 2020 Missouri ↑ Higher weather-normalized electric retail
Slide 26: 2020 Financing Update
Ameren Credit Ratings 2020 Financing Update Debt Financing and External Debt Balances1 • On Mar. 20, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due 2030 As of Sep. 30, 2020 $ in millions Moody's S&P – Proceeds used to repay short-term debt, including short-term debt incurred t
Slide 27: Select Regulatory Matters – Ameren Illinois
Select Regulatory Matters – Ameren Illinois Electric Distribution • In Dec. 2020, the ICC approved a $49 million base rate decrease in electric formula rates effective Jan. 2021 – All-in 2021 residential electric rates, for customers taking delivery and energy supply from Ameren Illinois, are down ~
Slide 28: Regulatory and Legislative Initiatives
Regulatory and Legislative Initiatives Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Illinois Electric Distribution • Continue to engage with key stakeholders and support Illinois legislation to support investments in renewable energy and electrif
Slide 29: Select Regulatory Matters – Ameren Transmission
Select Regulatory Matters – Ameren Transmission Ameren Transmission • In May 2020, FERC issued order on rehearing of its Nov. 2019 order related to first and second MISO base ROE complaint cases – Established new base ROE methodology and set new base ROE of 10.02% (resulting in ROE of 10.52% includi
Slide 30: Appendix
APPENDIX
Slide 31: 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 GAAP Earnings Per Diluted Share $1.18 $2.40 $2.59 $2.68 2.14 $3.32 $3.35 Exclude results from discontinued operations 0.87 — (0.01) — — — — Less: Income tax expense / (benefit) 0.05 — (0.20) — — —
Slide 32: Weather-Normalized Earnings Per Share Reconciliations
Weather-Normalized Earnings Per Share Reconciliations Year Ended Dec. 31, 2013 2014 2015 2016 2017 2018 2019 Core1 Diluted EPS $2.10 $2.40 $2.56 $2.68 $2.83 $3.37 $3.35 Effects of weather at Ameren Missouri 0.03 0.05 (0.04) 0.16 (0.07) 0.43 0.04 Less: Income tax expense (0.01) (0.02) 0.01 (0.06) 0.0
Slide 33: Investor Relations Calendar
Investor Relations Calendar JANUARY 2021 FEBRUARY / EARLY MARCH 2021 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 1 2 3 4 5 6 Q4 Quiet Period begins, cont’d 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 Evercore Evercore Q4 Quiet Q4 2020 I
Slide 34: Select Regulatory Matters
Select Regulatory Matters Missouri Public Service Commission • 2020 Integrated Resource Plan: Docket No. ER-2021-0021; https://www.ameren.com/netzero • Order approving electric rate review settlement: Docket No. ER-2019-0335 • Smart Energy Plan filing: Docket No. EO-2019-0044 • Order approving reque
Slide 35: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction M – Million ATXI – Ameren Transmission Company of Illinois MEEIA – Missouri Energy Efficiency Investment Act B – Billion MISO – Midcontinent Independent System Operator, Inc. bps – Basis points MoPSC – Missouri
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