Ameren Corporation · NYSE:AEE
Ameren — Investor Presentation (September 2022)
43 slides from Ameren's investor presentation, Sep 13, 2022
Slide 1: Transforming For Our Future
Transforming For Our Future Early Sep. Investor Meetings
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, which are non-GAAP financial measures and may not be comparable to those of other companies. A reconciliation of GAAP to non-GAAP information is include
Slide 3: Company Description
Company Description Fully rate-regulated electric and natural gas utility Ameren Businesses 2.4M electric Ameren Missouri customers • Electric transmission, distribution, and generation business and a natural gas distribution business in Missouri regulated by MoPSC 0.9M gas • Serves 1.2 million elec
Slide 4: 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 2022-20261,2 • Annualized equivalent dividend rate of • Track record of deliver
Slide 5: 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 6: Delivering Strong Value to our Customers
Delivering Strong Value to our Customers Achieving top quartile performance in reliability, affordability and customer satisfaction Increased Customer Outage Improved Reliability1 Affordable Rates2 Frequency Satisfaction3 JD Power (per customer per year) +12% ¢/KWh Score +23% 1.00 Better 15 Better 7
Slide 7: 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 $4.25 +84% or $2.40 ~+38% 2013 to 2021 $4.00 $2.36 | 58% ~8% CAGR $4.05 2013 to 2021 $3.75 $2.20 220% 2013 to 2021 $3.82 2
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; ~56% 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 and Dividend Growth
Expect to Deliver Strong Long-Term EPS and Dividend Growth • Expect 2022 EPS in a range of $3.95 to $4.151 – Midpoint represents 8% EPS growth compared to 2021 original guidance midpoint of $3.75 Long-Term EPS Growth2 and 2022E EPS Guidance1 • Remain on track to deliver strong long-term earnings gro
Slide 11: Strong Rate Base Growth in All Regulatory Jurisdictions
Strong Rate Base Growth in All Regulatory Jurisdictions1 Robust five-year infrastructure investment plan in all segments $17.3 Billion of Regulated Infrastructure Investment 2021 to 2026E Regulated Five-Year Rate 2022-2026 Infrastructure Rate Base2 Base CAGR Ameren Illinois ($ billions) Ameren Illin
Slide 12: Expected 2022-2026 Funding Plan
Expected 2022-2026 Funding Plan1 • Cash from Operations – Return of capital through depreciation in rates – Return on equity-financed portion of rate base – ~$1.6 to $1.7 billion of income tax deferrals and tax asset utilization • Income tax deferrals driven primarily by capital expenditures • Inclu
Slide 13: 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 Ameren Transmission • In late July 2022, MISO approved Tranche 1 projects which it estimated to cost ~$10 billion – Projects assi
Slide 14: 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 15: 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 16: CCNs filed with MoPSC in July 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 17: 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 18: 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 19: Investing in the Energy Grid
Investing in the Energy Grid • Investing to modernize energy grid, making it 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 and impr
Slide 20: 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 2022-20261 $48B+ ($ billions) Strong Pipeline of Regulated $17.3 Infrastructure Investments $3.5 2022-20312 $1.8 • Modernize electric and gas transmission a
Slide 21: Financial and Regulatory Update
Financial and Regulatory Update Ameren Missouri’s 400 MW High Prairie Renewable Energy Center placed in service Dec. 2020
Slide 22: 2022 Earnings Analysis for Six Months Ended June 30
2022 Earnings Analysis for Six Months Ended June 30 ↑ Ameren Transmission earnings — Increased investments in infrastructure — Absence of FERC order addressing the historical recovery of materials and supplies inventories: +$0.03 Diluted EPS ↑ Ameren Illinois Electric Distribution earnings — Increas
Slide 23: 2022 EPS Guidance and Select Balance of the Year Considerations
2022 EPS Guidance and Select Balance of the Year Considerations1 • Reaffirm 2022 diluted EPS guidance range of $3.95 to $4.15 2022E • Select considerations for Q3-Q4 2022 EPS compared to Q3-Q4 2021 EPS Diluted EPS – Ameren Missouri return to normal weather in 2022: Q3 ~$(0.02); Q4 ~+$0.02 $4.15 – Am
Slide 24: Financing and Ameren Credit Ratings
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 25: Aug. 2022 Missouri Electric Rate Review Filing
Aug. 2022 Missouri Electric Rate Review Filing • $316 million annual revenue increase request filed Aug. 1 with MoPSC – ROE: 10.2% and equity ratio: 51.9% – Rate base: $11.6 billion (Dec. 31, 2022 estimate) – Test year ended Mar. 31, 2022, with certain pro-forma adjustments through Dec. 31, 2022 – C
Slide 26: Ameren Illinois Regulatory Matters
Ameren Illinois Regulatory Matters Electric Distribution • Requesting $84 million annual performance-based rate update from ICC; ~2.25% rate increase request1 – In August, ICC Staff recommended $61 million base rate increase; difference driven primarily by a difference in proposed common equity rati
Slide 27: 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 28: Summary
Summary Expect to deliver strong earnings growth in 2022 with guidance in a range of $3.95 to $4.15 per diluted share1 Successfully executing our strategy; well-positioned for future growth • Focused on delivering a cleaner and sustainable energy future in a responsible manner Strong long-term growt
Slide 29: Appendix
APPENDIX
Slide 30: Missouri IRP Preferred Plans
Missouri IRP Preferred Plans Key Actions 2020 IRP 2022 Change Specifics Carbon Emission Reduction1 50% by 2030 60% by 2030 • Includes both Scope 1 and 2 emissions including other 85% by 2040 85% by 2040 greenhouse gas emissions of methane, nitrous oxide and Net Zero by 2050 Net Zero by 2045 sulfur h
Slide 31: Our Focus on Delivering a Cleaner Energy Future Responsibly
Our Focus on Delivering a Cleaner Energy Future Responsibly While providing safe, reliable and affordable energy to customers • Climate risk management and mitigation – Targeting significant reductions in greenhouse gases – Implementing robust customer energy efficiency programs – Investing to moder
Slide 32: Focused on Disciplined Cost Management to Keep Customer Rates Affordable
Focused on Disciplined Cost Management to Keep Customer Rates Affordable • Track record of disciplined cost management Ameren Total Fuel & Purchased Power and – Total fuel & purchased power and operations and maintenance Operations and Maintenance Expenses expenses decreased ~3% from 2016 levels ($
Slide 33: Working to Keep Missouri Customer Rates Low
Working to Keep Missouri Customer Rates Low • Ameren Missouri has kept 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 the 20
Slide 34: Key Customer Benefits Reflected in Missouri Rate Request
Key Customer Benefits Reflected in Missouri Rate Request • Strengthening the grid through Ameren Missouri’s Smart Energy Plan, including infrastructure upgrades bolstering reliability and resiliency, installation of smart meters, and addition of programs to stimulate economic growth for communities
Slide 35: 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 36: 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 Ameren Transmission • In Apr. 2021, MISO issued report outlining preliminary long- range transmission planning roadmap through 20
Slide 37: Solid ESG Ratings
Solid ESG Ratings A AAA 0 Dec. 2021 Dec. 2021 July 2022 A- Water 29.4 A Medium Risk Climate B Range: A-F Range: Range: (A is best) AAA-CCC 0-100 (AAA is best) (Lower is better) F CCC 100 Early Sep. Investor Meetings 37
Slide 38: 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 39: 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 GAAP Earnings / Diluted EPS $1.18 $2.40 $2.59 $2.68 $2.14 $3.32 $3.35 $3.50 $3.84 Exclude results from discontinued operations 0.87 — (0.01) — — — — — — Less: Income tax benefit / expense
Slide 40: Weather-Normalized Core Earnings per Share Reconciliations
Weather-Normalized Core Earnings per Share Reconciliations Year Ended Dec. 31, 2013 2014 2015 2016 2017 2018 2019 2020 2021 Core1 Diluted EPS $2.10 $2.40 $2.56 $2.68 $2.83 $3.37 $3.35 $3.50 $3.84 Ameren Missouri weather impact included in margins 0.03 0.05 (0.04) 0.16 (0.07) 0.43 0.04 (0.05) 0.02 Le
Slide 41: Investor Relations Calendar
Investor Relations Calendar SEPTEMBER 2022 NOVEMBER 2022 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 1 2 3 4 5 Tentative Q3 Quiet Q3 Period Earnings Cont’d Conf. Call 4 5 6 7 8 9 10 6 7 8 9 10 11 12 UBS Fireside Chat 11 12 13 14 15 16 17 13 14 15 16 17 18 19 Analy
Slide 42: 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 43: 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 LRTP – Long Range Transmission Planning B – Billion LT – Long-term bps – Basis points M – Million BTA – Build-Transfer agreement MEEI