Ameren Corporation · NYSE:AEE
Ameren — AGA Financial Forum 2022
40 slides from Ameren's conference presentation, May 17, 2022
Slide 1: Transforming For Our Future
Transforming For Our Future AGA Financial Forum May 17-18, 2022
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- • Annualized equivalent dividend rate of • Track record of delivering str
Slide 5: Our Sustainability Value Proposition
Our Sustainability Value Proposition ENVIRONMENTAL STEWARDSHIP SOCIAL IMPACT • Accelerating transition to a cleaner and more diverse portfolio1 • Delivered value to customers in 2021 while focused on safety ‒ Target carbon reductions from 2005 levels: 50% by 2030; 85% by 2040; net- ‒ Improved reliab
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 midpoint of $3.75 Long-Term EPS Growth2 and 2022E EPS Guidance1 • Remain on track to deliver strong long-term earnings growth – Exp
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 Apr. 2021, MISO issued report outlining preliminary long- range transmission planning roadmap through 20
Slide 14: Rush Island Energy Center
Rush Island Energy Center Ameren Missouri • In Aug. 2021, U.S. Court of Appeals affirmed the U.S. District Court’s Sep. 2019 order to install a flue gas desulfurization system at the Rush Island Energy Center – Reversed the District Court’s order to install a dry sorbent injection system at the Laba
Slide 15: 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 16: Missouri Energy Legislation
Missouri Energy Legislation Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Missouri • On May 5, 2022, SB 745 passed General Assembly, will be sent to Governor for signature – Bill enhances current Smart Energy Plan legislation • Modifies rate cap f
Slide 17: Investing in the Energy Grid
Investing in the Energy Grid • Investing to modernize energy grid, making it cleaner, safer, more reliable, resilient and secure – Expect greater transmission investments to support additional renewable generation – Provide customers with new and improved tools to manage energy usage 2021-2026E Regu
Slide 18: Robust Investment Opportunities Across All Businesses Over Next Decade
Robust Investment Opportunities Across All Businesses Over Next Decade1 Modernizing the grid and investing in cleaner generation Investment Plan 2022-20261 $45B+ ($ billions) Strong Pipeline of Regulated $17.3 Infrastructure Investments $3.5 2022-2031 $1.8 Additional Investment $3.1 Opportunities •
Slide 19: Financial and Regulatory Update
Financial and Regulatory Update Ameren Missouri’s 400 MW High Prairie Renewable Energy Center placed in-service Dec. 2020
Slide 20: 2022 First Quarter Earnings Analysis – Key Drivers
2022 First Quarter Earnings Analysis – Key Drivers ↑ Ameren Missouri earnings — Higher electric retail sales: ~+$0.03 Diluted EPS • Weather vs. 2021: ~+$0.02; vs. normal ~+$0.02 Q1 2021 vs. Q1 2022 • WN sales vs. 2021 (excl. MEEIA): Res.: ~(0.5)%, Com.: ~+1.5%, Ind.: ~+0.5%, Total: ~+0.5% — Increase
Slide 21: 2022 EPS Guidance and Select Balance of the Year Considerations
2022 EPS Guidance and Select Balance of the Year Considerations1 • Affirm 2022 diluted EPS guidance range of $3.95 to $4.15 2022E • Select considerations for Q2-Q4 2022 EPS compared to Q2-Q4 2021 EPS Diluted EPS – Ameren Missouri return to normal weather in 2022: Q2 ~$(0.01); Q3 ~$(0.02); Q4 ~+$0.02
Slide 22: Financing: Ameren Credit Ratings and External Debt Balances
Ameren Credit Ratings Financing and External Debt Balances2 Debt Financing • On Apr. 1, 2022, Ameren Missouri issued $525 million of 3.90% green first mortgage bonds due 2052 As of Mar. 31, 2022 $ in millions Moody's S&P – Proceeds to fund capital expenditures and refinance short-term debt; intend t
Slide 23: Ameren Illinois Regulatory Matters
Ameren Illinois Regulatory Matters Electric Distribution • In Apr. 2022, requested $83 million annual performance-based rate update from ICC; ~3.5% rate increase request1 – Expect ICC decision by Dec. 2022, with new rates effective in Jan. 2023 – Major investments included in the request • Installat
Slide 24: FERC Regulatory Matters
FERC Regulatory Matters Enhancing regulatory frameworks and advocating for responsible energy and economic policies 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 all
Slide 25: 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 26: Appendix
APPENDIX
Slide 27: Focused on Delivering Affordable Service to Our Customers
Focused on Delivering Affordable Service to Our Customers Residential rates since key legislative or regulatory enhancements Ameren Missouri Ameren Illinois Ameren Illinois Electric1 Electric Distribution2 Natural Gas Distribution3 ¢/KWh ~0.75% ¢/KWh ~0.3% $/therm ~1.4% CAGR CAGR CAGR 12.00 2017 to
Slide 28: Focused on Disciplined Cost Management to Keep Customer Rates Affordable
Focused on Disciplined Cost Management to Keep Customer Rates Affordable • Track record of disciplined cost management Ameren Total Fuel & Purchased Power and – Total fuel & purchased power and operations and maintenance Operations and Maintenance Expenses expenses decreased ~3% from 2016 levels ($
Slide 29: Our Focus on Delivering a Cleaner Energy Future Responsibly
Our Focus on Delivering a Cleaner Energy Future Responsibly1 While providing safe, reliable and affordable energy to customers • Climate risk management and mitigation – Targeting significant reductions in greenhouse gases 2 – Implementing robust customer energy efficiency programs – Investing to mo
Slide 30: Ameren Missouri Generation Transformation
Ameren Missouri Generation Transformation1 Transition to a cleaner and more diverse portfolio in a responsible fashion 2 50% CARBON EMISSIONS 85% CARBON EMISSIONS NET-ZERO CARBON REDUCTION3,4 REDUCTION3,4 EMISSIONS3,4 • Ameren Missouri filed its preferred Integrated Resource Plan with the MoPSC in S
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 facilities for MO available to MO residential non-residential customer Neighborhood Community and small business parking lots, open lan
Slide 32: 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 33: Illinois Energy Transition Legislation
Illinois Energy Transition Legislation Current Performance- Traditional Framework Multi-Year Plan Based Rates (Future Test Year) (IETL) 5.80% + average of 30-year ROE treasury rate each calendar year ICC determined ICC determined Potential for regulatory lag in non- Earned vs. Allowed Allowed test y
Slide 34: Solid ESG Ratings
Solid ESG Ratings A AAA 0 Dec. 2021 Dec. 2021 May 2021 A- Water 29.1 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 AGA Financial Forum | May 17-18, 2022 34
Slide 35: 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 36: 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 37: 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 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 Less: I
Slide 38: Investor Relations Calendar
Investor Relations Calendar MAY 2022 JUNE 2022 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 4 5 6 7 1 2 3 4 Q1 Quiet Q1 Period Earnings Cont’d Conf. Call 8 9 10 11 12 13 14 5 6 7 8 9 10 11 Virtual Annual Shareholder Meeting 15 16 17 18 19 20 21 12 13 14 15 16 17 18
Slide 39: Select Regulatory and Legislative Matters
Select Regulatory and Legislative Matters Missouri Public Service Commission • Order approving electric rate review filling: Docket No. ER-2021-0240 • Order approving natural gas rate review filing: Docket No. GR-2021-0241 • Smart Energy Plan filing: Docket No. EO-2019-0044 • 2020 Integrated Resourc
Slide 40: 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