Ameren Corporation · NYSE:AEE
Ameren — Morgan Stanley and Bank of America Merrill Lynch Utility Equity Conferences; Barclays Util (February 2018)
25 slides from Ameren's conference presentation, Feb 27, 2018
Slide 1: Purpose-Driven Performance
Purpose-Driven Performance Morgan Stanley and Bank of America Merrill Lynch Utility Equity Conferences Barclays Utility Fixed Income Conference Feb. 27-28, 2018
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 measure and may not be comparable to those of other companies. A reconciliation of GAAP to non-GAAP information is included in this presentation. Generally
Slide 3: Company Description: Ameren Businesses
Company Description 2.4M electric Ameren Businesses customers Fully rate-regulated electric Ameren Missouri and gas utility • Electric generation, transmission and distribution business 0.9M gas and a natural gas distribution business in Missouri regulated Corporate Headquarters customers by MoPSC E
Slide 4: Our Value Proposition to Investors and Customers
Our Value Proposition to Investors and Customers Attractive Strong Attractive total return long-term growth outlook dividend potential • Expect 5% to 7% compound annual EPS • Annualized equivalent dividend rate of • Attractive combined earnings growth growth from 2017 through 20221,2 $1.83 per share
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: Solid Operating Performance
Solid Operating Performance Electric rates Delivery system reliability Generating plant Strong safety performance are low has improved performance remains solid Average Residential Safety Distribution System Baseload Energy Electricity Prices1 Performance Reliability2 Center Performance Recordable L
Slide 7: Our Regulatory Frameworks
Our Regulatory Frameworks FERC-regulated: Formula ratemaking • Allowed ROE is 10.82%, which includes the MISO participation adder of 50 basis points Ameren • Rates reset each Jan. 1 based on forward-looking calculation with annual reconciliation Transmission • Constructive rate treatment for ATXI’s
Slide 8: Impacts of Federal Income Tax Reform
Impacts of Federal Income Tax Reform • Key utility provisions included in legislation enacted in Dec. 2017 ─ Corporate tax rate reduced to 21% from 35% beginning Jan. 1, 2018 ─ End of bonus depreciation for regulated utilities ─ Interest deductibility retained for regulated utilities ─ State and loc
Slide 9: Investing Strategically, Consistent with Regulatory Frameworks
Investing Strategically, Consistent with Regulatory Frameworks Excludes Ameren Missouri’s proposed wind generation and potential incremental grid modernization investments ~$11 Billion of Regulated 2017 to 2022E Regulated Five-Year Rate Infrastructure Investment1 Infrastructure Rate Base1,2 Base CAG
Slide 10: Wind Investment Update
Wind Investment Update • Ameren Missouri in advanced negotiations with multiple wind developers for ownership of at least 700 MWs of generation, ~$1 billion investment ─ Would achieve compliance with Missouri Renewable Energy Standard ─ Upon reaching agreements with developers, expect to file CCN re
Slide 11: Missouri Legislation Update
Missouri Legislation Update • Senate Bill 564 passed the Missouri Senate on Feb. 15, 2018 ─ Bill supports investment to modernize energy grid for the benefit of customers and state of Missouri ─ Next step is consideration by the Missouri House of Representatives • Key provisions for electric utility
Slide 12: Select Regulatory Matters
Select Regulatory Matters Ameren Transmission • Second complaint case to reduce MISO’s FERC-allowed base ROE pending ─ In June 2016, ALJ recommended a 9.70% base ROE • If approved by FERC, would result in total allowed ROE of 10.20% vs. current 10.82%, both include 50 basis point adder for MISO part
Slide 13: Select Regulatory Matters, Cont'd
Select Regulatory Matters, Cont’d Ameren Illinois Natural Gas • In Jan. 2018, requested a $49 million annual natural gas distribution rate increase from ICC; includes ~$42 million that would otherwise be recovered in 2019 under qualifying infrastructure plant (QIP) rider – Based on 10.3% ROE; 50% eq
Slide 14: Financial Strategy
Financial Strategy Long-term Debt Maturities • Strong liquidity profile As of Dec. 31, 2017 ─ $2.1 billion of combined credit under facilities maturing in Dec. 2021 ($ in Millions) • $1.1 billion Illinois credit facility ($800 million sublimit for Ameren Illinois; $500 million for Ameren Corp.) $1,0
Slide 15: Expected 2018-2022 Funding Plan
Expected 2018-2022 Funding Plan1 • Return of capital through depreciation in rates • Return on equity-financed portion of rate base • ~$1 billion of income tax deferrals and tax asset utilization ─ Income tax deferrals driven primarily by capital expenditures ─ Includes ~$350 million of tax assets a
Slide 16: Ameren Organizational Structure and External Debt Balances
Ameren Organizational Structure and External Debt Balances1 $ in millions as of Dec. 31, 2017 All Moody’s outlooks “Stable”; all S&P outlooks “Positive” Ameren Corporation (Baa1/BBB+) Sr. Unsecured (Baa1/BBB) - $700 Commercial paper (P-2/A-2) - $383 Ameren Missouri Ameren Illinois ATXI (Baa1/BBB+) (
Slide 17: Appendix
Appendix
Slide 18: GAAP to Core Earnings Reconciliation
GAAP to Core Earnings Reconciliation (in millions, except per share amounts) Year-Ended Dec. 31, 2016 2017 GAAP Earnings / Diluted EPS $ 653 $ 2.68 $ 523 $ 2.14 Charge for revaluation of deferred taxes resulting from — — 22 0.09 increased Illinois state income tax rate Less: Federal income tax benef
Slide 19: 2017 Earnings Analysis
2017 Earnings Analysis Core1 Diluted EPS Key Earnings Variance Drivers: 2016 vs. 2017 Higher Ameren Transmission earnings $2.83 ─ Increased investments in infrastructure, partially offset by a lower allowed ROE $2.68 Higher Ameren Illinois Natural Gas distribution earnings $0.48 $0.58 ─ Increased in
Slide 20: 2018 Earnings Guidance: Key Drivers and Assumptions
2018 Earnings Guidance: Key Drivers and Assumptions1 Higher average estimated rate base: ~$2.92 billion compared to ~$2.52 billion in 2017 reflecting infrastructure investments Ameren ─ FERC decision in second MISO ROE complaint case uncertain; guidance assumes 10.82% Transmission • ALJ recommended
Slide 21: 2018 Earnings Guidance: Key Drivers and Assumptions
2018 Earnings Guidance: Key Drivers and Assumptions1 Increased electric service rates for Q1 2018: ~+$0.112 Absence of scheduled Callaway refueling and maintenance outage: ~+$0.112 Return to normal weather: ~+$0.062 Ameren Lower expected interest expense driven by refinancing debt in 2017 and 2018:
Slide 22: Transitioning Generation to Cleaner, More Diverse Energy Portfolio
Transitioning Generation to Cleaner, More Diverse Energy Portfolio • Ameren Missouri filed its preferred 20-year Integrated Resource Plan with MoPSC in Sept. 2017 ─ Plan included addition of at least 700 MWs of wind generation1 by 2020, representing potential ~$1 billion wind investment ─ Would achi
Slide 23: Select Regulatory Matters
Select Regulatory Matters Missouri Public Service Commission • Senate Bill 564: http://www.senate.mo.gov/18info/pdf-bill/intro/SB564.pdf • 2017 Integrated Resource Plan: https://www.ameren.com/missouri/environment/integrated-resource-plan and Docket No. EO-2018-0038 • Working proceeding regarding ef
Slide 24: Investor Relations Calendar
Investor Relations Calendar LATE FEBRUARY/MARCH 2018 APRIL/EARLY MAY 2018 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. Feb. 25 26 27 28 Mar. 1 2 3 Apr. 1 2 3 4 5 6 7 Morgan Stanley & BAML Barclays Conf. Conf. 4 5 6 7 8 9 10 8 9 10 11 12 13 14 Q1 Quiet Period, begins 11 1
Slide 25: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations ALJ – Administrative Law Judge M – Million ATXI – Ameren Transmission Company of Illinois MEEIA – Missouri Energy Efficiency Investment Act B – Billion MISO – Midcontinent Independent System Operator, Inc. CAGR – Compound annual growth rate MoPSC – Missouri Public