Ameren Corporation · NYSE:AEE
Ameren — AGA Financial Forum 2023
42 slides from Ameren's conference presentation, May 22, 2023
Slide 1: Powering a Smart, Sustainable Tomorrow
Powering a Smart, Sustainable Tomorrow AGA Financial Forum May 22-23, 2023
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 and operations and maintenance expenses excluding COLI, which are non-GAAP financial measures and may not be comparable to those of other companies. A re
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 2023- • 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 portfolio • Delivered value to customers in 2022 while focused on safety ‒ Target carbon reductions from 2005 levels: 60% by 2030; 85% by 2040; net ‒ On average, Amere
Slide 6: 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 $4.50 $4.25 +92% or $2.60 ~+48% 2013 to 2022 $4.35 ~7.5% CAGR $2.52 | 58% $2.40 2013 to 2022 $4.00 2013 to 2022 $4.00 $2.3
Slide 7: Our Strategic Plan
Our Strategic Plan INVEST ENHANCE OPTIMIZE Enhance regulatory Invest in rate regulated Optimize operating frameworks and advocate energy infrastructure performance for responsible policies To capitalize on opportunities to benefit our customers, shareholders and the environment AGA Financial Forum |
Slide 8: 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 9: Expect to Deliver Strong Long-Term EPS and Dividend Growth
Expect to Deliver Strong Long-Term EPS and Dividend Growth • Expect 2023 EPS in a range of $4.25 to $4.451 – Midpoint represents 7% EPS growth compared to 2022 original guidance midpoint of $4.05 2023E EPS1 and Long-Term EPS2 Growth Guidance • Remain on track to deliver strong long-term earnings gro
Slide 10: Strong Rate Base Growth in All Regulatory Jurisdictions
Strong Rate Base Growth in All Regulatory Jurisdictions Increased five-year infrastructure investment plan by $2.4B reflecting increased investment in all segments1,2 $19.7 Billion of Regulated Infrastructure Investment 2022 to 2027E Regulated Five-Year Rate 2023-20271 Infrastructure Rate Base3,4 Ba
Slide 11: Expected 2023-2027 Funding Plan
Expected 2023-2027 Funding Plan1 • Cash from Operations – Return of capital through depreciation in rates – Return on equity-financed portion of rate base – ~$1.2 to $1.3 billion of income tax deferrals and tax asset utilization • Income tax deferrals driven primarily by capital expenditures • Inclu
Slide 12: MISO Long-Range Transmission Planning Roadmap
MISO Long-Range Transmission Planning Roadmap Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment • In July 2022, MISO approved Tranche 1 projects of ~$10 billion – $1.8 billion1 assigned to Ameren; planning, design work and procurement underw
Slide 13: Investing in the Energy Grid
Investing in the Energy Grid • Investing to modernize energy grid, making it cleaner, safer, more reliable, resilient and secure – Ameren Missouri Smart Energy Plan and Ameren Illinois MYRP filed with the MoPSC and ICC, respectively, supporting infrastructure investment to modernize the grid 2022-20
Slide 14: 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 2023-2027 $48B+ ($ billions) Strong Pipeline of Regulated $19.7 Infrastructure Investments $3.8 2023-2032 $1.9 • Modernize electric and gas transmission an
Slide 15: 2023 First Quarter Earnings Analysis – Key Drivers
2023 First Quarter Earnings Analysis – Key Drivers ↑ Ameren Transmission earnings — Increased investments in infrastructure Diluted EPS2 ↑ Ameren Illinois Electric Distribution earnings Q1 2022 vs. Q1 2023 — Increased investments in infrastructure; higher allowed ROE ↑ Ameren Illinois Natural Gas ea
Slide 16: Financing, Credit Ratings and External Debt Balances
Credit Ratings2 and Financing External Debt Balances Debt Financing • On Mar. 13, 2023, Ameren Missouri issued $500 million of 5.45% first mortgage bonds due 2053 – Proceeds were used to fund capital expenditures and refinance short term debt As of Mar. 31, 2023 $ in millions Moody's S&P Equity Fina
Slide 17: Long-Term Debt Maturities and Interest Rates
Long-Term Debt Maturities and Interest Rates Issuer 20231 2024 2025 2026 2027 $450 million 2.50% $350 million 3.65% $500 million 1.95% Ameren Corp. senior unsecured notes senior unsecured notes senior unsecured notes $350 million 3.50% $400 million 2.95% Ameren Missouri senior secured notes senior s
Slide 18: Missouri Electric Rate Review
Missouri Electric Rate Review • In April, reached a non-unanimous1 stipulation and agreement with MoPSC Staff, Office of Public Counsel and certain intervenors for a $140 million annual revenue increase2 – Allowed ROE, capital structure3 and rate base4 not specified – Continuation of existing FAC, R
Slide 19: Illinois Multi-Year Rate Plan
Illinois Multi-Year Rate Plan Electric Distribution • Multi-Year Rate Plan (MYRP) filed in Jan. 2023 with ICC – Requested annual revenue increases driven by infrastructure investment and cost of capital – ICC to approve return on equity and cost of debt Procedural Schedule • Seven performance metric
Slide 20: Illinois Regulatory Matters
Illinois Regulatory Matters Electric Distribution • In Apr. 2023, requested a $127 million reconciliation adjustment to the 2022 revenue requirement reflecting actual costs – Based on 2022 year-end rate base, ROE and equity ratio – ICC decision required by Dec. 2023; expected to be in rates in 2024
Slide 21: 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 22: 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 wh
Slide 23: Summary
Summary Expect to deliver strong earnings growth in 2023 with guidance in a range of $4.25 to $4.45 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 24: Appendix
APPENDIX
Slide 25: Proposed 2022 Change to the 2020 Missouri IRP
Proposed 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 retir
Slide 26: 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 hexa
Slide 27: Ameren Missouri Solar Projects
Ameren Missouri Solar Projects Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment Huck Finn Solar Boomtown Vandalia Project1 Solar Project2 Solar Project Facility size 200-MW 150-MW 50-MW Agreement date June 2022 Feb. 2022 Sept. 2022 Agreemen
Slide 28: Ameren Missouri Smart Energy Plan
Ameren Missouri Smart Energy Plan filed with MoPSC on Feb. 16 Investing in rate regulated energy infrastructure to benefit our customers, shareholders and the environment • $1.6 billion invested in 2022 to support reliability, address aged infrastructure and provide clean energy to the customers and
Slide 29: 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 30: Electric Vehicle Adoption and Infrastructure Development Programs
Electric Vehicle Adoption and Infrastructure Development Programs Enhance regulatory frameworks and advocate for responsible policies to benefit our customers, shareholders and the environment Ameren Illinois • ICC approved Beneficial Electrification Plan in Mar. 2023 – Provides at least $27 million
Slide 31: Focused on Disciplined Cost Management to Drive Affordability
Focused on Disciplined Cost Management to Drive Affordability Optimize operating performance to benefit of our customers, shareholders and the environment • Track record of disciplined cost management – Expect flat operations and maintenance expenses in 2023 as compared to 2022 – Target flat operati
Slide 32: 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 33: 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 203
Slide 34: Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics
Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics Adjustment / Metric Description Incentive (+/- bps) Improve System Average Interruption Duration Index (SAIDI) systemwide; improve interruption and 1. Reliability duration outages (SAIDI, SAIFI, CEMI, and CELID) in enviro
Slide 35: 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 36: Solid Sustainability Ratings
Solid Sustainability Ratings AAA 0 A Oct. 2022 July 2022 Dec. 2022 29.4 A- Water A Medium Risk C Climate Range: Range: Range: A-F AAA-CCC 0-100 (A is best) (AAA is best) (Lower is better) CCC 100 F Ameren Corp. 97.1 Trendsetter AGA Financial Forum | May 22-23, 2023 36
Slide 37: Ameren's Estimated Coal-Related Revenues in 2022
Ameren’s Estimated Coal-Related Revenues in 2022 Return on Investment Revenues Cost Recovery3 Revenues $2B1 x ($99M x $475M + 52% x $2B1 x 48% 25%) / (1 $168M x $138M + 9.50%2 = x 3.91% = - 25%) 20%1 = $171M = $99M $38M $33M $34M $784M $7,966M 12% Return on Interest Tax Expense Property Fuel, other
Slide 38: 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 2022 GAAP Earnings / Diluted EPS $1.18 $2.40 $2.59 $2.68 $2.14 $3.32 $3.35 $3.50 $3.84 $4.14 Exclude results from discontinued operations 0.87 — (0.01) — — — — — — — Less: Income tax bene
Slide 39: 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 2022 Core1 Diluted EPS $2.10 $2.40 $2.56 $2.68 $2.83 $3.37 $3.35 $3.50 $3.84 $4.14 Ameren Missouri weather impact included in margins 0.03 0.05 (0.04) 0.16 (0.07) 0.43 0.04 (0.05) 0
Slide 40: Investor Relations Calendar
Investor Relations Calendar MAY 2023 JUNE 2023 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 4 5 6 1 2 3 Q1 Quiet Q1 Period Earnings Cont’d Conf. Call 7 8 9 10 11 12 13 4 5 6 7 8 9 10 Virtual Annual Shareholder Meeting 14 15 16 17 18 19 20 11 12 13 14 15 16 17 21 22
Slide 41: 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 Certificate of Convenience and Necessity for Boomtown Solar Project: Docket No. EA-2022-0245 • Smart Energy Plan filing: Docket No. EO-2019-0
Slide 42: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction LT – Long-term ATXI – Ameren Transmission Company of Illinois M – Million B – Billion MEEIA – Missouri Energy Efficiency Investment Act BOD – Board of Directors MISO – Midcontinent Independent System Operator, I