Ameren Corporation · NYSE:AEE
Ameren — EEI Virtual Financial Conference 2020
36 slides from Ameren's conference presentation, Nov 9, 2020
Slide 1: Customers at the Center
Customers at the Center EEI Virtual Financial Conference Nov. 9-11, 2020
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 12.87 12.72 723 10 700 10.29 200 9.95 690 675 150 663 157 5 650 651 100 625 628 50 0 600
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 • Affirm expected 6% to 8% EPS CAGR • Annualized equivalent dividend rate • Track record of delivering strong from 2020-20241,2 of $2.06 per sha
Slide 7: 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 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; ~54% 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 Growth
Expect to Deliver Strong Long-Term EPS Growth • Expected 2020 EPS in a range of $3.40 to $3.551 2020 Initial EPS Guidance – Actions taken to mitigate expected financial impacts from COVID-19 and Long-Term EPS Growth2 • Affirm expected 6% to 8% EPS CAGR from 2020-20242 2024 – Using 2020 initial EPS g
Slide 10: 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 11: 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 12: 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 13: 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 Sources of Energy Current 2030 2040 2050 12% 3% 25% 25% 27% 17% 46% 5% 30% 58% 69% 25% 1% 53% 4% Coal Gas Renewables Nuclear Other Zero Carbon • Pref
Slide 14: Renewable Energy Investments
Renewable Energy Investments Creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment • Build-transfer agreements for 700 MW of wind generation in Missouri, ~$1.2 billion investment, to comply with Missouri’s RES – Construction of f
Slide 15: 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 16: 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 17: 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 18: 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 19: 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 – 55% women or people of color – Target carb
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 2020 ↑ 700 MW wind generation investment of ~$1.2 billion expected to be substantially in-service by end of 2020 ↑ New electric service rates effective Apr. 1, 2020 Ameren ↑ Higher weather-normalized electric retail sales reflecting gradual improvement
Slide 26: 2020 Financing Update and Credit Ratings
Ameren Credit Ratings 2020 Financing Update and External Debt Balances1 Debt Financing • On Mar. 20, Ameren Missouri issued $465 million of 2.95% first As of Sep. 30, 2020 $ in millions Moody's S&P mortgage bonds due 2030 – Proceeds used to repay short-term debt, including short-term debt Ameren Cor
Slide 27: 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 extend electric performance-based ratemaking and mod
Slide 28: Select Regulatory Matters – Ameren Illinois
Select Regulatory Matters – Ameren Illinois Electric Distribution • Requesting $45 million base rate decrease from ICC in annual update – In Nov. 2020, ALJ recommended $49 million base rate decrease – Expect ICC decision by Dec. 2020, with new rates expected to be effective in Jan. 2021 – If approve
Slide 29: Appendix
APPENDIX
Slide 30: Regulatory and Legislative Initiatives
Regulatory and Legislative Initiatives Enhancing regulatory frameworks and advocating for responsible energy and economic policies Ameren Illinois Electric Distribution • Downstate Clean Energy Affordability Act1 (HB 5673/SB 3977) introduced in Feb. 2020 – Allows utility-owned solar and battery stor
Slide 31: Regulatory and Legislative Initiatives, Cont’d
Regulatory and Legislative Initiatives, Cont’d Enhancing regulatory frameworks and advocating for responsible energy and economic policies 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
Slide 32: 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 33: 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 34: Investor Relations Calendar
Investor Relations Calendar NOVEMBER 2020 JANUARY 2021 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 4 5 6 7 1 2 Q3 Quiet Q3 2020 Period, Earnings Cont’d Call 8 9 10 11 12 13 14 3 4 5 6 7 8 9 EEI EEI EEI Virtual Virtual Virtual Conf. Conf. Conf. 15 16 17 18 19 20 21
Slide 35: 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 36: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction ISRS – Infrastructure System Replacement Surcharge ALJ – Administrative Law Judge M – Million ATXI – Ameren Transmission Company of Illinois MEEIA – Missouri Energy Efficiency Investment Act B – Billion MISO – M