Ameren Corporation · NYSE:AEE
Ameren — Q2 2022 Earnings Presentation
36 slides from Ameren's earnings presentation, Aug 5, 2022
Slide 1: Transforming For Our Future: Second Quarter 2022 Earnings
Transforming For Our Future Second Quarter 2022 Earnings Aug. 5, 2022
Slide 2: Cautionary Statements
Cautionary Statements Forward-looking Statements Statements in this presentation not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking s
Slide 3: Business Update
Business Update Marty Lyons President and Chief Executive Officer, Ameren Corp. Ameren Missouri’s 400 MW High Prairie Renewable Energy Center in service Dec. 2020
Slide 4: Earnings and Guidance Summary
Earnings and Guidance Summary • Remain focused on safety and executing strategic plan Diluted EPS • Key Q2 earnings variance drivers 2021 vs. 2022 ↑ Earnings on increased infrastructure investments across all business $1.71 $1.77 segments ↑ Higher Ameren Missouri electric retail sales primarily driv
Slide 5: Our Strategic Plan
Our Strategic Plan • Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • Enhancing regulatory frameworks and advocating for responsible energy and economic policies • Creating and capitalizing on opportunities for investment for the benefit of our cu
Slide 6: Executing Our Strategy
Executing Our Strategy Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • Significant infrastructure investments in each Capital Expenditures business segment are delivering value YTD June 30, 2022 ($ millions) • Regulatory rate review filings $1,53
Slide 7: 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 8: 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 9: 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 10: 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 11: CCNs filed with MoPSC 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 12: 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 13: 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 2022-2031 $1.8 • Modernize electric and gas transmission an
Slide 14: 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 15: Long-term Total Return Outlook
Long-term Total Return Outlook • Remain on track to deliver strong long-term earnings growth – Expect 6% to 8% EPS CAGR from 2022-20261 • Using 2022 EPS guidance range midpoint of $4.05 as the base – Expect ~7% rate base CAGR from 2021-20261,2 2021-2026E Regulated Five-Year Rate • Infrastructure inv
Slide 16: Ameren Illinois Leadership Update
Ameren Illinois Leadership Update • On Aug. 1, Lenny Singh became President of Ameren Illinois • More than 30 years of utility experience; recently served as Senior Vice President for Consolidated Edison Company of New York • Track record of operational excellence and value creation, as well as prio
Slide 17: Financial Update
Financial Update Michael Moehn Executive Vice President and Chief Financial Officer, Ameren Corp.
Slide 18: 2022 Second Quarter Earnings Analysis – Key Drivers
2022 Second Quarter Earnings Analysis – Key Drivers ↑ Ameren Transmission earnings — Increased investments in infrastructure ↑ Ameren Illinois Electric Distribution earnings Diluted EPS — Increased investments in infrastructure; higher allowed ROE Q2 2021 vs. Q2 2022 ↓ Ameren Missouri earnings — Hig
Slide 19: 2022 EPS Guidance and Select Balance of the Year Considerations
2022 EPS Guidance and Select Balance of the Year Considerations • 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 – Ame
Slide 20: 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 21: 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 June, ICC Staff recommended $60 million base rate increase; difference driven primarily by a difference in proposed common equity ratio
Slide 22: Financing, Ameren Credit Ratings and External Debt Balances
Financing Ameren Credit Ratings Debt Financing • On Apr. 1, 2022, Ameren Missouri issued $525 million of 3.90% green and External Debt Balances2 first mortgage bonds due 2052 – Proceeds used to fund capital expenditures and repay ST debt; amount equal to proceeds allocated to sustainable projects me
Slide 23: Summary
Summary Expect to deliver strong earnings growth in 2022 with guidance in a range of $3.95 to $4.15 per diluted share 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 growth
Slide 24: Appendix
APPENDIX
Slide 25: 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 26: 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 27: 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 28: 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 29: 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 this e
Slide 30: 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 31: 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 32: 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 33: 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 34: Investor Relations Calendar
Investor Relations Calendar AUGUST 2022 SEPTEMBER 2022 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 3 4 5 6 1 2 3 Q2 Quiet Q2 Period Earnings Cont’d Conf. Call 7 8 9 10 11 12 13 4 5 6 7 8 9 10 UBS Fireside Chat 14 15 16 17 18 19 20 11 12 13 14 15 16 17 UBS Kohler Min
Slide 35: 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 36: Glossary of Terms and Abbreviations
Glossary of Terms and Abbreviations AFUDC – Allowance for funds used during construction LRTP – Long Range Transmission Planning ATXI – Ameren Transmission Company of Illinois LT – Long-term B – Billion M – Million bps – Basis points MEEIA – Missouri Energy Efficiency Investment Act C&I – Commercial