Ameren Corporation · NYSE:AEE
Ameren — Evercore ISI Utility Conference 2023
48 slides from Ameren's conference presentation, Jan 12, 2023
Slide 1: Transforming For Our Future
Transforming For Our Future Evercore ISI Utility Conference Jan. 12, 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, 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 2022-20261,2 • Annualized equivalent dividend rate of • Track record of deliver
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 2021 while focused on safety ‒ Target carbon reductions from 2005 levels: 60% by 2030; 85% by 2040; net ‒ Improved reliabil
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 Focus on Affordability2 Frequency Satisfaction3 JD Power (per customer per year) +12% ¢/KWh Score +23% 1.00 Better 15 Be
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 2013 to 2021 $3.96 $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 $4.00 to $4.151 • Remain on track to deliver strong long-term earnings growth Long-Term EPS Growth2 and 2022E Original EPS Guidance – Expect 6% to 8% EPS CAGR from 2022-20262 • Using 2022 original EPS guidance
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 • In late July 2022, MISO approved Tranche 1 projects which it estimated to cost ~$10 billion – Projects assigned to Ameren total
Slide 14: Federal Energy Legislation
Federal Energy Legislation Enhancing regulatory frameworks and advocating for responsible energy and economic policies • Inflation Reduction Act enacted in Aug. 2022 – Ameren actively advocated for components of the Act individually and through our work with EEI – Provides tax credits for wind, sola
Slide 15: 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, 2022 – Bill enhances and extends current Smart Energy Plan legislation • Modifies rate cap from current all-in
Slide 16: 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 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 2021-2026E Regulated – Expect greater transmission investments to support additional renewable generation Infrastructure Rate Base3,5 – Provide customers with new and impr
Slide 18: 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 2022-20312 $1.8 • Modernize electric and gas transmission a
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 Earnings Analysis for Nine Months Ended Sep. 30
2022 Earnings Analysis for Nine Months Ended Sep. 30 ↑ Ameren Illinois Electric Distribution earnings — Increased investments in infrastructure; higher allowed ROE ↑ Ameren Transmission earnings — Increased investments in infrastructure Diluted EPS — Absence of FERC order addressing the historical r
Slide 21: 2022 EPS Guidance and Select Balance of the Year Considerations
2022 EPS Guidance and Select Balance of the Year Considerations1 • Expect 2022 diluted EPS guidance range of $4.00 to $4.15 2022E • Select considerations for Q4 2022 EPS compared to Q4 2021 EPS Diluted EPS – Ameren Missouri return to normal weather in 2022: ~+$0.02 $4.15 – Ameren Missouri higher ene
Slide 22: Financing and 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 first mortgage bonds due 2052 and External Debt Balances2 – Proceeds used to fund capital expenditures and repay ST debt; amount equal to net proceeds allocated to sustainable project
Slide 23: Interest Rates
Interest Rates Long-Term Debt Maturities Remaining Through 2026 Issuer 20221 20231 2024 2025 2026 $450 million 2.50% $350 million 3.65% Ameren Corp. senior unsecured notes senior unsecured notes $47 million 1.60% 1992 $350 million 3.50% Ameren Missouri Series bonds senior secured notes $100 million
Slide 24: Select 2023 Earnings Considerations Compared to 2022
Select 2023 Earnings Considerations Compared to 20221 ↑ New electric service rates effective late Feb. 2022: ~$0.01 ↑ New electric service rates expected to be effective by July 2023 Ameren ↑ Higher investments in infrastructure eligible for PISA Missouri ↓ Lower energy efficiency performance incent
Slide 25: 2022-2023 Winter Season and Natural Gas Prices
2022-2023 Winter Season and Natural Gas Prices Working to keep bills as low as possible Working to help customers manage bills • Energy efficiency programs available to customers in Missouri and Illinois • Low Income Home Energy Assistance Program (LIHEAP) grants and other energy assistance funds av
Slide 26: 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 wha
Slide 27: Missouri Electric Rate Review Filing
Missouri Electric Rate Review Filing • In Aug. 2022, filed $316 million annual revenue increase request with MoPSC – Annual revenue increase drivers Procedural Schedule • Increased investments made under the Smart Energy Plan, including increased cost of (Docket No.: ER-2022-0337) capital and deprec
Slide 28: Illinois Regulatory Matters
Illinois Regulatory Matters Electric Distribution • In Dec. 2022, ICC approved a $61 million base rate increase in electric formula rates effective Jan. 2023 – Represents a ~1.6% rate increase1 – Based on an imputed 50% equity ratio – Each year’s electric distribution earnings are a function of the
Slide 29: 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 30: Summary
Summary Expect to deliver strong earnings growth in 2022 with guidance in a range of $4.00 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 31: Appendix
APPENDIX
Slide 32: 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 33: Missouri IRP Preferred Plans
Missouri IRP Preferred Plans Key Actions 2020 IRP 2022 Change 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 h
Slide 34: CCNs filed with MoPSC in July 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 35: 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 36: 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 37: Working to Keep Missouri Customer Bills Low
Working to Keep Missouri Customer Bills Low • Ameren Missouri works to keep 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 t
Slide 38: 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 39: 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 July 2022, MISO issued final Attachment Y report – Designated both Ru
Slide 40: 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 41: Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics
Ameren Illinois Electric Distribution Multi-Year Rate Plan Performance Metrics Adjustments Metric Description (+/- bps) Improve System Average Interruption Duration Index (SAIDI) system wide; improve interruption and 1. Reliability duration outages (SAIDI, SAIFI, CEMI and CELID) in environmental jus
Slide 42: Solid ESG Ratings
Solid ESG Ratings A AAA 0 Dec. 2021 Oct. 2022 July 2022 A- Water 29.4 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 Evercore ISI Conference | January 12, 2023 42
Slide 43: 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 44: 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 45: Weather-Normalized Core Earnings per Share Reconciliations
Weather-Normalized Core 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 Le
Slide 46: Investor Relations Calendar
Investor Relations Calendar JANUARY 2023 FEBRUARY / EARLY MARCH 2023 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 Q4 Quiet Period cont’d 8 9 10 11 12 13 14 5 6 7 8 9 10 11 Evercore ISI Q4 Quiet Conf. Period 15 16 17 18 19 20 21 12 13 14 15 16 17 18
Slide 47: Select Regulatory and Legislative Matters
Select Regulatory and Legislative Matters Missouri Public Service Commission • Pending electric rate review filling: Docket No. ER-2022-0337 • Pending request for Certificate of Convenience and Necessity for Boomtown: Docket No. EA-2022-0245 • Smart Energy Plan filing: Docket No. EO-2019-0044 • 2020
Slide 48: 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 LRTP – Long Range Transmission Planning B – Billion LT – Long-term bps – Basis points M – Million BTA – Build-Transfer agreement MEEI