Ameren Corporation · NYSE:AEE
Ameren — AGA Financial Forum 2020
37 slides from Ameren's conference presentation, May 15, 2020
Slide 1: Customers at the Center
Customers at the Center AGA Financial Forum May 18-19, 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: COVID-19 Update
COVID-19 Update Significant actions taken to address COVID-19 • Focused on safety of co-workers, customers and communities – Crisis management team activated in late January; pandemic response plan implemented • Established travel restrictions and transitioned large portion of workforce to work from
Slide 4: Company Description
Company Description Ameren Businesses Fully rate-regulated electric and natural gas utility Ameren Missouri 2.4M • Electric transmission, distribution, and generation business Corporate Headquarters electric customers and a natural gas distribution business in Missouri regulated Electric Service Ter
Slide 5: Our Value Proposition for Customers, Shareholders and Environment
Our Value Proposition for Customers, Shareholders and 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 $1.98 per share p
Slide 6: 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 13.19 12.85 723 10 700 200 10.08 10.01 690 675 150 663 157 5 650 651 100 625 628 50 0 60
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 Weather-Normalized Earnings per Diluted Share1 Dividend Payout Ratio +60% or $2.00 +20% 80% $3.50 2013 to 2019 ~8% CAGR $1.98 $3.50 75% 2013 to 2019 $1.92 $3.32 $3.10 $1.85 $3.05 70% $1.75 $1.78 $2.88 $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 10.38%1, 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-regul
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 2020-2024 Infrastructure Rate Base1,3 Base C
Slide 11: Expect to Deliver Strong Long-Term EPS Growth
Expect to Deliver Strong Long-Term EPS Growth1 • Affirm expected 2020 EPS in a range of $3.40 to $3.60 Long-Term EPS Growth and – Actions taken to mitigate expected financial impacts from COVID-19 2020E EPS Guidance • Affirm expected 6% to 8% EPS CAGR from 2020-2024 2024 – Using 2020 EPS guidance ra
Slide 12: Executing Our Strategy – Natural Gas Distribution System
Executing Our Strategy – Natural Gas Distribution System Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • One of the nation’s largest natural gas distribution utilities – More than 0.9 million customers; 0.8 million in Illinois and 0.1 million in
Slide 13: Executing Our Strategy – Renewable Energy Investments
Executing Our Strategy – Renewable Energy Investments Creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment • Build-transfer agreements in place for 700 MW of wind generation in Missouri, ~$1.2 billion investment, to comply with
Slide 14: Ameren Missouri Smart Energy Plan filed with MoPSC
Ameren Missouri Smart Energy Plan filed with MoPSC on Feb. 26 Investing in and operating our utilities in a manner consistent with existing regulatory frameworks • $1.0 billion invested in 2019 to improve reliability and provide clean energy to the customers and communities we serve – Significant in
Slide 15: 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 16: Executing Our Strategy – Regulatory and Legislative Initiatives
Executing Our Strategy – Regulatory and Legislative Initiatives Investing in and operating our utilities in a manner consistent with existing regulatory frameworks Missouri Electric Rate Review Update • In Mar. 2020, MoPSC approved $32 million annual revenue decrease; ~1% decrease in customer rates
Slide 17: Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d
Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d Investing in and operating our utilities in a manner consistent with existing regulatory frameworks Electric Distribution • In Apr. 2020, requested $45 million base rate decrease from ICC in annual formula update – Expect ICC de
Slide 18: Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d
Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d 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 uti
Slide 19: Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d
Executing Our Strategy – Regulatory and Legislative Initiatives, Cont’d Enhancing regulatory frameworks and advocating for responsible energy and economic policies • In Nov. 2019, FERC issued order related to first and second MISO complaint cases – Established new base ROE methodology and set new ba
Slide 20: 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 environment • Investing to modernize energy grid – Provide a more safe, reliable, resilient and secure energy grid – Enable two-way energ
Slide 21: Robust Investment Opportunities Across All Businesses Over Next Decade
Robust Investment Opportunities Across All Businesses Over Next Decade1 Modernizing grid and investing in cleaner generation for the long-term benefit of customers, shareholders and the environment Investment Plan 2020-2024 Investment Opportunities 2025-2029 $36B+ ($ billions) $20+ Strong Pipeline o
Slide 22: 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 23: ESG: Environmental Focus – Achieving Balance Responsibly
ESG: Environmental Focus – Achieving Balance Responsibly • Transitioning Ameren Missouri’s generation to a cleaner, more diverse portfolio in a responsible fashion – 2017 preferred plan1 includes addition of 700 MW of wind generation by Ameren’s Planned CO2 Emissions 2020 and 100 MW of solar generat
Slide 24: ESG: Social and Governance Focus – Culture of Sustainability
ESG: Social and Governance Focus – Culture of Sustainability • Diverse Board of Directors focused on strong accountability and governance Hyperlinked below – Board committed to maintaining a balance of perspectives, qualifications, qualities and skills • ~55% women or minorities • Average tenure of
Slide 25: Summary
Summary Expect to deliver strong earnings growth in 2020 with guidance in a range of $3.40 to $3.60 per diluted share1 • Actions taken to mitigate expected COVID-19 financial impacts Successfully executing our strategy; well positioned for future growth Strong long-term growth outlook • Affirm expec
Slide 26: Financial Update
Financial Update
Slide 27: 2020 First Quarter Earnings Analysis
2020 First Quarter Earnings Analysis Key Earnings Variance Drivers ↓ Ameren Missouri earnings — Lower electric retail sales: ~($0.05) Diluted EPS • Weather vs. prior year: ~$(0.06); vs. normal ~$(0.03) Q1 2019 vs. Q1 2020 — Absence of energy efficiency performance incentives: $(0.06) — Higher other
Slide 28: 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 • Pension and OPEB tracker in • No electric revenue decoupling • No tracker or rider electric business • Electric margins are ~50% res., ~40% com., • Ability
Slide 29: 2020 EPS Guidance and Select Balance of the Year Considerations
2020 EPS Guidance and Select Balance of the Year Considerations1 • Affirm 2020 diluted EPS guidance range of $3.40 to $3.60 – Expect lower Ameren Missouri sales due to COVID-19: ~$(0.10) Ameren Missouri Weather-Normalized Sales vs. Prior Year (Excluding impacts of MEEIA) 2020E Period Res. Com. Ind.
Slide 30: Financing and Liquidity Update
Ameren Credit Ratings Financing and Liquidity Update and External Debt Balances1 Debt Financing • On Mar. 20, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due 2030 As of Mar. 31, 2020 $ in millions Moody's S&P – Proceeds used to repay short-term debt, including short-term debt A
Slide 31: Long-Term Debt Maturities Outlook
Long-Term Debt Maturities Outlook • Ameren Missouri Senior Secured Notes – $47 million of 1.60% due Dec. 1, 2022 Long-term Debt Maturities Outlook – $350 million of 3.50% due Apr. 15, 2024 As of Mar. 31, 2020 ($ in millions) • Ameren Illinois Senior Secured Notes $900 – $400 million of 2.70% due Sep
Slide 32: Appendix
APPENDIX
Slide 33: 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 34: 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 35: Investor Relations Calendar
Investor Relations Calendar MAY 2020 JUNE 2020 SUN. MON. TUES. WED. THUR. FRI. SAT. SUN. MON. TUES. WED. THUR. FRI. SAT. 1 2 1 2 3 4 5 6 Q1 Quiet Period, Cont’d 3 4 5 6 7 8 9 7 8 9 10 11 12 13 Virtual Annual Shareholder Meeting 10 11 12 13 14 15 16 14 15 16 17 18 19 20 JP Q1 2020 Morgan Earnings Vir
Slide 36: Select Regulatory Matters
Select Regulatory Matters Missouri Public Service Commission • Order approving electric rate review settlement: Docket No. ER-2019-0335 • Smart Energy Plan filing: Docket No. EO-2019-0044 • Order approving request regarding Callaway Energy Center outage expenses: Docket No. EU-2020-0114 • Order appr
Slide 37: 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 ISRS – Infrastructure System Replacement Surcharge B – Billion M – Million bps – Basis points MEEIA – Missouri Energy Efficiency Inve