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HomeMy Public PortalAboutExhibit MIEC 105F - Ameren First Quarter 2015 EarningsFirst Quarter 2015 Results 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 statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Ameren is providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. In addition to factors discussed in this presentation, Ameren's Annual Report on Form 10-K for the year ended December 31, 2014, and its other reports filed with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934 contain a list of factors and a discussion of risks which could cause actual results to differ materially from management expectations suggested in such "forward -looking" statements. All "forward -looking" statements included in this presentation are based upon information presently available, and Ameren, except to the extent required by the federal securities laws, undertakes no obligation to update or revise publicly any "forward -looking" statements to reflect new information or current events. Earnings Guidance In this presentation, Ameren has presented earnings guidance. The guidance assumes normal temperatures for the last nine months of 2015 and is subject to the effects of among other things, changes in 30-year U.S. Treasury bond yields; regulatory decisions and legislative actions; energy center and energy delivery operations; energy, economic, capital and credit market conditions; severe storms; unusual or otherwise unexpected gains or losses; and other risks and uncertainties outlined, or referred to, in the Forward - looking Statements section of this presentation and in Ameren's periodic reports filed with the Securities and Exchange Commission. 2 -Woo uaaewy aamu) an+lnOax3 JO!q3 pue Tuap!said `ueuaa!ey3 Jaycee Jew eM e epdn ssaulsn9 Earnings Summary Q1 2014 vs. Q1 2015 EPS1 $0.40 2014 4 $0.45 L, 2015 First Quarter 2015 Results Select Earnings Variance Drivers: Increased electric transmission and delivery infrastructure investments by ATXI2 and Ameren Illinois under formula ratemaking T Reduced parent company interest charges + Lower recognized allowed ROEs3 for ATXI and Ameren Illinois electric transmission and delivery 40 Lower electric and natural gas sales volumes due primarily to milder winter temperatures and energy efficiency Affirm 2015 Diluted EPS Guidance Range of $2.45 to $2.65 1 Earnings per share. 2 Ameren Transmission Company of Illinois. 3 Return on equity. Awn FOCUSED ENERGY First Quarter 2015 Results Business Update 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 policies • Creating and capitalizing on opportunities for investment for the benefit of our customers and shareholders Executing our plan • Strategically allocating capital to businesses with regulatory frameworks that provide fair, predictable and timely cost recovery, as well as long-term benefits to customers — Particularly FERC1-regulated electric transmission projects and Ameren Illinois electric and natural gas delivery infrastructure ▪ Advocating for responsible energy policies, including extending electric delivery formula rates through 2019 in Illinois Relentlessly improving operating performance, including disciplined cost W`� management and aligning spending with regulatory frameworks and outcomes Ameren FOCUSED ENERGY tier bite, 5J` 1 Federal Energy Regulatory Commission. Business Update, Cont'd Legislative and Regulatory Update • MoPSC1 approved $122 million annual electric rate increase on April 29, 2015 Allows for recovery of infrastructure investments made over the past couple of years and increased net fuel costs; however, other aspects of order are disappointing We will seek to align Ameren Missouri's overall spending to this outcome and request rehearing of certain issues Missouri General Assembly not expected to advance legislation in 2015 that would modernize regulatory framework; will continue advocacy efforts — Earnings growth plans not contingent on passage of legislation • Working with other MISO2 transmission owners to obtain constructive outcome in the pending base ROE cases at FERC 6 1 Missouri Public Service Commission. 2 Midcontinent Independent System Operator. First Quarter 2015 Results r` 1e.. gmeren FOCUSED ENERGY r 'tile. First Quarter 2015 Results Strategic investment consistent with regulatory frameworks1 2014 $11.5 Billion2 Tra ns3 $0.9e 8% Ameren Missouri $ 7.2B 53°4 7 Ameren Illinois Gas 51.4E 90 Ameren Illinois Electric Delivery $2.3B 20% Planned Rate Base Growth -6% Compound Annual Growth Rate 2014-2019 2019E $15.5 Billion2 Transmission3 $ 3.0B 19% Ameren Missouri $B.OB 52% Ameren Illinois Gas $1.5B 10° Ameren Illinois Electric Delivery $3.0B 19% 1 Issued and effective as of Feb. 25, 2015 Earnings Conference Call. 2 Year-end rate base except for FERC-regulated transmission, which is average rate base. Includes construction work in progress for multi -value projects. Average rate base for Ameren Illinois and ATXI was $0.7 billion and $0.2 billion for 2014, respectively, and is estimated to be $1.5 billion and $1.5 billion for 2019, respectively. 3 Transmission for Ameren Illinois and ATXI. Excludes Ameren Missouri transmission, which is in bundled Missouri rates. Compound annual growth rate. CAGRs for Ameren Illinois and ATXI are 16% and 50%, respectively. 5-Yr Rate Base CAGR4 6% 6%' 5% 2% '14-'19E wAmeren r FOCUSED ENERGY tor are. Earnings Analysis Q1 2014 vs. Q1 2015 EPS $0.45 $0.40 2014 2015 9 First Quarter 2015 Results Key Earnings Variance Drivers: 4 Increased electric transmission and delivery infrastructure investments by ATXI and Ameren Illinois: +$0.05 4 Lower operations and maintenance expensed: +$0.05 ![+ ICC2 order approving recovery of Ameren Illinois' power usage costs: +50.04 4 Reduced parent company interest charges: +$0.03 4# Lower electric and natural gas sales volumes: $(0.05) Milder winter temperatures:—$(0.03) vs. Q1 2014 and —+$0.05 vs. normal Energy efficiency and other: $(0.02) 4 Lower recognized allowed ROEs for electric transmission and delivery at ATXI and Ameren Illinois: $(0.02) 4 Increased depreciation and amortization expensed: $(0.02) 4 Increased Ameren Missouri financing costs: $(0.02) Excludes amounts incorporated into Illinois electric delivery and FERC-regulated electric transmission formula ratemaking. 2 Illinois Commerce Commission. 4,rI wAme ni rr FOCUSED ENERGY `m46. First Quarter 2015 Results Earnings Guidance 2015E Diluted EPS Select 2015 balance of year EPS considerations: $2.65 $2.45 • Return to normal temperatures 4+ Q2 2015—($0.04); Q3 2015—+0.09; Q4 2015—($0.01) • Q2-Q4 2015 compared with Q2-Q4 2014: T Increased earnings under formula ratemaking from electric transmission and delivery infrastructure investments by ATXI and Ameren Illinois — Reduced by lower recognized allowed ROEs 4 Reduced Ameren Missouri capitalized financing costs T Lower effective income tax rate; forecast 2015 rate of —38% Absence of Q4 2014 Callaway nuclear refueling outage:—+$0.08 40 Absence of Q4 2014 debt redemption cost regulatory decision at Ameren Illinois: $(0.03) Affirm 2015 Diluted EPS Guidance Range of $2.45 to $2.65 10 "Aen FOCUSED ENERGY. ral& Missouri Electric Rate Case Order 11 First Quarter 2015 Results • On April 29, 2015, MoPSC approved a $122 million annual rate increase effective May 30, 2015 — Net energy costs': $109 million; Other non -energy costs: $13 million — Rate base: $7.0 billion; Allowed ROE: 9.53%; Equity ratio: 51.8% • Continuation of fuel adjustment clause (FAC) — Continued 95%/5% sharing of variances from net base energy costs — Eliminated recovery of changes in transmission revenues and expenses through the FAC • Continuation of pension and OPEB2 cost tracking mechanism Discontinuation of tracking mechanisms for vegetation management and infrastructure inspection costs and storm costs — Can request MoPSC approval to defer extraordinary storm costs for potential recovery in future rate case • MoPSC provided Noranda Aluminum rate relief that is revenue neutral to Ameren Missouri 1 Net energy costs include fuel and purchased power costs, net of off -system sales, including transportation. 2 Other postretirement benefits. wAmerenr_ FOCUSED ENERGY grille. Missouri Electric Rate Case Order, Cont. 12 First Quarter 2015 Results Key drivers of $13 million rate increase for other non -energy costs: - Increased depreciation and amortization expenses: +$82 million • +$30 million of new solar rebate amortization expense effective May 30 • —+$16 million of increased expense due to new depreciation rates (primarily for Meramec Energy Center) effective May 30 • —$(11) million of decreased other amortization expenses effective May 30 - Decreased sales volumes: -+$30 million - Increased tax (other and income) expenses: +$27 million - Decreased non -tracked operations and maintenance expenses: $(88) million - Decreased tracked pension and OPEB expenses effective May 30: $(19) million - Reduction in allowed ROE to 9.53% from 9.8% net of increased rate base: $(10) million or, WAmeren FOCUSED ENERGY r1 . First Quarter 2015 Results Select Pending Regulatory Matters Illinois Commerce Federal Energy Regulatory Commission Commission • Filed in April 2015 for required annual electric delivery service formula rate update — Requested $110 million net annual revenue requirement increase — Expect decision by Dec. 2015, with new rates effective in Jan. 2016 — Each year's electric delivery service earnings are a function of the rate formula and not directly determined by that year's rate update filing • Filed in Jan. 2015 for a $53 million annual natural gas delivery rate increase — Based on future test year ended Dec. 31, 2016 — Includes decoupling mechanism for residential and small non-residential customers — Expect decision by Dec. 2015, with new rates effective by Jan. 2016 13 1 Regional Transmission Organization. 2Administrative Law Judge. Complaint cases seek to reduce Ameren Illinois' and ATXI's transmission service allowed base ROE of 12.38% retroactive to Nov. 2013 filing date — FERC approved ROE adder of up to 50 basis points for RTO1 participation effective Jan. 6, 2015 • Collection deferred until FERC issues final order in initial complaint case • Subject to "zone of reasonableness" Current schedule for initial case • Hearings begin Aug. 17, 2015 • Initial ALJ2 order by Nov. 30, 2015 • Final FERC order expected in 2016 wAmeren FDCUSED ENERGY Summary 0 Solid Q 12015 earnings • Affirm 2015 diluted EPS guidance range of $2.45 to $2.65 Successfully executing our strategy O Strong long-term growth outlook • Continue to expect 6% compound annual rate base growth from 2014 through 2019 - Capitalizing on strong long-term investment opportunities to benefit customers - Strategically allocating capital to modern, constructive regulatory frameworks O Attractive dividend • Current dividend of $1.641 per share provides 4.1%2 yield • Above average yield compared with regulated utility peers 14 1 Annualized equivalent rate. 2 Based on May 6, 2015 closing share price. First Quarter 2015 Results Ain FOCUSED ENERGY, C. valid la - r" First Quarter 2015 Results Pending Illinois Electric Delivery Formula Rate Update • Filed required annual electric delivery update with ICC on April 24, 2015 - ICC decision required by Dec. 2015 with new rates effective Jan. 2016 Filed for $110 million net annual revenue requirement increase consisting of: — $67 million increase reflecting 2014 recoverable costs and expected 2015 net plant additions per rate formula • Increased rate base: +$26 million Increased distribution operations and maintenance expenses: +$25 million Increased depreciation and amortization expenses: +$14 million Other: +$2 million - $112 million increase, including interest, related to 2014 revenue requirement reconciliation • Reflected in 2014 financial results and to be recovered from customers in 2016 — $69 million decrease related to 2013 revenue requirement reconciliation Reflected in 2013 financial results and is being recovered from customers in 2015 Each year's electric delivery service earnings are a function of the rate formula and not directly determined by that year's rate update filing 16- o 1, Aen FOCUSED ENERQX >vtig. Pending Illinois Natural Gas Delivery Rate Case • On Jan. 23, 2015, filed with ICC for $53 million annual natural gas delivery rate increase based on: - ROE: 10.25% (mid -point of 10%-10.5% request) Equity ratio: 50% Rate base: $1.19 billion Future test year ended Dec. 31, 2016 — ICC decision required by Dec. 2015 with new rates effective Jan. 2016 • Drivers of rate increase request: — Infrastructure investments, including depreciation and returns: +$35 million - Gas storage, transmission, distribution and other operating expenses: +$25 million — Cost of debt and capital structure: $(5) million Other: $(2) million • Requested decoupling mechanism — Permits collection of revenue requirement from residential and small non- residential customers independent of sales volume fluctuations 17 First Quarter 2015 Results RATE CASE SCHEDULE: Jun. 9, 2015 ICC staff and intervenor direct testimony due Aug. 24-27, 2015 Evidentiary hearings Nov. 3, 2015 (tentative) ALJ proposed order Dec. 19, 2015 Deadline for ICC final order Jan. 2016 New rates effective wAmeren FOCUSED ENERGY l " 1416. First Quarter 2015 Results Select Regulatory Matters Illinois Commerce Commission • Request for CPCN1 for ATXI's Spoon River transmission project: Docket No. 14-0514 • Pending natural gas delivery rate case: Docket No. 15-0142 • Pending electric delivery rate case: Docket No. 15-0305 • Website: http://www.icc.illinois.gov Missouri Public Service Commission • Recently decided electric rate case: Docket No. ER-2014-0258 • 2016-2018 Energy Efficiency Plan: Docket No. EO-2015-0055 • Request for CPCN for 7-mile Missouri portion of ATXI's Illinois Rivers transmission project: Docket No. EA-2015-0145 • Website: https://www.efis.psc.mo.gov/mpsc/DocketSheet.html Federal Energy Regulatory Commission • Complaints challenging MISO base ROE: Docket Nos. EL14-12-002 and EL15-45 • Ameren Illinois electric transmission case related to acquisition premiums: Docket No. AC11-46 • Website: http://elibrary.ferc.gov/idmws/search/fercadvsearch.asp Other Filings • ATXI 2015 Projected Attachment 0: http://www.oasis.oati.com/AMRN/ • Ameren Illinois 2015 Projected Attachment 0: http://www.oasis.oati.com/AMRN/ 18 1 Certificate of Public Convenience and Necessity. r11� "Ameren FOCUSED ENERGY 6,r L�4. Investor Relations Calendar 19 MAY 2015 -A. 'WED. THUR. FRI. 41 Quiet Period, eoni'd SAT. 3 4 5 • 01 Earnings Release 14 10 11 12 13 15 16 1,_ ial West Coast Meetings 26 West Coast Meetings 27 West Coast Meetings 28 22 23 24/31 25 29 30 • May 7 Q1 2015 earnings release and call • May 18 American Gas Association (AGA) Financial Forum • May 19-21 West Coast Investor Meetings First Quarter 2015 Results 4,1 wAmeren FOCUSED ENERGY g"e.