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.