Greetings, and welcome to the Ameren Corporation's Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. Andrew Kirk, Director of Investor Relations. Thank you. You may begin.

Thank you, and good morning. On the call with me today are Warner Baxter, our Chairman, President and Chief Executive Officer; and Michael Moehn, our Executive Vice President and Chief Financial Officer as well as other members of the Ameren management team joining remotely. Warner and Michael will discuss our earnings results and guidance as well as provide a business update. Then we will open the call for questions. Before we begin, let me cover a few administrative details. This call contains time-sensitive data that's accurate only as of the date of today's live broadcast and redistribution of this broadcast is prohibited. To assist with our call this morning, we have posted a presentation on the amereninvestors.com homepage that will be referenced by our speakers. As noted on Page two of the presentation, comments made during this conference call may contain statements that are commonly referred to as forward-looking statements. Such statements include those about future expectations, beliefs, plans, strategies, objectives, events, conditions and financial performance. We caution you that various factors could cause actual results to differ materially from those anticipated. For additional information concerning these factors, please read the forward-looking statements section in the news release we issued yesterday and the forward-looking statements and Risk Factors section in our filings with the SEC. Lastly, all per-share earnings amounts discussed during today's presentation, including earnings guidance are presented on a diluted basis, unless otherwise noted. Now here's Warner.

Thanks Andrew. Good morning, everyone and thank you for joining us. Before I begin our discussion of year end results and other key business matters, I'll start with few comments on COVID-19 as well as the steps we've taken to deliver safe, reliable electric and natural gas service to our customers during the recent period of extremely cold weather in our region. To begin, help you, your families and colleagues are safe and healthy. While COVID-19 has driven a great deal of change, I can assure you that one thing that remains constant in Ameren is our strong commitment to the safety of our co-workers, customers and communities. So too is a strong focus on delivering safe, reliable, cleaner, and affordable electric and natural gas service during this unprecedented time. We recognize that millions of customers in Missouri and Illinois are dependent on us. I can't express enough appreciation to my co-workers who have shown great agility, innovation, determination and a keen focus on safety while delivering on our mission to power the quality of life. And while we're focused on addressing the challenges associated with the pandemic, and achieving our mission each day, we never lose sight of our vision, leading the way to a sustainable energy future. Despite the significant challenges presented by COVID-19, I look to the future with optimism. Not just because vaccines are now being distributed to millions around the world, but also because of how our co-workers stepped up and addressed a multitude of challenges and capitalize on opportunities in 2020 that will clearly help us achieve our vision. Speaking of stepping up to challenges to ensure that we continue to deliver on our mission and vision, our team has been tirelessly working over the last week to ensure that we continue to deliver…

Thanks, Warner and good morning, everyone. Turning now to page 20 of our presentation. Yesterday we reported 2020 earnings of $3.50 per share compared to earnings of $3.35 per share in 2019. Ameren Transmission earnings were up $0.13 per share, which reflected an increase in infrastructure investment and the impact of the first quarter on the MISO allowed base return equity. Earnings from Ameren Illinois Natural Gas were up $0.06 per share, which reflected increased infrastructure investments and lower other operations and main expenses due to discipline cost management. Earnings in Ameren Missouri, our largest segment increased $0.03 per share from $1.74 per share in 2019 to $1.77 per share in 2020. The comparison reflected new electric service rates effective April 1, which increase earnings by $0.23 per share compared to 2019. Earnings also benefited from lower operations and maintenance expenses, which increased earnings to $0.16 per share. This was due in part to the deferral of expenses related to the fall 2020 Callaway Energy Center scheduled refueling and maintenance outage compared to recognizing all the expenses for the spring 2019 outage at that time. The change in time and expense recognition was approved by the Missouri PSC in early 2020 and better aligns revenue with expenses. In addition, the decline in other O&M expenses were driven by discipline cost management exercised throughout the year. These favorable factors are mostly offset by lower electric retail sales driven by the impacts of COVID-19 and weather, which together reduce earnings by approximately $0.18 per share. In 2020, we experienced milder than normal summer and winter temperatures compared to near normal summer and winter temperatures in 2019. In addition, lower MEEIA performance incentives reduced earnings by $0.09 per share compared to 2019 and higher interest expense due to higher long term debt outstanding…

[Operator Instructions] Our first question comes from Julien Smith with Bank of America.

Good morning to you and congratulations. Quite well, thank you, little frigid here in Texas. I suppose if you can elaborate a little bit. I know you provided some comments in your remarks here on Callaway. Can you elaborate a little bit more about how you've been able to reduce your fuel and purchase power costs care through the period as well as elaborate a little bit more just exactly what's transpired and what repairs are alongside. It seems like you're going to seek the bulk of the recovery through insurance and warranties here but if you can elaborate there, too.

Yes, and thanks, Julien, lots of stuff to unpack there. I'm going to first ask Marty to talk a little bit about sort of what happened in the event and some of the actions that we're taking to make sure we get timely recovery. And then I'll talk a little bit about how we're balancing the fuel purchase power costs. So Marty why don't you to talk a little bit about the event in Callaway and how we're managing through that place.

Yes, sure. Warner and good morning, Julien. Yes, we talked about in our prepared remarks, during the return to full power after our last refueling and maintenance outage, we experienced an issue with the electric generator, so non nuclear part of the plant non nuclear operation issue. So, subsequently, we did open up generator for inspection and identified issues with both the router as well as the status. So we decided that significant components did need to be replaced, those are long lead time materials that need to be manufactured, installed, tested, et cetera. So that we can ultimately make sure that we bring the plant back safely and sustainably. And we do estimate that that'll take as we said, late June, early July. So during this period of time the plant does remain down, but as we suggested, we're going to be doing everything we can to reduce the ultimate costs, including pursuing recovery of costs through warranties as well as we've made insurance claims, and to have insurance both on the property side as well as for accidental outage impacts as it relates to last generation.

So I think that summarizes generally the event and what we're doing from a warranty and insurance perspective. I think, Julien, what we're doing from an operational perspective is what we do, when Callaway has this normal outages, we adjust the efforts and the outages or move those around for our coal fired energy centers. Now, I got to tell you, I'm pleased to say during this very cold period, our coal fired energy centers operated extremely well. And we do the same thing with the rest of our generating use, because all those go to mitigate the impact that Callaway is out. And so those are things that our team has already checked and adjusted for during this period of time. And we're very focused on just doing that the work that Marty described extremely well, getting Callaway back in service for the benefit of our customers.

Excellent. If I can sneak in this one on legislation. I mean, there's been some consternation out in the market about this 30 year Treasury gyration and some of the proposals out there. I know a lot of bills floating out there. There's been some pickup in attention on that nuance. How would you characterize that? It seems like perhaps part of the back and forth and negotiation in the early part of the session here?

Well, you're right. There are a lot of bills being discussed and actually filed in the state of Illinois. And I tell you, we're excited about the Downstate Clean Energy Affordability Act. And really the enhancements those were made through the act that we just filed last year, and do several things. One, Julien, it addresses the issue that you talked about, it really is no longer that Downstate Clean Energy Affordability Act that was filed isn't based on a 30 year Treasury, it is doing what legislators really wanted to have done back in 2012, when the modernization action plan was put in place. That was simply to try and have the return on equity really become very close to the national average. And that's exactly what's reflected in there. And so we -- that's why we like that, though, and of course, we'd like to build that was filed, because it not only applies to our electric business, but our gas business, because we're firmly convinced that performance based rate making has been terrific things for the state of Illinois in terms of reliability, in terms of affordability and jobs. And we think we can duplicate that in natural gas business. We think that's the best way forward. I'm sorry, Julian, you dropped out little bit there. I'm sorry.

I am sorry, the gap as well as electric seems like a priority.

Exactly, right. So look just to sum it up, there are a lot of bills out there. Obviously very early innings of the session. Yes, there's some that are trying to take different approaches to it. The only thing you can rest assured is that Richard Mark and his team, they're at the table. We're talking with key stakeholders and we are strongly supporting the Downstate Clean Energy Affordability Act.

Our next question comes from Insoo Kim with Goldman Sachs.

Good morning and thank you for the time. I guess my first question going back to the Callaway outages a little bit and your work to mitigate any cost increases from purchase power fuel is expectation currently that during this time period, whether it's with the Callaway now or in the next few months, with the outage ongoing, that the fact it will still happen through bills? Or is there contemplation that maybe there'll be some type of deployment payment setup?

Good morning, this is Michael. Yes, you see, you are right. I mean, we have a fuel adjustment clause in place Insoo that fully expect to those costs would flow through that there's a 95, five, sharing on that mechanism, as Marty said, I mean, there is this, look, do everything we can to possibly mitigate the overall impact on customers. And so there is insurance that both on the property side as well as the replacement power side not upon on whether or not we're going to get recovered there, but to the extent that we do, and obviously would go to mitigate a big part of that impact.

Got it. And then on your funding equity plans through 2025, correct me if I'm wrong, but I think the last time you were contemplating was the $150 million run rate for the year through 2024 and now it seems like a stepped up COVID turning 2022 is that contemplating just that base CapEx frankly 2025? Or somewhat inclusive of potential upside from renewable projects or other items.

No, you're looking at the right way. I mean it's up about $150 million per year, starting in 2022, from where we were before, and it really is driven by we got about $1.1 billion additional capital here. $16 billion where we were last February to where we are today at $17.1 billion. And it really is just to continue to conservatively finance this balance sheet. We like our ratings, where they are, being heavily wanted Moody's BBB plus at S&P, and maintain that capital structure right at about 45%. So that's really what it's being driven to do at the end of the day, Insoo.

Got it. And just if I make what range of [Indiscernible] debt, should we be considering with this plan?

Yes, we haven't specifically given that in the past, I mean, it Moody's, we have a threshold, a third target, S&P we have a threshold of 13%. We have 17% threshold at Moody's. I would tell you historically we've been 19% 20%. It's been coming down a little bit over time as we've invested more in capital, but we've had some good margins there.

Our next question comes from Durgesh Chopra with Evercore ISI.

Good morning, guys. Thanks for taking my question. Going back to just the ROE, can you -- see pretty clear on what you're zooming for 2021? But maybe just how you're thinking about 30 year in the context of your five year plan?

Yes, good. Appreciate the question. We historically, you're right. I mean, we're assuming 1.95 here for this year. And as you think, Durgesh, about our overall range the 6% to 8% off of this 375, it provides you a quite a bit of range, you go out in time, obviously about 40%, up $0.40 in total. And we really haven't historically said what we are assuming it. It obviously accommodates a number of things within that in terms of those ROEs, in terms of CapEx, in terms of regulatory outcomes, et cetera. But we haven't specifically said that we're targeting from a 30 year Treasury.

Got it. Is it -- can we assume that like with the most of the forecasts here that you're assuming that yields creep up higher? Is that a fair assumption? Or are you kind of modeling surely a flat and that would be upside?

It is a wide range and lots of different things can accommodate it in there. I mean, obviously, the 30 years moved quite a bit here in the last few months or so, but difficult to speculate exactly where it's going.

Understood. Okay. I understand that. Maybe just one quick one, the 1.2 gigawatt of the investment that you highlight in the Missouri IRB what's the cadence of timing and cadence of including that in the current five year plan? Or you think that falls out of the current five years and it's more like 2025 and beyond?

So yes, this is Warner. Look, we've said before, we're focused on getting some of these renewable energy projects done consistent with our integrated resource plan. And so Marty and his team are working very hard, looking at several proposals, and as we said in our prepared remarks, that we plan on filing some CCN, still in 2021, to start addressing that. And so we don't have a specific number in terms of what we'll pursue. But we're looking to execute that plan. Simply put once we, when we do that we get further along the regulatory process, we finish our negotiations with developers, we think about the interconnection agreements to the extent needed. All those things will really dictate when we ultimately put them in our CapEx plan. But I would not suggest that 1,200 megawatts are outside of that -- all of that will be outside of the 2025.

Our next question comes from Steve Fleishman with Wolfe Research

Hey, great, thanks. Hey, Warner. So just a question on the dividend increase you did, which obviously, very happy about but you did, do it kind of off cycle. So you kind of did it in increase higher increase and you've been doing five months after you did your last one. So kind of curious, like, why didn't you do that in October? Or why don't you wait till next October? Is there any other kind of sense on what like, why now? And is this kind of the timing when you're going to do dividend increases going forward?

Yes. That's a great question. Look, we've discussed with you and investors in the past look, Ameren's dividend, and this dividend policy are really important matters to our Board of Directors. And so clearly the Board took careful consideration in terms of thinking first and foremost about the dividend policy. And as you know, we announced that dividend policy change that talked about the future dividend growth is really going to be in line with our long term earnings per share growth and within our payout ratio of 55% to 70%, which is what we talked about in the past. And so when they did that, we all collectively did that we also carefully considered the practice that we've been using over the last several years of raising the dividend in the fall or in October. And at the end of the day, the Board of Directors came to conclusion that it was really just appropriate to align the dividend increase we announced last week with the simultaneous updating of the dividend policy, which I just described. And then also to align it with our discussion about long term earnings guidance, which as you know we typically do right now at the beginning of the year. And so I can never tell you exactly what the Board would do in the future. And I would expect the practice that we employ this year to continue in the future. So of course all future dividend decisions, as we've said before, are driven by all kinds of things earnings, growth, cash flow, investments, business conditions, those types of things, but I expect to practice that we've employed this year to be consistent in the future.

Our next question comes from Paul Patterson with Glenrock Associates.

Great. So a really -- with easy with respect to the legislation and just sort of follow up on Julien's question. It seems like the sort of your -- you've got a downstate approach. And as you know there and as you mentioned, the other bills and stuff going on. I'm just wondering, sort of the strategy there and the thoughts about having sort of a one approach for downstate versus upstate. And could just elaborate a little bit one strategy there and just sort of a general what your thoughts are about what might be going on?

Sure. Look, really our message around this Paul hasn't really changed. We talked last year and we'll continue to talk about that. As we see it as our legislators see it the downstate needs are different. And keep in mind when we think about downstate, I mean we are the major energy supplier downstate not just on the electric side, but on the gas side as well. So that downstate legislators looked at it and they clearly recognize there's some broad policy issues in the state of Illinois clearly in the northern portion. The state of around the nuclear plants, these are important issues and so we get that. And of course, we're engaged in those conversations, because we want to make sure that policy decisions made for the nuclear plants and others don't have negative implications for our customers' downstate. So we're engaged there. But similarly, we know the importance of investing in energy infrastructure on the electric and gas businesses, and we don't want to lose sight of that. And so we have proposed legislation, like we did last year that really is affecting the downstate, which is very consistent with what the state of Illinois wants to move towards a cleaner energy future. In this Downstate Affordability Act isn't just about grid modernization, let's just be clear, it is in part, and certainly around the gas business, that also is driving towards greater electrification, greater solar and battery storage, and its own standard policies that support these critical investments. So, now look if at the end of the day, we are -- we believe this is an appropriate approach. Of course, we're still early in the session, as Julien and I discussed a little while ago, and so we will engage with key stakeholders, other utilities on this important management. This is the direction that we think is appropriate, and certainly the sponsors of the legislation do as well.

Okay, great. And then appreciate the data on the cost reductions and build data. But just in general, as you've updated your forecast everything here. What's your expectation for the potential bill impact or just roughly speaking, with this growth trajectory that you guys have?

Yes, I might comment just specifically for on O&M, and I'm not going to really comment on the overall bill impact itself. I think we've done a very good job, obviously, over time and managing that in terms of impact the customer, but if you think about the O&M piece of that as Warner pointed out, we've had some good success in managing those costs really on a flat basis over the last five years. And as we think about the future, we're obviously mindful of the capital that we're investing, and we're really focused on keeping that on O&M flattish over this five year forecasts as well.

Our last question comes from the line of Jeremy Tonet with JPMorgan.

Good morning. Thanks for taking the questions, looking at your prior rate based disclosures in today's update; the growth into 2025 is closer to 9%. If I'm doing the math there, right. Can you speak of the CapEx status here that is the typical industry profile that is more end loaded on the CapEx and the other thoughts on -- [Tech Difficulty] back and forth on ultimate pay Jeremy, I'm sorry, you are you are breaking up. It was hard to hear the first par

Hey, Jeremy, I am sorry. You are breaking it up. It is hard to hear the first part of your question. So and then our rate base growth. Look, if you could start again, I apologize. It just wasn't coming across clearly, please.

Sure. Can you hear me now? Is this better?

Yes, it's much better. Thank you.

Sorry about that. So looking at your prior rate based disclosures in today's update, it looks like growth into 2025 is closer to 9%. Can you speak to the CapEx reference here versus typical industry profile, which is more kind of front end loaded on the CapEx? And then just also kind of thinking about Missouri renewables ownership and transmission investments as well. Do you see this is additive to this growth, extending the growth one way or for having any other impacts here?

Yes. So let me -- I'll answer the second part. And then Michael, maybe you can get a little bit into to the math in the first part. Couple of things; with regard to the renewables and the transmission, we do see these as meaningful opportunities to continue a rate base growth. Now, as we've said in the past, we're not out here, given our five year plan and whether it will be 100% additive in all respects. And that be premature for me to say that, but to be clear we see the real needs clearly in our integrated resource plan for renewables. And we are taking steps as we discussed earlier to begin executing that plan. In fact, we have already started that, as you know with regard to the 700 megawatts, but we believe it's absolutely a prudent and appropriate to do more as we transition to a cleaner energy future. That clean energy future really is not going to be coming forth if we don't have greater levels of investment in transmission. And so as we pointed out in our slides and before that these large regional transmission projects, which have really put our country in the position where it is today in terms of growth and renewables, we're going to need to do more of that. And so we see those as greater opportunities when they come in is a little early to say we had been actively working with MISO and other key stakeholders to try and put the process in place for those transmission investments to get going on those. As I've said before, those take time, and not going to be done here in a year or two, if anything, we might see some towards the back end of our 2021 to 2025 plan. But we certainly see greater levels of investment in transmission in the next decade to enable where this transition to a clean energy future. So stay tuned in terms of how it ultimately gets additive. But we see that as clearly potential upside opportunities. And, Michael, I'll let you address for specific rate base question.

Yes, Jeremy. And I'm not sure I completely followed your question. But let me try again, I can, you can do a little follow up, if it doesn't hit what you're looking for. I mean the overall rate base growth obviously has come down a little bit from where we were in February; it's just a function of obviously a higher jump off point here and in 2020, but still very robust rate base growth of 8% as noted on the slide. As we think about beyond 2025, and obviously, there's a large pipeline of opportunity there 40 plus billion dollars that we've indicated. And look, we'll have to just continue to assess over time, how we continue to phase this into the capital plan, we're mindful to the previous question about customer affordability, and just managing overall rate impact. So that's got to be factored into all this just overall financing those types of things. So I think there's lots of opportunity there in terms of the overall runway, and we'll just continue to update as we move through time.

Got it, that's helpful. Maybe just to clarify, if I look at kind of the platform like some score was 25 yesterday at the rate base, I think it looks like a 9% step up there. And so we could take that discussion offline. Maybe it just kind of building off the some of the other comments you've had here given this week's extreme weather, how is your system performed overall, I guess, in light of everything, but more importantly do you expect any local policy impacts as a result of this week? Whether it's capacity, resiliency, generation transition, or anything from these events?

Yes, so Jeremy, this is Warner again. Look, couple of things. One, our system perform really quite well. Do we have our share of challenges because of the overall impact to the energy grid broadly in different areas of the country? Yes, we're impacted by that because of the interconnectivity, but our system performed well, and as I said before, certainly the fact that we had our coal fired energy centers running well, our gas storage operations doing very well. And those investments that we've been making over the last 5-10 years, it really paid off during this period of time. So no, we as I said, we did not have any significant reliability issues. And we're pleased to say that. Now, when you step back and say what is going to happen as a result of all this, I believe there will be greater levels of oversight or perhaps hearings. And as we all collectively try to understand how we can continue to improve the grid. I'm not going to speculate where it'll be it, whether there'll be, I think, likely state or federal matters but we're just -- we've been very focused on, as an industry is making sure that we're taking care of our customers collectively. But there's going to be more to be head on this to be sure. And we look forward to engaging with stakeholders should we be asked to, but I can be pleased to tell you and others, that's just a held up well, and we delivered customers safe, reliable electric and natural gas during this period of time.

Got it. That's very helpful. Just one last one if I could on Callaway here in outage. And just want to come back to how much ultimate cost recovery do you expect to seek from warranties and insurance. And insurance are there any early investigations findings that inform your kind of confidence here on the ultimate liability and [Indiscernible]?

And Jeremy, honestly we're, it'd be premature for us to comment on that. We're dealing with the appropriate parties from a warranty perspective, from an insurance perspective, that work continues so if we -- when we have material updates on that we will provide it. But it's just too early for us to really comment any further at this stage.

We have reached the end of the question-and-answer session. I'd like to turn the call back over to Andrew Kirk for closing comment.

Thank you for participating in this call. A replay of this call will be available for one year on our website. If you have questions, you may call the contacts listed on our earnings release. Financial Analysts inquiries should be directed to me, Andrew Kirk, media should call Tony Paraino. Again, thank you for your interest in Ameren and have a great day.

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.