Greetings, and welcome to Ameren Corporation's Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you. Mr. Kirk, you may begin.

Thank you, and good morning. On the call with me today are Warner Baxter, our Executive Chairman; Marty Lyons, our President, 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 us remotely. Warner will begin with a business overview. He will be followed by Marty, who will provide a strategic and business update for 2022 and beyond. And Michael will wrap up our prepared remarks with a discussion of key financial matters, including our earnings guidance. 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 is 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 2 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, projections, strategies, targets, estimates, 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 sections 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, who will start on Page 4.

Thanks, Andrew. Good morning, everyone, and thank you for joining us. To begin, I'd like to remind everyone that effective January 1 of this year, I became Executive Chairman of Ameren, Marty Lyons became President and CEO. Our transition to this new forward-thinking leadership structure is going very well. In light of the significant activities taking place in our industry, this new structure is enabling me to focus on key energy and economic policy matters and working with Marty on key strategic initiatives. At the same time, Marty has hit the ground running, leading the Ameren team in overall strategy development and execution, as well as managing the significant day-to-day operational and other responsibilities of the CEO. Our industry is transforming and millions of customers in Missouri and Illinois are depending on us to achieve our vision, leading the way to a sustainable energy future and our mission to power the quality of life. Each year provides a new set of opportunities and challenges, but one thing that remains constant in Ameren is our strong commitment to safely deliver reliable, cleaner and affordable electric and natural gas service. Our team continues to effectively execute our strategic plan across all of our businesses. including safely and successfully completing billions of dollars of value-adding projects for our customers; advocating for constructive federal and state energy policies and regulatory outcomes; leaning further forward on our digital transformation; and pursuing a wide range of sustainability goals. Simply put, continued strong execution of our strategic plan is delivering significant value to our customers, communities, shareholders and the environment, which brings me to a discussion of our 2021 performance. Yesterday, we announced 2021 earnings of $3.84 per share compared to earnings of $3.50 per share in 2020 or an increase of nearly 10%. Excluding the impact…

Thanks, Warner. Before I jump into the details, I would like to extend my appreciation to all of my coworkers for their dedication in 2021. Our accomplishments during the year are a result of their hard work and focus on executing our strategy, which has been delivering significant long-term value for all of our stakeholders. Going forward, our strategy remains the same, which is to invest in and operate our utilities in a manner consistent with existing regulatory frameworks, enhance regulatory frameworks, advocate for responsible energy and economic policies, and create and capitalize on opportunities for investment for the benefit of our customers, shareholders and the environment. As Chief Executive Officer, my focus is to drive continuous improvement as we execute our strategy and take Ameren to higher heights. Moving now to Page 9. Yesterday afternoon, we announced that we expect our 2022 earnings to be in a range of $3.95 to $4.15 per share. Based on the midpoint of the range, this represents 8% earnings per share growth compared to the midpoint of our initial 2021 guidance range. Michael will provide you with more details on our 2022 guidance a bit later. Building on the strong execution of our strategy and our robust earnings growth over the past several years, we continue to expect to deliver long-term earnings growth that is among the best in the industry. We expect to deliver 6% to 8% compound annual earnings per share growth from 2022 through 2026 using the midpoint of our 2022 guidance, $4.05 per share as the base. Our long-term earnings growth will be driven by continued execution of our strategy, including investing in infrastructure for the benefit of our customers while keeping rates affordable. Our dividend is another important element of our strong total shareholder return. I am pleased…

Thanks, Marty, and good morning, everyone. Turning now to Page 21 of our presentation. Yesterday, we reported 2021 earnings of $3.84 per share compared to earnings of $3.50 per share in 2020, an increase of 9.7%. Earnings in Ameren Missouri, our largest segment, increased $0.25 per share from $1.77 per share in 2020 to $2.02 per share in 2021. Increased investments in infrastructure and wind generation, eligible for plant and service accounting and the Renewable Energy Standard Rate Adjustment Mechanism, or RESRAM, positively impacted earnings by $0.21 per share. Higher electric retail sales also increased earnings by approximately $0.16 per share, largely due to continued economic recovery in 2021 compared to unfavorable impacts of COVID-19 in the year ago period. We've included on this page the year-over-year weather-normalized sales variances. Total weather-normalized sales in 2021 were largely consistent with our expectations outlined on our call last February. New electric service rates effective April 1, 2020, also increased earnings during 2021 by approximately $0.10 per share compared to the year ago period. Finally, these favorable factors were partially offset by higher operations and maintenance expenses, which decreased earnings $0.12 per share, primarily due to the amortization of deferred expenses related to the fall 2020 Callaway Energy Center scheduled refueling and maintenance outage. Moving to Ameren Illinois Electric Distribution, earnings increased $0.06 per share, which reflected increased infrastructure and energy efficiency investments and a higher allowed return on equity under performance-based ratemaking. The formula base return on equity was 7.85% in 2021 compared to 7.4% in 2020 as it was applied to -- and was applied to a year-end rate base. The 2021 ROE was based on the 2021 average 30-year treasury yield of 2.05%, up from the 2020 average of approximately 1.6%. Ameren Transmission earnings were up $0.02 per share, which…

[Operator Instructions]. Our first question comes from Shar Pourreza with Guggenheim Partners.

Just a couple of quick questions here. First, just on supply chain. Are you seeing any impacts on the renewable side, especially as we think about the 2.4 gigs? I mean we've seen a few of your peers shift megawatts out either from panel shortages or other sort of supply chain disruptions. Any thoughts here? Any materials locked in or procured? And if this isn't transitory, since you guys are essentially swapping megawatts for megawatts as we think about renewables versus coal, could any project delays cause an impact to sort of the coal retirement time lines, especially as we're thinking about Sioux?

Shar, yes, this is Marty. Let me take that one on supply chain as it relates renewables and then perhaps Michael can comment on supply chain or issues more broadly. First of all, I'd say that as we went through last year, we had hoped by the end of the year to have announced some renewable projects. As you saw, we just announced one this week, which we're excited about. I would say it's a start in terms of the renewal projects that we hope to get announced and delivered in the '24 to 2026 time frame. But to your point, some of the negotiations last fall and into the winter were, I would just say, slowed by supply chain issues, tariff issues, some of the inflationary pressure seen in the renewable space, which simply meant that it was taking a little longer to work through some of the contractual negotiations. But we're able to get that first project announced. We are still expecting this year to announce other projects. And we'll see whether these things are transitory or not. But again, some of the bigger bulk of the projects we're trying to get done are out there in that '24 to 2026 time frame. So certainly, time for some of those issues to settle down. Ultimately, whether that has any impact on longer term, our scheduled coal retirement at Sioux will remain to be seen. As you know, especially in light of the accelerated closure of Rush Island, we plan to update our Integrated Resource Plan in the first half of this year. And so as we do that, we'll be taking into consideration some of the observations -- more recent observations we have on the renewable market, the timing of expected projects there as well as just the other -- the broader dynamics associated with reliability of our system long term and providing updates in there. So it would really be premature to say whether there's any impact on the retirement date of Sioux. But again, we're continuing to work with developers on these renewable projects and do expect to have further announcements this year. As I did indicate in the prepared remarks, to the extent that we have additional projects to be approved by the commission, we anticipate filing those CCNs after we file the update to the Integrated Resource Plan because that Integrated Resource Plan provides a good backdrop for the commission to consider the approval of those CCNs. Michael, any other comments broadly on supply chain?

Marty, no, that was pretty comprehensive. Nothing material to add to that answer. Shar, do you have something else?

Yes, terrific. And then just one last one. I know this is maybe a little bit of a perennial topic at this point, but any thoughts on sort of the potential end of QIP in Illinois? I mean it seems like efforts to eliminate it are getting a little bit noisy again, but it's also scheduled to expire in '23. Could we see it extended? Would it change one way or another have any impact on your updated plan to invest about $1.8 billion between now and '26?

Yes, Shar. A terrific question. You know that the QIP in the gas business in Illinois has been really, I think, a terrific rider for the benefit of customers. It's really allowed us to do a lot of projects in Illinois, as much as 50% of our capital expenditures, replacing underground pipes, et cetera, to improve the safety and reliability of our gas system. So it's been a good rider. Certainly can't predict whether any legislative effort to end it prematurely will be successful or not. As you said, it's already scheduled to expire at the end of 2023. So look, it's been a good rider. We'd love to see it extended. We'd love to see perhaps some other mechanism go in its place that would be similarly beneficial. But ultimately, we do have in the gas business in Illinois, a favorable foundation for ratemaking, which is a forward test year with other good features like decoupling. So look, as we move forward, we'll continue to see whether there's either an extension of that QIP or perhaps something else that goes in its place. But ultimately, we can reassess both, not only the projects that we've got but also the timing of rate reviews and the like. At the end of the day, we feel like the projects that we're doing there, the projects we have planned there are great for our customers, great for the communities, and we'll look for a path forward to making those investments.

Our next question comes from the line of Durgesh Chopra with Evercore.

On the 6% to 8% growth rate target, I mean, obviously, it looks like there's a ton of upside CapEx potential, whether it's the Rush Island-related CapEx, the MISO transmission CapEx, there may be an ROE bump in future years from the SB2408 in Illinois. What are you assuming in that 6% to 8% growth rate target in terms of these upside opportunities?

Well, again, I think that you've summarized it well. At the end of the day, we've got $17.3 billion of planned capital expenditures over 4 quality jurisdictions. We expect that to drive 7% compound annual rate base growth. And really, that is the foundational driver of our 6% to 8% planned EPS CAGR over this period of time. But you also pointed out some additional opportunities we have, and those are specifically in the areas of renewable generation as well as some of these regionally beneficial transmission projects. And those represent potential additions to the capital expenditure plans and the rate base growth. So those are -- the things that you highlight are the things that give us confidence, not only in our ability to execute the $17.3 billion and the 7% rate base growth, but certainly conviction around that 6% to 8% EPS growth target.

Yes, the only thing I would add to that, Marty's really comprehensive answer, is with respect to Illinois, we kind of moved through this new process there in terms of opting into the multiyear plan. I think we'll continue to step back and assess the opportunities there. There obviously is a tremendous amount of projects that are needed to get done on the benefit of customers. We've made some great progress there, but there's just a lot of aging infrastructure. So as you know, we've been pulling that CapEx down a little bit over time just because of some of those returns. And so we'll assess that too as an opportunity, but Marty certainly highlighted the big ones.

Thanks, Michael.

Got it. And then maybe can I just follow up on the whole -- the staff and commission review of the Rush Island retirement and generation needs to fill that hole, what are sort of the key milestones for us to watch there in terms of like the next steps that we should be watching for? Is that -- and then what is the end outcome you think of that review process?

Yes, sure. So I think as it relates to Rush Island, we'll be continuing to work with the District Court in terms of the plans forward for the ultimate retirement date of Rush Island. As we shared in our prepared remarks, there was a preliminary assessment done by MISO related to the closure of Rush Island, which really determined that there were upgrades and additional investments needed too for voltage support and long-range -- longer-term reliability of the system in light of that planned closure. And so now we'll be moving forward with filing an Attachment Y soon, which will be more of a -- I just call it a formal assessment. The preliminary assessment's done and that formal assessment will be done. And then once we've done that, we have to determine what the right investments are to be made on the system and get those planned and approved and executed over time. So some of the milestones to watch there, the MISO Y filing as well as decisions coming from the District Court around the retirement of that plant. So those are some things in that regard. Now specifically, in terms of the staff review, like I said, what they're looking to do here, I think, is really get a deeper understanding of the decision to close Rush Island as well as these reliability impacts that I've been talking about. Rush Island, as you know, is a 1,200-megawatt plant. It's been highly reliable. It's been low cost and provided great value to our customers over time. So in terms of their review, they'll be conducting that, there's going to be -- the commission has asked them to file a preliminary report around April 15, but there's really no deadline on any kind of a final report from the commission staff. And then we also, at the commission's request, we'll be providing monthly status updates in terms of the progress towards closure of Rush Island and I think importantly to what we're doing from a reliability standpoint associated with that. So those are some of the milestones to look for.

Congrats on a solid quarter.

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

I just want to build off some of those questions there. Just wondering if you could frame, with regards to the Missouri IRP, MTEP process, Rush Island, just when could this be pulled into the plan? When do you think this could materialize? And how do we think about, I guess, potential incremental equity needs should this come in? Just trying to get the size of CapEx timing and incremental equity, how that might balance out.

Yes, Jeremy, this is Marty. I'll start, and I'm sure Mike will add on to this as well. But a couple of things. As we laid out again, in the IRP, we really expect that, that will get filed in the first half of this year. And importantly, there, we'll be considering, like I said, the early retirement of Rush Island, any updates to our renewable expansion plans, investments needed in the transmission system as well and doing a comprehensive update of that Integrated Resource Plan. So through that, certainly, you'll get an idea of some of the updated thoughts in terms of additional investments that may be required. Also, as you mentioned and we mentioned in our prepared remarks, we do expect that the MISO will end up approving some of the projects that will move us towards that Future 1 plan that they've got out there, and we expect that, that, again, too, is going to occur by mid this year. Premature to say the size of the portfolio projects that MISO approved in this Tranche 1 that we expect to get approved midyear or the size of the allocation of projects to us. But that's going to be another key milestone as we look ahead to this year in terms of identifying additional potential investments that we'll have longer term. So with that, those -- midyear, we should get some greater visibility, I suspect, in terms of some of those potential projects. And then I think as a team, we'll have to step back and assess those projects and decide ultimately which of those becomes additive to our plan and in what years and how we move forward with execution. Michael, you want to tackle some of those other questions?

Yes. Perfect, Marty. Yes. I think that's well said. I mean, just in terms of -- Jeremy, we said this before. We just don't want to get in front of the regulatory process on that, and we'll just continue to assess these over time. And as we make that determination and figure out sort of what is incremental to the plan, that's when we would step back and look at what our financing needs would be with respect to that. As we've said in the past, we like our ratings where they are today. We're very focused on our metrics. We're targeting this capitalization ratio of about 45% equity over the balance of the plan. That's really what's driven the $300 million that we have in there today. And again, it would kind of be just on a case-specific basis. I wouldn't see us deviating much from that honestly, so I mean if that gives you any indication of how we would think about financing this going forward. But we would assess it at that point in time. So hopefully, that helps.

That's very helpful, not much on the equity side, but great to hear. And then just from a transmission perspective, can you give any sense of the size and scope of the reliability needs around Rush Island's closure? Just wondering any thoughts you could provide there?

Yes. Really hard to at this point. We're in those early stages, like I said, through the preliminary assessment that MISO did clear. The transmission upgrades are going to be needed both for voltage support as well as to ensure long-term reliability of the system. So clearly, some transmission investment needs there. But it's premature to say exactly what those will be. Efforts along those lines, given the preliminary assessment are already underway to determine some of those things. But ultimately, it will be a process working with MISO in particular, to determine what those needs will be and how much of an investment will be required there.

Our next question is from Paul Patterson with Glenrock Associates.

Congratulations. So just on the Missouri legislation that you have there. Just wondering sort of what the practical impact from a shareholder perspective might be if you guys have that? And also, what's the reason from going from a 2.85% cap to a 2.5% cap? Is that just part of the give and take of legislation? Or is there something that's specifically happening that's causing people to want that?

Yes, Paul, good questions. Look, as it relates to this legislation, first of all, this plant and service accounting, we call it, Missouri Smart Energy Plan, has been working really well for customers. It's really allowed us to make significant additional investment in our system. We talked early on in the call about how that's just driving higher reliability. It's allowed us to deploy clean energy. It's really doing good things for the economy. We've created a lot of jobs and at the same time, been able to keep rates very low for customers. So it's really been working extremely well. And what this legislation really is all about is just making sure that we have a sustainable long-term framework to support continuation of those efforts. So it's really all about longevity of what the legislature put in place several years ago. And so that's what it's all about. You see some of the features we laid out in the slides: removes the sunset from the plan, which would be good, improves longevity to begin with; improves the economic development incentives, which have been really great for attracting businesses and helping businesses expand in our state. So it's improvement there. What the cap specifically is all about is today, as you see, there's a cap on the overall growth in rates, total rates. What we're saying here is that it would be better to have a cap, which is a good consumer protection, a cap, but it would be on the impact of these deferrals, the piece of deferrals that were really directed by that legislation. And so that, too, I think, improves longevity of the ability to utilize and -- this great regulatory framework long term.

So when do we need to -- I mean, you've got it there now, but when is the sunset again on the current one?

Sunset on the current one is the end of 2023. Now when we say sunset, it doesn't necessarily go away. It just means that we would need to go to the commission and re-up or ask them to re-up for another 5 years. So we would need to make a filing and the commission would need to approve that for another 5 years.

So it's not a real sunset? I mean -- so I mean, I guess you would be at the discretion of the commission as opposed to having it sort of legislatively in place. Is that the way to think of it?

Correct.

Yes, it's the right way to think about it. That's right. That's why I wanted to clarify my thoughts. You'd use the word sunset and I'd responded, but it's not a hard stop. Just a check-in point, if you will, to go back to the commission and re-up for another 5 years. But you're absolutely right in the way you've characterized the legislation, which would be more of a steady state going forward.

And Paul, this is Michael. I mean, if we were to do that opt-in and then everything that sort of exists today from a cap, sort of all of that would continue to apply going forward, right? So the commission has the ability to extend it but not modify it in any way, just to be clear.

And then on the coal ash, any thought about what the -- and I apologize if I missed this, what the total number in terms of the EPA impact might be? And also, is that -- how would that be treated regulatory speaking? Is that something that could be securitized? Or just how should we think about any potential coal ash cleanup expense?

No. Paul, there's really no -- we weren't really talking about coal ash cleanup expenses. It's really modifications to the impoundments that we have at these power plants in order to be able to continue to dispose of either ash or residuals coming out of our scrubbing. So again, what we said on the call there is, really don't expect to have any material impact from the EPA's decision. Part of it related to Meramec, which we have plans to close at the end of 2022. And then the other potential impact was at our Sioux Energy Center, and we are working through options, which we believe will ultimately mean that there's no significant impact in terms of the EPA's recent ruling.

Yes, that's right. And then Paul, it would just be in...

Okay. So in other words, the impoundment improvements really aren't going to be all that costly. Is that right?

Correct. It would just be a typical capital project that we would recover in the normal course of our rate review. And yes, correct. It is not going to be an overly material number as we sit here today.

Well, that's very good news. Okay. Awesome. Congratulations again.

Our next question is from Julien Dumoulin-Smith with Bank of America.

Listen, just with respect to the comments on Jeremy's question earlier, I want to go back, if I can, just to understand the cadence of some of these updates. If I hear you guys right, though, with respect to Rush Island and some of the MISO agreements in principle that you have, you could be in a position to at least update some of the transmission spending earlier than perhaps, say, some of the incremental renewables here. Can you talk about the time line here? I mean you've got Attachment Y coming pretty soon, it would seem. If this agreement translates in, as you say, Stage 1 in mid-'22, could you be in a position to look at kind of a more holistic view on transmission by, say, the November EEI time frame? Just curious if you can elaborate a little bit more on how that comes together, to what extent? It seems like there is an overlap in what you would be doing from a transmission perspective and what ultimately transpires around Rush Island. Or do you need to really wait for the full IRP process to play itself out prior to knowing what that transmission spend looks like?

Yes, Julien, obviously, you had a lot of topics in that question, and there are a bunch of moving parts. I think, number one, like you said on Rush Island, we'll let this MISO Y play out. But even if they come back pretty quickly on the MISO Y and again confirm that transmission investments are needed for both voltage support and long-term reliability, still then there'll be a process to determine what exactly those investments are and over what time period they'll be made. I can't give you an exact time line in terms of when we'll have clarity on all of that. But that's item number one. Item number two is the MISO actually approving projects as part of their Midwest region Tranche 1 approval process. And like I said, we do expect that, that will occur around midyear. And so there, we should get some clarity in terms of what projects of that portfolio would be ours to do, and we can begin assessing how we'll go about executing those and when those would be added to our plan. So we'll get some clarity there as well. And then with respect to the IRP, again, time line there is, again, around middle of the year. We said first half of this year. There is a little bit of dependency there. We'd certainly like to have clarity in terms of when transmission investments could be made, when Rush Island will actually be closing. And so we expect that over the course of this next 6 months, we should be able to have -- working with the District Court, MISO, et cetera, get some clarity on that. So all of those, I think, things will come to fruition likely in the first half of this year. We should get a lot of information, which we'll certainly be able to discuss. I think on our second quarter call, we'll have a lot of information there. Whether we update or not at EEI, hard to say. What traditionally we've done, and we discussed this earlier, step back, look at all these additional projects, look at the prioritization within our overall plan. Consider which of those projects we can get done, which of those are going to be additive, et cetera, how we're going to finance it. Typically, we'd lay that out on our fourth quarter call. But again, we should be able to provide, I think, a pretty comprehensive update on where things stand at the end of the second quarter and going into EEI. Michael, any additional thoughts there?

No. Marty, that's good.

Awesome. And just a quick clarification from Paul's question. Just with respect to the QIP, obviously, you've laid out your CapEx expectations through the full period here, including the -- I'm going to use the word sunset, I get that's not entirely appropriate. How do you think about whether or not that's extended and how that impacts your CapEx budget? I understand it impacts the recovery mechanisms and timing they're in. But it presumably does not impact your CapEx, one way or another?

That's right. I mean, look, the CapEx is an important CapEx that needs to be done on behalf of customers. We'll have to step back, I think as Marty said in his answer, and look at if that was not in place, how we file rate reviews and those types of things. But this is needed CapEx that's driving reliability improvements for customers, safety improvement for customers, et cetera.

Got it. All right. Actually, guys, I'll leave it there. Sorry, you're going to say something?

No, I was going to say thanks, Julien. I appreciate the questions.

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Marty Lyons for closing comments.

Great. Well, I just wanted to say thank you to all of you for joining us today. As you can see, we had a really strong 2021. And we remain very, very focused on delivering again in 2022 and beyond for our customers, our communities and for all of you, our shareholders. So with that, please be safe, and we look forward to seeing many of you in person over the coming months.

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