Greetings, and welcome to Ameren Corporation's Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Megan McPhail, Manager of Investor. Thank you. You may begin.

Thank you, and good morning. On the call with me today are 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. Marty 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 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 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, projections, strategies, targets, estimates, objectives, events, conditions in 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 on our news release we issued yesterday and the forward-looking statements and risk factors section in our filings with 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 is Marty who will start on page 4.

Thanks, Megan. Good morning, everyone. And thank you for joining us. We had a solid quarter and we're excited to share an update today on a number of recent developments. As always, our team continues to work hard to execute our strategic plan across all of our business segments, allowing us to deliver significant value to our customers and shareholders. Yesterday, we announced second quarter 2022 earnings of $0.80 per share, compared to earnings of $0.80 per share in the second quarter of 2021. The year-over-year results reflected increased infrastructure investments across all our business segments that will drive significant long-term benefits for our customers. The key drivers of our second quarter results are outlined on this slide. I am pleased to report that we remain on track to deliver solid earnings growth in 2022 and are reaffirming our 2022 earnings guidance range of $3.95 per share to $4.15 per share. Michael will discuss our second quarter earnings, 2022 earnings guidance and other related items in more detail later. Moving to slide 5, you will find our strategic plan reiterated. We continue to invest in and operate our utilities in a manner consistent with existing regulatory frameworks, enhance regulatory frameworks and 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. Turning now to page 6, which highlights our commitment to the first pillar of our strategy, investing in and operating our utilities in a manner consistent with existing regulatory frameworks. Our strong long-term earnings growth guidance is primarily driven by our infrastructure investment and rate base growth plans, which are supported by constructive regulatory frameworks. You can see on the right side of this page, we continue to strategically invest significant capital in each…

Thanks, Marty. And good morning everyone. Yesterday, we reported second quarter 2022 earnings of $0.80 per share, compared to $0.80 per share for the year ago quarter. Slide 18 summarizes key drivers impacting earnings at each segment. I'd like to take a moment to highlight a few key variances for the quarter. Earnings in Ameren Missouri, our largest segment benefited from higher electric retail sales driven by warmer early summer temperatures during the quarter compared to near normal temperatures in the year ago period, and higher electric grid. A positive factors impacting earnings Ameren Missouri were more than offset by, among other things, higher operations and maintenance expenses. Higher O&M reflected unfavorable market returns in 2022 on company on life insurance investments compared to payroll market returns in the year ago period. In addition, the higher O&M expenses were driven by the absence of refined coal credits in 2022, which had been a benefit to our coal fired energy centers in 2021, and prior year and increased transmission and distribution expenses including storm cost. The reduction in refined coal credits was anticipated and reflected in the new electric service rates effective earlier this year. In fact, year-to-date, O&M costs excluding COLI are largely in line with what we expected when we provide guidance in February. We remain focused on discipline cost management for the second half of the year. Before moving on, I'll touch on sales trends for Ameren Missouri and Ameren Illinois electric distribution year-to-date, weather normalized kilowatt hour sales to Missouri residential and commercial customers increased about 0.5% and 1.5% respectively. Our weather normalized kilowatt hour sales to Missouri industrial customers decrease about 0.5%. Weather normalized kilowatt hour sales to Illinois residential and commercial customers increased about 1.5% each year-to-date and weather normalized kilowatt hour sales to Illinois…

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

Hey, good morning, Marty. Not too bad. It's very good day. Marty, Let me ask just thank you for the visibility. Obviously, we're on the tranche 1 opportunities, but just a two part question here. What's your, I guess, confidence level on the competitive slice? Or how should we be thinking about maybe your ability to capture that? Is there a technical or cost of capital facet to your advantage? And then does this -- how does this sort of interact with your prior CaPex and sort of rate base guide? I mean, some of the projects do break ground in ‘25. So could these be an accretive to your 6% to 8%? Thanks.

Yes, you bet Shahriar, good questions. And, here I hope you have a Good Friday and a good weekend. But back to your questions, in terms of the competitive projects coming out of tranche 1, as we highlighted a little over $700 million of those. And as we mentioned in our prepared remarks that we do believe we're well positioned to compete for and successfully execute those, I think the bottom line is that we believe we're really well positioned to efficiently build, operate and maintain those assets over time. The projects that are competitive are within our footprint. They're places where we have strong relationships with local communities, regulators, suppliers, contractors, et cetera. And we've been operating in this area for many years. So we know the land, we know the environmental conditions and issues. And I tell you too that we've been working for several years now, as we've developed billions of dollars’ worth of transmission projects, and we've been working overtime with suppliers and contractors to really bring down the costs of construction. And because these projects, these competitive projects are contiguous with other assets that we own and operate, we think we're really well positioned to operate and maintain these assets at a low cost over time. So those are some of the reasons that we believe at the end of the day, we're well positioned to compete and execute on those projects. So we look forward to participating in that competitive process over time. And then your second question really got to some of the incremental capital into our plan. I'll let Michael comment on that. But you're right, in terms of the $1.8 billion worth of projects that were assigned to us, we do again, expect to begin those in 2025. And those cash flows and capital expenditures to be incurred over between 2025 and the end of the decade. Michael, any comments in terms of the added CaPex?

Yes. Good morning, Shahriar. Marty said as well in terms of the capital plan itself, Shahriar, and we've talked about this, I mean, I think that it's great to start getting some clarity here around these different projects. And as Marty said I think some of this could even benefit the five year plan, as we have indicated we're going to step back. And what we typically do with our cadences, will update all this in the February timeframe. And my sense is this has got the ability to be accretive to our five year capital plan, as well as just additive to the overall runway, as we talk about the growth story. I think as we, if you kind of remember, if you reflect back on the $48 billion that we have there now that number used to be $40 billion, we captured about $5 billion associated with transmission projects, it was broadly to try to look at these LRTP projects over the next 10 years. So, I think we got it in there. And now, it's a matter of where it just ends up by year, if that makes sense.

It does. Yes. I am sure it does.

Shahriar, this is Marty. And I think Michael touched on a good thing as we started the year we looked ahead to Q2, and we noted that there were going to be some important updates in Q2, and I think that's exactly what came through in terms of the Integrated Resource Plan in Missouri that indicated about $2.7 billion of incremental spend between now and 2031. And then, as Michael said, the LRTP, adding another $1.8 billion of expenditures that we have signed to us, as well as this potential for $700 million of additional competitive projects. So as Michael said all those things gave us confidence to add that $8 billion to that long-term capital expenditure outlook.

Perfect. And then just I know, you just probably touched on it a little bit on just the Inflation Reduction Act. I mean, obviously, [Inaudible] proposed some changes, I think we go to a vote on Saturday. Can you just touch a little bit on the tax side? I mean, some of the utilities have talked about a technical fix with the 50% AMT? Are you in sort of EI lobbying against it? Could you get a carved out? And then if there isn't enactment of that AMT how do we sort of think about the cash flows and rate base growth impact and the recovery timing? Thanks.

Shahriar, there's a lot there. And as you noted even based on the reports this morning there seems to be some moving pieces as it relates to the corporate minimum tax. Let me just say this overall, about the legislation, we're excited about the potential tax credits in the legislation, especially the wind and the solar, given the 4,700 megawatts of renewables that we looked at, in Missouri by 2040, based on our Integrated Resource Plan, so that's all pretty exciting, and even net of CMT impact. We think the legislation is good for Ameren, for our customers in both Missouri and Illinois, because it really should lower the cost of the clean energy transition in both states. And that's not even mention in some of the other positives in there, whether it's the credits for nuclear storage, CCUS, hydrogen things we talked about on the call, all of which align with our long-term resource plan. So that's all really good, other things you're aware of things like the PTC for solar is a positive versus the prior ITC and transferability provisions, which are things that we really think could help us to pass the value associated with some of these tax credits to our customers more swiftly. So, like I said, net, we think that the legislation overall is good and will help facilitate a lower cost transition to this clean energy. As it relates to the CMT, it is applicable to us, given that we have pretax book income of greater than $1 billion, but probably premature to speculate on exactly what that impact would be given, as you mentioned, some of the moving pieces that aren't even really clear to us at this particular time. But at the end of the day, we do think based on what we have seen we do believe that the cash flow impacts would be manageable. And as would and Michael can comment on this better, but also the impacts on credit metrics and credit rating. So that's, I guess, where we stand on things. Shahriar, hopefully, I answered all of your questions. Michael, do you have anything to add?

Yes, I think Marty, I think at a high level you gave it good justice there. I mean, I think overall, we do see it as being manual. There are a lot of moving pieces here. So I think that's why we're really trying to stay away from the specifics, but as we look at it and model it out we do think as Marty said both from a cash flow as well as any sort of impact, Shahriar, our FFO to debt metrics, that it definitely is something that's manageable. And I think the important thing to remember is just that the net benefit to customers just from an overall credit standpoint, certainly on the Missouri side, as you think about this clean energy transition that we're about to go through.

Our next question comes from Jeremy Tonet with JP Morgan.

Hi, good morning. Just wanted to round out the MISO tranche 1 conversation a little bit more. Would Ameren entertain the notion of pursuing competitive processes beyond the $700 million identified or is that the extent of what you would consider? And also we've heard about there being kind of some incremental upside to these projects, maybe 10% to 15% of CapEx, additionally for kind of ancillary components to these projects. And just wondering if you had any thoughts along those lines?

Yes, Jeremy, good questions. You've certainly will look to compete for the $700 million if there are other projects that are competitive, certainly we'll take a look at those as well. We're not limited to these. But of course, as you know, in many of the surrounding states you have entities with rights of first refusal. So, look, we feel good about the ones that have been assigned to us. I can't emphasize that enough. That's $1.8 billion we feel great about, and we'll go after the $700 million if we see other opportunities, we'll certainly look to compete in those as well. I wouldn't speculate right now, Jeremy, on in terms of any incremental investment beyond these, these are the estimates that really came from MISO. And as we indicated in our call, prepared remarks we'll certainly be looking to next steps is really work on more refined design, procurement, the regulatory approvals, et cetera. And give updates on what we think the overall value of these projects are, perhaps when we get around to February and update our overall plans, but for now, we think these are the best estimates to be able to provide.

Got it. That's helpful. Thanks. And then just as it relates to Rush Island here, if you could provide any incremental thoughts with regards to transmission upgrade opportunity here. Any – could you provide any estimates on what these upgrades could look like? I know it's bigger than a breadbox. We're trying to kind of scope out what that might look like.

Yes, good question. Look, we, we gave pretty good update in our prepared remarks on Rush Island. We did indicate that design and procurements underway with respect to the upgrade projects that MISO had approved. I mean I think our best estimate today, and this was a bit of a broad range, probably in the $100 million to $150 million range. And but like I said, we'll be able to refine that further as we go through the design and procurement activities.

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

Hey, good morning, team. Thanks for the time, the opportunity. Hope you guys are well. Thank you. Thank you, sir. So maybe I want to come back to the Rush Island situation. I know, you mentioned ’25 for instance, on retirement here, but I want to talk about these other CSAP regulations. And just try to understand how that lines up. I know that there's some proposals out there for 2026. And obviously, you've got a couple other plans Labadie and Sioux. How do you see this playing out? Because obviously that there's EPA regs and sort of hypothetical ether, and then there's sort of reality of them lining up against your portfolio in a pretty meaningful way. I just want to understand sort of the specifics as to, I mean, obviously, it's subject to litigation, but how do you see this playing out more specifically for your portfolio? And as you see to try to balance things?

Yes so as it relates to the CSAPR rules, look, it's something we're not only monitoring but engaging with EPA in terms of providing comment. Of course, Merrimack is retiring this year, Rush Island is, as you mentioned, looks like it's going to retire in the 2024 to 2025 timeframe. Again, we don't expect the transmission investments to be fully completed until 2025. As we noted, we have proposed some limited operations between now and then between now and when the plant would ultimately retire all subject to the court's ruling in terms of operating parameters as well as the ultimate closure date. But certainly going to significantly reduce NOx emissions as we ramped down towards closure of that facility. So I think the focus really becomes, Julien, that on NOx controls, at Labadie and Sioux, and I would remind you there that we've made significant investments over time in terms of NOx controls, and we're more than complying with all the current standards that are out there. So with respect to the proposed additional rules I think we'll wait to comment on specifically what the impacts will be at Labadie and Sioux over time, until we get the final rules, which we expect to come out next March. But I will tell you that what we'll be doing and we are, we're analyzing strategies for compliance, and making sure that we get the full benefit of the controls that we do have in place today at Labadie and Sue.

Yes. Excellent. Thank you. And then if I can, just jumping in on the inflation conversation, obviously, you filed here, though, your latest iteration of a rate case. But how are you seeing sort of cost inflation manifests itself across your portfolio? And how do you think about balancing that given the test here, embedded in the current rate case? And then the other levers you might have.

Yes, thanks, Julien. This is Michael. Look, inflation, it certainly we're in a little different environment today. But I mean, I think we've talked historically, and we've showed you a couple of times, even have a slide, I think that went through 16 through 21. And our overall operating costs were down about 3%. And so, look, we remain focused on it, you referenced this Missouri rate review that we just filed here. I would tell you that that's really predicated on a lot of capital investment within the Smart Energy Plan, we outlined, and I think the benefits that customers are getting associated with those investments. And obviously, it's also being impacted by what we just talked about with respect to Rush Island, and the net fuel costs and operating in that plant in a more limited fashion as well. So when you really cut through what's going on in case, it's not, it's really not about O&M costs, which I think is a testament to what this team has been doing in terms of just looking for ways to continue to hold down costs wherever possible. So in the present environment, I think we're managing well through it. As we noted, on the call, we had some O&M was up, but it was really driven by some one time things between the COLI performance towards some storm costs. And when you cut through it, it certainly lines up with what our expectations were on the February timeframe, we released guidance.

Got it. And just prospectively, here, just if I can push a little bit further, obviously, you've done a good job, sort of to date, if you will, if you look prospectively whether that's related to the cadence of labor relation negotiations, et cetera. When do you -- what kind of trajectory, what inflation are you seeing sort of in real time more prospectively here? If you can comment a little bit more?

Yes, sure. Look, I do. Yes, absolutely, I keep my comments consistent with already been in the past. And that's Marty and I and the rest of the team is very focused on these costs, and doing all that we can to control what we can control. And look, we aspire to keep these O&M costs. I think we said this for the really flat over the five year horizon, if at all possible, it's obviously, and it’s a bit more challenging in this environment. But again, as we look to our capital plan, we look to the investments that we're making in automation and digital and smart meters. I mean, we're using all of those things to increase productivity, lower costs where we can and we're going to stay focused on it and just do absolutely all that we can because we know again what it means to our customers, we understand we talked about this from a capital perspective for every dollar of O&M we reduce we can spend the equivalent $7 of capital and so, it is certainly top of mind, and continuous everyday focus here.

Our next question is from Paul Patterson with Glenrock Associates.

Hey, good morning. So, just on Rush Island, just sort of technically speaking. If you don't get, I mean if the courts don' completely go your way, the plan to shut down, what would actually happen, or do we have an idea about what would happen?

Yes, I guess I don't want to speculate that on, Paul, I think that it's obviously a process that we're still we're working through with court and the court proceedings and so we laid out for you on slide 9 the facts as they stand today and certainly wouldn't speculate if we get to that that crossroads, I would point you on slide 9, we said that with respect to the court, the March 31, 2024 compliance day remains in effect, unless extended by the courts. So the courts got that ability and certainly don't want to speculate as to what the court will or won't do. And we'll let these proceedings play out.

Okay. Fair enough. I don't want to push that. I guess it's all hypothetical, I guess, to certain degree. So with respect to wind curtailments that we've been seeing in the area, I was wondering if you could tell us what you've been seeing, not just in Ameren but the greater Ameren neighborhood so to speak, as well as how tranche 1 and other sort of activity occurring, like I guess, Green Belt is talking about a 25%, I think, increase among other things, as there's just a lot of moving pieces, I guess to put it right, so I'm just sort of wondering what if you could just sort of comment about what you're seeing there in terms of additions of generation plants, traditional plants, shutting down and transmission, what you see sort of the current situation with wind curtailments is generically speaking in your general region and what tranche 1 and other things might do with respect to the issue.

Yes Paul, I guess I don't have a specific comment on wind curtailments and something we can follow up on you, follow up with you on. That said what I have seen recently is a map of these tranche 1 projects overlaid against where we're seeing congestion across MISO. And I will tell you, there's tremendous alignment there meeting these plan projects and tranche 1 really align well with where we're seeing congestion across the footprint really promised to alleviate some of that congestion. And I think that's why if you go back a year or so ago, [Worter] made a comment about these being, I forget the word he use, but kind of no brainer projects or something like that, and no regrets projects. And I think what he really meant by those is that whether we proceed towards future one, two, or three in MISO these projects are very foundational, no matter where you go, and they're needed today to address some of the congestion that we're already seeing within the MISO footprint. And the look ahead to tranche 2, 3 and 4 especially based on what we're seeing coming out of this IRA legislation I think is really going to push us beyond that future one to more of like a closer to a future two kind of outlook. And my sense is that some of that'll end up getting baked into the extent of the projects that are approved in future tranches, including tranche 2, which is still expected to be approved by late next year. So again, don't have a specific comment on your question about what we're seeing currently. But to your question about these transmission projects and the need to alleviate congestion issues we're seeing absolutely they aligned very well.

[Operator Instructions] Our next question comes from Anthony Crowdell with Mizuho.

Hey, good morning, Mike. Good morning, Marty. Thanks for taking my questions. I guess first on the Missouri rate filing, just as I think about you filed in ‘21, you're filing again, in ‘22. We had a piece of legislation passed, just what's now, that you maybe have more clarity on the forward looking CaPex plan? What kind of frequency of rate filing you expecting in Missouri for the next two or three years?

Andy, we haven't actually said, I mean, you're right, we've been on kind of a two year cycle here at this point. And look, I mean, we obviously we want to continue to stretch these out as much as we possibly can. But just given the pace that we've been on from a capital standpoint two years has been sort of what the required paces be, needed to be. I think the only other thing to just keep in mind is that we are required to file every four years just because of the fuel adjustment clause, but otherwise we do want to try to stretch them out as long as we can.

Grea.t And then I guess, last, it is may be hard or may not be a great question. If I think about the futures one projects that the company will bid on, did the incumbent utilities, you guys operate in that jurisdiction, it's seems that maybe you're -- the incumbent utilities are more likely to submit a proposal for a more robust, like infrastructure, because it's in your jurisdiction, you're looking at [Inaudible] at asset list, be active for 50 years, 60 years or something like that, where's the competitor coming in there, they just meet the bare minimum of a design spec, and it makes it more affordable, and wins the competitive process? Is that possible? Or it's the design specs are the same for everyone?

I really think MISO is going to do their best to make sure that there are very clear scope and design and construction expectations and attributes such that you can really get apples-to-apples comparisons in these bids. And I gave a fairly extensive answer to a question earlier, at the end of the day, I just want to reinforce, I mean we really do believe that we're well positioned to efficiently build, operate and maintain these assets over time. But it is our expectation that there'll be every effort made to ensure there's apples-to-apples comparisons.

Our next question is from Neil Kalton with Wells Fargo Securities.

Hi, guys, how are you? Yes. So I know, it's not your project Greenbelts Express, though, there's been some recent developments, the capacity, as Paul mentioned, is going up on the project. And I would imagine IRA probably has some positive implications for the economics and prospects. I would love your latest thoughts on that project, if you will.

Hey, Neil, it’s Marty. Absolutely, we laid out in this updated Integrated Resource Plan some pretty significant ambitions in terms of addition of renewables. We’re talking about 2,800 megawatts through 2030. 4,300 megawatts by 2035. And we've filed a couple of CCN is related to that, as you know the Boomtown project, Huck Finn project, a couple of projects we outlined on this call, but there's a long way to go in terms of the addition of renewables. So we have issued a request for proposal, and we're evaluating the best options for our customers. As we've discussed with you and others over time Greenbelt remains a project that is of interest, primarily because of the opportunity to bring wind energy from the West, the Kansas region, for example, into Missouri for the benefit of our Missouri customers, and, in fact, in our integrated resource plan had highlighted the potential to utilize that line to bring in as much as 1,000 megawatts of wind energy. So it is something that we continue to evaluate, and we'll evaluate as we look at the opportunities for renewables that come out of this RFP, ultimately, as you know, we want to make sure we pick the right projects for our customers from the standpoint of affordability, and good mix of assets to meet their needs over time.

Great, thanks. And then one other question. I think in your prepared remarks, you mentioned, hydrogen as being, you sort of mentioned as part of the IRA, can you elaborate a bit more on sort of how you're thinking about hydrogen? Is this sort of nearer term opportunity, or any thoughts on that as well, please?

Yes, Neil. So in our updated integrated resource plan that we filed in June, we actually added a 1,200 megawatt combined cycle plant by 2031. And the idea there is to get to our net zero emissions by 2045. The idea would be to construct that with an eye towards transitioning to hydrogen or hydrogen blend with carbon capture retrofit by as early as the 2040 timeframe. So it's with regard to that project is specifically that we think about that.

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. Hey, thank you all for joining us today. I hope what you heard is we have a very strong start to 2022. We're looking to finish strong for the remainder of this year and we remain focused on continuing to deliver significant long-term value to our customers. The communities that we serve and to our shareholders. And so anyway, we look forward to seeing many of you at conferences over the next couple of months and we again, appreciate you joining us. Have a great day.

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