Greetings, and welcome to Ameren Corporation's Third 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 introduce your host, Megan McPhail, Manager of Investor for Ameren Corporation. Thank you. Mrs. McPhail, you may begin.

Thank you, and good morning. On the call with me today are Marty Lyons, our President, Chief Executive Officer; Michael Moehn, our Executive Vice President and Chief Financial Officer; as well as other members of the Ameren management team. 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 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 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's Marty, who will start on page 4.

Thanks, Megan. Good morning, everyone. And thank you for joining us. I'm pleased to report that we continue to execute on our strategic plan across each of our business segments, delivering significant value to our customers and shareholders while remaining focused on safety. At the start of the year, we laid out some key initiatives we were focused on. As I sit here today, I can confidently say that we have been able to deliver on these through strong execution of our plan. Starting with Ameren Missouri in February, our new Ameren Missouri Electric service rates took effect as a result of our recent rate review, which was constructively settled at the end of last year. In June, we filed a change to our Integrated Resource Plan, accelerating our planned clean energy investments, carbon emission reduction goals and our plan to achieve net zero by 2045. The Midcontinent Independent System Operator or MISO approved a portfolio of long-range transmission projects, including significant projects in our operating footprint. And in August, Senate Bill 745 was enacted in Missouri, extending the constructive Smart Energy Plan legislation that became law in 2018 out through 2028, with possible extension to 2033. I am pleased to say as a result of these developments in 2022, we were able to increase our 10-year investment opportunity pipeline from $40 billion to $48 billion. Further in our Ameren Illinois Electric Distribution business, in September, the Illinois Commerce Commission or ICC, approved constructive performance metrics, which keep us on track to file a multi-year rate plan next January. And finally at the federal level passage of the Inflation Reduction Act will support the clean energy transition, reducing the cost of related infrastructure investments for our customers in both Missouri and Illinois. I would like to express appreciation for all…

Thanks, Marty. And good morning, everyone. Yesterday we reported third quarter 2022 earnings of $1.74 per share, compared to $1.65 per share for the year ago quarter. Page 15 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 service rates, which became effective on February 28, 2022. The increase and reserve were partially offset by higher O&M driven in part by unfavorable market returns in 2022 on company owned life insurance investments. Earnings at our remaining three business segments were higher primarily driven by increased investments in infrastructure, in addition to a higher allowed return equated to Ameren Illinois Electric Distribution. Before moving on, I'll touch on year-to-date sales transfer for Ameren Missouri and Ameren Illinois Electric Distribution. Weather normalized kilowatt hours sales to Missouri residential customers were comparable versus the prior year, and sales to commercial customers increased about 1%. Weather normalized kilowatt hour sales to Missouri industrial customers decreased about 1%. Weather normalized kilowatt hour sales to Illinois residential customers decreased about 1%, and sales to commercial and industrial customers increased about 0.005% and 1% respectively. Recall that changes in electric sales in Illinois no matter the cause, do not affect earnings since we have full revenue decoupling. Turning to page 16. I would now like to briefly touch on our 2022 earnings guidance. We have delivered strong earnings in the first nine months of 2022 and are well positioned to finish the year strong. As Marty stated, we have narrowed our 2022 diluted earnings guidance to be in the range of $4 to $4.15 per share. This is a comparison to our original guidance range of $3.95 to $4.15 per share. Select…

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

Hey, guys, good morning. This is Darius on for Julian, thank you for taking the question. Wanted to start off at Illinois gas. Acknowledging that you guys have a filing -- a plan filing later in ‘23. Just curious with the pending sunset of that QIP rider, how you're thinking about potential forward looking cadence of filings or potentially, is there any appetite that you perceive for some kind of legislative solution, maybe akin to the multi-year rate plans that are now available on the electric side of things? Just curious how you're thinking about that at a high level?

Yes, perfect. Good morning, this is my Michael. Yes, I'll start and Marty can certainly supplement it. Look, we haven't really said exactly what our future cadence will be, you're correct as a QIP, is set to sunset at the end of ‘23. And so, we're indicating that we're going to file a case here, and it'll be effective under this QIP for the balance of 2023. I mean I think the thing to keep in mind is you step back, and you look at the Illinois gas regulations. I mean, it's still very constructive, even absent the QIP and all, I'll come back to that. But I mean, there is forward test year, rates are decoupled, bad debt tracker, et cetera. I mean, there's some real positives with respect to what goes on there. But as the team gets to look at the opportunities there. I mean, we may have to have a different cadence if it were ultimately expired. But there could be an appetite to extend something at some point. We just really haven't engaged in those conversations at the moment. But we feel like absent even getting an extended, there are certainly ways to continue to manage that business very constructively going forward. Anything to add, Marty?

Michael, that was well said. I would just say that as we look ahead to our gas business, we certainly see the opportunity and, frankly, need for continued investment in our infrastructure to ensure that safe and reliable for our customers. I think that the QIP that we've had over time, that infrastructure mechanism has really provided some good benefits for customers as we think about what it's enabled in terms of a timely investment in the system. So as Michael said, we'll certainly utilize the forward test year capabilities that we have under Illinois law today and continue to consider along with other stakeholders, whether a replacement for QIP is something that we can introduce in the future or not, we'll see. Thank you.

Great. Thank you for that. Appreciate the color. One more, if I can, and this is on the 2023 earnings considerations. I realize it's not a formal guidance or fully exhausted. But I noticed O&M is not included as one of the drivers. Are you planning to -- or are you managing to flat year-over-year? And maybe that's why it's not included on that list because it won't move the needle one way or the other on as an EPS driver? Or just how are you thinking about that cadence.

Yes. I appreciate the question there, too. Historically, we really haven't given O&M guidance, especially as you think about some of these ongoing rate reviews, which makes it a little bit complicated at the end of the day. I would tell you that we continue to stay very focused on O&M itself. And if you look at kind of our year-to-date results, and I think Missouri is a good example. And you back out obviously some of the noise with COLI and some of the refined coal that got caught up in the rate review. We really have managed that to about 1.5%, 1.7% sort of increase. So I think the team has done a great job from a core perspective. We have made comments before that we continue to aspire to being flat over the time horizon we look out over the five-year plan. If you look at historically where we've been, I think we've shared a couple of these slides in the past, I think maybe the '16 through '21 period was the last time we were actually down over that period of time. So I always look to make it really a nondriver at the end of the day. I think we can give you a little more color as we get to February. But again, it is just a little more complicated because of some of the ongoing rate reviews as well. So hopefully, that helps.

Our next question is from the line of Paul Patterson with Glenrock Associates.

Hey, how are you guys doing? Good morning. So back to that slide 23, I was also -- and I apologize if I missed it, it just lots of earnings today. Just on the impact of interest rates. I mean, I was just wondering if you could -- you did mention different maturities and everything going on. But I was just wondering if you have a rule of thumb of how we should maybe be thinking about things you've done to -- just what the impact of higher interest rates might be, I guess, is something to think about? Just if you could give us any flavor on that.

Yes, I appreciate the question. I mean we really did try to provide some of that detail on '21 to give you a sense of sort of what's happening from a redemption standpoint. Obviously, we're going to have some just normal financings in the normal course. We didn't provide anything in there just because of what's going on with respect to rates. What I tried to also do, Paul, as you look at the recovery of interest rates in terms of how we think about it, transmission business. Obviously, formula rates got a little bit of a positive -- obviously, a positive hedge on the 30-year treasury offsetting in addition to you have a formula on the interest rate within the electric distribution business. And then Missouri itself, we're obviously in the middle of a rate review. So you'll be updating some of the capital structure and the cost of capital as we go through that rate review through the end of this year. So I tried to give that perspective just to give you a sense for what the impact would be in 2023.

Yes, No, I appreciate the slide 21. I noticed, I guess, I was just wondering if you had a sheet on and Mike of course, there is short term you have and what have you. I was just wondering I guess we've got some sophisticated math you want us to do, which is fine. Okay. That's basically my only question. Thanks so much and have a great weekend.

Our next question is from the line of David Paz with Wolfe Research.

Hey, good morning. On the February call, as you plan to update -- are you planning to update your EPS growth target through 2027? And if so, will you roll in the expectations of the incremental Missouri renewables investments and the initial spending on the MISO projects?

Yes, David, this is Marty. Yes, in our February call, we will plan to update you on our thoughts in terms of EPS CAGR from 2023 to 2027 at that point in time. We'll also, at that time, expect to update our capital expenditure plan which right now really runs through '26, we'll take that out through 2027. And we'll also update you on our expectations in terms of our rate base CAGR out through 2027. So those are all things that we plan to do on the February call. In terms of the overall investment pipeline, as we've discussed this morning, this year as a result of the Missouri Integrated Resource Plan, as a result of the MISO approving Tranche 1 projects, we bumped our overall 10-year pipeline from $40 billion to $48 billion. And as we mentioned in some of the specifics, some of those capital expenditures, we would expect to start to fall in the latter half of that five-year update. So those are things that we'll consider how best to fold-in to both our five-year CapEx guidance as well as that rate base CAGR.

Got it. And do you think those -- would you make an assumption on the competitive projects for MISO spending? Or would that be just mostly on the assigned projects?

Yes. David, I think at this point, haven't made a firm determination as to whether what will fold-in or not. I would say with respect to some of those competitive projects, while it's a little bit of a different thing than we faced in the past, I would say, traditionally, we've been a bit conservative about rolling those things in until we have better line of sight to those being projects that we would be able to firmly execute. So I would expect with respect to those projects, we take a bit of a conservative posture.

Makes sense. And then just on equity, remind me your equity needs for 2024 to 2026 that we said when you last updated them. And along with that, just your targeted consolidated equity ratio?

Yes. David, this is Michael. Yes, so when we roll forward our plan in February ‘22, so we had $300 million basically of external equity through the balance of that plan, plus $100 million of DRIP as indicated, very pleased with where we are today. I mean we've gotten the '22 and '23 offer there. So you should continue to assume that $300 million ‘24 through the balance, we continue to target a capitalization ratio close to 45% over that five-year plan. So we'll stay focused on that. And then as Marty just talked about, as we roll forward into February and roll forward the new capital plan, obviously, we'll step back and address any financing needs as part of what happens with that capital plan itself, but you should continue to think about that $300 million at the moment.

Mr. Lyons, there are no further questions at this time. I would like to turn the floor back over to you for closing comments.

Okay. Well, thank you all for joining us today. As you heard on the call, we've had a strong 2022 year-to-date. We remain focused on continuing to deliver strong value through the end of this year for our customers, communities and our shareholders. So Again, thanks for joining us. We look forward to seeing many of you, I think, at the EEI conference, which is just a couple of weeks away. Thanks all and be safe.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.