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#Thanks, <UNK>
Good morning, everyone and thank you for joining us
Today, we announced 2016 earnings of $2.68 per share compared to core earnings of $2.56 per share for 2015. Once again, we delivered another year of solid earnings growth driven by the successful execution of our strategy
<UNK> will discuss the drivers of our 2016 earnings results in a few minutes
But first, I want to highlight some of the key actions we took to successfully execute our strategy in 2016 for the benefit of our customers and shareholders
Starting with our strategy to prudently invest in and operate our utilities in a manner consistent with existing regulatory frameworks
We continue to allocate significant amounts of capital to those businesses that are supported by modern constructive regulatory frameworks for the benefit of our customers
In fact, we invested $2.1 billion in utility infrastructure last year with two-thirds, over $1.3 billion, going to projects in the FERC regulated electric transmission and Illinois regulated electric and natural gas distribution businesses
A significant portion of the $1.3 billion was invested in the Illinois Rivers project, a new high-voltage transmission line, which will span 385 miles across the state of Illinois
This project remains on schedule for completion in 2019 with 4 of its 9 line segments energized, including 2 river crossings and 8 of 10 substations now in service
This strategic allocation of capital and effective project execution, combined with disciplined cost management, meaningfully contributed to the solid financial results I just discussed
Turning to Missouri, in order to earn a fair return on our electric business, we filed a rate review request in July with the Missouri Public Service Commission
We are seeking to recover costs related to infrastructure investments made for the benefit of customers and to remove the negative earnings effect of lower sales to the New Madrid smelter
There was a recent development in this rate review and I will provide an important update in a few minutes
Moving down the page last year, we also continued to work to enhance our regulatory frameworks and advocate for responsible energy and economic policies
I am pleased to report that we have made very good progress on this strategic focus area as well
Notably, Ameren Illinois successfully advocated for the recently enacted Future Energy Jobs Act, which improved the already constructive regulatory framework for our electric distribution business in Illinois
This will extend its constructive formula ratemaking through 2022 enabling the continuation of our strong infrastructure investment plan to benefit our customers and the state of Illinois and also meaningfully improved the regulatory framework for energy efficiency programs
The law allows us to capitalize and earn a fair return on our future energy efficiency expenditures, which will enable Ameren Illinois to expand its energy efficiency programs for the benefit of our customers
Further, it provides revenue decoupling, eliminating potential sales margin erosion due to, among other things, energy efficiency
Finally, this law will help maintain and create new jobs in our service territory and it contains strong consumer protections
Simply put, it was a win-win for all stakeholders in Illinois
And in Missouri, we continued our extensive efforts to enhance the state’s regulatory framework for electric service in order to support the investment in a smarter energy grid and create jobs
A great deal of time and effort was spent working with key stakeholders after the 2016 legislative session to discuss this important matter for the state of Missouri
I will update you on our ongoing efforts in this area a bit later
The final element of our strategy calls for creating and capitalizing on opportunities for investment for the benefit of our customers and shareholders
As I just mentioned, the Illinois energy legislation enacted in late 2016 enables expansion of energy efficiency programs and allows Ameren Illinois to capitalize and earn a fair return on those investments
Also, the Missouri Public Service Commission approved two solar pilot programs that will provide clean energy choices for our customers and increased investment opportunities for Ameren Missouri, should these pilots proved successful and the programs be expanded
Finally, in September of last year, Ameren Missouri filed a plan with the Missouri PSC for potential incremental infrastructure investments of $1 billion over a 5-year period ending in 2022 that would benefit customers should these investments be enabled by an enhanced electric regulatory framework
Ameren Missouri also identified additional potential incremental infrastructure investments over a 10-year period that would modernize its energy grid and facilitate the transition to a cleaner, more diverse generation portfolio for the long-term benefit of its customers and the state of Missouri
Turning now to Page 5 and earnings guidance
First, I am pleased to inform you that we expect our 2017 earnings per share to be in the range of $2.65 to $2.85 per share
The midpoint of this guidance reflects strong earnings per share growth of approximately 6.5% compared to weather normalized 2016 results
<UNK> will provide you more details on this a bit later
Second, we remained on track to deliver strong long-term earnings growth and continue to expect earnings per share to grow at a 5% to 8% compound annual rate from 2016 to 2020 based on the adjusted 2016 earnings per share guidance midpoint of $2.63 we provided a year ago
We plan to deliver these earnings results in the future through the continued execution of our strategy in 2017 and beyond
Turning now to Page 6, a key element of our strategy is to continue to advance our plan for investing in our utilities in a manner consistent with existing regulatory frameworks
The strong earnings growth outlook I just discussed is driven by our rate base growth outlook
Today, we are rolling forward our 5-year investment plan and I am pleased to say that we expect to grow our rate base at a strong 6% compound annual rate over the 2016 through 2021 period
As you can see on the right side of this page, we continue to allocate greater levels of capital to those jurisdictions with constructive regulatory frameworks that support investment
Our transmission projects are projected to increase FERC-regulated rate base by 13% compounded annually over the 2016 through 2021 period
In addition, our investments in Illinois Electric Distribution and Illinois Natural Gas are expected to result in 9% compound annual rate base growth for each of these businesses for the same period
I would note that energy efficiency investments made under the Illinois Future Energy Jobs Act are incorporated into this outlook
And finally, our Missouri rate base is expected to grow at a slower 2% compound annual rate
Of course, the expected Missouri rate base growth rate would increase from this level if legislation is enacted that sufficiently enhances the state’s regulatory framework to support investment
Moving now to Page 7, another key element of our strategy is to achieve a fair and balanced resolution to our pending Missouri electric rate review
I am pleased to report that as a result of extensive collaboration, all the major parties participating in this rate review, the Ameren Missouri, the staff at the Missouri Public Service Commission, the Office of Public Counsel, industrial consumer groups and others, recently reached an agreement in principle on all the issues in this case
As a result, we expect the stipulation and agreement signed by these parties and possibly others to be filed with the Missouri Public Service Commission very soon, with the request of the agreement be approved by the commission
At this point, the agreement in principle is considered confidential
However, I would note that the earnings guidance we have provided today is consistent with these terms
Turning to Page 8 of the presentation, enhancing Missouri’s electric regulatory framework remains a key strategic focus, because we strongly believe it would bring significant long-term benefits to our customers and the entire State of Missouri
Consistent with the benefits we have seen in Illinois and around the country, modernized policies to support energy infrastructure investments will lead to a more reliable and smarter energy grid, facilitate the transition to a cleaner and more diverse generation portfolio, provide greater tools for customers to manage their future energy usage, position us to meet our customers’ rising energy needs and expectations and create significant quality jobs for Missouri
With these benefits in mind, in December 2016, Senate Bill 190, the Missouri Economic Development and Infrastructure Investment Act was filed
This slide slight outlines the key provisions of the bill
In summary, Senate Bill 190 would implement important regulatory reforms which would drive significant infrastructure investments and results in the benefits I just described
In addition, this legislation contains robust consumer protections including strong oversight by the Missouri Public Service Commission
And finally, Senate Bill 190 includes forward-thinking economic development provisions for our larger energy consumers, which in turn would help create good quality jobs
I would note that enactment of this legislation in its current form will support Ameren Missouri’s ability to execute on $1 billion of incremental infrastructure investment over 5 years
Consistent with this filing with the Missouri Public Service Commission last fall, we along with all of the other Missouri investor owned electric utilities, have continued to actively engage in discussions with customers, legislators, state officials and other stakeholders to build support for this important legislation
I am pleased to report that Senate Bill 190 was approved by the Senate Commerce Committee last week by a bipartisan 8 to 1 vote, is now headed to the full Senate consideration
While good progress is made on Senate Bill 190 to-date, we are still very early in the legislative process
Keep in mind that the legislative session ends on May 12. As we move to the session, we will continue our extensive outreach and collaboration with key stakeholders to move Missouri forward on this important energy and economic policy initiative for the long-term benefit of our customers and the entire state of Missouri
Turning now to Page 9 of our presentation and a discussion of potential federal corporate income tax reform, I will begin by saying that Ameren supports thoughtful, comprehensive tax reform as we believe that lower corporate tax rates drive economic growth and job creation, benefiting our customers, the communities we serve and other key stakeholders
Recognizing that we are still in the relatively early stages of a tax reform debate, we are focusing our advocacy efforts with some key principles in mind
We want to ensure that tax reform does not negatively impact our key stakeholders, notably our customers as well as appropriately supports our industry’s efforts to invest in our nation’s critical energy infrastructure in an affordable manner
With these principles in mind, this slide highlights key areas of focus for Ameren and our industry
As I noted, it is still early in this debate and there are many moving parts, but we also recognize that many of you are interested in what impact tax reform could have on Ameren
Based on our current assessment of preliminary tax reform proposals, aside from the expected one-time non-cash charge to write-down certain of our deferred tax assets, we do not believe this plan would impact our strong earnings growth guidance through 2020. <UNK> will address some of the underlying assumptions associated with our assessment in a few moments
Of course, I expect there will be several changes to the tax reform proposals between now and the end of the debate
That is why Ameren and many of my colleagues in the industry will remain actively engaged with policymakers and key stakeholders on this important economic policy matter in the months ahead
Turning now to Page 10, here you can see that our strategic and disciplined allocation of capital is also being driven by our view that the energy grid will be increasingly more important and valuable to our customers, the communities we serve and our shareholders
We plan to continue to invest to modernize our electric and gas transmission and distribution operations to make them safer, smarter and more resilient
As well as invest in smart meters and new technologies in order to meet our customers’ future energy needs and expectations
Right side of this page shows that our allocation of capital is expected to grow these energy delivery businesses to nearly three quarters of our rate base by the end of 2021. As a result, our investment in coal and gas fired generation is expected to decline to a combined 15% of rate base by year end 2021. We are also advancing our efforts on innovative technologies to increase operating efficiencies, strengthen the energy grid and create innovative energy solutions for our customers
Further, we remain focused on transitioning our generation to a cleaner and more diverse portfolio in a responsible fashion
And this transition will continue beyond 2021 with the schedule retirement of Meramec’s coal fired energy center in 2022. In addition, Ameren Missouri is developing its next 20-year Integrated Resource Plan, which is scheduled to be filed with the Missouri PSC in October 2017. In this plan, we will continue to appropriately balance our responsibilities to our customers and communities, the environment and of course, our shareholders
Moving to Page 11, we anticipate that the execution of our strategy in 2017 and beyond will not only bring superior value to our customers, but also to our shareholders
To reiterate, we continue to expect earnings per share to grow at a 5% to 8% compound annual rate from 2016 to 2020, based on the adjusted 2016 guidance midpoint we provided a year ago
Further, as I also discussed, we project rate base growth of 6% compounded annually from 2016 to 2021. We expect these growth rates to compare favorably with our regulated utility peers
Further, Ameren shares offer investors an attractive dividend
The annualized equivalent rate of $1.76 per share incorporates the October 2016 decision by the Board of Directors to increase the dividend for the third consecutive year, reflecting their continued confidence in the outlook for our businesses and our long-term strategy
And we continue to expect our dividend payout ratio to range between 55% and 70% of annual earnings
Of course, future dividend increases will be based on consideration of, among other things, earnings growth, cash flows and economic and other business conditions
To summarize, we believe our strong rate base and earnings growth profile, combined with our solid dividend, currently providing a yield of approximately 3.3% results in an attractive total return opportunity for our shareholders compared to our regulated utility peers
We remain focused on executing our strategy and I remain firmly convinced that doing so will deliver superior value to our shareholders, customers and the communities we serve
Again, thank you all for joining us today
And I will now turn the call over to <UNK>
Good morning <UNK>
<UNK>, I think as we think about that extra $1 billion, obviously we are pursuing changes in the Missouri framework that would allow us to actually move forward with those to the extent that we have the opportunity to make those investments for the benefit of customers
What we will do <UNK>, at that point is step back and look at our overall capital plan, assess and reassess what we have got in that plan and also step back and reassess our financing
So I think it’s premature that we would need to issue any additional equity or that we would issue additional equity
We will take a step back and look at our overall capital expenditure and financing plans
Of course, we do have a very strong balance sheet today
And we have very strong credit metrics relative to our ratings
So we will assess all of those things as we move forward to the extent we have that opportunity
Hi <UNK>, this is <UNK>
Couple of comments, yes, in December, three bills were filed
Senate Bill 190, which we spent most of our time on, but then there are two other bills Senate Bill 214 and Senate Bill 215. Senate Bill 214 really is very similar to the performance based rate-making bill that was filed last year and then Senate Bill 215 is similar to what I would say enabling language
Our focus right now and those in the industry is on Senate Bill 190. We believe when you take all the stakeholder input that we have had since last session and even in this session, it reflects many of the inputs that we have received from stakeholders and so that’s our focal point now
Those other two bills are still out there, but we are focused on Senate Bill 190.
And so look, I am going to turn it over to <UNK> <UNK> who overseas our Missouri operations
<UNK>, you can comment a little bit about the process the commission has gone through in the past and then sort of where we are at
Thanks, <UNK>
