Andrew Kirk - Ameren Corp. Warner L. Baxter - Ameren Corp. Michael L. Moehn - Ameren Corp. Marty Lyons - Ameren Corp..

Jeremy Tonet - JPMorgan Securities LLC Durgesh Chopra - Evercore Group LLC Paul Patterson - Glenrock Associates LLC Sangita Jain - KeyBanc Capital Markets, Inc. Andrew Stuart Levi - HITE Hedge Asset Management LLC Insoo Kim - Goldman Sachs & Co. LLC David Paz - Wolfe Research LLC.

Greetings and welcome to the Ameren Corporation's Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. 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 Chairman, President, and Chief Executive Officer; and Michael Moehn, our Executive Vice President and Chief Financial Officer; as well as other members of the Ameren management team joining remotely.

Warner and Michael will discuss our earnings results and guidance as well as provide a business update. Then, we will open the call for questions. Before we begin, let me cover a few administrative details.

This call contains time-sensitive data that's accurate only as of the date of today's live broadcast and redistribution of this broadcast is prohibited. To assist with our call this morning, we have posted a presentation on the AmerenInvestors.com homepage that will be referenced by our speakers.

As noted on page 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, strategies, objectives, events, conditions, and financial performance.

We caution you that various factors could cause actual results to differ materially from those anticipated. For additional information concerning these factors, please read the forward-looking statements section in the news release we issued yesterday, and the forward-looking statements and risk factors 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..

reliability and affordability. Our plan is clearly transformational as it significantly accelerates our carbon emission reduction goals from those that we established in 2017. In particular, the plan targets a 50% reduction in carbon emissions below 2005 levels by 2030 and an 85% reduction by 2040.

And by 2050, our goal is to achieve net-zero carbon emissions across all of Ameren. We plan to achieve these goals by making significant investments in renewable generation. Under our preferred plan, we would add 3,100 megawatts of wind and solar to our portfolio, representing approximately $4.5 billion of investment by 2030.

By 2040, in total, 5,400 megawatts of wind and solar would be added for a total investment of approximately $8 billion. These renewable generation additions include our wind generation investment of $1.2 billion for 700 megawatts that we expect will be substantially complete this year.

The plan also advances the retirement of two of our coal-fired energy centers, with all of our coal-fired energy centers retired by 2042. It is important to note that our plan does not include the addition of any combined cycle natural gas plants.

Further, we expect to seek an extension of the operating license of our carbon-free Callaway Nuclear Energy Center beyond the current expiration date of 2044. And we will continue to implement robust energy efficiency and demand response programs.

Importantly, our plan represents a responsible transition of our portfolio that takes into consideration environmental stewardship, system reliability, and customer affordability.

Our plan leverages the very low-cost generation that our customers enjoy today and used it as a bridge to enable us to add greater levels of intermittent resources in the future while ensuring system reliability.

Our plan also intends to leverage important research and development investments by the public and private sectors and incorporate advances in clean energy technologies over time to achieve our net-zero carbon emissions goal. We are very excited about this transformational plan and are already taking steps to implement it.

In September, we issued a request for proposal that will enable us to assess and take the appropriate next steps on solar and wind projects that will deliver the best value to our customers, consistent with our IRP. Responses to our request have been robust and we are in the process of assessing those proposals as we speak.

We will provide an update on our assessment as well as our five-year capital plan for 2021 to 2025 during our year-end conference call in February. Consistent with our approach in the past, we will consider a variety of factors before we include such major projects into our plan. Having said that, one thing is clear.

Our IRP includes significant incremental investment opportunities including approximately $3 billion by 2030.

As I said before, we are very excited about our transformational plan as well as how Ameren and our industry are leading the country and the world in executing responsible and achievable plans to significantly reduce carbon emissions and in so doing creating a cleaner and sustainable energy future.

Speaking of creating a cleaner and sustainable energy future, let's move now to page 8 for an update on our $1.2 billion wind generation investment plan to achieve compliance with Missouri's Renewable Energy Standard through the acquisition of 700 megawatts of new wind generation at two sites in Missouri.

Good progress continues to be made at both facilities. All of the construction and related installation of key components for the 400 megawatt facility have been completed and testing of the units will be completed over the next several weeks. As a result, we expect a 400 megawatt facility to be in service by the end of 2020.

For the 300 megawatt facility, we are working closely with the developer to monitor the shipment and installation of remaining facility components.

As we discussed on prior earnings calls this year, we have experienced some delays in the project due to several factors including those related to challenges in the global supply chain due to COVID-19, as well as in the transportation of certain components.

As a result, we expect a portion of the project, or approximately $200 million of investment, to be placed in service in the first quarter of 2021. We do not expect this to have a significant economic consequences or reduce the production tax credits for this project because of the recent rule changes made by the U.S.

Department of the Treasury to extend the in-service criteria by one year to December 31, 2021.

Moving to page 9, looking ahead through the end of this decade, we have a robust pipeline of investment opportunities of over $39 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter, and cleaner.

This robust pipeline now includes the new renewable generation proposed in the preferred plan of the Missouri Integrated Resource Plan, which added approximately $3 billion of incremental investment opportunities in 2020 to 2029.

Importantly, these investment opportunities exclude any new regionally beneficial transmission projects that would increase the reliability and resiliency of the energy grid, as well as enable additional renewable generation projects.

Of course, our investment opportunities will not only create a stronger and cleaner energy grid to meet our customers' needs and exceed their expectations, but they will also create thousands of jobs for local economies.

Maintaining constructive energy policies that support robust investment in energy infrastructure will be critical to meeting our country's future energy needs and delivering on our customers' expectations.

Moving to page 10; a few moments ago, I mentioned that we are focused on delivering a sustainable energy future for our customers, communities, and our country. Consistent with that focus, we recently published a stakeholder presentation called Leading the Way to a Sustainable Energy Future, which is Ameren's vision statement.

This presentation demonstrates how we have been effectively integrating our focus on environmental, social, governance and sustainability matters into our corporate strategy. This slide summarizes our sustainability value proposition for environmental, social, and governance matters.

We have a strong environmental focus which is, in part, demonstrated by the Missouri Integrated Resource Plan I discussed earlier. Importantly, the preferred plan discussed earlier is consistent with the objectives of the Paris Agreement and limiting global temperature rise to 1.5 degrees Celsius.

Emissions from our coal-fired energy centers are well below state and federal limits, and our natural gas pipeline system has no cast or wrought iron pipes. We also have a strong long-term commitment to our customers and communities to be socially responsible and economically impactful.

There has never been a more important time than now to be a leader in this area.

In terms of COVID-19 relief, we have been tirelessly working to help our customers in need, including implementing disconnection moratoriums, providing special bill payment plans, and providing over $15 million of critical funds for energy assistance and other basic needs.

And we have set up and spoken out against racial injustice and discrimination and have taken actions to enable our company and community to further embrace diversity, equity, and inclusion. And we were honored to again be recognized by DiversityInc as one of the top utilities in the country for diversity, equity and inclusion.

Finally, our strong corporate governance is led by a diverse Board of Directors, focused on strong oversight that's aligned with ESG matters. And our executive compensation practices include performance metrics that are tied to sustainable long-term performance and progress towards a cleaner, sustainable energy future.

I encourage you to take some time to read more about our sustainability value proposition. You can find this presentation at amereninvestors.com. Moving to page 11; to sum up our value proposition, the consistent execution of our strategy over many years and on many fronts has positioned us well for future success.

We remain firmly convinced that the execution of this strategy in 2020 and beyond will deliver superior value to our customers, shareholders, and the environment. In May, we affirmed our five-year growth plan, which included our expectation of 6% to 8% compound annual earnings per share growth for the 2020 through 2024 period.

This earnings growth is primarily driven by our approximate 9% compound annual rate base growth from 2019 through 2024, and compares very favorably with our regulated utility peers.

I am confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done. In addition, we will continue to advocate for constructive regulatory frameworks and energy policies to support these important investments for the future.

Further, our shares continue to offer investors a solid dividend. Last month, Ameren's board of directors expressed its confidence in our long-term growth plan by increasing the dividend by 4%, the 7th consecutive year with a dividend increase.

Given the midpoint of our 2020 earnings guidance range that I discussed earlier, our dividend payout ratio is approximate 59%, which stores the (00:21:13) lower end of our company's targeted dividend payout ratio range of 55% to 70%. This factor, combined with strong earnings growth expectations, (00:21:24) well for future dividend growth.

Of course, future dividend decisions will be driven by earnings growth, in addition to cash flows and other business conditions. Together, we believe our strong earnings growth outlook, combined with our solid dividend, results in an attractive total return opportunity for shareholders.

Again, thank you all for joining us today, and I'll now turn the call over to Michael..

Thanks, Warner, and good morning, everyone. Turning now to page 13 of our presentation. Yesterday we reported third quarter 2020 earnings of $1.47 per share compared to earnings of $1.47 per share for the year-ago quarter. The key factors by segment that drove the year-over-year results are highlighted on this page.

Ameren Transmission and Ameren Illinois Natural Gas earnings were up $0.03 and $0.02 per share, respectively, reflecting increased infrastructure investments.

In Ameren Illinois Electric Distribution earnings increased $0.01 per share, reflecting increased infrastructure and energy efficiency investments, partially offset by a lower expected allowed of return on equity under (00:22:28) performance-based ratemaking.

Ameren Missouri, our largest segment, reported earnings that declined $0.02 per share compared to the prior year.

The comparison was primarily driven by a lower electric sales of $0.08 per share due to both milder than normal temperatures in the third quarter compared to warmer than normal temperatures in the previous year, as well as lower weather-normalized sales, primarily due to impacts of COVID-19.

Ameren Missouri's earnings also reflected lower MEEIA performance incentives of $0.03 per share compared to the year-ago period.

These unfavorable factors were partially offset by new electric service rates effective April 1, which increased earnings by $0.08 per share compared to the year-ago period, as well as lower operations and maintenance expenses reflecting a disciplined cost management, which increased earnings by $0.04 per share.

And finally, Ameren Parent and Other results decreased $0.04 per share, primarily due to the timing of income tax expense, which is not expected to impact full year earnings and increased interest expense resulting from higher long-term debt outstanding.

Moving now to page 14 of our presentation, I'd like to briefly touch on key drivers impacting our 2020 earnings guidance. As Warner stated, we narrowed our 2020 earnings guidance to a range of $3.40 to $3.55 per share from $3.40 to $3.60 per share.

This guidance range assumes normal weather in the remaining three months of the year, as well as reflect sales update since our second quarter earnings call in August primarily related to COVID-19. For the year, we expect total weather normalized sales in Ameren Missouri to be down approximately 2%.

Broken down by customer class, we now expect 2020 commercial sales to decline approximately 6.5%, industrial sales to decline approximately 3% and residential sales to increase approximately 3.5%.

Overall, our update today is largely consistent with our expectations outlined in our call in May in terms of both total sales and EPS impacts for 2020 due to COVID-19.

Before moving on, let me briefly cover electric sales trends for Ameren Illinois Electric Distribution for the first nine months of this year compared to the first nine months of last year. Weather-normalized kilowatt-hour sales to Illinois residential customers increased a little over 2.5%.

And weather-normalized kilowatt-hour sales to Illinois commercial and industrial customers decreased 6.5% and nearly 8%, respectively. Recall that changes in electric sales in Illinois no matter the cause do not affect our earnings since we have full revenue decoupling.

Moving on to other guidance considerations; select earnings considerations for the balance of the year are listed on this page. As Warner mentioned earlier, we remain very focused on maintaining disciplined cost management for the remainder of the year.

Our focus in these areas enabled us to effectively address the headwinds we have faced from COVID-19 to-date. Moving now to page 15 for an update on Ameren Illinois regulatory matters. In April, we made our required annual electric distribution rate update filing.

Under Illinois performance-based ratemaking, we are required to file annual rate updates to systematically adjust cash flows over time for changes in costs of service and to true up any prior period over and under recovery (00:25:53) of such costs.

In late September, the ICC staff recommended a $49 million base rate decrease compared to our rate – compared to our request of a $45 million base rate decrease. A decision is expected by December with new rates expected to be effective in January 2021.

Earlier this year, we also filed with the ICC for an annual increase in Ameren Illinois natural gas distribution rates using a 2021 future test year and has since updated our request to in September (00:26:29). We're requesting a rate increase of $97 million, while the ICC staff has recommended an increase of $60 million.

A decision is expected by January 2021 with new rates expected to be effective in February 2021. Turning now to page 16 for an update on financing activities. I'd like to highlight an important milestone recently reached for our wind generation investments.

On October 9, Ameren Missouri issued $550 million of 2.625% green first mortgage bonds due in 2051. This issuance marked the first green bond offering for the company as the lowest coupon that Ameren Missouri or any Ameren issuer has secured on 30-year debt.

At the time of issuance, it was also the fifth lowest 30-year coupon ever in the power and utility industry. Proceeds from the issuance will be used to fund a portion of the 700 megawatts of wind generation investment.

We also expect to settle a portion of the equity forward sale agreement before the end of this year with proceeds also used to fund a portion of the wind generation investment. We expect to settle the remainder of the equity forward sale agreement when the 300-megawatt wind project is completed in the first quarter of 2021.

Finally, on October 15, Ameren Corporation redeemed $350 million or 2.7% senior unsecured debt at par that to mature on November 15. A portion of the proceeds from the $800 million issuance by Ameren Corporation in early April was used to fund the repayment.

Before moving on, I'd also like to mention that we expect Ameren Illinois to issue long-term debt this year to repay short-term debt. Moving now to page 17, we plan to provide 2021 earnings guidance when we release fourth quarter results in February next year.

Using our 2020 year-to-date results and guidance as a reference point, we have listed on this page select items to consider as you think about the earnings outlook for next year.

Beginning with Missouri, as previously noted, the 700 megawatts of wind generation are expected to be substantially in-service by the end of 2020 with a portion of the 300-megawatt facility expected to be in service in the first quarter of 2021. As a result, we expect to see contributions earnings from these investments beginning in 2021.

The 2021 earnings comparison is also expected to be favorably impacted (00:28:54) in the first quarter next year by the increase in Missouri electric service rates that took effect April 1, 2020.

We also expect higher weather-normalized electric sales in 2021 compared to 2020, reflecting the continuing improvement in economic activities since the COVID-19 lockdowns in the second quarter of this year.

Further, we expect the return to normal weather in 2021 will increase Ameren Missouri earnings by approximately $0.04 compared to 2020 results through the third quarter, assuming normal weather in the last quarter this year.

As a result in Missouri PSC approval of our requested change in the way we account for Callaway's scheduled refueling and maintenance expenses, we expect the amortization expenses associated with the fall 2020 outage to be approximately $0.07 per share higher in 2021 than the amortization expense expected to be realized in 2020.

The fall 2020 outage is expected to cost approximately $0.11 per share and will be amortized over approximately 18 months starting in December of this year.

Moving on, earnings from our FERC-regulated electric transmission activities are expected to benefit from additional investments in Ameren Illinois and ATXI projects made under our forward-looking formula ratemaking.

For Ameren Illinois Electric Distribution, earnings are expected to benefit in 2021 compared to 2020 from an additional infrastructure investments made under the Illinois performance-based ratemaking. The allowed ROE under the formula would be at the average of the 2021 30-year treasury yield plus 5.8%, which applied to year-end rate base.

For Ameren Illinois Natural Gas, earnings are expected to benefit from higher delivery service rates based on a 2021 future test year and from infrastructure investments qualifying for rider treatment.

Finally, the issuance of common shares under the forward sale agreement to fund a portion of our wind generation investments and under our dividend reinvestment and employee benefit plans as well as additional equity of approximately $150 million (00:30:58) in 2021 are expected to unfavorably impact earnings per share.

Of course, in 2021, we will seek to manage all of our businesses to earn as close to our allowed return as possible, while being mindful of operating in other business needs (00:31:11). Finally, turning to page 18, I will summarize. We have a strong team and are well-positioned to continue executing our plan.

We continue to expect to deliver solid earnings growth in 2020 as we successfully execute our strategy and navigate the impacts of COVID-19. As we look to the longer term, we continue to expect strong earnings per share growth driven by robust rate base growth and disciplined cost management.

Further, we believe the growth compares very favorably with the growth of our utility peers, and Ameren shares continue to offer investors a solid dividend. In total, we have attractive total shareholder return story that converts very favorably to our peers. This concludes my prepared remarks. With that, now, we'll invite your questions..

Thank you. We will now be conducting a question-and-answer session. We ask that you please limit your time to one question and one follow-up as necessary. Our first question comes from line of Jeremy Tonet with JPMorgan. Please proceed with your question..

Hi. Good morning..

Good morning, Jeremy. Good morning.

How are you doing?.

Great. Thank you..

Terrific..

Just want to dig in on 2021 a little bit more if I could and would you be able to provide any additional color on the sales outlook across different sectors; residential, commercial, industrial in your 2021 earnings considerations? And what local trends are you seeing and how do you expect these trends to change over 2021 with COVID recovery? And then lastly, are there any additional considerations for your gas versus electric operations under continued COVID impact?.

Yeah. So, Jeremy, so, lot to unpack there. Clearly, Michael laid out some of the trends that we have seen in 2020, and now obviously, we've talked a little bit about 2021 in the past. So, Michael, why don't you maybe touch on some of those trends? And then we can sort of look at the gas business and sort of the second part of that question..

Yeah. Good morning. Appreciate the question. Yeah, look, we did lay out quite a bit of detail, obviously, onto2020, and we continue to, I think, track pretty well with where we expected things to come out as we talked about the beginning of the year. I think for the most part, it's coming in about where we expected. The mix is a little bit different.

As you think about 2021, I mean, we're doing a lot of different scenarios, Jeremy, and we're thinking about how this recovery is going to continue. And we are obviously modeling a recovery to continue into 2021, and we're looking hard within each of those sectors.

And obviously, you've seen the strong piece on the residential side, industrial, it's come back for the most part. Commercial is the area we're spending a lot of time on just really trying to understand what that impact will be for retail, et cetera.

So, we haven't, obviously, provided what we're going to exactly see for 2021 because we want to really see where 2020 continues to finish out here. Being really thoughtful about it, I mean, I – to be honest, I'm not seeing a lot of scenarios where we would gain all of that back; I mean, I'll be honest about that.

But we clearly do continue to see the recovery continue in place. Now, all of that is premised on the fact that we wouldn't go back to any sort of shelter-in-place orders. And for the most part, where we're impacted by earnings here in Missouri, we're pretty well opened up.

I mean, you do have certain sectors operating at some limited capacity, restaurants or retail, those kind of things. And so, we're assuming that some of that continues to come back. But again, all that's premised on the fact that we wouldn't have any significant sort of shelter in place at the moment..

Yeah. Michael, I think that's a great summary. So, I think Michael summed it up well. We continue to see really pretty much what we expected at the outset. We expected a modest recovery over time, and that's what we're seeing.

And we'll get more guidance, of course, when we come out in our February conference call with regard to 2021 and beyond, so we'll be able to give you some more perspectives. You asked about the gas business. And so, keep in mind, the – our big gas business.

We have a small gas business in Missouri, but the big gas business is in Illinois, and that's decoupled. And so, when you think in terms of COVID-19, the implications there are really nonexistent in terms of the overall impacts on sales and margins and the like..

Yeah. That's exactly right, Warner. I mean, we are decoupled for the residential and small noncommercial customer in Illinois, which is probably about 90% of the margin over there, Jeremy. So that's probably the – really the way to think about that for 2021..

Got it. That's very helpful. Thank you.

And maybe just pivoting a bit over to the Missouri rate cases and what are the primary drivers of the timing of the Missouri rate cases here? And do you expect to incorporate any IRP elements in the electric filing around the plant retirements, and are there any notable test year differences under a first half 2021 filing versus filing now?.

Yeah, Jeremy. So, this is Warner. Look, I think that we'll be able to provide a lot more detail when we ultimately file the rate case.

But as we've said before when we think about filing this next rate review, we're going to be mindful of the fact that we have some big wind generation projects, right, renewable wind generation projects that we expect to be substantially in-service by the end of the year.

And so, that's clearly a driver, always an opportunity to true up for costs and sales. Those will, obviously, be drivers as well. But to say there'll be any significant variations at this point in time, it'd be premature. Marty and his team are diligently putting together that rate review.

And as we said, we'll put together in the first half of next year. And so, I really think the best thing to say is that, obviously, the wind generation is a big portion of it, as well as the Smart Energy Plan, right? I keep and (00:37:16) not lose focus on the fact that we're making significant investments in Missouri.

So, those will be some key drivers to be looking towards, and we'll be able to give you a better update when we file that plan sometime in the first half of next year..

Got it. That's helpful. I appreciate it. Thank you..

Thanks, Jeremy. Have a good day..

Thank you. Our next question comes from the line of Durgesh Chopra with Evercore ISI. Please proceed with your question..

Good morning..

Good morning..

Hey. Good morning, guys. Thank you for taking my question. I'm sorry I didn't realize I was in mute. Maybe – you guys talked about sort of you're going to be cautious and disciplined including some of those incremental CapEx on the Q4 call.

Perhaps what are – between now and Q4 sort of what goes into that consideration of including that CapEx (00:38:11)? Is there something incremental on the IRP that you're going to hear (00:38:14)? Just any thoughts or color around that would be appreciated..

Sure. Sure. So, this is Warner, again. Look, as we've said in the past, we'll be thoughtful in terms of when we include new renewable generation projects, things from the Integrated Resource Plan into our long-term CapEx and look at (00:38:34) a variety of factors.

And certainly, one important matter that we'll be mindful of is that Marty and his team, they've issued an RFP for the wind and solar projects. And so, that's already out there. So, well, not only we filed (00:38:46) the IRP, but we're taking steps to execute elements of that plan.

And of course, an RFP and our ability to assess those projects from that RFP will be one important consideration that we'll look at. And, of course, there are regulatory factors.

It's always – we want to be thoughtful in terms of when we do these things, looking at the nature of the projects, the regulatory approvals that would be required, all those things go into our determination of when we actually put it in there.

But as I said at the outset, one thing is clear, is that the opportunities from our Integrated Resource Plan are significant, and there are $3 billion through 2030.

And so, Michael, any other thing that you would add to that?.

(00:39:25), that's a great summary, I think, of the IRP itself. I mean, I think of just the normal kind of budgeting and stuff, the updates that we'll do in the February timeframe, we go through that process obviously throughout the year. We continue to look at capital allocation issues.

And so, it'll be the normal updates just in the course of the business that we run through. And so, you certainly should expect to see that. And that's typically when we do that in that February call as well..

Absolutely. Absolutely..

That's great. And maybe just a quick follow-up.

Could you comment on sort of how much room do you have (00:39:58)? I mean, that's sort of something that you've routinely talked with investors about, and how does the IRP plan fit in to that?.

Yeah. Perfect, appreciate that question. Really what we've said in the past, I think you were referring to the 2.85% cap that was built in the Senate Bill 564. Really, there's only two things that have occurred. And again, that's a CAGR over that 2017 through 2023 time period. Two things have happened since that legislation was passed.

We had the – obviously, the federal tax reduction that occurred in 2019 (00:40:30). We're able to keep half of that for purposes of that calculation. And then we just obviously concluded this last rate review, which was another 1% decrease.

So we haven't specifically said exactly how much headroom, but to give you a sense that both of those things have been rate decreases. You've got the 2.85% CAGR, so it gives you hopefully an idea of what kind of headroom we have today..

Great. Thanks, guys. Appreciate the time..

Sure..

Thank you. Our next question comes from the line of Julien Dumoulin-Smith with Bank of America. Please proceed with your question..

Julien, how are you doing?.

Hey, good morning. It's actually Darius Lazney (00:41:11) on for Julien.

How are you?.

I'm doing terrific.

How are you doing?.

Doing well. Thanks. I just wanted to quickly touch on your 2020 guidance. As I've looked at your drivers relative to the Q2 update, it looks like you're expecting an incrementally higher ROE in Illinois and it looks like your Q4 COVID impact, once you back out the Q3 impact, looks like that's gotten a little bit better by about a penny.

So, can you maybe just help us understand a little bit better what drove the reduction by a nickel at the high end?.

Yeah. I mean, really, I think if you think about the reduction of the nickel, I mean, so, if you go to – through 9.30% (00:41:56), we're down about $0.04, obviously, on weather. We've had a number of COVID impacts there. You can see about $0.17 or so along with that.

And as we thought about it, we've offset a lot of those COVID impacts, obviously, with some disciplined cost management on the O&M side. And really, it's about adjusting that down by a couple of cents on the weather piece of that, really, is what drove that decision..

Okay, great. Thank you. And if I could just touch on the dividend briefly. You mentioned in your remarks earlier, you guys – it sounds like you have a little bit of latitude relative to your 55% to 70% range.

So, I know future decisions are obviously subject to board approval, but how should we think about future increases in the payout relative to the payout range and also to your 6% to 8% EPS CAGR?.

Yeah. And I appreciate – this is Warner again. Clearly, the dividend is an important area of focus for our board of directors. And we've been clear all along that we target our dividend payout ratio of 55% to 70%.

And so, as you know, over the last several years that we've allocated a great deal of our capital to rate-based growth, which has obviously driven strong earnings per share growth, which that couple with our solid dividend has really delivered really strong total shareholder returns.

So at the same time, I think, as you pointed out, we've seen that dividend payout ratio now come lower down our overall range. And so, that factor coupled with our strong earnings per share growth expectations of 6% to 8% really positions us well for future dividend growth.

Now, I can't ultimately predict that, but the point is that we try to execute our strategy and position ourselves for a solid dividend growth and perhaps even a greater dividend growth in the future. And so you saw our board of directors just increased it to 4% just recently.

I think that's evidence of their belief on our overall strategic plan and their confidence in it. And so, we'll continue to visit that going forward, but that does just give us an opportunity certainly when you look at those metrics to continue to grow that dividend..

Okay. Thank you very much..

Sure..

Thank you. Our next question comes from the line of Paul Patterson with Glenrock Associates. Please proceed with your question..

Hello, Paul.

How are you?.

Thank you (44:25). All right. I'm managing. A busy day today.

So, in terms of Illinois, legislatively speaking, do you expect anything to happen in this abbreviated session here? Would you switch to clean energy or the formula rate stuff that you put forward and what have you? I mean, do you see anything legislatively significantly happening?.

Yeah..

(44:52)?.

Yeah. So, Paul, this is Warner. So, yeah, and I said in the talking points, we do not expect comprehensive energy legislation to be addressed in the veto session which is coming up. They obviously have two sessions scheduled in November and December for certain days. So, we do not see that at this point. Of course, we can't certainly predict that.

But as we sit here now, we do not see comprehensive legislation on really any of those fronts being addressed in the veto session at this time..

Okay.

And then just to clarify, it looks to me that you're – although you're lowering the top end of the guidance for this year, your growth rate is still off of the midpoint of your original guidance of 2020, correct?.

Yeah..

That's the way to think about it. Absolutely. This is Michael..

Awesome. Thanks, guys..

Sure, Paul. Thank you..

Thank you. Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Please proceed with your question..

Hi. Good morning..

Good morning..

This is – good morning. This is Sangita for Sophie. Thanks for taking my question..

Absolutely..

Just to follow-up on the Illinois legislature question.

Can you tell us when they do come back full time and if you have a sense of when they may decide to pick up this piece of legislation?.

Well, so, we laid out on the talking points the specific dates for the veto session. And....

Yeah..

...and there's a thing called a lame duck session. There's been no specific dates for them to set that. That would be sometime in January. So, whether they have that remains to be seen. That's ultimately up to the Speaker and the President and the Senate. So, no specific dates.

But one of the things getting to the second part of your question is when might they take it up. I've learned long ago not to handicap, not just legislative proposals or when legislation ultimately be taken up.

I would just say this, that there – stakeholders are absolutely engaged on energy legislation in a lot of various forms including the Downstate Clean Energy Affordability Act, right? That is continuing to be a topic of conversation, as well as comprehensive energy legislation to address items and issues that are being addressed up in the northern part of the state.

And, obviously, we're very focused on things that are new in the southern part of the state. So because of that, I do expect energy legislation to be a topic of discussion in the next session, but I certainly can't predict when and what form it'll take at this time.

All I can say is that Richard Mark and his team are advocating for the Downstate Clean Energy Affordability Act for all of the right reasons because we believe it will deliver a significant value for our customers, certainly for the state of Illinois.

And we believe, too, it'll continue to deliver long-term value for not just customers, but also for shareholders. So, stay tuned..

Oh, thanks for that. And then, if I can follow up with just one more.

Can you tell us what the timeline looks like for the Missouri IRP approval since that'll give us some kind of an indication on CapEx (48:11)?.

Sure. A couple of things around that. I know Marty Lyons is on the line, he can jump into some of the specifics. But there is no set time period with regard to the Integrated Resource Plan. History has shown that it's usually all addressed within sort of one year of the filing.

And, I think, last time, it was around nine months when it was all said and done. And so, remember, too, the Commission, when they go through this, they really approve the overall process and what we go through in terms of putting together the Integrated Resource Plan.

They don't necessarily go through and approve specific elements or projects contained within that plan. And so, the process has been started. Filings have been made. And then, Marty, I'll let you come on in if there's any other specific details around that.

But, again, the Commission doesn't have a set time period, but history has shown it's usually done within 9 to 12 months.

Marty, do you have anything to add from that?.

Warner, that's all accurate. I would say that once we file the IRP, there's opportunities for others, other stakeholders to comment on their perspectives and any deficiencies they see. The Commission at its option can have a hearing to discuss those matters that others bring up and ultimately will provide some perspective on the IRP.

But typically, what the Commission does is just identifies whether there were any deficiencies or not. It's not necessarily an approval of the IRP itself or an endorsement of the IRP.

So, with all that said, the other thing I would simply mention is in our prepared remarks, we mentioned that we have already issued a request for proposal relating to projects that we would plan to do in accordance with our preferred plan.

And we're not precluded from moving forward with negotiating or announcing or filing for certificate of convenience and need with the Commission. There's nothing that precludes us from taking any of those steps before the Commission actually rules on the Integrated Resource Plan in the way that I mentioned..

Great. Thanks. Thank you so much and that was very helpful..

Great. Thank you..

Thank you. Our next question comes from the line of Andrew Levi with HITE Hedge. Please proceed with your question..

Hey, guys.

How are you doing?.

Good morning.

How are you (50:56)?.

Terrific.

How are you doing?.

I'm doing well..

That's terrific..

Actually, I think I'm all set. I think Paul already asked my questions. But just to clarify, so the 5% delta from your guidance, we shouldn't carry that into 2021. There's really no effect from that as far as the midpoint or what was going to be your base or anything like that.

It's all kind of weather related and kind of one time, I wouldn't say (51:31) one-time stuff, but you don't extend (51:32) stuff that you can – that will come back in 2021..

You got it, Andy. I think you said 5%, but $0.05, yeah, is – yeah..

I said $0.05. Yeah..

Yeah. So, anyway, so....

Andy, you made my knees buckle when you said 5% Let's be clear, (51:52), it's $0.05..

Did I say that? I apologize (51:55)..

No. no. No worries. But you're thinking about the right way in terms of the jump-off point, so..

Okay. Great. Thank you very much..

Sure. Thank you, Andy..

Thank you. Our next question comes from line of Insoo Kim with Goldman Sachs. Please proceed with your question..

Good morning, Insoo.

How are you?.

Thank you (52:16). Good. Good morning. Just one question from me.

Can you just give us the latest update on the appeals process for the, I think, the judge's ruling last year on the Labadie and Rush Island plants and whether we expect any updates before the end of the year?.

Sure. Insoo, this is Warner again. We have filed our briefs with the appellate courts, obviously, putting forth what we believe are very strong arguments. And so, really, where things are at today is that we're waiting for the court to schedule oral arguments. And we're still hopeful to have those scheduled by the end of the year.

So, that's – it's going through the normal process. Of course, there are no specific timeframe that the court has to act or to take specific action. But – so, we'll wait to hear the schedule, and it's still possible to have them still by the end of the year..

Got it.

And if the decision – the appeals process is going against you, then what are procedurally the next steps that you're considering? And given these plants in your IRP, at least, I know you've outlined some of the retirement dates and this could potentially require you to take other actions, like what are some of the thought processes there?.

So, I think, Insoo – and I'm just making sure it's a little bit garbled here.

In terms of – is your specific question, as a result of the court's decision how much time might that change? Is that what your question was in terms of our IRP?.

Not necessarily IRP.

But if the appeals process doesn't go your way, what are the next steps and just thought processes around given the remaining rate base of the plants, what your thought process around the plants will be?.

Sure. Look, if – as I said, we strongly believe we have a great case. But having said that, if things go against what we think is the appropriate answer, then we'll do what we always do. We'll step back. We'll take a look at what we believe our next steps are. It depends on the specific actions and things that the court says, of course.

And then, we'll take a look and determine what we think, is the – in the best long-term interest of our customers and certainly our shareholders. So, it'd be premature to speculate just exactly where that might head..

Understood. Thank you very much..

Thanks, Insoo..

Take care..

Thank you. Our next question comes from Line of David Paz with Wolfe Research. Please proceed with your question..

Good morning, David.

How are you?.

Yeah. Good morning, Warner.

How are you doing?.

I'm terrific. Thank you..

Great. Just one follow-up question maybe. Assuming you were to own the 1.2 gigawatts of renewables under your preferred option in the IRP, and I think those are projected to be online by year-end 2025....

Correct..

...do you anticipate that to be – have an upward bias on your EPS growth target or will that CapEx – renewables CapEx push out or displace other nonrenewables CapEx in that 2024, 2025 period? Thanks..

Yeah. Hey, David. This is Michael. Probably won't be a terribly satisfactory answer. But I mean, I think – look, we're probably a bit premature to speculate on that.

I mean, it's something that we will be very thoughtful about and we'll take a number of things under consideration when you look at it just in terms of what the overall rate impact is, the timing of it. I mean, hopefully, we'll be able to give us some additional color on that in February as Warner talked about.

I mean, we don't want to get ahead of just the regulatory process there. But we'll be very thoughtful about it, but it's probably a bit premature to answer that..

Okay. Understand. Thank you..

Thanks, David..

Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Kirk for any final comments..

Yeah. Thank you for participating in this call. A replay of this call will be available for one year on our website. If you have questions, you may call the contacts listed on our earnings release. Financial inquiries should be directed to me, Andrew Kirk. Media should call Brad Brown. Again, thank you for your interest in Ameren.

We look forward to visiting with you at our EEI meetings next week. Until then, have a great day..

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