2008 Ameren Meeting of Shareholders

Transcription

1 2008 Ameren Meeting of Shareholders April 22,

2 Gary Rainwater Chairman, President & Chief Executive Officer Ameren Corporation 2

3 Agenda Welcome & Introduction Subsidiary Balloting Central Illinois Light Co. Central Illinois Public Service Co. Illinois Power Co. Union Electric Co. Results of Subsidiary Balloting Ameren Corporation Balloting Business Review Questions & Discussion Results of Ameren Corporation Balloting Adjournment 3

4 Introduction of Officers Steve Sullivan, Senior Vice President, General Counsel & Secretary Alan Kelley, Chairman, President and CEO, Ameren Energy Resources Richard Mark, Senior Vice President-Missouri Energy Delivery, AmerenUE Chuck Naslund, Senior Vice President & Chief Nuclear Officer, AmerenUE Tom Voss, Chairman, President and CEO, AmerenUE 4

5 Introduction of Officers Scott Cisel, Chairman, President and CEO, AmerenCILCO, AmerenCIPS and AmerenIP Dan Cole, Senior Vice President Administration, Ameren Services Donna Martin, Senior Vice President and Chief Human Resources Officer Warner Baxter, Chief Financial Officer, and President and CEO, Ameren Services 5

6 Agenda Welcome & Introduction Subsidiary Balloting Central Illinois Light Co. Central Illinois Public Service Co. Illinois Power Co. Union Electric Co. Results of Subsidiary Balloting Ameren Corporation Balloting Business Review Questions & Discussion Results of Ameren Corporation Balloting Adjournment 6

7 Balloting Central Illinois Light Co Central Illinois Public Service Co. Illinois Power Co. Union Electric Co. Results of Balloting 7

8 Balloting Ameren Corporation 8

9 Cautionary Statements Regulation G Statement Ameren has presented certain information in this presentation on a diluted cents per share basis. These diluted per share amounts reflect certain factors that directly impact Ameren s total earnings per share. The non-gaap earnings per share and non-gaap earnings per share guidance excludes one or more of the following: costs related to severe January 2007 storms, abnormal weather, the earnings impact of the settlement agreement among parties in Illinois for comprehensive electric rate relief and customer assistance, the reversal of accruals made in 2006 for low-income energy assistance and energy efficiency program funding commitments in Illinois and a March 2007 FERC order, which retroactively adjusted prior years regional transmission organization costs. Ameren believes this information is useful because it enables readers to better understand the impact of these factors on Ameren s results of operations and earnings per share. In providing non-gaap earnings guidance and a non-gaap earnings growth forecast, there could be differences between non-gaap earnings and earnings prepared in accordance with Generally Accepted Accounting Principles (GAAP) for unusual items, such as the 2007 Illinois electric settlement and the impact of abnormal weather. Except for the Illinois settlement, Ameren is not able to estimate the impact, if any, on future GAAP earnings of these items. Therefore, Ameren is not able to provide a corresponding GAAP equivalent for its earnings growth rate forecast. Forward-looking Statements Ameren s consolidated and segment earnings guidance excludes one or more of the following: costs related to severe January 2007 storms, abnormal weather, the earnings impact of the settlement agreement among parties in Illinois for comprehensive electric rate relief and customer assistance, the reversal of accruals made in 2006 for low-income energy assistance and energy efficiency program funding commitments in Illinois and a March 2007 FERC order, which retroactively adjusted prior years regional transmission organization costs. Ameren s earnings guidance assumes normal weather and is subject to, among other things, regulatory and legislative decisions, plant operations, energy market and economic conditions, severe storms, unusual or otherwise unexpected gains or losses and other risks and uncertainties outlined in Ameren s Forward-looking Statements and Risk Factors sections in its periodic filings with the Securities and Exchange Commission. 9

10 a Pivotal Year Reached comprehensive settlement in Illinois to transition to market electric rates Settled all governmental issues related to the Taum Sauk reservoir breach and began reconstruction Increased investments to harden distribution system and improve reliability Major environmental upgrades at power plants began Laid foundation for future earnings growth 10

11 Vision, Mission, Values Vision: To be the best utility company in the U.S. - in the eyes of our customers, shareholders, communities and employees Mission: To meet our customers energy needs in a safe, reliable, efficient and environmentally responsible manner Values: Integrity, Respect, Accountability, Stewardship, Teamwork, and a Commitment to Excellence 11

12 Historical Perspective Industry cost leader Significant customer value Electric rates were historically among the lowest in U.S. High quality reliability High performing power plants Labadie - Best in Class Sioux - Best in Class Grand Tower - Best in Class Solid investment Strong, reliable dividend 12

13 Changing Cost Environment Declining Cost Environment Cost reductions and load growth Fewer rate cases Beneficial to customers Regulatory lag - positive Rising Cost Environment Virtually all aspects of business Additions to rate base More frequent rate cases Higher rates for customers Regulatory lag - negative Rates Base load generation investments Climate change investments Environmental investments Reliability investments

14 Changing Regulatory Framework Constructive regulatory frameworks are the key to success Customer satisfaction is critical More frequent rate cases Smaller rate increases better than large Cost tracking mechanisms Customer focus Meet 21st century expectations Find right balance between quality and cost Fair return on investment Meaningful investment in serving customers High customer satisfaction High quality service 14

15 AmerenUE Power On Three year, $1 billion commitment $300 million for core underground cabling and reliability improvement (mostly capital) $84 million for circuit and device inspection and repair (mostly O&M) $135 million for tree trimming (O&M) $500 million for investment to reduce sulfur dioxide and mercury emissions Pure Power renewable credits 15

16 AmerenCIPS, AmerenCILCO, AmerenIP Enhance customer satisfaction Energy efficiency Bill paying assistance Program initiatives Storm performance Elevate reliability Re-establishment as trusted advisor 16

17 Non-Rate-Regulated Generation A commodity business Success determined by competitive advantage Low capital cost Low fuel cost Strategy is to optimize assets Improve plant performance Control costs Execute effective marketing and trading Duck Creek 330 MW Coal 1976 Meredosia 445 MW Coal/Oil 1948 Non-Rate-Regulated Plants Grand Tower CTG 510 MW Gas 2001 Edwards 745 MW Coal 1960 Joppa 80% 1,000 MW Coal 1953 CTGs 1,140 MW Gas Newton 1,210 MW Coal 1977 Hutsonville 150 MW Coal 1953 Coffeen 900 MW Coal

18 The Climate Debate Ameren supports mandates that will result in meaningful reductions in CO 2 There is no single solution to the climate challenge A portfolio of approaches is necessary Effective climate policy must balance the benefits to the environment against the potential negative impacts to the economy and the customer 18

19 Increase in Annual Regional Net Household Costs 4,000 Impact of Proposed Climate Legislation 3,500 Real 2007 $ Change 3,000 2,500 2,000 1,500 1, Extreme Aggressive Moderate 19

20 Missouri Regulated Capacity Ameren will need baseload capacity by Preserving the nuclear option and benefits of 2005 Energy Policy Act Will not proceed on new baseload plant without construction costs being allowed in rate base Ameren Reserve Margins 25% 20% 15% 10% 5% 0% -5%

21 A Risk-Managed Approach Potential Callaway 2 Project Timeline COLA License to build a U.S. EPR at a specific site (good for 40 years) is a marketable asset Long-Lead Materials Being in shop queue and steel forging is a marketable asset Likely Decision Make final decision whether to proceed Construction Early decisions build options for the future. 21

22 A Vision for the Future Operational excellence Best plant operator in U.S. Best service provider Best customer value Excellent service Low costs Customer focus Delivering superior shareholder value UE CILCO IP CIPS 22

23 Delivering Superior Shareholder Value Significant earnings growth Greater levels of investment in regulated business Achieve constructive regulatory frameworks and returns Optimize existing non-rate-regulated generation assets Targeting 4% to 6% non-gaap EPS growth from 2007 to 2010 Driven primarily by regulated business growth Goal of ~$4 per share by 2011 and higher in 2012 Focused on providing a strong, sustainable dividend Current yield of ~6% Cash flows do not support near-term change Focus on future dividend growth Targeting long-term total annual shareholder return of ~10% Proven and lower-risk strategies to achieve these results 23

24 Long-Range EPS Expectations 2007 to 2010 CAGR of 4% to 6%, continued growth thereafter >$4.00 Non-GAAP $3.34 Non-GAAP $ $3.20 ~$3.70 Weather-Normalized $3.24 GAAP $2.98 GAAP $ $ GAAP Non-GAAP 24

25 Delivering Superior Shareholder Value Significant earnings growth Greater levels of investment in regulated business Achieve constructive regulatory frameworks and returns Optimize existing non-rate-regulated generation assets Targeting 4% to 6% non-gaap EPS growth from 2007 to 2010 Driven primarily by regulated business growth Goal of ~$4 per share by 2011 and higher in 2012 Focused on providing a strong, sustainable dividend Current yield of ~6% Cash flows do not support near-term change Focus on future dividend growth Targeting long-term total annual shareholder return of ~10% Proven and lower-risk strategies to achieve these results 25

26 Questions & Discussion 26

27 Balloting Results Ameren Corporation 27

28 Adjournment Please drive home safely 28