Q1 2020 Earnings Call

Greetings and welcome to the Ameren Corporation first quarter 2020 earnings call. At this time all participants are in listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero or your telephone keypad.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Mr. Andrew Kirk.

Director of Investor Relations for Ameren Corporation. Thank you you may begin.

Thank you and good morning on the call with me today, our Warner Baxter, Our chairman President and Chief Executive Officer, and Michael Main our executive Vice President and Chief Financial Officer, as well as other members of the ever and management team joining remotely.

Warner and Michael will discuss our earnings results and guidance as well as provided 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 poster presentation on the M. investors Dot Com home page that will be referenced by our speakers as noted on page two of the presentations.

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 factor section in our filings with the FCC Lastly, all per share earnings amounts discussed during todays presentation, including earnings guidance are presented on the diluted basis.

Unless otherwise noted that here as Warner who will start on page four of the presentation. Thanks, Andrew Good morning, everyone and thank you for joining us.

This morning, I'm going to begin our presentation by providing a carbon 19 update.

And in particular, how like some of the key efforts we are taking for the safety security of our co workers and customers. During this difficult time, providing essential electric and natural gas service.

Well then touch on our first quarter results and 2020 earnings guidance.

Finally, I will discuss our long term growth prospects well Holland is important strategic matters, Oh position Cameron for future success.

Before I jump into the details I hope that you your families and colleagues are safe and healthy during this unprecedented time.

As our World works to address cover 90, many things are uncertain amarins commitment to safety for our co workers are customers and our communities remains constant.

Amarin, we never compromise on safety. It is one of our core values.

When I Express my profound appreciation for those who are on the front lines battling this virus.

For the healthcare workers first responders grocery store workers local leaders community workers and of course, Oh utility workers across our nation. Thank you.

In particular I want to express my sincere appreciation tomorrow Amarin coworkers remain focused every day and delivering safe reliable power and natural gas to millions of people in Missouri and Illinois.

To ensure that we could continue to deliver safe and reliable service. We took swift action in January and it's somewhat a cross functional crisis management response team found reports about threats why did the cobot 19.

Since January our team has been playing in and implementing a pandemic response, consistent with established kind of mines and industry best practices as well as in consultation with World class health experts and state and local governmental leaders.

We quickly restricted domestic and international travel and implemented free work from home policies for anyone that could limit exposure of our coworkers.

Of course.

Our coworkers are crucial to the execution of our mission and many continues to be out in our communities in America energy centers everyday keeping the lights on and the natural gas flowing for millions of customers, Missouri and Illinois.

Our access to continue safe operations also included securing and supplying personal protective equipment.

Separating workgroups adjusting work schedules for me and robust health screenings at home and onsite and of course practicing social distancing coworkers and customers.

Our transition to under work practices went very well.

Not only where were you able to quickly take significant actions to protect safety of our co workers and customers. We've been able to continue executing their projects and strategic plan across our entire business.

We also recognize this is a difficult time for many of our customers who are struggling financially due to lost wages and other circumstances related to covert 19.

That's why we currently have voluntarily suspended all electric and gas disconnects for non payment and waived all they payment fees for customers and able to pay their energy Bill on time.

In addition, we have contributed $1 million and energy assistance and nearly $1 million to fund other cobot 19, leveraged top families and businesses, not Illinois, and Missouri communities.

We're not done helping our customers in our communities.

As part of our Amarin, Missouri rate review settlement, we are working with the Missouri office other public council to provide another three and a half million dollars and energy assistance funds from Missouri residential customers in neat.

Our proposals pending approval and Missouri Public Service Commission.

In addition, we live and work in our communities and we want to go beyond keeping the lights on and natural gas flowing for millions of customers.

As a result, we recently watching Amarin cares initiative, whereby our leadership team board of directors and all Amarin coworkers can contribute to covert 19 relief efforts, including energy assistance for our customers.

Operationally, we are exercising financial discipline and taken several actions to mitigate the expected financial impacts covert 19 on our business.

It was actually include among other things stringent high restrictions managing spending on outside consultants.

Significantly restricting travel and modifying the scope of our energy center maintenance outage. This large part to enhance the safety of our co workers.

In addition, we have taken several actions to strengthen our already solid liquidity position.

Those steps include proactively accessing the capital markets earlier this year.

I will share some of those details with you a bit later.

Looking ahead, we are putting the final touches on the first phase or return to facilities transition plan or co workers that are working remotely.

Safety will remain at the top of our mind and this transaction will be done in a very measured and thoughtful way.

We will also continue to work with state and local leaders as well as what the health care community support to support reopening the regional economy in a safe measured and timely fashion.

Stay at home mortgage, Missouri were lifted on May 4th on the Saint Louis area. Those orders will be in lifting on May 18.

In Illinois stay at home water remains in place through May Thirtyth.

Of course, we expect restrictions on economic and social activity will continue and all of our communities for sometime.

Since we're on essential business. These orders have not limited our operations or the execution of our strategic plan beyond the safety measures, we have implemented protection of our co workers and customers.

I'm very proud of our work that our co workers have done over the last several months.

He said that you're not letting our guard down.

We will continue to to be relentlessly focused on safety and delivering on our mission to power the quality of life for our customers and communities and managing through this unprecedented period of time.

With that let's now turn to page five for an update on first quarter results in 2020 earnings guidance.

Yesterday, we announced first quarter 2020 earnings of 59 cents per share compared to 78 cents per share earned in 2019.

The slide outlined some of the key drivers that impacted earnings in the first quarter.

Well, we had some items that drove earnings down compared to last year I am pleased to tell you that we continue to effectively execute all elements of our strategic plan.

In addition, due to the actions we have taken to mitigate the expected financial impacts of coping 19, which I described earlier combined with the constructive outcome not Missouri rate review, which benefited all stakeholders. We remain on track to deliver within our 2020 earnings guidance range $3.40 per share.

The Threed I was just 60 cents per share.

And affirming our 2020 guidance, we've assessed several economic scenarios and taking into consideration expectations associated with lower Missouri total electric sales the potential for higher bad debt expenses and lower returns in our Illinois electric distribution business due to lower interest rates among other things Mike.

I'll discuss our first quarter earnings 2020 earnings guidance and other related items in more detail later.

Turning now to Paychex yesterday, we also affirmed our expectation to deliver 68% compound annual earnings per share growth from 2020 through 2024, driven by robust compound annual rate base growth or approximately 9%.

Simply put we continue to believe our strategy to deliver strong long term earnings growth remains intact.

This outlook accommodates several factors, including a range of treasury rates sales growth spending levels regulatory developments and impacts of cobot 19.

And of course earnings growth in any individual year will be impacted by the time in a capital expenditures regulatory reviews and sales volumes, including those driven by weather.

Actually cover 19 and other factors.

Moving to page seven here, we reiterate our strategic plan.

The first pillar of our strategy stresses in best CNN and operating our utilities in a manner consistent with existing regulatory frameworks.

This is driven our multiyear focus on investing in energy infrastructure for the long term benefit of customers.

As a result, and as you can see on the right side of this page during the first three months for this year, we invested significant capital and each of our business segments and the pipeline remains robust.

In addition, we remain on track to achieve our capital expenditure target for 2020.

Regarding regulatory matters I am pleased to report then in March and Missouri Public Service Commission approved a constructive settlement and Ameren Missouri's electric rate review that included a 32 million dollar annual revenue decrease.

Incorporates more fuel and transportation costs, Texas regulatory asset amortization expenses, while providing for recovery of significant infrastructure investments as well as an opportunity to earn within the implicit range up 9.4%, 9.8% return on equity on a growing Missouri rate base.

This decrease marks the second consecutive decrease since 2018 when customers received a 6% might cut as a result of federal corporate income tax reduction and our smart energy plant.

In Illinois last month, we made our required annual electric distribution form the rate up they piling requesting a 45 million dollar base rate decrease.

From a proof as requested all in 2021 residential electric rates for customers, taking delivery and energy supply from Ameren, Illinois would be down approximately 1% since formula Ratemaking began in 2012.

As you can see with these rate decreases we are clearly focused on keeping our customers cost competitive and affordable to continuous improvement and disciplined cost management, while we make significant investments in energy infrastructure to deliver long term value.

Michael will provide more detail about the electric and natural gas rate reviews in a moment.

Turning now to page eight and a second pillar of our strategy enhance your regulatory frameworks and advocating for responsible energy and economic policies.

Beginning with Ameren, Illinois electric distribution.

Now say clean energy Affordability Act legislation was filed in February.

This important legislation, whether or not but allow ameren, illinois to make significant investments in solar energy and battery storage to improve reliability as opposed to make investments in transportation electrification in order to benefit customers and the economy across central and southern Illinois.

In addition, this legislation would modify be allowed return on equity formula to increase the base point at or to the average 30 year Treasury rate from 582, Sixeighty analytics also extend electric formula Ratemaking to 2032.

The downstate clean energy Affordability Act will move the state of Illinois closer to reaching this goal of 100% clean energy by 2050 and builds on Ameren, Illinois efforts to modernize the energy grid under a transparent and stable regulatory framework that support a significant investment to modernize the energy grid, while improving <unk>.

Ability and creating jobs, all while keeping rates well below the Midwest and national averages.

All these benefits in mind, we're focused on working with key stakeholders to get this important legislation passed.

Prior to a Germans the Illinois General Assembly in mid March due to cope with 19.

The House Bill had advanced to the public Utilities Committee and the Senate Bill still are weighted assignment to the energy and public Utilities Committee.

A lot of the challenges that exist with covered 19, it's unclear whether these bills well advanced in this spring session, which is currently set and may 31st let's extended by the leadership in Illinois House and Senate.

And not pass this bring these bills could also be addressed in the veto session or potentially other special sessions later this year.

Turning to page nine for an update on FERC regulatory matters.

In terms of the Fercs November 2019 order and its subsequent order to extend time to reconsider hearing request I do not have any significant updates.

However, the FERC did recently took some constructive actions that could further support investment and transmission.

In particular in March the FERC issued a notice of proposed rulemaking electric transmission or we incentives.

And the notice the for proposed several changes to our we incentives, including an increase in the regional transmission organization RTL participation at her from 50 basis points to 100 basis points.

For prospective every 50 basis point change and our FERC ROE, we impacts annual earnings per share by approximately four cents.

I know this also proposes incentives on new projects, but considering the benefits rather than the rest separate project.

We're pleased with the direction the purchase taken with this notice.

It's suggests that the FERC understands the importance of incentivizing transmission investment to both upgrade and replace the aging infrastructure to also and able to transition to more renewable generation across the country.

We expect to file comments by the July 1st deadline.

Of course, we're unable to predict the ultimate timing or impact, but these FERC matters as a FERC is under no timeline to issue decision.

Moving now to page 10 for an update on the third pillar of our strategy, creating capitalizing on opportunities for investment for the benefit of our customers shareholders in the environment.

Here, we provide an update on our wind generation investment plans to achieve compliance with Missouri's renewable energy standard and continued to transition our generation portfolio.

We have received all regulatory approvals to acquire 700 megawatts, new wind generation at two sites in Missouri.

Construction is well underway and continues at both wind generation facilities.

We continue to work closely with the developers for both projects to monitor the time to manufacturing shipment and installation of a shelter components, which are coming from various parts of the world.

We continue to expect the 400 megawatt facility to be in service by the end of 2020.

However, the 300 megawatt facility is facing greater challenges given that this project was originally scheduled to be completed later in the year.

The developer continues to work towards completing the entire project in 2020, however, manufacturing shipping and other supply chain issues have negatively impacted the schedule on this project.

Well, we have not received formal notice from the developer that any portion of this project will be delayed beyond December 31st 2020 at this time.

A discussion is what the developer indicate that a completion oh portion of the project representing approximately $100 million of investment May go into service in the first quarter 2021.

Well, we wouldn't be disappointed at this entire project is not completed in 2020. It is important to keep some key factors in mind.

First if only this portion of this project is not completed in 2020, we would still be closing on approximately $1.1 billion or 92%. Our plan 2020 wind generation, but investment of $1.2 billion.

In addition for any portion of the project completed in 2021, we have contractual protections to pay a reduced amount to account for the potential loss or production tax credits subject to an obligation to later pay the original contracted amount should even be entitled to receive those credits.

Finally late last week U.S. Department at the Treasury indicated plans to modify the wind production tax credit rules, which is expected to result in a one year extension of in service criteria.

The bottom line is we expect to deliver the vast majority of our wind generation investment in 2020.

We believe these investments will deliver clear long term benefits to our customers communities, we serve and the environment.

Finally, consistent with our goal to meet our customers long term energy needs in a responsible manner, we will assess additional renewable generation opportunities and the context of our next integrated resource plan, which will be filed in September of this year.

This comprehensive stakeholder process is well underway to evaluate our future customer demand as well generation resources needed over the next 20 years and beyond.

We continue to work with cheese steak orders in this process and are committed to transitioning ameren Missouri's generation to a cleaner more diverse portfolio in a responsible fashion our customers our shareholders and the environment.

Moving to page 11.

Looking ahead to the end of this decade, we have a robust pipeline of investments over $36 billion that will deliver significant value to all of our stakeholders, but making our energy grid stronger smarter and cleaner.

These investment opportunities exclude any potential new renewable generation for the next Missouri integrated resource plan, which is I. Just noted we filed in September as well as any potential new multi value transmission projects.

Of course, our investment opportunities not only create a stronger and cleaner energy grid to meet our customers' needs and exceeded their expectations. I think we're also creates thousands of jobs for local economies.

Needless to say this is very important for our country and the communities we serve at this time.

Maintaining constructive energy policies that support robust investment and energy infrastructure will be critical meeting, our customers' countries future energy needs and delivering on our customers' expectations.

Moving to page 12.

To sum up our value proposition, while the current environment is challenging we're optimistic about the future.

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 same strategy in 2020 and over the next decade will deliver superior value to our customers shareholders in the environment.

We believe the expectation of a 6% to 8% earnings per share compound annual growth rate in 2020 through 2024, driven by strong rate based growth compares very favorably with our regulated utility peers.

I'm confident in our ability to execute our investment plans and strategies across all four of our business segments as we haven't experience and dedicated team to get it done.

Further our shares continue to offer investors a solid dividend.

Our strong earnings growth expectations outlined today position us well for future dividend growth.

Of course future dividend decisions will be driven by earnings growth. In addition to cash flows and out of business conditions.

Together, we believe our strong earnings growth outlook combined with our shallow dividend results in a very attractive total return opportunity for shareholders.

Before I turn the call I'll turn the call to Michael I'd like to mentioned an important report that we recently issued.

Just last week, we publish the annual Amarin sustainability report.

This report outlines how we are effectively managing a wide range of environmental social and governance matters for the benefit of all stakeholders.

Encourage you to read it ameren investors Dot com.

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

Thanks, Warner and good morning, everyone. Turning now to page 14 of her presentation. Today, we reported first quarter 2020 earnings of 59 cents per share compared to earnings of 78 cents per share for the year ago quarter.

The key factors that drove the overall 19 cents per share decrease or highlighted by segment on this page.

Earnings from Missouri, Our largest segment were down 20 cents per share.

The results reflected lower electric retail sales, primarily driven by mild winter temperatures in 2020 compared to colder than normal temperatures in the year ago period, as well as the absence of energy efficiency performance incentives in the first quarter and 2020, which combined reduced earnings by 11 cents per share.

In addition earnings were impacted by higher operations, and maintenance expenses, which reduced earnings by eight cents per share.

This increase in operation and maintenance expense was primarily driven by changes in the cash surrender value of our company owned life insurance.

Finally on returned to the Missouri rate resettlement, and where we recognize a one time charitable contributions in the first quarter, which reduced earnings by two cents per share.

Earnings for Ameren, Illinois, natural gas were slightly lower due to higher operation and maintenance expenses also due to change in the cash surrender value Callie, mostly offset by increased investments in infrastructure.

Ameren, Illinois electric distribution earnings were flat, reflecting increased investments in infrastructure offset by a lower allowed return on equity.

Ameren transmission earnings were one cent per share higher due to increased investments in infrastructure, partially offset by a lower allowed return on equity.

Finally, amarin Paran. Other results also increased one cent per share driven primarily by the timing on income tax expense, which is not expected the impact full year earnings offset by reduced tax benefits associated with share based compensation.

Before moving on let me briefly cover electric sales trends rare, Missouri, and Amarin, Illinois electric distribution for the first three months of this year compared to the first three months of last year.

While we did see an impact on electric margins for Air, Missouri, and Amarin, Illinois Electric distribution do cobot 19, the impact was not material in the first quarter due in part.

To the timing to stay at home orders, Illinois that began March 21st and the stay at home orders in the city St was city and seamless County that began in March 20 Threerd.

In addition, marches a solar month as a result, we tend to have less earnings exposure to large percentage changes in sales and we would otherwise have in winter summer months.

Weather normalized kilowatt hour sales to Missouri residential customers increased 2.5%, excluding any in the effects of our Missouri energy efficiency plan in EMEA.

Weather normalized kilowatt hour sales to Missouri, commercial and industrial customers decreased 1.5% and 2% respectively. After excluding the effects of our energy efficiency plan.

We exclude me FX because the plan provides rate recovery to ensure their earnings are not affected by the reduced electric sales, resulting from our energy efficiency efforts.

Weather normalized kilowatt hour sales to Illinois residential customers increased about 1%.

And weather normalized kilowatt hour sales to Illinois, commercial industrial customers decreased 1.5% and 2% respectively.

Recall that changes in electric sales in Illinois, no matter the cause do not affect earnings since we have full revenue decoupling.

I will touch a bit more in sales expectations for the second quarter and the balance of the year in a moment.

Turning to page 15.

As you think about the financial uncertainties for the remainder of the year due to covert 19.

Page lays out the regulatory mechanisms available in our business segments to mitigate certain cobot 19, uncertainties, including lower sales revenues higher bad debt and pension expense.

As you can see on the slide we have constructive regulatory mechanisms to address these uncertainties for business segments that accounted for approximately 50% over 2019 earnings.

We have limited exposure to changes in sales in Illinois, as we are fully de coupled and our electric distribution business as well as for residential and small small nonresidential natural gas sales.

In addition, any variance in bad debt expense in Illinois recovered through the electric and gas uncollectable adjustment writers.

Also formula rates in our amarin transmission business provide for recovery of any variance in revenues bad debt expense or pension expense.

In Missouri, we currently do not have any have a regulatory mechanism mitigate the financial impacts of changes in sales I'm or bad debt expense.

For prospective approximately 50% over an annual Missouri electric margins are residential, 40% or commercial and 10% or industrial.

The earnings impact of a 1% change in your new sales in 2020 by classes approximately three cents residential two cents for commercial and a half cent for industrial.

It should be noted that we have seasonal electric rates in Missouri.

Because of seasonal rates approximately 50% of our electric margins are typically realize from June through September assuming normal weather.

We are mine the financial impact so cover 19 and have the ability to seek an accounting authority or from the Missouri PSC it attracts such impact to recovery in a future rate review.

Finally, any variance in pension expense for Missouri's recovered through a pension tracker.

With that mine turning to page 16, I'd like to briefly touch on key drivers impacting our 2020 earnings guidance as Warner stated, we continue to expect 2020 diluted earnings to be in the range of $3.40 to three dollar and 60 cents per share.

This guidance range assumes normal weather and the remaining nine months of the year as well as reflects several other updates from our February call primarily related to covert 19.

While it's still very difficult to predict the ultimate impacts over 19, our business. Our team reviewed several cobot 19 scenarios incorporated what we believe are prudent and reasonable assumptions into our earnings guidance.

Our guidance contemplates the stay at home or is currently in effect.

As Warner mentioned, the Governor, Missouri lifted the statewide stayed home Warner on May four.

Although St will a city and county, well begin lifting in their orders on May 18.

While these restrictions are being lifted in may our guidance assumes live limited business activity during the entire second quarter.

Which will significantly impact commercial industrial sales, while favorably impacting residential sales.

As the year goes on we expect to see commercial industrial sales improve in the third and fourth quarters, but never fully recovering by year end.

We also expect residential sales to taper off as the year goes on especially in the fall when schools reopened.

As a result, our guidance assumes a gradual recovery.

As we sit here today, we expect lower sales and air Missouri due to co. The 19 to reduce earnings approximately 10 cents per share.

Compared to 2019 weather normalized sales.

For the year, we expect total weather normalized sales to be down approximately 2.5%.

Broken down by class, we expect 2020 commercial sales decline approximately 7%.

Industrial decline approximately 4% in residential to increase approximately 2.5%.

Before moving on I would note that air military customer sales for April.

Excluding the impact of colder than normal weather were down approximately 7%, reflecting the negative impact from Cowen 19 compared to the prior year.

Broken down by class and compare to the prior year preliminary here, Missouri April weather normalized commercial industrial sales decline, approximately 15% and 10% respectively.

Which more than offset the margins on increase weather normalized sales to residential customers of approximately 6%.

Similar to March April and May R.R.R. mild weather months.

As a result, our annual earnings have less exposure to large percentage change in residential and commercial sales.

And that then in those months.

Moving on to other guidance considerations.

Despite the extensive federal actions being taken to provide co. The 19 relieved to individual and businesses across the country as well as the energy assistance fine they're running is providing we understand that some customers will still face challenges and paying their bills and we incorporated an increase in bad debt expense into our guidance for the balance of the year.

Today's guidance also incorporates an estimated 2020 allowed or are we for Ameren, Illinois electric distribution of 7.3%.

Which reflects the 30 year treasury yield of approximately 1.5% as well as an increase in parent interest expense associated with the accelerated 800 million dollar note issuance at near record, which I'll touch on more in a moment.

On the positive side, we've incorporated the final terms in the inventory electric rate review settlement, which will discuss later as well.

In addition, as Warner mentioned, we've already taken certain actions, but in place other actions to reduce costs to help mitigate the expected negative financial impact some cobot 19.

Rest assured we will remain very discipline in managing our cost for remainder of the year.

Finally select earnings considerations by quarter for the balance of the year are listed on this page.

Moving now to page 17 for a discussion of air Missouri regulatory matters in March the PSC approved the stipulation agreement to resolve the M., Missouri rate review.

As many of you know the agreement was a black box settlement and therefore, the final order does not provide certain specific details.

The effective April Onest base electric revenues were decreased by $32 million annually or a decrease of approximately 1%, 80% of which we expect to realize this year.

Concurrently net base energy costs, which will be the basis used for perspective changes to the fuel adjustment clause writer.

Decreased by approximately $115 million annually.

In addition, net regulatory asset and liability amortization expenses and the base level expenses for regulatory tracking mechanisms reduced by approximately $50 million annually.

The agreement did not specified and allow early.

Hey rate base level or common equity ratio.

However, the PSC determined that I'm, an implicit or are we in the range of nine 4% to 9.8% is reasonable.

In the absence of a stated our we our goal continues to be earn as close to 9.6%. The midpoint of there are we range as possible.

[noise]. The agreement also called for continues of a 9.53% or are we to calculate allowance for funds used during construction.

Finally, the approved to groom provided for continuation of key trackers and riders, including the fuel adjustment clause, where the sharing percentage of 95 five was affirmed by the commission in April.

Looking ahead, we will continue to assess the timing of our next Missouri rate review.

In making this a termination we will take into account consideration the constructive rate settlement of this recent rate review the ongoing impacts of co. The 19 on our customers and our business our capital expenditures, including the plan when acquisitions, coupled with the flexibility provided by Senate Bill 564 plants service accounting and other costs.

So service considerations.

Turning to page 18 for financing and liquidity update we feel very good about our liquidity and financial position today in particular after taking a number of steps in March in early April to it to access to access the capital markets.

On March 20th Air, Missouri issued $465 million at 2.95% first mortgage bonds due in 2030.

This tied for the lowest rate for a 10 year bond issuance and and Missouri's history.

Which helps keeps customers rates low as proceeds were used to repay short term debt, including short term debt incurred to repay to repay immaturity in $85 million of 5% senior unsecured notes that matured on February onest.

Additionally, in April 3rd Amarin, Corp. issued $800 million or 3.5% senior unsecured notes due in 2031.

These proceeds were used for general corporate purposes, including to repay short term debt and to fund the repayment of Mcorp's, 2.7% Senior notes due November 15th.

Which is the only maturity remaining in 2020.

We decided to accelerate the holding company debt offering to secure our liquidity position during an uncertain time in the credit markets.

We continue to expect tissue long term debt at Amarins or later this year to fund a portion of the wind generation investments expected to be in service by the end of 2020.

And I would note there are no long term debt maturities in 2021.

In December we also increased the capacity of our credit facilities by $200 million and extended the maturity dates out to just Sember 2024.

Amarins available liquidity on April 30, with approximately $2.5 billion.

This includes the $2.3 billion of combined credit facilities available and approximately $150 million a cash on hand at the end of them.

There are no outstanding credit facility or commercial paper borrowings as of April Thirtyth.

In addition, we also expect to receive between $540 million and $550 million. Upon the physical settlement of the August 2019 forward sale agreement on or before March 30, Onest 2021, which expected to be used for to fund a portion in the air Missouri's wind generation investments.

Finally, I'm pleased to report that last month, both Moody's and S&P affirmed their credit rating outlook of stable.

Moving now to page 19 for an update on the Ameren, Illinois regulatory matters.

Last month, we made our required annual electric distribution form their rate update following requesting a 45 million dollar base rate decrease.

Under Illinois Formula Ratemaking, Ameren, Illinois is required to make any annual rate rate updates to systematically adjust cash flows over overtime for changes in cost of service and a true up any prior period over or under recoveries of such cost.

If approved the has requested an all in 2021 residential electric rates for customers, taking delivery and energy supply for Amarin, Illinois would be down by approximately 1% since formula rate, making began in 2012.

The ITC will review the matter in the months ahead with a decision expect in December of this year and new rates effective in January of next year.

This along with our natural gas rate review remain on track.

Finally, turning to page 20, I'll summarize we have a strong team and are well positioned to continue executing our plan. During these unprecedented times, we continue to expect to deliver strong earnings growth in 2020, as we successfully execute our strategy.

As we look to the longer term, we continue expect strong earnings per share growth driven by robust rate base growth and disciplined cost management. Further we believe this growth compares very favorably with the growth of our regulated utility peers and amarin shares continued off investors an attractive dividend.

In total we have an attractive total shareholder returns through the compares very favorably to our peers.

This concludes our prepared remarks, we now invite your questions.

Thank you at this time will be conducting a question.

If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation Tom will indicate your line is in the question.

You May proceed start to.

Your question from the Q.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

Our first question comes from the line of Julien.

Alan Smith with Bank of America. Please proceed with your question.

Hey, good morning to thank you for all the extensive commentary I hope you all are doing well.

Thank you joining hotel I hope, you're doing well as well good to hear your voice.

Likewise, thank you.

Wanted to follow up on Zuhri <unk>.

Oh, one Q you had a number of Oh caught higher expenses you listed them out fairly detailed how do you think about those cascading through the course of the year and into 21 I imagined much of it like why there and onetime contributions are pretty limited to once you Connie.

But separately from focus on focusing on higher so how do you think about how it.

Oh in them opportunities to offset the details that you provided on the lower two and a half a cent sales altogether.

[noise] at Yep perfect. Thank you. Good morning, Julien This is Michael So I'll take a stab at this and then certainly Warner can add anything as well, but I mean, if I heard you right you broke up a little bit there, but in terms of the higher cost that we saw in the first quarter. You know clearly were impacted by this company on life insurance, which we indicated in their set.

Obviously provided a headwind.

You think back in terms of where we were at the beginning of the year, we talked about Oh, I am costs being higher in general we Didnt, we didn't guide to a specific number we just said that we're going to be higher you. Obviously had these headwinds that are occurring in the first quarter as we think about all these coated related issues that we outlined.

Outlined in terms of.

What's going on with sales and bad debts. We are clearly focused on guiding to a lower I went out of number today.

And so hopefully gives you some contacts isn't not giving you the specifics of it but clearly we were we are higher own m. going into the year got these headwinds we take a number of actions as Warner said in terms of just managing headcount, obviously travel conferences, you know what watching overtime or we can all those kind of things to make sure that we.

And keep a keep a firm grasp on US Yeah, I think Michael you hit it right. So you know look we were going to we're guiding down now from from a onetime expenses from where they were last year.

And look and looking at some of those things a Julian clearly we're mindful of several things of course, we're mindful of the expected impacts of Cobot 19, which what Michael did a nice job of outlining before but of course, we're also mindful that we need to make sure we're delivering safe and reliable service to our customers, but clearly we.

We never lose our focus to to earn as close to our allowed return as possible. So when we think about all those things and provided that guidance that that's how we think about the beyond them actions that were taken.

Got it okay, but no specific pinpoint number here for the totality of the year and then and at this point no I think we're going to continue to monitor it and as you can appreciate here. We are here in the first quarter and several continuing to monitor operations for the rest of the or so.

So yes, but that gives you I think a good sense of the direction that we're headed.

Absolutely and then related to that so they can what about the Missouri rate case strategy I know you put a bullet in your slides about that but can you elaborate on your thinking today and it can also be cognizant that yes, we're still in the first quarter here results, but how are you. These conceptually think about approaching it.

Yeah. So Julien just a couple of thoughts there and then you know Marty men, who who is joining us remotely all of our leaders. Just so you know our presidents are for joining us for remotely today as we continue to make sure. We do the proper social distancing. So look I think if you have a day really no decision has been made at this time, but.

Clearly when you think about your next rate case filing there's several things you have to think about and certainly not the wind projects, which we've talked about on the call. But we're also had to be mindful of the implications and impacts of covert 19.

So you know those coupled with the fact that we just completed our last rate review and those are some of the things that you would put on the list in terms of making a final determination there and Marty I know that picture on anything that you had that you would add does some of the things that you and your team are kicking around.

Well water you hit on a a couple of the key ones.

I think Julian when you look back at our last rate review filing it was really to set up the timing for this next one given the wind projects that we have going into service later this year.

So those projects will still be a top of mind in terms of getting those completed and making sure. We think about how to time rate case around those of course Senate Bill 564. The planned service accounting is really provided us a better flexibility on capital expenditures and the ability to be able to.

Deferred depreciation return and get full recovery so.

That's a consideration, but but as Warner said.

We feel good about the constructive rate settlement that we just had this past rate review I think that you know.

Puts us in a good position to really think about the timing going forward over 19, obviously, having impacts our customers and our business as Warner made mention and so all of those will be considerations as well as other cost of service considerations that will go into it. So I think all that consider just mean that.

We'll be thinking about a really the best timing.

Oh for this next rate review.

Actually guys. Thank you for the time, they well thanks Julien take care.

Thank you. Our next question comes from line of Jeremy.

Please proceed with your question.

Good morning, Jeremy This is one or how are you doing.

Hi, Good morning, it's Rick Sunderland on for Jeremy <unk>, taking the questions today.

Sure.

Sure. So just starting off with the wind project for she update there could you speak to.

Any regulatory obligations with regards to the in service dates and maybe just a little bit more color with.

The line of sight to the potential end of year versus a slight pushed into Q1 for the 200 megawatts.

Yeah. So this is one or so in terms of regulatory obligations really none.

By the end of this year of course, we're very focused on getting those done in a timely fashion as we outlined during the call but.

But if some of the projects and we've talked about you know at this time, we we think there's a possibility for I'm $100 million of that second project get pushed into 2021, but doesn't cause any particular regulatory challenges for us. So so that that's how I see that yes, I mean, you got the renewable.

Standard here in the state of as there you got 15% by 2021, but we'll be in compliance process, where we are today. So that's what Warner Center no issues with that.

Great. Thanks, you and then on bad debt expense could you speak to a little bit about trends from maybe only nine and what you're baking into guidance. It's one that's why.

Michael lunch you once you take that one place yeah, you bet. So yeah, we'll look at where we're looking and mindful of everything that's happening did customers. They were looking at in terms of lie heap as providing obviously an unprecedented amount of dollars here I think Warner mentioned as well that we have dollars that are being allocated obviously to energy assistance as well, but as we.

As we step back and look at and going back to only eight or nine you're right I think thats a great great place it for us to spend some time I mean, we've done a nice job of driving down bad debt expense over time, we're probably at about $8 million today I in bad debt expense. If you think about Oh, eight or nine timeframe, you know you're probably closer to 14.

15 million. So that's probably a good a good proxy thing about in terms of a couple of cents about $6 million in terms of headwind potentially associated with bad debt expense.

Great. Thanks to the update Warner Michael.

My pleasure, Thank you stay well.

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

Good morning, Paul how are you doing okay, alright, I imagine.

Just.

Your comments, you mentioned that the a long term growth.

Has certain.

Expectations with respect to the.

30 year Treasury.

And I know you guys have legislation pending in Illinois, which you mentioned and went over but.

How should we think about what the long term growth rate is.

If we do have these.

To your Treasury words out.

And also just you know.

Your rate base growth seems to be unchanged and what have you how should we think about what's your expectation is absent any legislation changing what.

What are the treasury.

The through your Treasury would be.

So Michael wanting to address sort of the overall 30 year Treasury and then maybe I can jump in and talk about you bet potential allocation of capital and Okay got it.

Appreciate the question Yeah, I think as you think about the long term guidance. In you know you think about the 350 is the midpoint for 2020 and take the six date off of that Paul I mean, you get to about a 35% range out there in 2024 sold at a decent size range and I think that range accommodates a number of things, which I think Warner maybe either.

I refer to this early I mean, it refers potential treasury outcomes certainly rate case outcomes.

The timing of Capex other things I mean, there there are a number of levers that can be polled overtime I would remind you had a couple of I think key data points just to keep in mind I mean for every 50 basis points move in that distribution business. It's worth about it it's an impact about three and a half sense.

And the other thing keep in mind too as I mean, as you think about how we're allocating capital today and where rate base growth is going over time and you get out to 2024, Illinois distribution business is only about 18% of the overall rate base.

So those are things just to keep them back your mind, you think about different impacts associated with that 35 cent ranch asset acquired so maybe maybe I'll add then a little bit more color because you had a specific question around.

How are you might think about our investments in Illinois. So look we're mindful of the fact that you know I return on equity in Illinois below industry averages and I mean, that's why we're supporting legislation that's going to add 100 basis points to the to the current 580 basis points to to the 30 year Treasury and so [noise].

Well at the same time to no we recognize that a you know we're currently in frankly unprecedented appeared and our country's history. That's obviously driving historically low interest rates and so.

Well I would say is it look we're not going to have a knee jerk reaction to our investment strategy because the investments that we've been making them, Illinois have been delivering value to both our our customers and shareholders, but look we're also going to continue to monitor the situation. Then at that same time, you know richer and his team, they're gonna be relentless and and trying to make sure. We pass what we think is you know really good legislation for.

Our customers the state of Illinois, and certainly for our shareholders.

So doing we're going to continue to advocate for fair returns on those infrastructure investments.

And in so doing to we think we continue to make them, they're going to deliver a lot of value to our customers. So that's a that's the color that so in terms of how we think about a right now.

Okay, I mean I appreciate the color I'm, just sort of wondering though if if we don't get legislation and if youre. The the rate is so low.

Would you yeah, I would assume that there would probably be some change in how you would allocate capital.

Let me is a pretty robust rate based growth as it happened as logs and stuff.

Sure well you know like I said before because I've we.

We're going to be mindful of our returns in our businesses. We always are mindful about how we allocate capital a we obviously are very thoughtful and strategic in so doing but at the same time as I sit here today, we're not going to be making predictions are knee jerk reactions.

Okay Fair enough baseball in fact, I'm just don't please if you have another comment please.

Okay, I'm, sorry, just the the cold.

You broke it out for for Missouri, and I'm just sort of.

Just to understand why <unk>.

The Illinois distribution isn't affected apparently by it and just give us a little more color about how that colins distributed.

No not anything huge if it's very complicated so popular but [laughter] <unk>.

No worries good good question certainly not a it's not it's not complicated I mean, it really that Illinois, it doesn't impact the only distribution business because of the formula rate nature of it so where you do have a little bit of impact is on the Illinois gas <unk> natural gas side, and so really focused in on the primary piece, the Missouri, because that's where the that's where the biggest impact is just because of.

The nature of that regulatory regime.

Awesome, thanks much guys.

<unk> every day.

Thank you.

Thank you, ladies and gentlemen, as reminder, if you'd like to during the question Q. Please press star one.

Our next question comes from the line James <unk>.

Capital markets.

With your question.

Morning, Jim how are you doing.

How are you.

I'm going to hope, you're staying well in your family, saying well as well.

You guys I appreciate it.

Just following up real quickly on on Paul's question as you kind of look out.

Reaffirmation of the 60%.

In the past I know you guys have use kind of the the forward curve for the treasuries.

That kind of what we should assume is embedded in the growth rate.

Yeah, No Paula no Jim that you know historically I think you know maybe did guide to that several years ago I think the kind of moved away from that I'm a bit ago, and so again just wait we have various a internal assumptions in there and again as Warner stated when we have a lot of deferred.

Levers that we can Paul I.

I know, there's some sensitivity about just given obviously were that 30 year treasury sits today, but.

Again, it's a 35 cent range talked about the size that overall distribution out there in 2024, I talked about the sensitivity to to those rates and so I think there are things that we can you do to manage around that Oh, yeah, I think to Michael just add I mean so.

No don't lose sight of the now that the slide that we show up there about the robust pipeline of investment that we have across all of our enterprises that goes not just beyond this first five years, but that $36 billion and total over 10. So.

So that's certainly a lever that we have and of course, all along we're mindful of customer affordability and those types of things. So so you know look we don't we never say anything is a lay up right, but at the same time, we're gonna be very thoughtful in terms of how we manage the business that drives by.

You for our customers and value for our shareholders.

Okay. Thank you and I guess, just as a as a real quick follow up.

You know.

As you look at the range I know that.

Funded today, but are you guys comfortable at this point in kind of talking about.

Your cost containment and what you see for your sort of sales progression through the year. So the various scenarios if kind of where you see yourself within that range would it be sort of.

At the midpoint upper half sort of lower house like how are you thinking about that.

Yeah. Jim. So this is this is wondering I assume you're talking about our 2020, <unk> EPS guidance and so now look consistent with our past practice you know, we just don't disclose where we're at within our guidance range frankly, the in any given time.

And so the only thing I would say is that you know this team is focused and has a strong record of not just being focus but delevering within our guidance and that's where we're going to continue to be focused and 20 Twain.

Got it.

Thank you very much for the time and hope everyone's assays.

We are thank you very much you do the say.

Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back.

Okay.

Yes.

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 analysts inquiries should be directed to me Andrew Kirk Media should call. Aaron Davis again, Thank you for your interest and eminent have a great day.

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