Greetings, and welcome to the Ameren Corporation Second Quarter 2014 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Douglas Fischer. Thank you. You may begin.

Thank you, and good morning. I'm Doug Fischer, Senior Director of Investor Relations for Ameren Corporation. On the call with me today are: Warner Baxter, our Chairman, President and Chief Executive Officer; and Marty Lyons, our Executive Vice President and Chief Financial Officer, as well as other members of the Ameren management team. Before we begin, let me cover a few administrative details. This call is being broadcast live on the Internet, and the webcast will be available for 1 year on our website at ameren.com. Further, this call contains time-sensitive data that is accurate only as of the date of today's live broadcast. Redistribution of this broadcast is prohibited. To assist with our call this morning, we have posted on our website a presentation that will be referenced by our speakers. To access this presentation, please look in the Investors section of our website under Webcast and Presentations and follow the appropriate link. Turning to Page 2 of the presentation. I need to inform you that 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 today and the Forward-looking Statements and Risk Factors sections in our filings with the SEC. Warner will begin this call with a review of second quarter earnings and full year guidance. He will then provide an update on regulatory and business matters. Marty will follow with more detailed discussions of second quarter results, as well as 2014 earnings and cash flow guidance. He will also provide details related to pending rate cases. We will then open the call for questions. Before Warner begins, I would like to mention that all per share amounts discussed during today's presentation, including earnings guidance, are presented on a continuing operations basis, unless otherwise noted. Now here's Warner, who will start on Page 4 of the presentation.

Thanks, Doug, and good morning, everyone, and thank you for joining us. Today, we announced second quarter 2014 earnings of $0.62 per share, compared to second quarter 2013 earnings of $0.44 per share. This increase reflected the absence of Callaway Energy Center nuclear refueling outage expenses in the second quarter of this year, as well as the absence of last year's second quarter charge related to the Missouri fuel adjustment clause. This year, the Callaway refueling outage is scheduled for the fourth quarter, while last year the refueling outage occurred in the second quarter. The earnings comparison also benefited from this year's warmer early summer temperatures, which drove Missouri native load electric sales volumes higher. Other positive factors included increased rates effective the beginning of this year for FERC-regulated electric transmission and Illinois natural gas delivery services, as well as decreased interest expense. These positives were partially offset by a higher effective income tax rate. Today, we also affirmed our earnings guidance for this year. We continue to expect 2014 earnings to be in the range of $2.30 to $2.50 per share. Marty will provide further details on the second quarter earnings and other financial matters in a few minutes. Before he does so, I would like to update you on recent regulatory and business developments at our Missouri and Illinois utilities, as well as our FERC-regulated electric transmission activities. Turning now to Page 5, I will begin with a discussion of Missouri operations. At Ameren Missouri early last month, we filed a request with the Missouri PSC for an electric service rate increase to recover higher costs for providing our customers with more dependable energy from a cleaner and more diverse energy portfolio. Nearly 1/2 of the $264 million annual request is for recovery of increased net energy costs…

Thank you, Warner. Turning now to Page 12 of our presentation. As Warner noted, today, we reported earnings for the second quarter of 2014 of $0.62 per share compared to $0.44 per share for the second quarter of 2013. Key drivers of the earnings improvement are listed on this page. The absence of a refueling and maintenance outage at our Callaway Nuclear Energy Center in this year's second quarter increased earnings by $0.08 per share. The absence of another item, the second quarter 2013 charge related to Missouri FAC treatment of certain prior period wholesale sales had a $0.06 per share positive impact on the comparison. A third driver of the earnings improvement was this year's warmer early summer temperatures. This warmer weather drove higher Missouri native load electric sales volumes and benefited earnings by an estimated $0.03 per share compared to the year-ago quarter, and by an estimated $0.04 per share compared to normal temperatures. On a weather-normalized basis, we estimate that second quarter 2014 electric sales volumes to residential and commercial customers were essentially flat compared to the second quarter of 2013. We estimate that these weather-normalized sales volumes would've grown, but for energy efficiency programs. And you will recall that the energy -- the earnings effect of Missouri's energy efficiency programs are offset by revenue recovery provided for under our Missouri PSC approved energy efficiency plan. Electric sales volumes to industrial customers declined about 1.5%, which was entirely due to lower Illinois electric delivery volumes, which were down about 3%. Our Illinois industrial customers are subject to formula ratemaking, and margins on sales to these customers are relatively low. Missouri industrial sales increased about 0.5% compared to the second quarter of last year and on a year-to-date basis. Other factors contributing to the increase in the second…

[Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith with UBS.

Well, I wonder, first off -- obviously, you made an announcement about Meramec. I wondered if, first, with respect to your current contemplated CapEx budget, how does that change anything? Obviously, it's pretty long-dated. And then secondly, obviously, your IRP is still coming up here, but with respect to the balance of your portfolio, I'm thinking Rush Island or others, how could that eventually shift here as well? How are you thinking about compliance for those plants?

Sure, Julien. This is Marty. I'll start, and see if anybody else or Warner wants to add anything. But with respect to our overall capital expenditure plan that we've laid out for the 5 years that was in the slide Warner covered and we've shared previously, really, we don't see any change there resulting from the Meramec decision. Really, there, the Meramec decision in the context of certainly the rate case filing is probably where the biggest impact is, where we're looking to shorten up the depreciable life of Meramec to coincide with the expected retirement date of that plant. And that's driving, I guess, about $17 million of the overall increase we're requesting as part of the Missouri rate case. But overall, no change in our capital expenditure plans. And I'd say that in terms of how Meramec will impact our future generation resources and plans, as well as other considerations regarding the rest of our fleet, as you point out, will really be laid out as part of our October Integrated Resource Plan filing.

And Julien, this is Warner. I think you asked a good question about Rush Island. As Marty said, we'll talk about the specifics of our Integrated Resource Plan in October. But in general, our objective is to take our existing coal-fired facilities and utilize them towards the end of their useful lives, which is what we're doing with Meramec. And that's how we would think about Rush Island as well. And so we'll be able to spell that with out more specificity, but we're not contemplating accelerating the retirement of our coal-fired units as part of our Integrated Resource Plan because we think that's in the long-term interest of our customers and the State of Missouri.

Great. And then secondly, on FERC, obviously, a lot of activity in the quarter. First, could you comment on potentially filing for incentives to the extent to which that the ROE itself gets adjusted here? And then secondly, from your point of view, what do you perceive the timeline is being for the MISO 206 at this point in time?

This is Maureen Borkowski. It's -- obviously, we can't speculate on either a timeline or any results at FERC. With regard to the question about incentives, we obviously already have certain incentives like Quip for the Illinois River, Spoon River and Mark Twain projects. We are also, we believe, entitled to an extra 50-basis-point adder that's not included in the 12.38% MISO-based rate today. We, in our answer to the complaint that was filed in November, asked FERC to affirm that we were entitled to that 50 basis points. So obviously, to the extent FERC chose to take some action at some point, we believe we're entitled to that adder.

But just to be clear, when would you file for that adder? Would that be subsequent to any resolution?

I really can't speculate on that at this point. As I said, we actually did already request FERC to affirm that when we filed our answer. So to the extent FERC took any action, they may address it at that point.

Great, excellent. And then lastly, on financing, just at the parent, any updated thoughts on timeline in terms of getting that done? And perhaps, just more broadly, I'm not sure I heard it, how are you thinking about taking down the parent expense? Any updated thoughts there, just post-Genco, et cetera?

No, a fair question, Julien, but I wouldn't say any updated considerations. I think as we pointed out in our talking points, we were able to utilize commercial paper borrowings in order to handle the maturity of the $425 million parent company debt; obviously very low cost there associated with those commercial paper borrowings, less than 50 basis points of ongoing cost. We'll evaluate the need for and the amount of parent company financing, long-term parent company financing, over time, both in terms of considering how much short-term debt we would ideally keep outstanding and then how much long-term funding we would need. Longer -- certainly, some of that parent company financing right now is really going to support the transmission build-out that is occurring. And so longer term, we'll be considering whether to issue the more permanent financing at the parent company or at the transmission company level. And that's something that will play out over the next couple of years, as we build out that transmission business. So may or may not do some parent company long-term financing later this year or into next. We'll be evaluating that through time. In terms of other financing activities later this year, we do still plan to issue additional long-term debt at our Ameren Illinois utility company; again, there because of the capital expenditures for our electric and gas distribution businesses, but also for some of the transmission growth that we're seeing there as well.

Our next question is from Stephen Byrd with Morgan Stanley.

I wonder if you could just give us an update on expected timing for your transmission plans relating to the integration of Entergy into MISO? And just more broadly, milestones or other steps we should be on the lookout as you think further about growth in transmission?

Obviously that -- this is Maureen again. The -- any integration with regard to Entergy has to go through the MISO transmission expansion planning process. We are actively engaged in that with the intent of identifying future projects that might both provide better reliability and integrate Entergy fully into the marketplace. But that has to go through the timeline that MISO has established.

And I would add -- Steve, this is Warner. I would just add that Maureen and her team have been working actively on this, not just for the last several months, but frankly, for the last year and will continue to do so. As we even said in our last conference call, we see real opportunities in MISO, but also beyond MISO in PJM and SPP, those transmission growth opportunities.

Is there anything specific in regards to upcoming MISO events or timelines that we should be focused on?

I would say at this point in time, the MISO planning process is like a 15-month process. So the one that we're beginning now that we'll be actively studying, the transmission opportunities for -- between Entergy and the rest of MISO would ultimately come to fruition at the end of 2015.

Okay, understood. And shifting gears just over to the proposed EPA carbon regulation. Warner, you've mentioned that as you looked at it, it appeared to be a fairly unworkable rule, as presented. Can you talk a little bit more to the key issues that you see with the proposed EPA regulation?

Yes, sure, Steven. And I would probably put them in probably 2 or 3 buckets. I think the most important bucket we should talk about is, it's unworkable from a customer standpoint and in terms of the overall significant cost increases that they would result in. We have a baseline plan that we have put together as part of our integrated resource planning effort. So our team has been able to really compare what it would take to execute the greenhouse gas proposal compared to our baseline plan. And as we identified, it would be a significant cost increase to our customers. And that's really driven by some of the -- what I will consider some of the more operational challenges associated with the overall proposal. And you probably have heard, and many of my colleagues who've been out there talking to the same thing about building blocks, and some of the challenges that we -- that you have with those. From our perspective, you look at the plant efficiency building block looking for plant efficiencies of approximately 6%. Simply put, those aren't achievable. Those aren't achievable. We've taken a lot of efficiencies out of the plant. We've already done a lot of those works. To try and get an additional 6% is, from our perspective, just simply not achievable. When you think about the uneconomic dispatch of natural gas, which is another key driver of the increase, look, I think you have to think about the gas infrastructure first to support that, but then the uneconomic dispatch and whether, frankly, states have the ability to dispatch in that way. As you know, the RTLs control that. That's a tough nut to crack. I'm not sure if that is ultimately going to be fact-based, and whether we can execute that.…

Our next question comes from Paul Patterson with Glenrock Associates.

Just back on the FERC ROE case, could you give us a little bit of a flavor of some of the differences you guys see in your situation versus New England that might not lead to the same outcome that we saw in New England?

Paul, I -- we laid all those out in testimony. So I certainly would refer you to there. I mean, I think right now, certainly, there's more uncertainty because the FERC really hasn't established any kind of a timeline for the MISO case. And therefore, it's really uncertain when they'll take the case up, assuming that they do take the case up, and then what the data will look like at the time that, that data is collected to determine the appropriate range of ROEs to consider. So I think the biggest difference that I would point to is just timing and the uncertainty about when the FERC would potentially take the case up and how that might affect the data that underlies the ROE determination. So I'd say that's the biggest factor.

Okay. Just to make sure I understand, though, have you guys filed anything in response to the -- because there's a lot of stuff going on. Have you guys filed anything in response to what FERC decided in the New England case? Or are you just referring to stuff that you filed previously in the back and forth?

I was just referring to things we filed previously in the back and forth. Hands on that specifically, we could certainly you help offline. But, no, we did not file anything specifically as a response or in reaction to the New England case.

Okay, I appreciate that. The second thing is with respect to the Noranda case, what I'm a little bit confused by is why -- and I'm talking about the rate design case, why the OPC and these other customer groups seem to be supporting the subsidy, which I would assume will be coming from the customers that they're representing. Do I understand that correctly or am I missing something? Or could you maybe fill me in on what's going on there?

Yes, this is Michael Moehn. Yes, it's hard to speculate. Honestly, it -- they are certainly representing consumers. As we've argued all along in this case, we don't think it's good policy. It's not good for our customers, because of the way it shifts the cost. And it's hard to speculate why they're doing it, but it absolutely is -- it doesn't seem to make sense, and that's why we are absolutely so opposed against it.

Okay. And then just 2 really quick ones. I'm sorry I missed this, but what was the weather normalized sales growth for Q2? And then with respect to Noranda tricks [ph], it looks like, if the smelter closes, does that change any way your CapEx plans with respect to load and what have you? Because your smelter sometimes use a lot of electricity. I'm wondering, if it closes, does that make -- I don't know, does that change what you might need to do with respect to certain plans and stuff?

Sure, I'll -- Paul, it's Marty. I'll try to take those in reverse order. Certainly, not speculating on Noranda's operations and any risk or potential for closure there, but the -- your underlying -- I guess, the bottom line question there is, would it affect any of our CapEx plans? And the answer to that is no, that there wouldn't be any change in our -- the CapEx plans that we've outlined over this 5-year period as a result of that. Going back to your original question then, which was about the sales and the economy. I took the question out of order because I'll probably give a little more sort of lengthy explanation about what we're seeing in terms of sales and the economy. When we started off the year, you may recall that we expected sales to be down, the residential and commercial, about 1%, and industrial overall down about 0.7%. Year-to-date, what we're actually seeing on a weather-normalized basis is that our residential and commercial customers are up about 0.5%, and the industrial customers are actually down about 1.5%. And again, that's Ameren-wide. And so as we think about the remainder of the year, we've seen, like I said, a little bit more a positive in terms of residential and commercial through middle of the year. We're factoring that in, but still expecting that due to energy efficiency programs, as well as federal lighting standards, et cetera, that the remainder of the year, we would still expect to see sales lag the prior year. So overall, we're now expecting about residential and commercial to decline about 0.5% versus our initial beginning year guidance of negative 1%. On the industrial front, we still seem to see really manufacturing weakness, particularly in Illinois. And so we're expecting there for…

Our next question is from Michael Lapides with Goldman Sachs.

A couple of easy ones, and then one on the Missouri rate case. Marty, you made some comments about O&M in the second half for the year. Outside of the Callaway outage that sends an impact in the fourth quarter, and that's more of just a timing issue, what else is impacting O&M? And is it up more than 1% or 2%?

Paul, it's -- or not Paul; I apologize. Michael, I apologize. Yes, just in terms of the O&M, we did comment on that, just general growth across the business in terms of our distribution business, our generation portfolio, as well as just other areas like an increasing property taxes and the like. So we're kind of seeing growth across those areas this year. I don't have anything in terms of overall percentages for you, but as we think about the rate case and the rate case that we filed in Missouri, certainly, those costs are picked up. So the test year has an update period after December 31. And as it relates to significant drivers, let's say fuel cost or other elements of O&M, actually we'll reach out and pick up, say, January 1, kinds of cost increases. So those things are built in. And I pointed out in our discussion of our rate case filing that overall, we're actually seeing a sort of -- while there's a rate increase being requested, that's net of about a $67 million reduction in operations and maintenance costs. So in that 2.5 years period from the last rate case to this rate case, while there've been some elements of cost increase, net, we've been able to use continuous improvement efforts to drive costs out of the business, and that's reflected in the rate case.

Okay. And I wanted to ask a little bit about the rate case, only because I've thumbed through some of the detail earlier. So I kind of think about the Missouri business, and please correct me if I'm using wrong data here, kind of a $7.6 billion, $7.7 billion of total rate base for next year. If you use kind of the authorized equity layers in the very low 50% range and kind of the ROEs that the commission has given over the last 1 or 2 cases, kind of around 10% or so, you kind of get close to about $400 million of authorized net income. And if I look backwards a little bit, like at 2012 or 2013, your UE segment kind of reported net income in that level. So I just -- I wanted to kind of think about what's driving the actual need for the case. Just kind of back of the envelope rate base math would imply you're not too far off from actually earning your authorized, and may have been you had abnormal weather in some of those years or abnormally low costs that are now creeping up. I just -- I wasn't really kind of sure I understood the puts and takes.

Well, Michael, I would say, without knowing exactly what years you're looking at, certainly, the prior years' earnings, when you pick them up on an as reported basis, certainly do reflect fluctuations for things like weather, for the timing of Callaway outages. So certainly, you can't really look at a calendar year earnings and assume those are sort of normalized and apples-to-apples for what might be achievable in a different year. As it relates to the rate case itself and your earnings drivers, I mean, I think you were picking up the right things overall. If you refer to Slide 15 in our slide deck, we've outlined the drivers of our current rate case, and we've shown there what we expect rate base to be at the end of this year, around $7.3 billion. We talked about the equity ratio we expect for the end of this year, 51.6%. And those are the real drivers, of course, of the earnings levels. And then in part of the rate case process, you normalize cost levels and sales levels and things of that sort. But the real driver over time in terms of earnings, of course, is your rate base and the amount of rate base supported by your equity and your capital structure. And as part of this rate case, just going from the last rate case to this rate case, as a result of $1.5 billion or so spending, a rate base has actually increased about $500 million from the last rate case to this rate case. That's the real driver of increased earnings in Missouri over time.

Our next question comes from Andy Bischof with Morningstar Research.

Any update on the Missouri legislative front in terms of reform on reducing regulatory lag, among other things?

No real update for you. I'd again refer back to our last quarter's call and the transcript there, where we were sort of right at the end of the legislative session, and I think provided pretty fulsome comments about the situation there. I think as we go through time, I think as we've talked about, we will continue to work to educate all stakeholders in the state about the need for and the importance of investment in our aging infrastructure in Missouri. And in months like this, like any other time of the year, but particularly between active legislative sessions, we're certainly doing our best to continue to make sure that we are doing the right outreach for stakeholders and education about the importance of good, strong energy policy for the state of Missouri.

And I appreciate the, what I understood are sales discussion. Any -- how are customer account numbers looking in the quarter?

Yes, we continue to look at those. Our residential and commercial accounts in Missouri were actually up. I talked about it last time, they're up slightly. So less than 0.5%. But nonetheless, residential and commercial counts were up, and I think that's a positive. Over in Illinois, residential accounts were down a little bit. Though again, just a small amount, less than 0.5%, but we did see commercial customer accounts actually grow by about 0.7%. So overall, I think those are good trends. They're positive. If you want, I'll talk a little bit about the industrial sales. I mentioned in Missouri that they're up in terms of industrial sales. I mentioned about 0.5%. And we are seeing good, robust growth in areas like cement, automotive, food and agriculture, those kinds of industrial customers. And so that -- it's encouraging to see that industrial sales growth, it's encouraging to see jobs grow, and it's encouraging to see the customer accounts go up. I think all those things seem to be moving in a positive direction. In Illinois, like I mentioned, industrial sales have been down. It's more there in steel and metals, heavy equipment manufacturing. Those are some of the industries that have seen declines in sales, but as I mentioned, not much of an impact right now on residential customer accounts, down just a little. And it's certainly encouraging to see commercial accounts still continue to grow.

There are no further questions at this time. Would you like to make any closing remarks?

Yes, Warner does have one remark.

Yes, thanks, Doug. A little bit earlier, Stephen Byrd had asked me a question about the greenhouse gas proposal and elements that were unworkable, and I outlined the concerns that we had in the building blocks. And I just want to make sure I add one other important aspect, and that relates to the target dates. Now the headline is that it desires to have carbon emissions 30% below 2005 levels by 2030. I think it's important to recognize that their interim, aggressive interim target dates, begin as early as 2020. And so when you look at some of the challenges and the cost drivers, it is indeed these interim target dates and the overall target date, which really drives our costs up. So I just want to make sure I added that to Stephen to your question. And so we appreciate that. Doug, I'll turn it back over to you to wrap it up.

Okay. Thank you, Warner. Thank you, all, for participating in this call. Let me remind you again that a replay of the call will be available for 1 year on our website. If you have questions, you may call the contacts listed on today's release. Financial analyst inquiries should be directed to me, Doug Fischer. Media should call Joe Muehlenkamp. And our contact numbers are on today's news release. Again, thank you for your interest in Ameren, and have a great day.