Greetings, and welcome to Ameren Corporation's Second Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Doug Fischer, Senior Director of Investor Relations for Ameren Corporation. Thank you. Mr. Fischer, you may begin.

Thank you and good morning. I am Doug Fischer, Senior Director of Investor Relations for Ameren Corporation. On the call with me today are Warner Baxter, our Chairman, President & Chief Executive Officer and Marty Lyons, our Executive Vice President & 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 a webcast will be available for one year on our Web site at ameren.com. Further, 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 posted on our Web site a presentation that would be referenced by our speakers. Acronyms used in the presentation are defined in the glossary on the last page. To access the presentation, please look in the Investors section of our Web site under Webcasts 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 statement section in the news release we issued today and the forward-looking statements and risk factor sections in our filings with the SEC. Warner will begin this call with comments on second quarter financial results, full year 2016 earnings guidance and a business update. Marty will follow with a more detailed discussion of second quarter results and an update on financial and regulatory matters. We will then open the call for questions. Before Warner begins I would like to mention that all per share earnings amounts discussed during today’s call including earnings guidance are presented on a diluted basis unless otherwise noted. Now here is Warner who will start on Page 4 of the presentation.

Thanks Doggie. Good morning everyone, and thank you for joining us. Today we announced second quarter 2016 core earnings of $0.61 per share compared to core earnings of $0.58 per share in last year’s second quarter. This earnings increase reflected higher retail electric sales volumes, excluding sales to Noranda Aluminum driven by warmer early summer temperatures. The earnings comparison also benefited from increased FERC regulated transmission and Illinois Electric Distribution infrastructure investments made under modern constructive regulatory frameworks to better serve our customers. These favorable items were partially offset by expenses for the 2016 scheduled Callaway nuclear refueling and maintenance outage as well as lower electric sales to Noranda Aluminum historically Ameren Missouri's largest customer. Earlier this year Noranda idled production at its smelter and the plant remains shutdown. Overall our second quarter results were solid as our team continued to successfully execute our strategy. And I am pleased to report that we have raised our 2016 guidance to a range of $2.45 to $2.65 per share, up from our prior range of $2.40 to $2.60 per share, reflecting year-to-date results. Turning to Page 5, here we reiterate our strategic plan. We remain focused on executing the strategy and continue to strongly believe it will deliver superior long-term value to both our customers and shareholders. I would like to take a moment and highlight some of our year-to-date efforts and accomplishments towards this end. To begin our accomplishments include continued strategic allocation of significant amounts of capital to those businesses whose investments are supported by regulatory frameworks to provide fair, predictable and timely cost recovery and also deliver long-term benefits to our customers. This capital allocation is illustrated in the graphic on the right side of this slide. As you can see, year-to-date, we invested almost $650 million of capital…

Thank you, Warner and good morning everyone. Turning now to Page 9 of our presentation, today we reported second quarter 2016 GAAP earnings of $0.61 per share which matched last year's second quarter GAAP earnings. As you can see on this page, there was no difference between GAAP and core results for this year’s second quarter. Moving then to Page 10, here we highlight factors that drove the $0.03 per share increase in second quarter 2016 results compared to prior year core results. In 2016 we experienced higher retail electric sales volumes excluding sales to Noranda driven by warmer early summer temperatures. These temperatures increased earnings by an estimated $0.07 per share versus 2015 and $0.06 per share versus normal conditions. Moving to the next key driver of the second quarter earnings variance, increased investments in electric transmission and distribution infrastructure in our ATXI and Ameren Illinois businesses lifted earnings by $0.06 per share compared to the year ago period and net of changes in returns on equity. Our Illinois electric distribution business results incorporated an 8.45% allowed ROE under formulaic rate making compared to 8.75% for the year ago period, based on an assumed average of 30 year treasury rate of 2.65% for the full year. Moving to the next two items on the page, earnings for the second quarter also benefited from higher Illinois natural gas distribution service rate effective this year as well as a decline in other operations and maintenance expenses not subject to writers, regulatory trackers or formulaic rate each adding $0.02 per share compared to the prior year period. Shifting now to factors that had an unfavorable effect on the second quarter earnings comparison, the scheduled 2016 Callaway nuclear refueling and maintenance outage reduced second quarter 2016 earnings by $0.07 per share compared to…

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Julien Dumoulin-Smith with UBS. Please state your question.

So just first detailed question and a bigger picture question, on energy efficiency, obviously you're talking about lower load growth here in general, but what is the annualized impact here in 2016 after incentives? It seems as if it's about $0.17. In tandem with, that what are the weather-normalized sales trends excluding Noranda? And then most importantly, what are your 2017 expectations as you think about that energy efficiency drag?

Yes sure Julien, this is Marty, and obviously a number of questions there. I think as that relates to energy efficiency you got to keep in mind that some of what we’ve quantified is year-over-year comparative impacts from last year to this year. So when we think about that you got to remember that the construct of the energy efficiency plan in Missouri from 2013 through 2015 was different than the one we’ve got now and last year we were being compensated for some of the efforts associated with energy efficiency and being compensated not only for the current year effects in 2015 but some of the carryover effects to 2016. And so that’s creating a bit of a year-over-year comparison and that’s why we’ve noted some of those effects this year. In terms of the sales trends what we’re seeing we mentioned this on the call year-to-date on a consolidated basis residential and commercial sales were roughly flat. Frankly they’re up a little bit in Missouri and down a little bit in Illinois. Then industrial sales overall were down about 4% with Missouri down about 0.5% and Illinois down more significantly. When you actually exclude the impacts of energy efficiency in Missouri we would actually see overall sales instead of being flat. Overall sales we see up about a 1.5%. On the residential we think they’d be up about 1.3%, commercial maybe up 2% and industrial while they’re down on a reported basis maybe up 0.5% excluding energy efficiency. So we do see those programs as having an effect both the programs we put in place last year are having a carryover effect to this year, but also the current year programs that we’ve now put into place. So they are having an impact but overall sales are about where we thought. We said they -- we thought they’d be about flattish because of the effects of energy efficiency and that’s about where they are. I think economically unemployment is running pretty good in Missouri frankly I think you probably saw nationally the unemployment was about 4.9% now for the past couple of months. What we’re seeing in Missouri is it's actually running a little bit below that, closer to 4%. While unfortunately on the Illinois side, where we’re seeing some of the industrial sales declines, seeing unemployment a little bit higher over there about 6% but overall I think the economies are remaining stable. We’re seeing a little bit of growth I’d say in Missouri especially when you strip out energy efficiency. And then in Illinois while the industrial sales are down we’re still seeing some growth in terms of residential and commercial demand, which we see as a positive.

And then just a follow-up here on the broader 5% to 8% CAGR, can you comment quickly what the impact is from the U.S. treasury being down within that range perhaps it's linear but I just want to reaffirm it? And then separately related what about the impact from the pension discount rates? Just want to make sure we under it's probably fairly modest given Illinois and then also Missouri. But just want to make sure we have that right?

Yes, sure I understand the question. I think that, as you would think about the 5% to 8% growth overtime as we’ve said repeatedly that is really anchored by the 6.5% compound annual rate base growth. And so that really is the foundation and then when you think about whether we would be above that or below that from an earnings per share growth perspective, certainly changes in treasury rates or earned ROEs, sales growth levels, spending levels, regulatory decisions, all of those things can push you up or down within that range. And look it’s a five year outlook going out to 2020, so a number of things can happen over that time and that's why we have sort of a $0.40 range when you look out to 2020. As it relates to the current impact of 30 year treasuries as we mentioned on the call, we have booked to a lower treasury yield than we expected at the beginning of the year. The beginning of the year we had expected treasury yields to be around 3.2, what we've booked to as of the end of June is an average rate for the year of about 2.65 and of course the current 30 year treasuries are sitting at 2.25. So, that has caused us to change our outlook for this year. We've baked that into our guidance range for this year. I'd remind you that 50 basis points move in ROEs in the Ameren Illinois delivery business about $0.025. That gives you a sensitivity but we've baked that into our current year guidance, we feel very good about the guidance, we were able to raise it $0.05 as you know this year which is a position, it's net of the impacts of those changes in 30 year treasuries. And as it relates to our long-term guidance we obviously update our overall thoughts about how we're going to manage our business going forward on an annual basis but right now I feel very good about that 6.5% rate base growth and that 5% to 8% compound annual EPS growth that we've projected.

[Multiple Speakers] and then one other issue on pensions and OPEBs.

Yes thanks Warner. On the pension and OPEB which was a good question Julien, I know that's impacting some folks with the lower discount rates that are expected but we have trackers in Missouri for both pension and OPEB and then in Illinois for our energy deliver business as well as in our FERC transmission business, you have formulaic rates, so we're largely protected from those declines that are happening in terms of the discount rate. In the Illinois gas business obviously we have forecasted test years and depending on the timing of those filings there can be some impact there, but largely insulated from the impacts of the changes in discount rates and any kind of asset performance changes.

Our next question comes from Brian Russo with the Ladenburg Thalmann. Please state your question.

The $0.05 increase in the guidance, is there any way to breakdown some of the more noticeable positives and negatives? It looks like interest rates would be maybe a $0.025 negative versus previous guidance and I'm not sure, I think weather is a $0.01 positive, just maybe if you can elaborate on that, what's operational and what's kind of weather related?

And I think if you look back at our beginning of the year guidance and then walk through our first quarter and now second quarter disclosures you can piece some of these things together and you've got some of those. I think as it relates to starting with our guidance at the beginning of the year and thinking about how it moved. W had an $0.08 or so pickup from the adoption of the new accounting standard in the first quarter which was a positive. At that same time we also had a couple of additional cents of decline due to this Noranda outage we started the year thinking it was going to be a $0.13 impact and we're at about $0.15 impact. We also had as you mentioned we have now had a little bit of lowered expectation in terms of the treasury rates and again that like you said that has impacted us by $0.02 or $0.03 there as well, so those are some of the impacts of it that we had. Now in the first quarter we also had negative weather it was it about $0.05 negative in the first quarter as mentioned on the call we had positive weather here in the second quarter which more than offset and we're about a penny positive now for weather year-to-date. So when you look at that, you look at that where we are at the end of six months you have got that tax gain that we experienced in the first quarter, you get about a penny of positive weather. And we've had some offsets due to the decline in the treasuries and then this temporary impact of the Noranda outage that we're experiencing this year. So those are some of the things that were pluses and minuses versus our original expectations and why we were positioned then with the backdrop of solid operations and very solid execution of our strategy and our plan for this year that we're able to raise the guidance by $0.05.

Okay, great. It's my understanding that you're using the ATXI and FERC transmission is being financed at the parent. Just want to be -- just like you to clarify the financing strategy with ATXI and when might we see it break out into a separate sub and that parent leverage be a little bit more transparent?

Yes, that’s a, you correctly described it, I mean what we're doing today think of it as the most, has been the most efficient way to do it as we've been financing the transmission growth at our ATXI business through financing at the parent which we've got both some short-term and long-term financing in place there at the parent that supports the investments we've been making at ATXI. Obviously as that short-term debt grows the parent will consider when it might be appropriate to term some of that out. I don't expect that to be this year, but in perspective periods we very well might consider that and to the extent that we believe it’s more efficient at that point to do it, at an entity other Ameren Corp., at either ATXI or a holding company level, we'll evaluate that going forward. But as we approach that decision, whether that would be next year or in some period beyond we'll certainly be happy to discuss our thinking at that time about why we're proceeding.

And then the Missouri electric case filing, did you file a utility cap structure or the parent cap structure?

Yes in the Missouri filing that we filed as we mentioned on the call, you have a equity content in the cap structure of 51.8% and that is the cap structure of the utility subsidiary Ameren Missouri.

Our next question comes from Michael Lapides of Goldman Sachs. Please state your question.

Can you talk about in your multi-year forecast what your planning is for leverage at the holding company level? Meaning, do you plan on de-levering the holding company? Do you plan on issuing debt solely to fund ATXI or using debt at the holding company level and sending it down to the utilities to help fund utility growth?

Michael this is Marty and as you've seen in our slides we have about an $11 billion expenditure plan over the next five years. It's something that we believe given the strength of our balance sheet today. We can finance solely with debt and maintain a very strong balance sheet and maintain very strong credit metrics relative to the ratings that we have today. And then as we think about the expenditures, obviously we’ve got those in each of the subsidiaries. We do financing independently at each one of the subsidiaries. So we have obviously we issued long-term debt at Ameren Illinois and Missouri and then as we just spoke about on our prior Q&A as it relates to the ATXI transmission business then we are using parent company leverage to be able to adapt, to be able to fund those investments at ATXI. And at some point may very well be able to do financing either at ATXI or some sort of intermediate holding company. But that’s overall our plan and our goal is with each one of our utility subsidiaries to maintain very strong overall balance sheets there as well. So, that’s how we’re balancing things out and again we do believe we’ll be able to finance this capital expenditure plan with that over the coming five year period.

So no real plans for equity or significant debt at the holding company to infuse those equity into the operating companies?

That is correct that’s absolutely correct. And I think one thing too to keep in mind longer term overtime we’ll be able to monetize some of the tax assets that we have up at the parent. We’ve got quite a bit of tax assets built up overall, about 760 million but about 460 million or so of that is really at the parent company and something that overtime we’ll be able to monetize as well.

One last one and this is really I don’t know if this is Warner or for Michael, but when you’re thinking about the proceeding in Missouri to help improve rate making processes. I know some of the testimony filing dates have already passed and honestly it didn’t look like there were a lots of suggestions of very specific things that other interveners besides you guys really were recommending more -- and that testimony seem like it was more please don’t this or don’t do that but not as much please do this or do that. How do you think the commission kind of takes it from there, like if you think about it as this is a giant kind a caldron a boiling pot or lots of things can come out this. How do you think about what the options that the commission actually looks at are based on what’s been filed in the public estimates?

Hello Michael this is Warner. I’ll take a shot at it and then I’ll let Michael add some more of the details on that. Number one I think I would start with this. This is a positive development that we’re talking about the need to address Missouri’s agent infrastructure and seeking solutions, especially outside of the legislative session. So I see that these proceedings that are being conducted both by the Missouri Public Service Commission and the Senate Interim Committee an opportunity for stakeholders really to come together to not only share ideas, to share differences and to try and find a constructive path forward. And so while maybe some of the filings included things that the interveners or others did not want to see that’s informative. But secondly I know that Ameren Missouri and then certainly the utility group they filed specific suggestions and there was a host of suggestions to try and address this issue. So I fully expected the commission to carefully look at these things to engage with stakeholders as well as the Senate Interim Committee to try and advance Missouri forward, because as we’ve been consistent, we strongly believe that this is not only an opportunity but one of these things that is really imperative to Missouri to move forward with that constructive policies. And so we're encouraged by these developments, we look forward to engage with the key stakeholders. Michael you've been working with some of the more specific key stakeholders, anything you'd like to add in terms of the overall process and where things go from here?

I think that I mean where we are today is a positive as Warner said, I mean there's a great deal of dialogue that's occurring and I think that given where the various stakeholders are it's not terribly surprising I think that the commission has been very constructive in this process, we'll have a couple of more rounds of testimony as we move through it. As Warner said the Interim Senate Committee is going to hold some hearings in the very near future. They're really looking to get some outside perspectives. And I think to me the one thing that's really positive in all of this is there's a recognition of the issue. Now, there's not tremendous consensus on what the solution is yet but there's a recognition of the issue and that's where this whole thing starts. Once we have the problem identified we can figure out how to go about it and come through debate and dialogue, come up with the right solutions. So, I think it's a positive first step, it is hard to predict where it's going to go, but both I think the commission ordered process as well as the Interim Senate Committee are driving towards an early December date with ample time to work something through the legislative process.

Our next question comes from Paul Patterson with Glenrock Associates. Please state your question.

Just a few quick follow-ups, most of my questions have been answered but, the tax asset monetization that you were referring to is that just over the course of business or is there any potential transaction that might be contemplated as such I was just wondering if you could elaborate a little further on that?

Yes, really expect it to be monetized just over the course of business. As we go through time, what'll happen is that as we have taxable earnings and we have taxes due, what'll happen overtime is that the utilities will burn off their tax assets the utilities will then pay taxes up to the parent. The parent will be able to monetize the sort of kind of this tax shield of the 460 million that I spoke about. And then ultimately once that's burned through Ameren Corp. becomes a tax payor which is out in the 20-21 timeframe is when we project today.

And then on Illinois, there's a lot of legislative discussion there regarding the nuke stuff that EXELON is asking for but also others are asking for sort of renewable stuff etcetera and there's been some discussion of an ominous bill. There's discussion of singlized those kind of things, and I was just wondering is there any opportunity there for you guys giving your formula rate plan and everything else for additional investments or additional opportunity or any thoughts of risks or any thoughts that you guys have that in terms of seeing what's going on in the Illinois?

Hello Paul this is Warner again. The simple answer is yes, we're at the table with key stakeholders and as EXELON and others have promoted plans or potential pieces of legislation. We've provided input and we provided input that we believe that will encourage some additional investments that we believe will benefit customers, but also to make sure that is balanced for certainly the Southern part of Illinois as well as the Northern part of Illinois. It's all part of the framework and so we think there are opportunities, whether that will be a legislative effort that will be the priority for this legislature here in the short-term remains to be seen. They obviously are very focused on addressing some budget issues and so once those matters are addressed perhaps an energy legislation will come to the forefront. But the bottom-line is we're engaged, we're simply engaged with them and Richard Mark oversees our operations there. Richard would you have anything else to add there?

No, I think you put it well Warner. I think we're at the table with stakeholders who are watching the legislation very closely, but in Illinois right now I think the primary focus of the legislature is trying to get some of the state budget issues resolved.

Sure.

Right, sure. And then just finally, on the Mark Twain, you guys mentioned the assent process of the counties. Is that going well? Is that working out, as just as a sort of a follow-up from -- was just wondering what, if there was anything, going on there?

We'll have Maureen Borkowski who oversees our transmission operations she will be able to give you some input on that.

Hi, this is Maureen, yes we think that Mark Twain is going as per schedule, we're basically preparing packets of information to demonstrate to each county that we need the statutory requirement of safely crossing public roadways and we continue to have dialogue with each of the commissioners in each of the five counties to move that forward. So everything's on schedule at this point.

Our last question comes from Steven Fleishman with Wolfe Research. Please state your question.

I wanted to give you a rare compliment for basically staying disciplined in this Westar M&A process. Usually people congratulate on doing deals but sometimes best not to. Just on that front, though, could you maybe just give a sense of how important M&A is to the plan, or is it pretty much focus on the core rate-based growth and is kind of more opportunistic?

Steve, this is Warner, so let me comment squarely on this. Our focus is on the strategic plan we laid out right at the outset. And that focus as you can see is on the organic growth in our business which is driven by robust rate base growth which we believe is going to deliver solid earnings per share growth. And we have obviously talked about the dividend that goes along with it, it is going to deliver what we think is superior total shareholder return. As you said we do believe the industry will continue to consolidate and certainly in the past we have obviously participated in some level of consolidation and so the bottom-line is we're focused on our organic growth plan, we're attentive to what’s going on in the industry and we'll simply just continue to execute, execute, execute, period.

I'm showing no further questions at this time, so I will turn it back to Mr. Fischer for closing remarks.

Thank you for participating in this call. Let me remind you again that a replay of the call will be available for one year on our Web site, if you have question you may call the contacts listed on our earnings release, financial analyst inquiry should be directed to me Doug Fischer or my associate Andrew Kirk. Media should call Joe Muehlenkamp, our contact numbers are on the release. Again, thank you for your interest in Ameren and have a great Friday.

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