Greetings, and welcome to the Ameren Corporation’s Fourth Quarter 2017 Earnings Call. [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. 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. Warner and Marty will discuss our earnings results and guidance as well as provide a business update. Then we will open the call for questions. Before we begin, let me cover a few administrative details. This call contains time-sensitive data that 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 a presentation on the amereninvestors.com website homepage that will be referenced by our speakers. As noted on Page 2 of the presentation, comments made during this conference call may contain statements that are commonly referred to as forward-looking statements. Such statements include those about future expectations, beliefs, plans, strategies, objectives, events, conditions and financial performance. We caution you that various factors could cause actual results to differ materially from those anticipated. For additional information concerning these factors, please read the Forward-looking Statements section in the news release we issued today and the Forward-looking Statements and Risk Factors sections in our filings with the SEC. Lastly, all per share earnings amounts discussed during today’s presentation, including earnings guidance, are presented on a diluted basis, unless otherwise noted. Now, here’s Warner, who will start on Page 4 of the presentation.

Thanks, Doug. Good morning, everyone, and thank you for joining us. Before I begin my business update, I first want to express my deep appreciation to our coworkers who volunteered to leave their families work weeks to support Puerto Rico in this hurricane restoration efforts as well as offer best wishes to a second group of coworkers who are heading to the island to continue this important work. It’s been a historic year for restoration efforts following Hurricanes Harvey, Irma and Maria, which impacted so many in Texas, Florida and Puerto Rico. I’m so proud of all of our coworkers who volunteered to support this important restoration efforts as well as those who stayed behind and handled extra duties while they were gone. These efforts displayed incredible teamwork and commitment to our mission to power the quality of life. Now moving to our financial results. Earlier today, we announced 2017 core earnings of $2.83 per share compared to $2.68 per share earned in 2016. This marks another year of strong growth driven by the successful execution of our strategy across our businesses. While Marty will discuss the drivers of these results in a few minutes, I’d like to highlight some areas of our team’s strong performance in 2017. Last year, we continue to exercise discipline, cost management and strategically allocated capital to our businesses that were supported by constructive regulatory frameworks. We also effectively managed capital projects across all of our businesses, which ultimately delivered value to our customers. ATXI’s three major transmission projects proceeded very well, as noted on this page. We continue to make significant good modernization investments in our Illinois electric and natural gas distribution businesses, including the continued deployment of smart electric meters and gas modules, which combined, are now about two-thirds complete. In addition, Callaway…

Thanks, Warner, and good morning everyone. Turning now to Page 12 of our presentation. Today, we reported 2017 GAAP earnings of $2.14 per share compared to GAAP earnings of $2.68 per share for the prior year. As you can see in the table on this page, the 2017 GAAP earnings included two noncash charges, primarily at the parent company, that decreased earnings by a combined $168 million or $0.69 per diluted share, reflecting the revaluation of deferred taxes as a result of changes in Illinois and federal income tax rates. Excluding these charges, Ameren recorded 2017 core earnings of $691 million or $2.83 per diluted share, which compared favorably to our last guidance range of $2.73 to $2.87 per share. There were no differences between GAAP and core earnings for 2016. Turning to Page 13. We highlight by segment the key factors that drove the overall $0.15 per share increase in 2017 core earnings compared to 2016 results. Starting with Ameren Transmission, here, the earnings per share contribution increased $0.10 per share from $0.48 in 2016 to $0.58 in 2017. This 21% growth was primarily driven by earnings on increased infrastructure investments at ATXI and Ameren Illinois, partially offset by a lower allowed return on equity of 10.82% for 2017 compared to an average of approximately 11.3% for the prior year. In 2016, our Transmission segment benefited from a temporarily higher FERC-allowed ROE that extended from mid-May to late September 2016 when the FERC adjusted MISOs based ROE to its current level. Turning to Ameren Illinois Electric Distribution. Earnings for this segment grew from $0.52 per share in 2016 to $0.54 per share in 2017, reflecting increasing infrastructure investments as well as a higher allowed return on equity under formulaic rate making of 8.7% compared to 8.4% for the prior…

[Operator Instructions] Our first question is from Julien Dumoulin-Smith with Bank of America Merrill Lynch. Please proceed with your question.

Hey good morning. Congratulations.

Good morning, Julien. How are you doing?

Great. Thank you. So I wanted to first ask real quickly on the legislation and the previously contemplated $1 billion program. How much inflation in bills does that $1 billion contemplate? How much latitude does that give you when you kind of hash that out against the tax reform, et cetera, against these new rates that they’re putting in there?

Julien, this is Michael Moehn. I don’t – we haven’t really said. I mean, what we’ve been clear about is that we think as this legislation is written, 564, it certainly would support that incremental $1 billion of investment, and we think that we could do it underneath that prescribed cap.

Got it. Excellent. And then clearly, there’s a multitude of factors that would drive your financing needs higher to your tax reform and incremental spend, if successful, on either front, how are you thinking about your debt commitments? Clearly, I hear you saying you’re committed to your existing strong credit metrics, but how committed? Perhaps can you elaborate a little bit on the equity financing needs if you get either of the two incremental projects?

Julien, this is Marty. Yes. When you look at the credit metrics and the credit ratings that we have today, we are very happy with the credit ratings that we have today. Our issue of ratings today for Ameren at S&P are BBB+, as shown in the materials; and with Moody’s, Baa1. To give you a sense, I mean, our FFO-to-debt metric, the threshold that S&P has for us out there, that BBB+, is 13%. And at Moody’s, the threshold for the Baa1 for FFO to debt is 20%. So look, as we go through time, and you can see this in the materials we provided today, we’ve always looked to maintain a strong balance sheet, strong credit metrics. We’ve worked hard over the past several years to improve, I’d say, the business risk profile of the company, and we’re going to continue to work on both of those fronts as we move forward. As we looked at the capital investment plan that we laid out today, the rate base growth plans and we looked at our cash flows, including the impacts of tax reform, we ended up thinking it was certainly prudent that we go ahead and issue some equity under the dividend reinvestment and employee benefit programs, again with the goal of keeping the balance sheet strong and keeping strong credit metrics. As we look ahead and as we update the capital expenditure plans, looking ahead the rate base growth plans, we’ll step back and assess the overall capital plan and the funding needs but again with that backdrop of wanting to keep a balance sheet, strong credit metrics, and importantly, make sure we’re positioning those investments for success in the regulatory environment as we seek to earn a fair equity returns on those investments.

just a further nuance on this, if you can. What’s the timing of the commencement expense, specifically, and the legislation is contemplated? When could you actually start spending? And over what period of time, at present, do you intent to spend that $1 billion under your earlier program or proposal?

Julien, this is Warner. I think what we said is we would spend these expenditures through 2023. That’s what it would be. And a lot of this would be predicated when the legislation is ultimately passed, but we’ve been clear. We had a plan out there. That’s a five-year plan for $1 billion. And so through 2023 is what we’ve been talking about.

Got it. And so fairly ratable.

I’m sorry?

Fairly ratable.

Yes, yes. Relatively speaking, I think fairly ratable is a good way to think about it.

That all. Thank you.

Sure. Thank you Julien.

Our next question is from Paul Patterson with Glenrock Associates. Please proceed with your question.

Good morning and congratulations on everything.

Good morning, Paul. How are you doing?

I’m doing great. Just with respect to the 3.5% rate base growth in your slides for Missouri, does that include pretty much what you see happening in – this long-term rate base growth, does that include the legislative impact?

Paul, this is Marty. No, it does not. So when you look at that slide, it includes the $4.3 billion of expenditures that are shown in the table to the left. And then as Warner pointed out on the conference call, it includes the impacts of tax reform and the impacts on rate base we see from, I’d say, the changes in deferred taxes versus what we otherwise would have expected.

Okay. So to Julien’s point, I guess, there’s additional upside that we could see in this? Is that a good way to think about it?

Yes. Yes.

Okay. And then when we look at this 7% growth rate and we look at your previous credit rate and rate base and what have you, I know that you guys have a higher base and what have you, but the lower sales growth – I’m sorry, the lower earnings – long-term earnings growth on the top end of the range you’ve lowered it a little bit. Is that just simply a function of the change? And could you just walk through that a little bit compared to now that you’ve got a higher growth in rate base? Do you follow what I’m saying? It’s not completely intuitive maybe why the top end of the earnings growth rate has gone down.

Yes. Well, look, I think we have a very strong rate base growth plan at 7%. And I think our EPS growth that goes along with it, a 5% to 7% compound annual, is also very strong, especially coming off of the strong 2017 earning base that we have of $2.83. So that is the base for that. And I would say that, Paul, as you think about it, it includes also all of our assumptions about funding that I just laid out, including the use of equity from those dividend reinvestment and employee benefit plan. Again, that should produce about $80 million of equity annually. And I think the 5% to 7%, which is, again, we think very strong, incorporates a variety of assumptions in terms of Treasury rate assumptions, spending levels, rate case outcomes, economic conditions and the like. But it does – it’s what we believe is certainly the right growth given the rate base and funding plans that we’ve laid out.

Okay, fine. And this is – there was some discussion yesterday at the Missouri PSE among the commissioners regarding another utility, and it looks like a majority of them don’t – or basically are not necessarily supportive of a consolidated cap structure. And I’m just wondering, now you guys made comments about your commitment to obviously the credit ratings and what have you. But just in general, I’m just wondering is there any perhaps – have you guys been thinking perhaps that there could be additional sort of opportunity on double leverage or anything like that?

Paul, I think if you look through time, I mean, we’ve always worked to maintain strong balance sheets and credit metrics at all of our legal entities, both the parent company as well as our subsidiaries. We laid out on the slides that our target capitalization over time is around 50-50. And I would say, as it relates to Ameren Missouri, for a third time, we have had ratemaking in Missouri for our Ameren Missouri utility that is based on the utility’s capital structure. And we would expect that to be the case through time.

Great. Thanks so much.

Our next question is from Steve Fleishman with Wolfe Research. Please proceed with your question.

So just when you first talked about doing the wind projects, you suggested then that we could see some modification of the base plan as part of it. At this point now, should we assume this is the base plan? And then if you do the wind and if you do the – if the legislation passes, those are just additive, not likely to be any meaningful adjustment to this base?

Steven, this is Warner. I think clearly we’d pointed out opportunities for additions, both for the wind as well as for grid modernization. We presented our base plan, and we have two meaningful opportunities that we’ll continue to work very hard to execute on. And so it’d be premature to say exactly what we’ll do with the overall plan. But the bottom line, we’re not saying we’re going to make any changes to the plan as we see it today.

Okay. And then just on the wind projects, could you just be a little more explicit on how the CCN process works? So you’ll file – once we have winners, you’ll file CCN. The renewable rider is kind of part of that filing, so kind of both the project and the rate treatment would all be approved in one proceeding.

Yes. Steve, this is Michael Moehn. Yes, you got it right. And so I think what we have been telling folks as we wrap up the conclusion of these contracts that we’ll be filing for the CCN in the first half of 2018. And you’re correct, I mean, as part of that filing, we would make the request to use what’s called the RESRAM, the regulatory recovery mechanism for these renewable projects. And that process, I think, we’ve been saying could take anywhere from six to 10 months to complete.

Good. I think that’s it from me. Thank you.

Thanks, Steve.

Our next question is from Andrew Levi with Avon Capital Advisors. Please proceed with your question.

Hi guys. Andrew Levi

Good morning, Andy. How are you?

It’s Andrew Levi. Just one or maybe two questions. But on the $0.14 of Missouri incremental O&M relating to plants, can you just kind of go more into that of exactly what’s going on there because that was not part of your EEI disclosures and where that came from and whether that goes away in 2019?

Andy, this is Marty. Yes. When you look at it overall, especially in a non-Callaway outage year, we thought it was certainly prudent this particular year to have a little bit of a higher or higher-than-normal schedule for our nonnuclear outage costs. And that’s the primary driver of that number as well as some – I’d just say some other O&M that we have in Missouri this year. I would not necessarily expect that to be a recurring number year-over-year. And look, I think when you step back overall, as you know, we’ve been improving our earn return as a company and each of our jurisdictions through time on a consolidated basis. And in Missouri, it’s our goal to continue to earn very close to our allowed returns.

Okay. So out of the $0.14, how much is kind of – I don’t want to say onetime in nature, but was put there because of the Callaway – back at the Callaway outage?

I guess I don’t have a breakdown on exactly that number for you, Andy, other than to say I wouldn’t call them necessarily onetime. These kinds of outages do occur through time, just a higher concentration of them this year than in some other years.

Okay. Got that. And then on the 2.85% increase that’s capped in Missouri? Does that include fuel or not?

That’s an all-in cap, Andy

So that does include fuel. So if fuel would go up, that would be part of the 2.85% cap?

That’s correct.

Okay. And on the wind project, is that part – is that something to the cap as well?

It is. Yes, it is.

Okay. Got it. Thank you very much.

Thank you Andy. Thank you.

Our next question is from Ashar Khan with Visium Asset Management. Please proceed with your question.

Good morning. Congratulations.

Hi, Ashar. How are you?

Could you just describe the timing of the wind RFP, you said, kind of approvals by the first half of this year? Could you just tell us how we should look at that – the timing of some kind of an announcement as we look in the next, two, four months?

Michael, you want to address that, please?

Yes. Again, as we’ve talked a couple of times, we have been going through this RFP process and now are in the middle of serious contract negotiations, which we hope to be wrapping up soon. And we just were committed to filing the CCN in the first half of 2018.

Okay. And then once you file it, how should – what approval time frame should we look at?

The CCN process, we’ve been saying that it typically follows about a six- to 10-month kind of approval process.

Six months to 10 months. Okay. Thank you so much.

Our next question is from Paul Ridzon with KeyBanc Capital Markets. Please proceed with your question.

Just because there’s been so much focus on the Senate and clearly you’ve cleared that hurdle, but can you give a sense of the tone in the House?

Yes. Paul, this is Warner, and I’ll ask Michael to comment. Look, I think that the bottom line is, as we’ve said, the passage of this bill in the Senate is a positive step forward, but now we’re going to turn our attention to the House of Representatives. And what we do is we’re going to look forward to discussing the real significant benefits of Senate Bill 564 with all the members of the House. You have to keep in mind that the Senate just passed this bill so that it’s now moved on over to the House, and so we’re looking forward to having those conversations.

I Yes. I would just add, look, this bill is the result of a lot hard work and compromise. I mean, it’s an excellent bill. I think that, as Warner said, we’re going to demonstrate the benefits to our customers, so obviously the benefits to us and benefits to the state of Missouri. So we look forward to engaging with the House.

And, Michael, just to add a little bit to that and I guess a little maybe to what Steve’s question was before. When we look at this bill, and we’ve been clear that if Senate Bill 564 is passed, I mean, we will spend significantly more investments or make significantly more investment in the state of Missouri. $1 billion, this is what we’re talking about. And so that is absolutely our plan. And so with that comes significant benefits to our customers in terms of, not just modernizing the grid, but also giving them the tools that they want to manage our energy usage. Michael talked about this compromise. This compromise took what was already a bill that have robust consumer protection and made them even more robust. So these are the types of things that we’re going to talk about the with House of Representatives, including a significant number of jobs that will be driven by this bill.

Thank you. That’s good color.

Our next question is from Neil Kalton with Wells Fargo Securities. Please proceed with your question.

Hi, guys, how are you?

Good morning Neil, how are you?

Good, thanks. Just a question on wind in Missouri. I think Empire sequenced maybe a little bit before you guys. Is that proposal a good proxy for your project? Or would you advise us not to sort of look too closely to that, that the proposals between you and Empire are unique?

Which assets, Neil, are you referring to? I mean, in terms of their…

What I’m getting to is simply depending on how that process goes, is that – if there’s something that’s negative that kind of comes out, would that be a good readthrough to your proposal? Or would you advise us that your proposal is unique versus the Empire proposal?

Yes. I think, our proposal, yes. Again, if you just step back and you think about why we’re doing this, I mean, you have the renewable standard that’s out there that requires us to have the renewables in place by 2021. I mean, that’s really the driver behind this. We went through a robust RFP process, which we’re in the process of bringing to a conclusion. We’re working through all the transmission issues that come along with that, and then we’re going to file the CCN. And so – and that’s the process that I think you typically file with the commission here in the state of Missouri. So I think we feel very, very good about our overall process. I can’t really comment about Empire’s but feel strong about ours.

Okay. Fair enough. And then just a follow-up on the capital plan. So – and I know there’s a lot of moving pieces here, but if some of the incremental spend comes through in Missouri, should we think of the base plan as being the base plan? And then everything else would be additive? Or could the base plan be somewhat fluid and there might be some capital there that would be sequenced that way?

Yes. Neil, this is Marty again. As we’ve said before, to the extent we have additional capital expenditures, and in this case, whether they’d be related to the wind, whether they’d be related to the Senate Bill 564, we’ve always said we’ll stop – step back and we’ll reassess the overall capital plan and funding plans. But as Warner said, it’s premature to discuss whether we would make any changes to the base plan that we have today. We have said repeatedly that we are certain that if we get Senate Bill 564 across the finish line that we will put significantly more capital to work in the state of Missouri. And so I’d say that those are sort of our thoughts as we look ahead and think about the possibility of those incremental expenditures.

Well said, Marty. And I would just add similarly with wind, right. That’s the bottom line. We have a very constructive regulatory mechanism that is contained and then the renewable energy standard. Both of those things will drive important than investments in the state of Missouri.

That makes sense. Thank you very much.

[Operator Instructions] We have a follow-up question from Avon Capital Advisors. Please proceed with your question.

It’s me again. I’m not sure – I mean, this is just me because I’m reading Slide 7, where you described the legislation and but still having read parts of the legislation, why would the wind be subject to the cap? It’s not part of the infrastructure spending.

So Andy, I’m sorry, if you don’t mind, could you maybe repeat your question? It’s a little bit loud – it’s hard to hear you.

I’m sorry. I’m going to take the headset off, so – battery is going down. Okay. So if you look on Page 7 of your slide deck, and obviously you’ve – I mean, obviously you know the legislation better than I do. But my understanding was, based on your slide and reading parts of the legislation, that your wind investment would be not – would not be subject to the cap. Am I wrong on that or…

So the wind does fall underneath the cap. I think what the slide is potentially trying to explain is that if these riders cause you to exceed the cap, either the FAC, the RESRAM, et cetera, you’re able to defer that for a future rate case as long as you’re, again, underneath that 2.85% and get that recovered.

Okay. So it’s like in FRP like it is in Arkansas where it’s capped to a certain amount, but then you defer it and you recover it in the next rate case. If the rate case or rate case or true-up, so let’s just say, I don’t know, like in 2019, you max out at 2.85, but there’s – I don’t know, let’s just say, another $50 million left over. But in 2020 you’re at 1%, that $50 million would be on – would be added to the 2020 number, so the 1% plus that $50 million. Is that kind of what you’re saying?

Yes. That’s great. That clarifies much better. Thank you.

Ladies and gentlemen, we have reached the end of our question-and-answer session. I would like to turn the call back to Doug Fischer for any closing remarks.

Thank you for participating on this call. Let me remind you again. That a replay of the call will be available for one year on our website. If you have questions may call the contacts listed on our earnings release. Financial analysts inquiries 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 and thank you for your interest in Ameren, and have a great day.

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