Ameren Corporation (AEE)

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Ameren Corporation (AEE)

Q1 2011 Earnings Call

May 5, 2011 10:00 AM ET

Executives

Doug Fischer

Tom Voss – Chairman, President and CEO

Marty Lyons – CFO, Principal Accounting Officer and SVP

Warner Baxter – President and CEO, Ameren Missouri

Scott Cisel – President and CEO, Ameren Illinois

Analysts

Paul Ridzon – KeyBanc Capital Markets

Erica Piserchia – Wunderlich Securities

Paul Patterson – Glenrock Securities

Julien Dumoulin-Smith – UBS

Andy Levi – Caris & Company

Gregg Orrill – Barclays Capital

Toran Miller – Knight Capital Group

Andy Serry [ph]

Michael Lapides – Goldman Sachs

Neil Calton – Wells Fargo

Presentation

Operator

Good morning ladies and gentlemen, and welcome to the Ameren Corporation Q1 2011 Earnings Conference Call. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Doug Fischer, Director of IR for Ameren Corporation. Thank you, Mr. Fischer – you may begin.

Doug Fischer

Thank you and good morning. I’m Doug Fischer, Director of Investor Relations for Ameren Corporation. On the call with me today are Chairman, President and Chief Executive Officer Tom Voss; our Senior Vice President and Chief Financial Officer Marty Lyons; and other members of the Ameren management team.

Before we begin let me cover a few administrative details. This call will be available by telephone for one week to anyone who wishes to hear it by dialing a playback number. The announcement you received in our news release includes instructions for replaying the call by telephone. This call is also being broadcast live on the internet and the webcast will be available for one year on our website at www.ameren.com.

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 a presentation on our website to which we will refer during this call. To access this presentation please look in the Investor’s section of our website 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 and described in the forward-looking statements. 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.

Tom will begin this call with a brief overview of Q1 2011 earnings and 2011 guidance followed by a discussion of recent business developments. Marty will follow with more detailed discussions of our Q1 2011 financial results and guidance as well as regulatory and financial matters. We will then open the call for questions. Here’s Tom who will start on page 3 of the presentation.

Tom Voss

Thanks Doug. Good morning and thank you for joining us. Today we announced Q1 2011 core earnings of $0.25 per share compared to Q1 2010 core earnings of $0.40 per share. These results were in line with our expectations despite being lower than those of the same period last year. The decline in core earnings per share was primarily the result of reduced margins in our Merchant Generations segment, as well as higher operations and maintenance expenses and reduced capitalized financing costs in our regulated utilities segments.

Kilowatt hours sales of electricity to native load utility customers decreased 3% in Q1 of 2011 compared to Q1 of 2010 due in part to milder winter temperatures. Kilowatt hour sales to residential and commercial customers, both of which are temperature-sensitive, declined 4%. Kilowatt hour sales to industrial customers grew a strong 7%, an encouraging sign of continued economic growth.

The decline in merchant generation segment margins reflected lower realized power prices and higher fuel and related transportation costs. The higher O&M expenses at our Ameren Missouri and Ameren Illinois regulated utilities segments in Q1 of 2011 largely reflected increased storm-related expenses compared to Q1 of 2010. We continued to exercise disciplined cost control in Q1 2011 with operations and maintenance expenses, excluding storm-related costs, up just slightly over the year-ago quarter. Factors favorably contributing to Q1 2011 core earnings compared to Q1 2010 core earnings included lower interest expenses and 2010 electric rate changes in Missouri and Illinois.

Turning to page 4. Today we are reaffirming our GAAP and core earnings guidance of $2.20 to $2.60 per share for this year. Further we are reiterating our GAAP and core guidance ranges of $2.05 to $2.30 per share for our combined Ameren Missouri and Ameren Illinois segments and $0.15 to $0.30 per share for our merchant generation segment.

Moving to page 5 we continue to anticipate positive free cash flow of approximately $100 million in 2011. This amount excludes approximately $45 million of potential cash proceeds from the pending sale of our remaining interest in the Columbia Combustion Turbine Facility to the City of Columbia, Missouri. Regarding storm impacts, this year our region has been hit very hard by a series of winter and spring storms affecting the lives of tens of thousands of our customers.

Our employees in Missouri and Illinois have worked tirelessly and effectively to restore power and help meet other community needs. In Illinois, the February storms were the most widespread severe winter weather to hit our service area in years. Snow, ice, sustained high winds and freezing rain caused power outages in 50 counties and created several days of challenging work. More than 1600 Ameren Illinois employees and outside partners were part of the restoration effort. Reflecting the effectiveness of our work the Illinois Commerce Commission commended Ameren Illinois in our efforts in preparing for and responding to these historic winter storms.

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