Ameren Earnings Call Insights: Merchant Business and Credit Support for Coal Contracts

Ameren Corp (NYSE:AEE) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Merchant Business

Stephen Byrd – Morgan Stanley: I wanted to just touch on the disclosure and thank you for the additional disclosure on the Merchant business, as well as increased spending at the utility. Regarding the Merchant business, can you just discuss a little bit further whether you’re taking action to actively evaluate strategic alternatives for the business or you are still more in the assessment phase? Is this something that you are actively pursuing at this time?

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Martin J. Lyons, Jr. – SVP and CFO: To see if I can expand a little bit. Obviously, we put out the 8-K suggesting that we expected to exit from the business. I think one of the things we tried today was to provide clarity that exit could take the form of either sales or restructuring. As you would expect management is spending time and attention with respect to those exit strategies and exit possibilities.

Stephen Byrd – Morgan Stanley: Just as a follow up, you laid out shared services which was helpful presuming that you did have a complete exit for Merchant Generation should we assume that that 30 million would not effectively be transfer back to the parent but would effectively no longer be expensive parent because those services are truly allocated and dedicated to the merchant business?

Martin J. Lyons, Jr. – SVP and CFO: Yes, David. We would expect that in the event of merchant exit that the cost of $30 million could be substantially eliminated/.

Stephen Byrd – Morgan Stanley: Substantially eliminated, so does that mean when you look at that 30 million that that it is – that truly is allocated and you wouldn’t see a substantial portion coming back to the parent?

Martin J. Lyons, Jr. – SVP and CFO: I guess what I am saying is large part of that is dedicated specifically to support of the merchant business and so the event of the exit much of that cost could be eliminated so yeah that is what I’m saying is that we would we work to eliminate – reduce and eliminate those costs.