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Ameren (NYSE: AEE) Announces Second Quarter 2017 Results
- Second Quarter Earnings Per Share were $0.79 in 2017, Compared to $0.61 in 2016
- 2017 GAAP Earnings Guidance Range Reaffirmed at $2.65 to $2.85 Per Diluted Share
- 2017 Core (Non-GAAP) Guidance Range Established at $2.70 to $2.90 Per Diluted Share Reflecting Exclusion of Expected Third Quarter Non-Cash, Tax-Related Charge

ST. LOUIS, Aug. 4, 2017 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced second quarter 2017 net income attributable to common shareholders of $193 million, or $0.79 per share, compared to second quarter 2016 net income attributable to common shareholders of $147 million, or $0.61 per share.

The increase in year-over-year second quarter earnings reflected new Ameren Missouri electric service rates effective April 1, 2017 driven, in part, by increased infrastructure investments and removal of the negative effect of lower sales to the New Madrid smelter. The earnings improvement also resulted from the absence of a nuclear refueling and maintenance outage at the Callaway Energy Center, which reduced operations and maintenance expenses compared to the year-ago period when there was such an outage. In addition, the comparison benefited from a 2017 change in the timing of interim period revenue recognition at the Ameren Illinois Electric Distribution segment, reflecting the Illinois Future Energy Jobs Act, as well as increased infrastructure investments in the Ameren Transmission and Ameren Illinois Electric Distribution segments. These favorable factors were partially offset by lower 2017 Ameren Missouri electric retail sales, primarily driven by milder early summer temperatures.

"As a result of solid execution of our strategy, including continued disciplined cost management, we expect to deliver 2017 core earnings within a range of $2.70 to $2.90 per share, a 5-cent improvement over our prior guidance," said Warner L. Baxter, chairman, president and chief executive officer of Ameren Corporation. "Our team continues to allocate capital to jurisdictions with modern, constructive regulatory frameworks. This includes advancing key Illinois grid modernization projects that provide significant customer benefits, all while meeting our region's energy needs, especially during the hot summer months. We expect this execution to deliver superior value to our customers and shareholders."

Ameren recorded net income attributable to common shareholders for the six months ended June 30, 2017, of $295 million, or $1.21 per share, compared to net income attributable to common shareholders for the six months ended June 30, 2016, of $252 million, or $1.04 per share.

The increase in year-over-year six-month earnings reflected a 2017 change in the timing of interim period revenue recognition at the Ameren Illinois Electric Distribution segment, new Ameren Missouri electric service rates and the absence of a nuclear refueling and maintenance outage at the Callaway Energy Center compared to the year-ago period when there was such an outage. The earnings comparison also benefited from increased infrastructure investments in the Ameren Transmission and Ameren Illinois Electric Distribution segments. These favorable factors were partially offset by lower 2017 Ameren Missouri electric retail sales primarily driven by milder temperatures, lower tax benefits associated with share-based compensation and higher Ameren Missouri depreciation expense.

Earnings Guidance

Ameren continues to expect 2017 earnings guidance in accordance with generally accepted accounting principles (GAAP) in a range of $2.65 to $2.85 per diluted share, which now includes an expected third quarter non-cash estimated charge of 6 cents per diluted share, primarily at the parent company, for revaluation of deferred taxes resulting from an increase in the Illinois corporate income tax rate effective July 1, 2017. Excluding this expected charge, the company expects 2017 core (non-GAAP) earnings to be in a range of $2.70 to $2.90 per diluted share, a 5-cent-per-share improvement over the prior guidance range, reflecting solid execution of Ameren's strategy.

GAAP and core earnings guidance for 2017 assume normal temperatures for the last six months of this year and are subject to the effects of, among other things: 30-year U.S. Treasury bond yields; regulatory, judicial and legislative actions; energy center and energy distribution operations; energy, economic, capital and credit market conditions; severe weather; unusual or otherwise unexpected gains or losses; and other risks and uncertainties outlined, or referred to, in the Forward-looking Statements section of this press release.

Ameren Missouri Segment Results

Ameren Missouri second quarter 2017 earnings were $120 million, compared to second quarter 2016 earnings of $92 million. The increase in year-over-year earnings reflected new electric service rates and the absence of a nuclear refueling and maintenance outage at the Callaway Energy Center. The earnings comparison was unfavorably affected by lower 2017 electric retail sales, primarily driven by milder early summer temperatures.

Ameren Illinois Electric Distribution Segment Results

Ameren Illinois Electric Distribution second quarter 2017 earnings were $33 million, compared to second quarter 2016 earnings of $18 million. The improvement in year-over-year earnings included a $9 million increase due to a 2017 change in the timing of interim period revenue recognition reflecting the Illinois Future Energy Jobs Act, which decoupled revenues from sales volumes. This change increases first, second and fourth quarter revenue while decreasing third quarter revenue, compared to 2016, with no effect on full-year earnings. Earnings in 2017 also benefited from increased infrastructure investments, as well as a higher allowed return on equity due to a higher projected average 30-year U.S. Treasury bond yield in 2017 compared to 2016.

Ameren Illinois Natural Gas Segment Results

Ameren Illinois Natural Gas second quarter 2017 earnings were $5 million, compared to second quarter 2016 earnings of $7 million.

Ameren Transmission Segment Results

Ameren Transmission second quarter 2017 earnings were $34 million, compared to second quarter 2016 earnings of $32 million. The year-over-year earnings improvement reflected increased infrastructure investments, partially offset by a lower allowed return on equity.

Analyst Conference Call

Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Friday, Aug. 4, to discuss 2017 earnings, earnings guidance and other matters. Investors, the news media and the public may listen to a live broadcast of the call at Amereninvestors.com by clicking on "Webcast" under "Q2 2017 Earnings Conference Call," where an accompanying slide presentation will also be available. The conference call and presentation will be archived for one year in the "Investor News and Events" section of the website under "Events and Presentations."

About Ameren

St. Louis-based Ameren Corporation powers the quality of life for 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area through its Ameren Missouri and Ameren Illinois rate-regulated utility subsidiaries. Ameren Illinois provides electric and natural gas transmission and distribution service while Ameren Missouri provides vertically integrated electric service, with generating capacity of over 10,200 megawatts, and natural gas distribution service. Ameren Transmission Company of Illinois develops regional electric transmission projects. For more information, visit Ameren.com, or follow us at @AmerenCorp, Facebook.com/AmerenCorp, or LinkedIn/company/Ameren.

Use of Non-GAAP Financial Measures

In this release, Ameren has presented core earnings per share guidance, which is a non-GAAP measure and may not be comparable to those of other companies. A reconciliation of non-GAAP information to GAAP information has been included in this release. Generally, core earnings (or losses) include earnings or losses attributable to common stockholders and exclude income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as the expected third quarter 2017 non-cash estimated charge for the revaluation of deferred taxes resulting from an increase in the Illinois corporate income tax rate effective July 1, 2017. Ameren uses core earnings internally for financial planning and for analysis of performance. Ameren also uses core earnings as the primary performance measurement when communicating with analysts and investors regarding our earnings results and outlook, as the company believes that core earnings allow the company to more accurately compare its ongoing performance across periods. In providing consolidated core earnings guidance, there could be differences between core earnings and earnings prepared in accordance with GAAP as a result of our treatment of certain items, such as that described above. Ameren is unable to estimate the impact, if any, on future GAAP earnings of such future items.

Forward-looking Statements

Statements in this release not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors in Ameren's Annual Report on Form 10-K for the year ended December 31, 2016, and elsewhere in this release and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:

  • regulatory, judicial, or legislative actions, including any changes in regulatory policies and ratemaking determinations, such as those that may result from the complaint case filed in February 2015 with the Federal Energy Regulatory Commission seeking a reduction in the allowed base return on common equity under the Midcontinent Independent System Operator tariff, Ameren Illinois' April 2017 annual electric distribution formula rate update filing, and future regulatory, judicial, or legislative actions that change regulatory recovery mechanisms;
  • the effect of Ameren Illinois participating in a performance-based formula ratemaking process under the Illinois Energy Infrastructure Modernization Act (IEIMA), including the direct relationship between Ameren Illinois' return on common equity and 30-year United States Treasury bond yields, and the related financial commitments;
  • the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, and energy policies;
  • the effects of changes in federal, state, or local tax laws, regulations, interpretations, such as the increase in Illinois' corporate income tax rate that became effective in July 2017, or rates and any challenges to the tax positions we have taken;
  • the effects on demand for our services resulting from technological advances, including advances in customer energy efficiency and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive;
  • the effectiveness of Ameren Missouri's customer energy efficiency programs and the related revenues and performance incentives earned under its Missouri Energy Efficiency Investment Act plans;
  • Ameren Illinois' achievement of Future Energy Jobs Act electric energy efficiency goals and the resulting impact on its allowed return on program investments;
  • our ability to align overall spending, both operating and capital, with frameworks established by our regulators in our attempt to earn our allowed return on equity;  
  • the timing of increasing capital expenditure and operating expense requirements and our ability to recover these costs in a timely manner;
  • the cost and availability of fuel, such as ultra-low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power, zero-emission credits, renewable energy credits, and natural gas for distribution; and the level and volatility of future market prices for such commodities, including our ability to recover the costs for such commodities and our customers' tolerance for the related rate increases;
  • disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies from Westinghouse Electric Company, LLC, the Callaway Energy Center's only Nuclear Regulatory Commission-licensed supplier of such assemblies, which is currently in bankruptcy proceedings;
  • the effectiveness of our risk management strategies and our use of financial and derivative instruments;
  • the ability to obtain sufficient insurance, including insurance for Ameren Missouri's Callaway Energy Center, or in the absence of insurance, the ability to recover uninsured losses from our customers;
  • business and economic conditions, including their impact on interest rates, collection of our receivable balances, and demand for our products;
  • disruptions of the capital markets, deterioration in our credit metrics, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity;
  • the actions of credit rating agencies and the effects of such actions;
  • the impact of adopting new accounting guidance and the application of appropriate accounting rules and guidance;
  • the impact of weather conditions on Ameren Missouri and other natural phenomena on us and our customers, including the impact of system outages;
  • the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets;
  • the effects of breakdowns or failures of equipment in the operation of natural gas transmission and distribution systems and storage facilities, such as leaks, explosions, and mechanical problems, and compliance with natural gas safety regulations;
  • the effects of our increasing investment in electric transmission projects, our ability to obtain all of the necessary approvals to complete the projects, and the uncertainty as to whether we will achieve our expected returns in a timely manner;
  • operation of Ameren Missouri's Callaway Energy Center, including planned and unplanned outages, and decommissioning costs;
  • the effects of strategic initiatives, including mergers, acquisitions and divestitures;
  • the impact of current environmental regulations and new, more stringent, or changing requirements, including those related to carbon dioxide, other emissions and discharges, cooling water intake structures, coal combustion residuals, and energy efficiency, that are enacted over time and that could limit or terminate the operation of certain of Ameren Missouri's energy centers, increase our costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
  • the impact of complying with renewable energy portfolio requirements in Missouri;
  • labor disputes, work force reductions, future wage and employee benefits costs, including changes in discount rates, mortality tables, and returns on benefit plan assets;
  • the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;
  • the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri's energy sales;
  • legal and administrative proceedings;
  • the impact of cyber attacks, which could result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer data and account information; and
  • acts of sabotage, war, terrorism, or other intentionally disruptive acts.

New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.

AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)



Three Months Ended
June 30,


Six Months Ended
June 30,


2017


2016


2017


2016

Operating Revenues:








Electric

$

1,383



$

1,274



$

2,589



$

2,376


Natural gas

155



153



463



485


Total operating revenues

1,538



1,427



3,052



2,861


Operating Expenses:








Fuel

189



166



395



369


Purchased power

149



135



329



273


Natural gas purchased for resale

41



41



171



193


Other operations and maintenance

422



435



827



835


Depreciation and amortization

222



210



443



417


Taxes other than income taxes

117



115



235



229


Total operating expenses

1,140



1,102



2,400



2,316


Operating Income

398



325



652



545


Other Income and Expenses:








Miscellaneous income

14



16



29



36


Miscellaneous expense

5



6



14



13


Total other income

9



10



15



23


Interest Charges

99



95



198



190


Income Before Income Taxes

308



240



469



378


Income Taxes

114



92



171



123


Net Income

194



148



298



255


Less: Net Income Attributable to Noncontrolling Interests

1



1



3



3


Net Income Attributable to Ameren Common Shareholders

$

193



$

147



$

295



$

252










Earnings per Common Share – Basic and Diluted

$

0.79



$

0.61



$

1.21



$

1.04










Average Common Shares Outstanding – Basic

242.6



242.6



242.6



242.6



 

AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)



June 30,
2017


December 31,
2016

ASSETS




Current Assets:




Cash and cash equivalents

$

10



$

9


Accounts receivable - trade (less allowance for doubtful accounts)

446



437


Unbilled revenue

334



295


Miscellaneous accounts receivable

77



63


Inventories

512



527


Current regulatory assets

95



149


Other current assets

97



113


Total current assets

1,571



1,593


Property, Plant, and Equipment, Net

20,589



20,113


Investments and Other Assets:




Nuclear decommissioning trust fund

651



607


Goodwill

411



411


Regulatory assets

1,506



1,437


Other assets

526



538


Total investments and other assets

3,094



2,993


TOTAL ASSETS

$

25,254



$

24,699


LIABILITIES AND EQUITY




Current Liabilities:




Current maturities of long-term debt

$

578



$

681


Short-term debt

892



558


Accounts and wages payable

522



805


Taxes accrued

122



46


Interest accrued

104



93


Customer deposits

108



107


Current regulatory liabilities

141



110


Other current liabilities

298



274


Total current liabilities

2,765



2,674


Long-term Debt, Net

6,821



6,595


Deferred Credits and Other Liabilities:




Accumulated deferred income taxes, net

4,444



4,264


Accumulated deferred investment tax credits

52



55


Regulatory liabilities

2,003



1,985


Asset retirement obligations

634



635


Pension and other postretirement benefits

758



769


Other deferred credits and liabilities

477



477


Total deferred credits and other liabilities

8,368



8,185


Ameren Corporation Shareholders' Equity:




Common stock

2



2


Other paid-in capital, principally premium on common stock

5,528



5,556


Retained earnings

1,649



1,568


Accumulated other comprehensive loss

(21)



(23)


Total Ameren Corporation shareholders' equity

7,158



7,103


Noncontrolling Interests

142



142


Total equity

7,300



7,245


TOTAL LIABILITIES AND EQUITY

$

25,254



$

24,699



 

AMEREN CORPORATION (AEE)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)




Six Months Ended June 30,


2017


2016

Cash Flows From Operating Activities:




Net income

$

298



$

255


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

433



419


Amortization of nuclear fuel

48



38


Amortization of debt issuance costs and premium/discounts

11



11


Deferred income taxes and investment tax credits, net

175



134


Allowance for equity funds used during construction

(10)



(13)


Share-based compensation costs

8



12


Other

(5)



(7)


Changes in assets and liabilities

(95)



(86)


Net cash provided by operating activities

863



763


Cash Flows From Investing Activities:




Capital expenditures

(998)



(1,000)


Nuclear fuel expenditures

(50)



(24)


Purchases of securities – nuclear decommissioning trust fund

(213)



(201)


Sales and maturities of securities – nuclear decommissioning trust fund

204



192


Other

(2)



(2)


Net cash used in investing activities

(1,059)



(1,035)


Cash Flows From Financing Activities:




Dividends on common stock

(214)



(206)


Dividends paid to noncontrolling interest holders

(3)



(3)


Short-term debt, net

334



477


Maturities of long-term debt

(425)



(389)


Issuances of long-term debt

549



149


Share-based payments

(39)



(32)


Capital issuance costs

(4)



(1)


Other

(1)



(2)


Net cash provided by (used in) financing activities

197



(7)


Net change in cash and cash equivalents

1



(279)


Cash and cash equivalents at beginning of year

9



292


Cash and cash equivalents at end of period

$

10



$

13



 

AMEREN CORPORATION (AEE)
OPERATING STATISTICS



Three Months Ended


Six Months Ended


June 30,


June 30,


2017


2016


2017


2016

Electric Sales - kilowatthours (in millions):








Ameren Missouri








Residential

2,760



2,899



5,969



6,376


Commercial

3,556



3,610



6,888



7,079


Industrial

1,144



1,142



2,171



2,444


Off-system and other

3,495



1,400



6,716



3,326


Ameren Missouri total

10,955



9,051



21,744



19,225


Ameren Illinois Electric Distribution








Residential

2,416



2,540



5,133



5,444


Commercial

2,934



3,001



5,851



5,836


Industrial

2,792



2,876



5,528



5,707


Street Lighting/Public Authority

125



119



257



263


Ameren Illinois Electric Distribution total

8,267



8,536



16,769



17,250


Eliminate affiliate sales

(97)



(79)



(265)



(277)


Ameren Total

19,125



17,508



38,248



36,198


Electric Revenues (in millions):








Ameren Missouri








Residential

$

362



$

356



$

650



$

654


Commercial

334



326



563



566


Industrial

84



82



141



150


Off-system and other

133



80



305



168


Ameren Missouri total

$

913



$

844



$

1,659



$

1,538


Ameren Illinois Electric Distribution








Residential








Delivery service

$

145



$

134



$

282



$

251


Power supply and other cost recovery

63



72



145



159


Commercial








Delivery service

82



70



162



131


Power supply and other cost recovery

45



49



98



100


Industrial








Delivery service

15



13



32



26


Power supply and other cost recovery

12



10



23



18


Street Lighting/Public Authority








Delivery service

9



5



15



13


Power supply and other cost recovery

3



2



6



6


Other

14



3



10



6


Ameren Illinois Electric Distribution total

$

388



$

358



$

773



$

710


Ameren Transmission








Ameren Illinois Transmission(a)

$

65



$

63



$

125



$

114


    ATXI

40



29



82



61


Ameren Transmission total

$

105



$

92



$

207



$

175


Other and intersegment eliminations

(23)



(20)



(50)



(47)


Ameren Total

$

1,383



$

1,274



$

2,589



$

2,376




(a) 

Includes $12 million, $10 million, $18 million and $21 million, respectively, of electric operating revenues from transmission services provided to the Ameren Illinois Electric Distribution segment.

 

AMEREN CORPORATION (AEE)
OPERATING STATISTICS



Three Months Ended


Six Months Ended


June 30,


June 30,


2017


2016


2017


2016

Gas Sales - dekatherms (in millions):








Ameren Missouri

3



3



9



10


Ameren Illinois Natural Gas

29



30



87



92


Ameren Total

32



33



96



102


Gas Revenues (in millions):







Ameren Missouri

$

22



$

23



$

66



$

70


Ameren Illinois Natural Gas

134



131



398



416


Eliminate affiliate revenues

(1)



(1)



(1)



(1)


Ameren Total

$

155



$

153



$

463



$

485





June 30,
2017




December 31,
2016

Common Stock:








Shares outstanding (in millions)



242.6





242.6


Book value per share



$

29.51





$

29.28


 

SOURCE Ameren Corporation

For further information: Media, Joe Muehlenkamp, 314.554.2182, jmuehlenkamp@ameren.com, Analysts Doug Fischer, 314.554.4859, dfischer@ameren.com, Andrew Kirk, 314.554.3942, akirk@ameren.com, Investors Investor Services, 800.255.2237, invest@ameren.com

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