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Ameren (NYSE: AEE) Announces Third Quarter 2017 Results
- Third Quarter GAAP Diluted Earnings Per Share were $1.18 in 2017 vs. $1.52 in 2016
- Third Quarter Core (Non-GAAP) Diluted Earnings Per Share were $1.24 in 2017 vs. $1.52 in 2016
- 2017 GAAP Earnings Guidance Range Narrowed to $2.67 to $2.81 Per Diluted Share
- 2017 Core (Non-GAAP) Earnings Guidance Range Narrowed to $2.73 to $2.87 Per Diluted Share Reflecting Exclusion of Third Quarter Non-Cash, Tax-Related Charge

ST. LOUIS, Nov. 3, 2017 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced third quarter 2017 net income attributable to common shareholders in accordance with Generally Accepted Accounting Principles (GAAP) of $288 million, or $1.18 per diluted share, compared to third quarter 2016 net income attributable to common shareholders of $369 million, or $1.52 per diluted share. The third quarter 2017 GAAP earnings included a non-cash charge that decreased net income by $14 million, or 6 cents per diluted share, for the revaluation of deferred taxes resulting from a July 2017 change in Illinois law that increased the state's corporate income tax rate. Excluding this item, Ameren recorded third quarter 2017 core earnings of $302 million, or $1.24 per diluted share.

Ameren Logo

The decrease in year-over-year third quarter earnings was largely due to a change in the timing of interim period revenue recognition at Ameren Illinois Electric Distribution that reduced results by 24 cents per diluted share but will have no effect on full year earnings. The earnings comparison was also negatively affected by lower electric retail sales, primarily driven by milder summer temperatures, as well as the absence of a 2016 performance incentive award related to Ameren Missouri's 2013 through 2015 energy efficiency plan. These unfavorable factors were partially offset by new Ameren Missouri electric service rates effective April 1, 2017, which were driven, in part, by increased infrastructure investments and removal of the negative effect of lower sales to the New Madrid aluminum smelter. In addition, the comparison benefited from earnings on increased infrastructure investments made at Ameren Transmission and Ameren Illinois Electric Distribution.

"As a result of continued solid execution of our strategy, including disciplined cost management, we remain on track to deliver strong earnings results this year," 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, including investments in key Illinois grid modernization and regional electric transmission projects that provide significant customer benefits. Further, in September, Ameren Missouri announced a forward-thinking plan under which it expects to accelerate the transition to a cleaner, more diversified energy portfolio with the addition of at least 700 megawatts of wind generation by 2020 and 100 megawatts of solar generation over the next 10 years."

Ameren recorded GAAP net income attributable to common shareholders for the nine months ended Sept. 30, 2017, of $583 million, or $2.39 per diluted share, compared to net income attributable to common shareholders for the nine months ended Sept. 30, 2016, of $621 million, or $2.56 per diluted share. Excluding the third quarter 2017 revaluation of deferred taxes resulting from an increase in Illinois' corporate income tax rate, Ameren recorded core net income for the nine months ended Sept. 30, 2017, of $597 million, or $2.45 per diluted share.

The decrease in year-over-year nine-month earnings reflected lower electric retail sales driven by milder temperatures and a change in the timing of interim period revenue recognition at Ameren Illinois Electric Distribution that reduced results by 12 cents per diluted share but will have no effect on full year earnings. The earnings comparison was also negatively affected by lower tax benefits associated with share-based compensation and, for Ameren Missouri, the absence of a 2016 performance incentive award for the 2013 through 2015 energy efficiency plan, and higher depreciation expense. These unfavorable factors were partially offset by new Ameren Missouri electric service rates, 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, as well as earnings on increased infrastructure investments made at Ameren Transmission and Ameren Illinois Electric Distribution. The 2017 Callaway refueling and maintenance outage began in October.

As reflected in the table below, core earnings for the third quarter and first nine months of 2017 excluded a non-cash charge at the parent company for the revaluation of deferred taxes resulting from a July 2017 change in Illinois law that increased the state's corporate income tax rate, which decreased net income by $14 million in both periods. A reconciliation of GAAP to core earnings in millions of dollars and on a per share basis is as follows:


Three Months

Nine Months


2017

2016

2017

2016

GAAP Earnings / Diluted EPS

$

288


$

1.18


$

369


$

1.52


$

583


$

2.39


$

621


$

2.56


  Charge for revaluation of deferred taxes

22


0.09




22


0.09




  Less: Federal income tax benefit

(8)


(0.03)




(8)


(0.03)




    Charge, net of tax benefit

14


0.06




14


0.06




Core Earnings / Diluted EPS

$

302


$

1.24


$

369


$

1.52


$

597


$

2.45


$

621


$

2.56


Earnings Guidance

Ameren narrowed its 2017 GAAP earnings guidance range to $2.67 to $2.81 per diluted share, compared to the prior range of $2.65 to $2.85 per diluted share, and narrowed its 2017 core earnings guidance range to $2.73 to $2.87 per diluted share, compared to the prior range of $2.70 to $2.90 per diluted share. Core earnings guidance excludes the previously discussed third quarter charge for the revaluation of deferred taxes.

GAAP and core earnings guidance for 2017 assume normal temperatures for the last three 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 third quarter 2017 earnings were $234 million, compared to third quarter 2016 earnings of $241 million. The decrease in year-over-year earnings reflected lower electric retail sales primarily driven by milder summer temperatures, the absence of a performance incentive award for energy efficiency, and higher depreciation expense. These unfavorable factors were mostly offset by new electric service rates.

Ameren Illinois Electric Distribution Segment Results

Ameren Illinois Electric Distribution third quarter 2017 earnings were $31 million, compared to third quarter 2016 earnings of $93 million. The year-over-year earnings decline was primarily the result of a $57 million decrease due to a change in the timing of interim period revenue recognition reflecting the Illinois Future Energy Jobs Act enacted in late 2016, 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. In addition, the earnings comparison was negatively affected by the absence of the 2016 benefit from warmer-than-normal temperatures before the decoupling of electric revenues began in 2017. These unfavorable factors were partially offset by earnings on increased infrastructure investments, as well as a higher allowed return on equity due to a higher average 30-year U.S. Treasury bond yield in 2017 compared to 2016.

Ameren Illinois Natural Gas Segment Results

Ameren Illinois Natural Gas third quarter 2017 earnings were $2 million, equal to third quarter 2016 earnings of $2 million.

Ameren Transmission Segment Results

Ameren Transmission third quarter 2017 earnings were $38 million, compared to third quarter 2016 earnings of $39 million. The comparable year-over-year earnings reflected increased infrastructure investments offset by a lower allowed return on equity. 

Other Results

Other results, which includes items not reported in a business segment, were a GAAP loss of $17 million for the third quarter of 2017, compared to a GAAP loss of $6 million for the third quarter of 2016. The larger year-over-year loss was due to the $14 million charge for revaluation of deferred taxes.

Analyst Conference Call

Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Friday, Nov. 3, 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 "Q3 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 and core earnings per share guidance, which are non-GAAP measures 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 shareholders and exclude income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as the third quarter 2017 non-cash charge for the revaluation of deferred taxes resulting from a July 2017 change in Illinois law that increased the state's corporate income tax rate. 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, 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, or rates, such as the July 2017 change in Illinois law that increased the state's corporate income tax rate, or changes to federal tax laws as a result of tax reform legislation currently being developed by Congress, 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' ability to achieve 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 and to recover these costs in a timely manner in our attempt to earn our allowed returns on equity;
  • 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 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 as well as potential wind and solar generation 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, among other things, 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, employee, financial, and operating system 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
September 30,


Nine Months Ended
September 30,


2017


2016


2017


2016

Operating Revenues:








Electric

$

1,594



$

1,725



$

4,183



$

4,101


Natural gas

129



134



592



619


Total operating revenues

1,723



1,859



4,775



4,720


Operating Expenses:








Fuel

199



205



594



574


Purchased power

162



178



491



451


Natural gas purchased for resale

25



34



196



227


Other operations and maintenance

402



411



1,229



1,246


Depreciation and amortization

225



211



668



628


Taxes other than income taxes

129



129



364



358


Total operating expenses

1,142



1,168



3,542



3,484


Operating Income

581



691



1,233



1,236


Other Income and Expenses:








Miscellaneous income

13



18



42



54


Miscellaneous expense

2



8



16



21


Total other income

11



10



26



33


Interest Charges

97



97



295



287


Income Before Income Taxes

495



604



964



982


Income Taxes

205



233



376



356


Net Income

290



371



588



626


Less: Net Income Attributable to Noncontrolling Interests

2



2



5



5


Net Income Attributable to Ameren Common Shareholders

$

288



$

369



$

583



$

621










Earnings per Common Share – Basic

$

1.19



$

1.52



$

2.40



$

2.56










Earnings per Common Share – Diluted

$

1.18



$

1.52



$

2.39



$

2.56










Average Common Shares Outstanding – Basic

242.6



242.6



242.6



242.6


Average Common Shares Outstanding – Diluted

244.7



242.9



244.0



243.0


 

AMEREN CORPORATION (AEE)

CONSOLIDATED BALANCE SHEET

(Unaudited, in millions)



September 30,
2017


December 31,
2016

ASSETS




Current Assets:




Cash and cash equivalents

$

9



$

9


Accounts receivable - trade (less allowance for doubtful accounts)

507



437


Unbilled revenue

262



295


Miscellaneous accounts receivable

85



63


Inventories

547



527


Current regulatory assets

75



149


Other current assets

96



113


Total current assets

1,581



1,593


Property, Plant, and Equipment, Net

20,906



20,113


Investments and Other Assets:




Nuclear decommissioning trust fund

672



607


Goodwill

411



411


Regulatory assets

1,509



1,437


Other assets

538



538


Total investments and other assets

3,130



2,993


TOTAL ASSETS

$

25,617



$

24,699


LIABILITIES AND EQUITY




Current Liabilities:




Current maturities of long-term debt

$

777



$

681


Short-term debt

446



558


Accounts and wages payable

548



805


Taxes accrued

159



46


Interest accrued

106



93


Customer deposits

108



107


Current regulatory liabilities

119



110


Other current liabilities

318



274


Total current liabilities

2,581



2,674


Long-term Debt, Net

6,922



6,595


Deferred Credits and Other Liabilities:




Accumulated deferred income taxes, net

4,721



4,264


Accumulated deferred investment tax credits

50



55


Regulatory liabilities

2,045



1,985


Asset retirement obligations

631



635


Pension and other postretirement benefits

711



769


Other deferred credits and liabilities

469



477


Total deferred credits and other liabilities

8,627



8,185


Ameren Corporation Shareholders' Equity:




Common stock

2



2


Other paid-in capital, principally premium on common stock

5,534



5,556


Retained earnings

1,830



1,568


Accumulated other comprehensive loss

(21)



(23)


Total Ameren Corporation shareholders' equity

7,345



7,103


Noncontrolling Interests

142



142


Total equity

7,487



7,245


TOTAL LIABILITIES AND EQUITY

$

25,617



$

24,699


 

AMEREN CORPORATION (AEE)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited, in millions)



Nine Months Ended September 30,


2017


2016

Cash Flows From Operating Activities:




Net income

$

588



$

626


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




Depreciation and amortization

653



625


Amortization of nuclear fuel

71



63


Amortization of debt issuance costs and premium/discounts

16



17


Deferred income taxes and investment tax credits, net

366



364


Allowance for equity funds used during construction

(16)



(20)


Share-based compensation costs

12



17


Other

(7)



(9)


Changes in assets and liabilities

(40)



(124)


Net cash provided by operating activities

1,643



1,559


Cash Flows From Investing Activities:




Capital expenditures

(1,523)



(1,496)


Nuclear fuel expenditures

(52)



(41)


Purchases of securities – nuclear decommissioning trust fund

(248)



(310)


Sales and maturities of securities – nuclear decommissioning trust fund

235



297


Other

3



(1)


Net cash used in investing activities

(1,585)



(1,551)


Cash Flows From Financing Activities:




Dividends on common stock

(320)



(309)


Dividends paid to noncontrolling interest holders

(5)



(5)


Short-term debt, net

(112)



307


Maturities of long-term debt

(425)



(389)


Issuances of long-term debt

849



149


Share-based payments

(39)



(32)


Debt issuance costs

(5)



(1)


Other

(1)



(2)


Net cash used in financing activities

(58)



(282)


Net change in cash and cash equivalents



(274)


Cash and cash equivalents at beginning of year

9



292


Cash and cash equivalents at end of period

$

9



$

18


 

AMEREN CORPORATION (AEE)

OPERATING STATISTICS



Three Months Ended


Nine Months Ended


September 30,


September 30,


2017


2016


2017


2016

Electric Sales - kilowatthours (in millions):








Ameren Missouri








Residential

3,667



3,867



9,589



10,243


Commercial

4,065



4,190



10,953



11,269


Industrial

1,197



1,239



3,368



3,683


Off-system and other

2,491



1,823



9,207



5,149


Ameren Missouri total

11,420



11,119



33,117



30,344


Ameren Illinois Electric Distribution








Residential

3,172



3,457



8,305



8,901


Commercial

3,420



3,624



9,271



9,460


Industrial

2,983



3,188



8,511



8,895


Street Lighting/Public Authority

131



127



388



390


Ameren Illinois Electric Distribution total

9,706



10,396



26,475



27,646


Eliminate affiliate sales

(117)



(117)



(382)



(394)


Ameren Total

21,009



21,398



59,210



57,596


Electric Revenues (in millions):








Ameren Missouri








Residential

$

491



$

499



$

1,134



$

1,153


Commercial

408



416



971



982


Industrial

101



101



242



251


Off-system and other

98



128



410



296


Ameren Missouri total

$

1,098



$

1,144



$

2,757



$

2,682


Ameren Illinois Electric Distribution








Residential








Delivery service

$

143



$

204



$

425



$

455


Power supply and other cost recovery

81



94



226



253


Commercial








Delivery service

84



110



246



241


Power supply and other cost recovery

49



59



147



159


Industrial








Delivery service

10



14



42



40


Power supply and other cost recovery

15



11



38



29


Street Lighting/Public Authority








Delivery service

6



9



21



22


Power supply and other cost recovery

2



2



8



8


Other

15





25



6


Ameren Illinois Electric Distribution total

$

405



$

503



$

1,178



$

1,213


Ameren Transmission








Ameren Illinois Transmission(a)

$

72



$

73



$

197



$

187


ATXI


47




35




129




96


Ameren Transmission total

$

119



$

108



$

326



$

283


Other and intersegment eliminations

(28)



(30)



(78)



(77)


Ameren Total

$

1,594



$

1,725



$

4,183



$

4,101




(a) 

Includes $14 million, $14 million, $32 million and $35 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


Nine Months Ended


September 30,


September 30,


2017


2016


2017


2016

Gas Sales - dekatherms (in millions):








Ameren Missouri

3



3



12



13


Ameren Illinois Natural Gas

26



26



113



118


Ameren Total

29



29



125



131


Gas Revenues (in millions):







Ameren Missouri

$

17



$

20



$

83



$

90


Ameren Illinois Natural Gas

112



114



510



530


Eliminate affiliate revenues





(1)



(1)


Ameren Total

$

129



$

134



$

592



$

619





September 30,
2017




December 31,
2016

Common Stock:








Shares outstanding (in millions)



242.6





242.6


Book value per share



$

30.28





$

29.28


 

SOURCE Ameren Corporation

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

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