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.
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:
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 |
Nine Months Ended | ||||||||||||||
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, |
December 31, | ||||||
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, |
December 31, | ||||||||||||||
Common Stock: |
|||||||||||||||
Shares outstanding (in millions) |
242.6 |
242.6 |
|||||||||||||
Book value per share |
$ |
30.28 |
$ |
29.28 |
SOURCE Ameren Corporation