ST. LOUIS, Feb. 14 /PRNewswire-FirstCall/ -- Ameren Corporation (NYSE: AEE) today announced 2007 net income in accordance with generally accepted accounting principles (GAAP) of $618 million, or $2.98 per share, compared to 2006 GAAP net income of $547 million, or $2.66 per share. Excluding unusual items in each year, Ameren recorded 2007 non-GAAP net income of $690 million, or $3.34 per share, compared to 2006 non-GAAP net income of $599 million, or $2.92 per share.
Ameren recorded GAAP net income of $108 million, or 52 cents per share, for the fourth quarter of 2007, compared to $61 million, or 30 cents per share, for the fourth quarter of 2006. Excluding unusual items in the fourth quarter of each year, Ameren recorded 2007 non-GAAP net income of $123 million, or 61 cents per share, compared to 2006 non-GAAP net income of $89 million, or 43 cents per share. A reconciliation of GAAP to non-GAAP earnings per share is as follows:
Fourth Quarter Year
2007 2006 2007 2006
GAAP earnings per share $0.52 $0.30 $2.98 $2.66
Illinois electric rate
relief settlement, net 0.08 - 0.21 -
Severe storms - 0.13 0.09 0.26
Retroactive federal
regulatory order 0.01 - 0.06 -
Non-GAAP earnings per
share $0.61 $0.43 $3.34 $2.92
Non-GAAP earnings in 2007 principally benefited from higher-priced power sales contracts in Ameren's non-rate-regulated generation business segment, the June 2007 implementation of a Missouri electric rate order and greater demand for electricity and natural gas caused by warmer summer and cooler winter weather than in 2006. Reducing the benefit of these positive items were, among other things, higher fuel costs and bad debt expenses, lower emission credit sales, increased expenditures to improve reliability in Ameren's regulated business segments and higher depreciation and financing costs due to greater energy infrastructure investment. In addition, there were fewer sales of non-core assets in 2007.
"In 2007, we accomplished some key objectives we believe will bring significant long-term benefits to our customers and shareholders," said Gary L. Rainwater, chairman, president and chief executive officer of Ameren Corporation. "In Illinois, we reached a settlement that will help our customers' transition to new electric rates and bring stability to the power procurement process. In Missouri, we were able to settle all state and federal issues associated with the Taum Sauk Plant reservoir breach, and we have begun rebuilding the upper reservoir of that pumped-storage hydroelectric plant. And in both states, we have significantly increased our investments in our energy infrastructure to deliver the reliable energy and cleaner air our customers and communities expect. These investments will also significantly contribute to the future earnings growth in our regulated businesses."
"However, our returns in 2007 and expected returns in 2008 in Missouri and Illinois are below levels allowed by the respective state utility commissions in our last rate cases since our current rates are significantly below the cost and investment levels we are facing in our business today," added Rainwater.
"As a result, in late 2007 we sought an aggregate $247 million electric and gas rate increase in Illinois and expect to file an electric rate increase request in Missouri in the second quarter of 2008 to mitigate these higher cost levels. In a rising cost environment, earnings will be negatively impacted due to regulatory lag until appropriate levels of rate relief are granted."
Ameren reaffirmed today it expects 2008 GAAP earnings to be in the range of $2.68 to $3.08 and non-GAAP earnings to be in the range of $2.80 to $3.20 per share. An estimated 12 cents per share negative impact in 2008 of the 2007 settlement agreement among parties in Illinois to provide comprehensive electric rate relief and customer assistance is excluded from 2008 non-GAAP earnings guidance. Ameren also reaffirmed that its business segments are expected to contribute to 2008 non-GAAP earnings per share as follows:
Missouri Regulated $1.20 - $1.30 Illinois Regulated 0.35 - 0.45 Non-rate-regulated Generation 1.25 - 1.45 2008 Earnings Guidance Range $2.80 - $3.20
Ameren's guidance for 2008 assumes normal weather and is subject to, among other things, regulatory and legislative decisions, plant operations, energy market and economic conditions, severe storms, 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.
Missouri Regulated Operations
GAAP earnings in 2007 were $281 million, or $14 million higher than in 2006. The factors behind increased 2007 earnings in the Missouri regulated segment include the earnings impact of the June 2007 implementation of the Missouri electric rate order and greater demand for electricity and natural gas caused by warmer summer and cooler winter weather than in 2006. In addition, there were less costs associated with the 2005 Taum Sauk Plant upper reservoir breach and for storm recovery in 2007, compared to 2006. Partially offsetting these favorable items were higher fuel costs, increased expenditures towards improving distribution system reliability and reduced emission allowance sales. Also negatively affecting earnings were a Callaway nuclear plant refueling and maintenance outage and rising financing costs.
On a non-GAAP basis, Ameren's Missouri regulated business segment contributed $304 million to net income in 2007 - $7 million more than the year-ago period. Costs related to severe storms reduced Ameren's Missouri regulated business segment's GAAP net income by $16 million in 2007 and $30 million in 2006. In addition, a Federal Energy Regulatory Commission (FERC) order retroactively adjusting prior years' regional transmission organization costs reduced GAAP net income by $7 million in 2007.
Illinois Regulated Operations
GAAP earnings in 2007 were $47 million, or $68 million lower than in 2006. The factors behind lower 2007 earnings in the Illinois regulated segment include increased expenditures towards improving distribution system reliability, higher financing costs resulting from reduced credit ratings and increased borrowings, higher bad debt, depreciation and amortization expenses and the costs associated with the Illinois comprehensive electric rate relief and customer assistance settlement agreement. These decreases to earnings were offset, in part, by greater demand for electricity and natural gas caused by warmer summer and cooler winter weather than in 2006. In addition, costs for storm recovery were lower in 2007, compared to 2006.
On a non-GAAP basis, Ameren's Illinois regulated business segment contributed $77 million to net income in 2007 - $61 million less than the year-ago period. Costs related to severe storms reduced GAAP net income by $2 million in 2007 and $23 million in 2006. In addition, the FERC order retroactively adjusting prior years' regional transmission organization costs reduced GAAP net income by $15 million in 2007. The net costs associated with the Illinois comprehensive electric rate relief and customer assistance settlement agreement reduced the Illinois regulated business segment's GAAP net income by $13 million in 2007.
Non-Rate-Regulated Generation Operations
GAAP earnings in 2007 were $281 million, or $143 million higher, than in 2006. GAAP earnings in the non- rate-regulated generation business segment were primarily higher in 2007 due to higher-priced power sales contracts. Lower sales of emission allowances and higher fuel costs and plant maintenance expenses partially offset the benefit of the higher power sales prices.
On a non-GAAP basis, Ameren's non-rate-regulated generation business segment contributed $300 million to net income in 2007 - $163 million higher than the year-ago period. The costs associated with the Illinois comprehensive electric rate relief and customer assistance settlement agreement reduced the non-rate-regulated generation business segment's net income by $29 million in 2007. The FERC order retroactively adjusting prior years' regional transmission organization costs increased net income by $10 million in 2007.
Other
GAAP earnings from Ameren's other corporate activities in 2007 were $9 million, or $18 million lower than in 2006. Reduced sales of certain non-core properties, including leveraged leases, reduced other net income in 2007.
Ameren will conduct a conference call for financial analysts at 9:00 a.m. (Central Time) on Thursday, Feb. 14, to discuss 2007 earnings and other matters. Investors, the news media and the public may listen to a live Internet broadcast of the call at http://www.ameren.com/ by clicking on "2007 Ameren Corporation Earnings Conference Call," then the appropriate audio link. A slide presentation will also be available on Ameren's website reconciling earnings per share for 2007 to 2006, and reconciling 2008 non-GAAP earnings per share guidance to 2007 earnings per share on a comparable share basis. This presentation will be posted in the "Investors" section of the website under "Presentations." The analyst call will also be available for replay on the Internet for one year. Telephone playback of the conference call will also be available beginning at 11:00 a.m. (Central Time), from Feb. 14 through Feb. 21, by dialing, U.S. (800) 405-2236; international (303) 590-3000 and entering the number: 11108033#.
With assets of approximately $21 billion, Ameren serves approximately 2.4 million electric customers and almost one million natural gas customers in a 64,000 square mile area of Missouri and Illinois. Ameren owns a diverse mix of electric generating plants strategically located in its Midwest market with a generating capacity of more than 16,400 megawatts.
Regulation G Statement
Ameren has presented certain information in this release on a diluted cents per share basis. These diluted per share amounts reflect certain factors that directly impact Ameren's total earnings per share. The non-GAAP earnings per share and non-GAAP earnings per share guidance excludes one or more of the following: costs related to severe January 2007 storms, abnormal weather, the earnings impact of the settlement agreement among parties in Illinois for comprehensive electric rate relief and customer assistance, the reversal of accruals made in 2006 for low-income energy assistance and energy efficiency program funding commitments in Illinois and a March 2007 FERC order, which retroactively adjusted prior years' regional transmission organization costs. Ameren believes this information is useful because it enables readers to better understand the impact of these factors on Ameren's results of operations and earnings per share.
In providing non-GAAP earnings guidance, there could be differences between non-GAAP earnings and earnings prepared in accordance with Generally Accepted Accounting Principles (GAAP) for unusual items, such as the 2007 Illinois electric settlement and the impact of abnormal weather. Except for the Illinois settlement, Ameren is not able to estimate the impact, if any, on future GAAP earnings of these 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 elsewhere in this release and in our filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations as suggested by such forward-looking statements:
-- regulatory or legislative actions, including changes in regulatory
policies and ratemaking determinations, such as the outcome of pending
Central Illinois Public Service Company, Central Illinois Light Company
and Illinois Power Company rate proceedings or future legislative
actions that seek to limit or reverse rate increases;
-- uncertainty as to the effect of implementation of the Illinois
comprehensive electric settlement agreement on Ameren, the Ameren
Illinois utilities, Ameren Energy Generating Company and AmerenEnergy
Resources Generating Company, including implementation of the new power
procurement process in Illinois beginning in 2008;
-- changes in laws and other governmental actions, including monetary and
fiscal policies;
-- changes in laws or regulations that adversely impact the ability of
electric distribution companies and other buyers of wholesale
electricity to pay their suppliers,
-- enactment of legislation taxing electric generators in Illinois or
elsewhere;
-- the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of our business at both the
state and federal levels, and the implementation of deregulation, such
as occurred when the electric rate freeze and power supply contracts
expired in Illinois at the end of 2006;
-- the effects of participation in the Midwest Independent Transmission
System Operator, Inc.;
-- the availability of fuel such as coal, natural gas, and enriched
uranium used to produce electricity; the availability of purchased
power and natural gas for distribution; and the level and volatility of
future market prices for such commodities, including the ability to
recover the costs for such commodities;
-- the effectiveness of our risk management strategies and the use of
financial and derivative instruments;
-- prices for power in the Midwest, including forward prices;
-- business and economic conditions, including their impact on interest
rates;
-- disruptions of the capital markets or other events that make access to
necessary capital more difficult or costly;
-- the impact of the adoption of new accounting standards and the
application of appropriate technical accounting rules and guidance;
-- actions of credit rating agencies and the effects of such actions;
-- weather conditions and other natural phenomena;
-- the impact of system outages caused by severe weather conditions or
other events;
-- generation plant construction, installation and performance, including
costs associated with Union Electric Company's Taum Sauk pumped-storage
hydroelectric plant incident and the plant's future operation;
-- recoverability through insurance of costs associated with Union
Electric Company's Taum Sauk pumped-storage hydroelectric plant
incident;
-- operation of Union Electric Company's nuclear power facility, including
planned and unplanned outages, and decommissioning costs;
-- the effects of strategic initiatives, including acquisitions and
divestitures;
-- the impact of current environmental regulations on utilities and power
generating companies and the expectation that more stringent
requirements, including those related to greenhouse gases, will be
introduced over time, which could have a negative financial effect;
-- labor disputes, future wage and employee benefits costs, including
changes in discount rates and returns on benefit plan assets;
-- the inability of our counterparties and affiliates to meet their
obligations with respect to contracts and financial instruments;
-- the cost and availability of transmission capacity for the energy
generated by the Ameren companies' facilities or required to satisfy
energy sales made by the Ameren companies;
-- legal and administrative proceedings; and
-- acts of sabotage, war, terrorism or intentionally disruptive acts.
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 publicly update or revise any forward-looking statements to reflect new information, future events, or otherwise.
AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
December 31, December 31,
2007 2006
ASSETS
Current Assets:
Cash and cash equivalents $355 $137
Accounts receivable - trade 570 418
Unbilled revenue 359 309
Miscellaneous accounts and notes
receivable 280 160
Materials and supplies 735 647
Other current assets 181 203
Total current assets 2,480 1,874
Property and Plant, Net 15,069 14,286
Investments and Other Assets:
Nuclear decommissioning trust fund 307 285
Goodwill 831 831
Intangible assets 198 217
Other assets 685 654
Regulatory assets 1,158 1,488
Total investments and other assets 3,179 3,475
TOTAL ASSETS $20,728 $19,635
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $221 $456
Short-term debt 1,472 612
Accounts and wages payable 687 671
Taxes accrued 84 58
Other current liabilities 438 406
Total current liabilities 2,902 2,203
Long-term Debt, Net 5,691 5,285
Preferred Stock of Subsidiary Subject
to Mandatory Redemption 16 17
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes,
net 2,046 2,144
Accumulated deferred investment tax
credits 109 118
Regulatory liabilities 1,240 1,177
Asset retirement obligations 562 549
Accrued pension and other
postretirement benefits 839 1,065
Other deferred credits and
liabilities 354 283
Total deferred credits and other
liabilities 5,150 5,336
Preferred Stock of Subsidiaries Not
Subject to Mandatory Redemption 195 195
Minority Interest in Consolidated
Subsidiaries 22 16
Stockholders' Equity:
Common stock 2 2
Other paid-in capital, principally
premium on common stock 4,604 4,495
Retained earnings 2,110 2,024
Accumulated other comprehensive
income 36 62
Total stockholders' equity 6,752 6,583
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $20,728 $19,635
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Operating Revenues:
Electric $1,423 $1,229 $6,267 $5,585
Gas 384 391 1,279 1295
Total operating revenues 1,807 1,620 7,546 6,880
Operating Expenses:
Fuel 303 242 1,167 1,018
Purchased Power 281 254 1,387 1,150
Gas purchased for resale 278 290 900 931
Other operations and maintenance 439 415 1,688 1,556
Depreciation and amortization 167 176 681 661
Taxes other than income taxes 86 89 381 391
Total operating expenses 1,554 1,466 6,204 5,707
Operating Income 253 154 1,342 1,173
Other Income and Expenses:
Miscellaneous income 23 21 77 50
Miscellaneous expense - - (10) (4)
Total other income 23 21 67 46
Interest Charges 107 96 423 350
Income Before Income Taxes, Minority
Interest and Preferred Dividends of
Subsidiaries 169 79 986 869
Income Taxes 51 11 330 284
Income Before Minority Interest and
Preferred Dividends of Subsidiaries 118 68 656 585
Minority Interest and Preferred
Dividends of Subsidiaries 10 7 38 38
Net Income $108 $61 $618 $547
Earnings per Common Share - Basic and
Diluted $0.52 $0.30 $2.98 $2.66
Average Common Shares Outstanding 208.1 206.3 207.4 205.6
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Year Ended
December 31,
2007 2006
Cash Flows From Operating Activities:
Net income $618 $547
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain on sales of emission allowances (8) (60)
Gain on sale of non-core properties (3) (37)
Depreciation and amortization 735 656
Amortization of nuclear fuel 37 36
Amortization of debt issuance costs
and premium/discounts 19 15
Deferred income taxes and investment
tax credits, net (28) 91
Minority interest 27 27
Other 12 13
Changes in assets and liabilities:
Receivables (320) 91
Materials and supplies (88) (75)
Accounts and wages payable 20 (85)
Taxes accrued 21 (72)
Assets, other 25 (103)
Liabilities, other 8 138
Pension and other postretirement
obligations, net 27 97
Net cash provided by operating
activities 1,102 1,279
Cash Flows From Investing Activities:
Capital expenditures (1,381) (992)
CT acquisitions - (292)
Proceeds from sale of noncore
properties 13 56
Nuclear fuel expenditures (68) (39)
Purchases of securities - nuclear
decommissioning trust fund (142) (110)
Sales of securities - nuclear
decommissioning trust fund 128 98
Purchases of emission allowances (24) (42)
Sales of emission allowances 5 71
Other 1 (16)
Net cash used in investing activities (1,468) (1,266)
Cash Flows From Financing Activities:
Dividends on common stock (527) (522)
Capital issuance costs (4) (4)
Short-term debt, net 860 419
Dividends paid to minority interest (21) (28)
Redemptions, repurchases and
maturities:
Long-term debt (488) (164)
Preferred stock (1) (1)
Issuances:
Common stock 91 96
Long-term debt 674 232
Net cash provided by financing
activities 584 28
Net Change In Cash and Cash
Equivalents 218 41
Cash and Cash Equivalents at
Beginning of Year 137 96
Cash and Cash Equivalents at End of
Year $355 $137
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
Electric Sales - kilowatt-hour (in
millions):
Missouri Regulated
Residential 3,135 2,996 14,258 13,081
Commercial 3,486 3,367 14,766 14,075
Industrial 2,431 2,369 9,675 9,582
Other 182 178 759 739
Native 9,234 8,910 39,458 37,477
Non-affiliate interchange sales 3,798 1,150 10,984 3,132
Affiliate interchange sales - 2,565 - 10,072
Subtotal 13,032 12,625 50,442 50,681
Illinois Regulated
Residential
Generation and delivery service 2,720 2,569 11,857 11,476
Commercial
Generation and delivery service 1,580 2,764 7,232 11,406
Delivery service only 1,254 68 5,178 269
Industrial
Generation and delivery service 223 2,888 1,606 10,950
Delivery service only 2,447 311 11,199 2,349
Other 145 144 576 598
Subtotal 8,369 8,744 37,648 37,048
Non-rate-regulated Generation
Non-affiliate energy sales 6,759 6,680 25,179 24,921
Affiliate energy sales 1,631 4,483 7,313 18,425
Subtotal 8,390 11,163 32,492 43,346
Eliminate affiliate sales (1,633) (6,665) (7,296) (28,036)
Eliminate Illinois Regulated/Non-
rate-regulated Generation common
customers (1,312) (287) (5,800) (2,024)
Ameren Total 26,846 25,580 107,486 101,015
Electric Revenues (in millions):
Missouri Regulated
Residential $179 $171 $980 $899
Commercial 165 157 839 796
Industrial 82 78 390 392
Other 30 27 111 104
Native 456 433 2,320 2,191
Non-affiliate interchange sales 163 88 466 263
Affiliate interchange sales - 40 - 196
Subtotal 619 561 2,786 2,650
Illinois Regulated
Residential
Generation and delivery service 247 173 1,055 852
Commercial
Generation and delivery service 134 174 666 784
Delivery service only 17 1 54 3
Industrial
Generation and delivery service 17 124 105 489
Delivery service only 7 - 24 2
Other 73 27 358 112
Subtotal 495 499 2,262 2,242
Non-rate-regulated Generation
Non-affiliate energy sales 326 251 1,266 1,032
Affiliate native energy sales 113 160 495 662
Affiliate other sales - 6 37 19
Subtotal 439 417 1,798 1,713
Eliminate affiliate sales (130) (248) (579) (1,020)
Ameren Total $1,423 $1,229 $6,267 $5,585
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
Electric Generation - megawatt-hour
(in millions):
Missouri Regulated 12.9 12.8 50.3 50.8
Non-rate-regulated Generation
Genco 4.6 4.6 17.6 15.6
AERG 1.4 1.7 5.3 6.7
EEI 2.2 2.1 8.1 8.3
Subtotal 8.2 8.4 31.0 30.6
Ameren Total 21.1 21.2 81.3 81.4
Fuel Cost per KWH (cents)
Missouri Regulated 1.252 0.972 1.247 1.028
Non-rate-regulated Generation 1.649 1.632 1.691 1.594
Gas Sales - Dth (in thousands)
Missouri Regulated 3,759 3,720 11,745 10,709
Illinois Regulated 29,299 30,000 93,952 90,890
Other 372 2,397 2,174 7,083
Ameren Total 33,430 36,117 107,871 108,682
Net Income(Loss) by Segment (in
millions):
Missouri Regulated $17 $12 $281 $267
Illinois Regulated 2 (10) 47 115
Non-rate-regulated Generation 84 36 281 138
Other 5 23 9 27
Ameren Total $108 $61 $618 $547
December 31, December 31,
2007 2006
Common Stock:
Shares outstanding (in millions) 208.3 206.6
Book value per share $32.41 $31.86
Capitalization Ratios:
Common equity 48.2% 50.6%
Preferred stock 1.4% 1.5%
Debt, net of cash 50.4% 47.9%
SOURCE: Ameren Corporation
CONTACT: Media: Tim Fox, +1-314-554-3120, tfox@ameren.com, Analysts:
Bruce Steinke, +1-314-554-2574, bsteinke@ameren.com, or Theresa Nistendirk,
+1-314-206-0693, tnistendirk@ameren.com, or Investors: Investor Services,
1-800-255-2237, invest@ameren.com, all of Ameren
Web site: http://www.ameren.com/