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.
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.
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
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