2009 EARNINGS GUIDANCE UPDATED
ST. LOUIS, Mo., May 1 /PRNewswire-FirstCall/ -- Ameren Corporation today announced first quarter 2009 net income in accordance with generally accepted accounting principles (GAAP) of $141 million, or 66 cents per share, compared to first quarter 2008 GAAP net income of $138 million, or 66 cents per share. Excluding the effects of mark-to-market activity and the 2007 Illinois electric rate relief settlement in each year, Ameren recorded first quarter 2009 core (non-GAAP) net income of $114 million, or 54 cents per share, compared to first quarter 2008 core (non-GAAP) net income of $134 million, or 64 cents per share.
A reconciliation of GAAP to core (non-GAAP) earnings per share is as follows:
First Quarter 2009 2008 GAAP earnings per share $0.66 $0.66 Illinois electric rate relief settlement, net 0.02 0.03 Mark-to-market activity, net (0.14) (0.05) Core (non-GAAP) earnings per share $0.54 $0.64
The decline in core (non-GAAP) earnings per share in the first quarter of 2009, versus the same period in 2008, was principally due to lower electric and gas sales volumes, higher fuel and related transportation prices, the impact of a severe winter ice storm and the effect of gas rate redesign in the Illinois regulated utility segment. The items noted above more than offset the benefit to earnings of new utility service rates in Illinois, effective October 1, 2008, and in Missouri, effective March 1, 2009, among other factors.
"Despite the challenges of the current economic downturn, we remain focused on executing our strategy," said Thomas R. Voss, president and chief executive officer of Ameren Corporation. "That strategy calls for prudently investing in our regulated businesses to meet our customers' needs and expectations, achieving constructive regulatory frameworks and returns and optimizing our non-rate-regulated generating assets. I expect execution of this strategy will position us to deliver solid, long-term shareholder value."
In the first quarter of 2009, milder weather and the absence of a leap day contributed to a 6% decline in kilowatthour sales to residential customers and a 2% sales decline to commercial customers, compared to the year-ago quarter. Absent these factors, Ameren estimates that first quarter 2009 residential and commercial kilowatthour sales each declined a more modest 1%, versus the year-ago period. The weak economy significantly impacted industrial electric sales. They declined 13% from the year-ago quarter, excluding the impact of reduced demand from AmerenUE's largest customer, the Noranda Aluminum, Inc., smelter plant in New Madrid, Missouri. Noranda's plant sustained damage because of a power interruption on non-Ameren-owned power lines during a severe January ice storm. This loss of operating capacity at Noranda is expected to last through much of 2009.
At the non-rate-regulated generation segment, first quarter 2009 earnings were relatively flat, with those of the year-ago quarter. These 2009 results reflected proactive forward sales of 2009 generation in prior years at higher-than-current market prices.
2009 Earnings Guidance
Ameren also announced today that it updated its expectations for full-year 2009 earnings. GAAP earnings for 2009 are now expected to be in the range of $2.63 to $2.98 per share, down from the prior $2.68 to $3.08, and core (non-GAAP) earnings are now expected to be in the range of $2.70 to $3.05 per share, down from the prior $2.75 to $3.15 per share. An estimated 7 cents per share negative impact in 2009 from the 2007 settlement agreement among parties in Illinois to provide comprehensive electric rate relief and customer assistance is excluded from core (non-GAAP) earnings guidance. Any net unrealized mark-to-market gains or losses will impact GAAP earnings, but are excluded from GAAP and core (non-GAAP) earnings guidance because the company is unable to reasonably estimate the impact of any such gains or losses. The updated GAAP and core (non-GAAP) guidance include the effects of a severe January 2009 winter storm, including an estimate of the related full-year impact of reduced electric margins due to the loss of operating capacity at the Noranda Aluminum smelter plant. The prior earnings guidance, which was issued in mid-February, had excluded these storm-related impacts.
In addition to incorporating the severe storm costs and the estimated impact on electric margins of the related Noranda outage, the revised earnings guidance is also based on higher expected financing costs for new credit facilities and lower expected sales to industrial customers than had been included in the prior guidance. These negatives are offset, in part, by higher expected long-term sales for resale.
Ameren expects its business segments to provide the following contributions to full year 2009 core (non-GAAP) earnings per share:
Missouri Regulated $1.15 - $1.25 Illinois Regulated 0.40 - 0.50 Non-rate-regulated Generation 1.15 - 1.30 2009 Core (Non-GAAP) Earnings Guidance Range $2.70 - $3.05
Ameren's earnings guidance for 2009 assumes normal weather and is subject to, among other things, regulatory decisions and legislative actions, plant operations, energy and capital and credit market conditions, 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 Earnings
Core (non-GAAP) earnings in the first quarter of 2009 were $6 million, down from $45 million in the first quarter of 2008. This decline was primarily due to lower native load electric sales reflecting the weak economy, milder weather, the outage at the Noranda Aluminum smelter, as well as lower margins on electric off-system sales. In addition, there were higher distribution system reliability expenses, including storm costs, higher fuel and related transportation costs and a 12-day unscheduled outage at the Callaway Nuclear Plant. The above negatives were offset, in part, by new, higher electric rates, effective March 1, 2009. Missouri regulated operations recorded GAAP earnings in the first quarter of 2009 of $23 million, $29 million less than in the first quarter of 2008. In addition to the items noted above, this GAAP earnings decrease was reduced by net unrealized mark-to-market activity.
Illinois Regulated Operations Earnings
Core (non-GAAP) earnings in the first quarter of 2009 were $25 million, up from $18 million in the first quarter of 2008. This increase was primarily due to new, higher electric and natural gas delivery service rates, effective October 1, 2008. The increase was offset, in part, by lower electric and natural gas sales, reflecting the weak economy and milder weather and the previously discussed seasonal gas rate redesign. Effective October 1, 2008, the Illinois Commerce Commission authorized a change in the way natural gas distribution costs are recovered from residential and commercial customers. This rate redesign shifts some revenues from the first quarter to other quarters with no expected impact on full-year earnings. Illinois regulated operations recorded GAAP earnings in the first quarter of 2009 of $25 million, up $9 million from the first quarter of 2008. In addition to the items noted above, this GAAP earnings increase was primarily due to lower costs in 2009 related to the 2007 Illinois electric settlement agreement.
Non-rate-regulated Generation Operations Earnings
Core (non-GAAP) earnings in the first quarter of 2009 were $85 million, versus $80 million in the first quarter of 2008. This increase in earnings was mainly driven by higher realized margins reflecting proactive forward sales of 2009 generation in prior years and lower plant operations and maintenance expenses. These positives were partly offset by higher fuel and related transportation prices, among other things. GAAP earnings from non-rate-regulated generation operations in the first quarter of 2009 were $93 million, compared to $78 million in the first quarter of 2008. In addition to the items noted above, this increase in GAAP earnings was driven by higher net unrealized mark-to-market gains and lower costs related to the 2007 Illinois electric settlement agreement.
Analyst Conference Call
Ameren will conduct a conference call for financial analysts at 9:00 a.m. Central Time on Friday, May 1, to discuss first quarter 2009 earnings and other matters. Investors, the news media and the public may listen to a live Internet broadcast of the call at www.ameren.com by clicking on "Q1 2009 Ameren Corporation Earnings Conference Call," followed by the appropriate audio link. An accompanying slide presentation will be available on Ameren's Web site. This presentation will be posted in the "Investors" section of the Web site under "Presentations." The analyst call will also be available for replay on the Internet for one year. In addition, a telephone playback of the conference call will be available beginning at approximately noon Central Time, from May 1 through May 7, by dialing, U.S. (800) 406-7325; international (303) 590-3030 and entering the number: 4053513#.
With assets of $23 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 core (non-GAAP) earnings per share and core (non-GAAP) earnings per share guidance excludes one or more of the following: the earnings impact of the settlement agreement among parties in Illinois for comprehensive electric rate relief and customer assistance and net mark-to-market gains or losses. Ameren uses core (non-GAAP) earnings internally for financial planning and for analysis of performance. Ameren also uses core (non-GAAP) earnings as primary performance measurements when communicating with analysts and investors regarding our earnings results and outlook, as the company believes it allows it to more accurately compare the company's ongoing performance across periods.
In providing consolidated and segment core (non-GAAP) earnings guidance, there could be differences between core (non-GAAP) earnings and earnings prepared in accordance with GAAP for certain items, such as those listed above. Ameren is unable to estimate the impact, if any, on future GAAP earnings of such 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 suggested in such forward-looking statements:
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 BALANCE SHEET (Unaudited, in millions) March 31, December 31, 2009 2008 ASSETS Current Assets: Cash and cash equivalents $304 $92 Accounts receivable - trade, net 554 502 Unbilled revenue 247 427 Miscellaneous accounts and notes receivable 318 292 Materials and supplies 657 842 Mark-to-market derivative assets 324 207 Current portion of regulatory assets 159 79 Other current assets 194 153 Total current assets 2,757 2,594 Property and Plant, Net 16,781 16,567 Investments and Other Assets: Nuclear decommissioning trust fund 223 239 Goodwill 831 831 Intangible assets 160 167 Regulatory assets 1,682 1,653 Other assets 637 606 Total investments and other assets 3,533 3,496 TOTAL ASSETS $23,071 $22,657 LIABILITIES AND EQUITY Current Liabilities: Current maturities of long-term debt $380 $380 Short-term debt 997 1,174 Accounts and wages payable 519 813 Taxes accrued 83 54 Interest accrued 167 107 Mark-to-market derivative liabilities 273 155 Other current liabilities 462 380 Total current liabilities 2,881 3,063 Long-term Debt, Net 6,900 6,554 Deferred Credits and Other Liabilities: Accumulated deferred income taxes, net 2,159 2,131 Accumulated deferred investment tax credits 97 100 Regulatory liabilities 1,296 1,291 Asset retirement obligations 412 406 Pension and other postretirement benefits 1,514 1,495 Other deferred credits and liabilities 539 438 Total deferred credits and other liabilities 6,017 5,861 Ameren Corporation Stockholders' Equity: Common stock 2 2 Other paid-in capital, principally premium on common stock 4,812 4,780 Retained earnings 2,241 2,181 Accumulated other comprehensive income 6 - Total Ameren Corporation stockholders' equity 7,061 6,963 Noncontrolling Interests 212 216 Total equity 7,273 7,179 TOTAL LIABILITIES AND EQUITY $23,071 $22,657 AMEREN CORPORATION (AEE) CONSOLIDATED STATEMENT OF INCOME (Unaudited, in millions, except per share amounts) Three Months Ended March 31, 2009 2008 Operating Revenues: Electric $1,395 $1,469 Gas 521 612 Total operating revenues 1,916 2,081 Operating Expenses: Fuel 274 302 Purchased power 233 287 Gas purchased for resale 383 459 Other operations and maintenance 421 430 Depreciation and amortization 174 169 Taxes other than income taxes 110 113 Total operating expenses 1,595 1,760 Operating Income 321 321 Other Income and Expenses: Miscellaneous income 16 19 Miscellaneous expense (4) (4) Total other income 12 15 Interest Charges 118 100 Income Before Income Taxes 215 236 Income Taxes 70 87 Net Income 145 149 Less: Net Income Attributable to Noncontrolling Interests 4 11 Net Income Attributable to Ameren Corporation $141 $138 Earnings per Common Share - Basic and Diluted $0.66 $0.66 Average Common Shares Outstanding 212.7 208.7 AMEREN CORPORATION (AEE) CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, in millions) Three Months Ended March 31, 2009 2008 Cash Flows From Operating Activities: Net income $145 $149 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sales of emission allowances - (2) Net mark-to-market gain on derivatives (51) (16) Depreciation and amortization 176 180 Amortization of nuclear fuel 12 11 Amortization of debt issuance costs and premium/ discounts 4 5 Deferred income taxes and investment tax credits, net 32 23 Other (1) (1) Changes in assets and liabilities: Receivables 119 (52) Materials and supplies 185 179 Accounts and wages payable (245) (80) Taxes accrued, net 29 4 Assets, other 45 63 Liabilities, other 128 44 Pension and other postretirement benefits 36 22 Counterparty collateral, net (53) (88) Taum Sauk costs, net of insurance recoveries (24) (112) Net cash provided by operating activities 537 329 Cash Flows From Investing Activities: Capital expenditures (424) (420) Nuclear fuel expenditures (3) (102) Purchases of securities - nuclear decommissioning trust fund (203) (89) Sales of securities - nuclear decommissioning trust fund 200 86 Purchases of emission allowances (2) (2) Net cash used in investing activities (432) (527) Cash Flows From Financing Activities: Dividends on common stock (82) (133) Capital issuance costs (3) - Dividends paid to noncontrolling interest holders (8) (10) Short-term debt, net (177) 145 Redemptions, repurchases, and maturities of long- term debt - (19) Issuances: Common stock 28 46 Long-term debt 349 - Net cash provided by financing activities 107 29 Net change in cash and cash equivalents 212 (169) Cash and cash equivalents at beginning of year 92 355 Cash and cash equivalents at end of period $304 $186 AMEREN CORPORATION (AEE) CONSOLIDATED OPERATING STATISTICS Three Months Ended March 31, 2009 2008 Electric Sales - kilowatthours (in millions): Missouri Regulated Residential 3,697 3,978 Commercial 3,473 3,523 Industrial 1,629 2,278 Other 176 184 Native load subtotal 8,975 9,963 Off-system sales 3,250 3,111 Subtotal 12,225 13,074 Illinois Regulated Residential Generation and delivery service 2,948 3,082 Commercial Generation and delivery service 1,369 1,442 Delivery service only 1,490 1,515 Industrial Generation and delivery service 113 335 Delivery service only 2,604 2,867 Other 137 146 Native load subtotal 8,661 9,387 Non-rate-regulated Generation Non-affiliate energy sales 5,545 6,387 Affiliate native energy sales 1,275 1,761 Subtotal 6,820 8,148 Eliminate affiliate sales (1,275) (1,761) Eliminate Illinois Regulated/Non-rate-regulated Generation common customers (1,305) (1,250) Ameren Total 25,126 27,598 Electric Revenues (in millions): Missouri Regulated Residential $209 $218 Commercial 167 165 Industrial 59 76 Other 11 28 Native load subtotal 446 487 Off-system sales 133 154 Subtotal 579 641 Illinois Regulated Residential Generation and delivery service 279 258 Commercial Generation and delivery service 134 134 Delivery service only 21 17 Industrial Generation and delivery service 1 27 Delivery service only 8 7 Other 51 88 Native load subtotal 494 531 Non-rate-regulated Generation Non-affiliate energy sales 304 317 Affiliate native energy sales 116 118 Other 32 15 Subtotal 452 450 Eliminate affiliate revenues (130) (153) Ameren Total $1,395 $1,469 AMEREN CORPORATION (AEE) CONSOLIDATED OPERATING STATISTICS Three Months Ended March 31, 2009 2008 Electric Generation - megawatthours (in millions): Missouri Regulated 12.3 12.9 Non-rate-regulated Generation Ameren Energy Generating Company (Genco) 3.4 4.4 AmerenEnergy Resources Generating Company (AERG) 1.4 1.7 Electric Energy, Inc. (EEI) 1.9 2.0 AmerenEnergy Medina Valley Cogen, L.L.C. 0.1 0.1 Subtotal 6.8 8.2 Ameren Total 19.1 21.1 Fuel Cost per kilowatthour (cents) Missouri Regulated 1.328 1.231 Non-rate-regulated Generation 1.957 1.900 Gas Sales - decatherms (in thousands) Missouri Regulated 5,437 6,208 Illinois Regulated 43,141 50,783 Other 2,093 638 Ameren Total 50,671 57,629 Net Income (Loss) by Segment (in millions): Missouri Regulated $23 $52 Illinois Regulated 25 16 Non-rate-regulated Generation 93 78 Other - (8) Ameren Total $141 $138 March 31, December 31, 2009 2008 Common Stock: Shares outstanding (in millions) 213.4 212.3 Book value per share $33.08 $32.80 Capitalization Ratios: Common equity 46.3% 45.9% Preferred stock of subsidiaries 1.3% 1.3% Debt, net of cash 52.4% 52.8%
SOURCE: Ameren Corporation
Web site: http://www.ameren.com/