ST. LOUIS, Mo., Aug. 6 /PRNewswire-FirstCall/ -- Ameren Corporation (NYSE: AEE) today announced second quarter 2009 net income in accordance with generally accepted accounting principles (GAAP) of $165 million, or 77 cents per share, compared to second quarter 2008 GAAP net income of $206 million, or 98 cents per share. Excluding certain items in each year, Ameren recorded second quarter 2009 core (non-GAAP) net income of $161 million, or 75 cents per share, compared to second quarter 2008 core (non-GAAP) net income of $142 million, or 67 cents per share.
The increase in core (non-GAAP) earnings per share in the second quarter of 2009 over the same period in 2008 was principally because of new utility service rates in Illinois, effective October 1, 2008, and in Missouri, effective March 1, 2009, as well as lower plant operations and maintenance expenses and warmer weather. The favorable earnings impact of the above factors was reduced by higher net fuel costs and the absence this year of the 2008 portion of a lump-sum payment from a coal supplier received last year as a result of the premature closure of a mine and the termination of a contract, among other items.
"I am pleased to report that our second quarter earnings were in line with our expectations, and the company's strong operating performance allows me to reaffirm our core 2009 earnings guidance of $2.70 to $3.05 per share," said Thomas R. Voss, president and chief executive officer of Ameren Corporation. "Rate relief, cost control and actions taken to reduce our exposure to price fluctuations in the wholesale energy markets are helping us weather difficult economic and market conditions in 2009.
"We are realizing the benefits from steps we took, beginning in late 2008, to reduce our planned capital and operations and maintenance costs," Voss added. "As we look ahead to 2010 and beyond, we are identifying further opportunities to tighten our belt for the good of all stakeholders. In total, we have identified approximately $2 billion of opportunities to reduce capital expenditures for 2010 through 2013, as compared to earlier plans. Notably, in our non-rate-regulated, or merchant, generation business, we have eliminated approximately $1 billion of planned capital expenditures from this period. In our regulated businesses, we have also identified and are carefully evaluating projects that may be eliminated or deferred to help our customers manage their costs in these tough economic times and further strengthen our financial profile. However, we will not reduce costs to a level that would prevent us from providing safe and reliable service. We are also looking carefully at planned operations and maintenance expenditures across our organization, but especially in our merchant generation business and business support functions. We are aggressively managing power plant outage and labor costs, among other things. Our objective is to significantly lower 2010 non-fuel operations and maintenance costs, relative to the 2008 level, in our merchant generation business."
In the second quarter of 2009, warmer weather contributed to a 4% increase in kilowatthour sales to residential customers and a 1% increase in kilowatthour sales to commercial customers, compared to the year-ago quarter. On a weather-normalized basis, Ameren estimates that second quarter 2009 residential and commercial kilowatthour sales were virtually unchanged from the year-ago period. The slowing economy continued to affect the level of regulated electric sales to industrial customers, resulting in a 13% decline 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 2009 ice storm. Including Noranda, regulated industrial electric sales declined 17% in the second quarter of 2009, as compared to the year-ago quarter.
Despite solid operating performance, second quarter 2009 merchant generation output declined 4%, compared to the year-ago quarter, as lower power prices reduced the periods of time when the plants could profitably sell power in the open market. However, the segment's core earnings were not significantly affected due to proactive forward hedges of 2009 generation in prior years at higher-than-current market prices.
The following items are excluded from second quarter 2009 and second quarter 2008 core (non-GAAP) earnings, as applicable:
Net income in accordance with GAAP for the first six months of 2009 was $306 million, or $1.43 per share, compared to $344 million, or $1.64 per share, in the first half of 2008. Excluding certain items in each year, Ameren recorded first half 2009 core (non-GAAP) net income of $275 million, or $1.29 per share, compared to first half 2008 core (non-GAAP) net income of $276 million, or $1.31 per share. A reconciliation of GAAP to core (non-GAAP) earnings per share is as follows:
Second Quarter Six Months
-------------- ----------
2009 2008 2009 2008
---- ---- ---- ----
GAAP earnings per share $0.77 $0.98 $1.43 $1.64
Illinois electric rate relief
settlement, net 0.02 0.04 0.04 0.07
Net unrealized mark-to-market
activity (0.04) (0.23) (0.18) (0.28)
Coal contract settlement - 2009
portion - (0.08) - (0.08)
Accounting order for
severe storms - (0.04) - (0.04)
Core (non-GAAP) earnings
per share $0.75 $0.67 $1.29 $1.31
2009 Earnings Guidance
Ameren also announced today that it has reaffirmed its expectations for full-year 2009 GAAP and core (non-GAAP) earnings. GAAP earnings for 2009 continue to be expected in the range of $2.63 to $2.98 per share, and core (non-GAAP) earnings continue to be expected in the range of $2.70 to $3.05 per share. GAAP and core (non-GAAP) guidance includes the estimated effect on earnings of cooler-than-normal July 2009 weather. 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 affect 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.
Ameren expects its business segments to provide the following contributions to full year 2009 core (non-GAAP) earnings per share:
Missouri Regulated $1.05 - $1.15
Illinois Regulated 0.45 - 0.55
Merchant Generation 1.20 - 1.35
---- ----
2009 Core (Non-GAAP) Earnings Guidance Range $2.70 - $3.05
These estimated segment contributions have been updated to reflect revised load and revenue forecasts and July's mild weather, among other things.
Ameren's earnings guidance for 2009 assumes normal weather for the balance of the year 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 Segment Earnings
Core (non-GAAP) earnings in the second quarter of 2009 were $80 million, comparable to year-ago results. The primary factors positively impacting second quarter 2009 earnings as compared to the year-ago period were higher electric rates, effective March 1, 2009, warmer 2009 weather and lower plant operations and maintenance costs. These factors were offset by higher net fuel costs, lower electric margins as a result of reduced industrial load, including lower sales to the Noranda Aluminum smelter plant, and higher financing and depreciation and amortization expenses. Missouri regulated operations recorded GAAP earnings in the second quarter of 2009 of $82 million, $40 million less than in the second quarter of 2008. The GAAP earnings decrease was the result of reduced income from net mark-to-market activity, which in the prior-year period included gains on non-qualifying hedges of transportation costs, and the previously-mentioned benefit, in the second quarter of 2008, of the accounting order from the Missouri Public Service Commission related to 2007 severe storm costs.
Illinois Regulated Segment Earnings
Core (non-GAAP) earnings in the second quarter of 2009 were $17 million versus a loss of $9 million in the second quarter of 2008. This earnings improvement was primarily due to higher electric and natural gas delivery service rates, effective October 1, 2008. The increase was offset by higher storm restoration, financing and depreciation and amortization expenses, among other things. Illinois regulated operations recorded GAAP earnings in the second quarter of 2009 of $15 million versus a loss of $14 million in the second 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.
Merchant Generation Segment Earnings
Core (non-GAAP) earnings in the second quarter of 2009 were $73 million, down from $77 million earned in the second quarter of 2008. This decline reflected the absence this year of the previously mentioned 2008 portion of a lump-sum payment from a coal supplier, which increased the year-ago period core earnings by $21 million. In addition, merchant generation operations incurred higher financing and depreciation and amortization expenses, which were only partly offset by lower plant operations and maintenance costs. While market prices for power were substantially lower in the second quarter of 2009, as compared to the year-ago period, the segment's core earnings were not significantly affected because of proactive forward physical and financial hedges of 2009 generation in prior years at higher-than-current market prices. GAAP earnings from merchant generation operations in the second quarter of 2009 were $75 million, down from $98 million in the second quarter of 2008. In addition to the items noted above, this decline in GAAP earnings was driven by the absence of the previously-mentioned 2009 portion of a lump-sum payment from a coal supplier recorded in 2008 and reduced income from net mark-to-market activity, partially offset by 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 Thursday, August 6, to discuss second 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 "Q2 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 August 6 through August 13, by dialing, U.S. (877) 660-6853 or international (201) 612-7415, and entering account number 352 and ID number 328249.
About Ameren
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, net mark-to-market gains or losses, the 2009 portion of a 2008 lump-sum payment from a coal supplier for expected higher fuel costs in 2009 as a result of the premature closure of a mine and termination of a contract, and the estimated minimum benefit of an accounting order from the Missouri Public Service Commission associated with the 2007 storm costs. 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.
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 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)
June 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $251 $92
Accounts receivable - trade, net 450 502
Unbilled revenue 365 427
Miscellaneous accounts and notes
receivable 337 292
Materials and supplies 733 842
Mark-to-market derivative assets 277 207
Other current assets 251 232
--- ---
Total current assets 2,664 2,594
----- -----
Property and Plant, Net 17,006 16,567
Investments and Other Assets:
Nuclear decommissioning trust fund 249 239
Goodwill 831 831
Intangible assets 150 167
Regulatory assets 1,616 1,653
Other assets 674 606
--- ---
Total investments and other assets 3,520 3,496
---------------------------------- ----- -----
TOTAL ASSETS $23,190 $22,657
------------ ------- -------
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term
debt $129 $380
Short-term debt 965 1,174
Accounts and wages payable 523 813
Taxes accrued 131 54
Interest accrued 126 107
Mark-to-market derivative
liabilities 234 155
Other current liabilities 437 380
--- ---
Total current liabilities 2,545 3,063
----- -----
Long-term Debt, Net 7,321 6,554
Deferred Credits and Other
Liabilities:
Accumulated deferred income taxes,
net 2,194 2,131
Accumulated deferred investment
tax credits 95 100
Regulatory liabilities 1,307 1,291
Asset retirement obligations 418 406
Pension and other postretirement
benefits 1,486 1,495
Other deferred credits and
liabilities 470 438
--- ---
Total deferred credits and other
liabilities 5,970 5,861
----- -----
Ameren Corporation Stockholders' Equity:
Common stock 2 2
Other paid-in capital, principally
premium on common stock 4,835 4,780
Retained earnings 2,323 2,181
Accumulated other comprehensive
income (loss) (13) -
--- ---
Total Ameren Corporation
stockholders' equity 7,147 6,963
Noncontrolling Interests 207 216
--- ---
Total equity 7,354 7,179
------------ ----- -----
TOTAL LIABILITIES AND EQUITY $23,190 $22,657
---------------------------- ------- -------
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Operating Revenues:
Electric $1,515 $1,547 $2,910 $3,016
Gas 169 243 690 855
--- --- --- ---
Total operating revenues 1,684 1,790 3,600 3,871
----- ----- ----- -----
Operating Expenses:
Fuel 287 200 561 502
Coal contract settlement - (60) - (60)
Purchased power 219 306 452 593
Gas purchased for resale 83 165 466 624
Other operations and maintenance 451 476 872 905
Depreciation and amortization 182 171 356 340
Taxes other than income taxes 97 89 207 202
--- --- --- ---
Total operating expenses 1,319 1,347 2,914 3,106
----- ----- ----- -----
Operating Income 365 443 686 765
Other Income and Expenses:
Miscellaneous income 17 19 33 38
Miscellaneous expense (7) (8) (11) (13)
--- --- --- ---
Total other income 10 11 22 25
--- --- --- ---
Interest Charges 124 118 242 218
--- --- --- ---
Income Before Income Taxes 251 336 466 572
Income Taxes 83 119 153 206
-- --- --- ---
Net Income 168 217 313 366
Less: Net Income Attributable to
Noncontrolling Interests 3 11 7 22
--- --- --- ---
Net Income Attributable to Ameren
Corporation $165 $206 $306 $344
--------------------------------- ---- ---- ---- ----
Earnings per Common Share - Basic and
Diluted $0.77 $0.98 $1.43 $1.64
Average Common Shares Outstanding 213.6 209.5 213.1 209.1
--------------------------------- ----- ----- ----- -----
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Six Months
Ended
June 30,
--------
2009 2008
------------------------------------- ---- ----
Cash Flows From Operating Activities:
Net income $313 $366
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 (56) (94)
Coal contract settlement - (60)
Depreciation and amortization 364 350
Amortization of nuclear fuel 25 20
Amortization of debt issuance costs and
premium/discounts 7 8
Deferred income taxes and investment tax credits, net 77 107
Other 11 4
Changes in assets and liabilities:
Receivables 93 15
Materials and supplies 109 16
Accounts and wages payable (204) (38)
Taxes accrued 77 (58)
Assets, other 53 32
Liabilities, other 68 65
Pension and other postretirement benefits 23 29
Counterparty collateral, net (4) (126)
Taum Sauk costs, net of insurance recoveries (48) (133)
--- ----
Net cash provided by operating activities 908 501
----------------------------------------- --- ---
Cash Flows From Investing Activities:
Capital expenditures (846) (798)
Nuclear fuel expenditures (35) (123)
Purchases of securities - nuclear
decommissioning trust fund (288) (247)
Sales of securities - nuclear decommissioning trust fund 291 231
Purchases of emission allowances (4) (2)
Sales of emission allowances - 2
Other - 2
--- ---
Net cash used in investing activities (882) (935)
------------------------------------- ---- ----
Cash Flows From Financing Activities:
Dividends on common stock (164) (266)
Debt issuance costs (47) (9)
Dividends paid to noncontrolling interest holders (16) (21)
Short-term debt, net (209) (22)
Redemptions, repurchases, and maturities
of long-term debt (250) (808)
Issuances:
Common stock 47 75
Long-term debt 772 1,335
--- -----
Net cash provided by financing activities 133 284
----------------------------------------- --- ---
Net change in cash and cash equivalents 159 (150)
Cash and cash equivalents at beginning of year 92 355
---------------------------------------------- --- ---
Cash and cash equivalents at end of period $251 $205
------------------------------------------ ---- ----
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Electric Sales - kilowatthours
(in millions):
Missouri Regulated
Residential 3,045 2,881 6,742 6,859
Commercial 3,621 3,662 7,094 7,185
Industrial 1,731 2,210 3,360 4,488
Other 446 212 622 396
--- --- --- ---
Native load
subtotal 8,843 8,965 17,818 18,928
Off-system sales 3,051 2,930 6,301 6,041
----- ----- ----- -----
Subtotal 11,894 11,895 24,119 24,969
------ ------ ------ ------
Illinois Regulated
Residential
Generation and
delivery service 2,646 2,573 5,594 5,655
Commercial
Generation and
delivery service 1,426 1,517 2,795 2,959
Delivery service
only 1,561 1,336 3,051 2,851
Industrial
Generation and
delivery service 126 404 239 739
Delivery service
only 2,581 2,740 5,185 5,607
Other 141 128 278 274
--- --- --- ---
Native load
subtotal 8,481 8,698 17,142 18,085
----- ----- ------ ------
Non-rate-regulated Generation
Non-affiliate
energy sales 6,168 5,928 11,713 12,315
Affiliate native
energy sales 1,032 1,437 2,307 3,198
----- ----- ----- -----
Subtotal 7,200 7,365 14,020 15,513
----- ----- ------ ------
Eliminate affiliate sales (1,032) (1,437) (2,307) (3,198)
Eliminate Illinois Regulated/
Non-rate-regulated
Generation common customers (1,356) (1,128) (2,661) (2,378)
------ ------ ------ ------
Ameren Total 25,187 25,393 50,313 52,991
------------ ------ ------ ------ ------
Electric Revenues (in millions):
Missouri Regulated
Residential $261 $227 $470 $445
Commercial 244 230 411 395
Industrial 84 94 143 170
Other 45 35 56 63
--- --- --- ---
Native load
subtotal 634 586 1,080 1,073
Off-system sales 91 150 224 304
--- --- --- ---
Subtotal 725 736 1,304 1,377
--- --- ----- -----
Illinois Regulated
Residential
Generation and
delivery service 288 255 567 513
Commercial
Generation and
delivery service 141 151 275 285
Delivery service
only 22 17 43 34
Industrial
Generation and
delivery service 7 22 8 49
Delivery service
only 9 7 17 14
Other 16 69 67 157
--- --- --- ---
Native load
subtotal 483 521 977 1,052
--- --- --- -----
Non-rate-regulated Generation
Non-affiliate
energy sales 322 289 626 606
Affiliate native
energy sales 103 92 219 210
Other (5) 29 27 44
--- --- --- ---
Subtotal 420 410 872 860
--- --- --- ---
Eliminate affiliate revenues (113) (120) (243) (273)
---- ---- ---- ----
Ameren Total $1,515 $1,547 $2,910 $3,016
------------ ------ ------ ------ ------
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Electric Generation -
megawatthours (in millions):
Missouri Regulated 11.7 12.2 24.0 25.1
Non-rate-regulated Generation
Ameren Energy Generating
Company (Genco) 3.5 3.5 6.9 7.9
AmerenEnergy Resources
Generating Company (AERG) 1.6 1.6 3.0 3.3
Electric Energy, Inc. (EEI) 1.5 1.8 3.4 3.8
AmerenEnergy Medina Valley
Cogen, L.L.C. - - 0.1 0.1
--- --- --- ---
Subtotal 6.6 6.9 13.4 15.1
--- --- ---- ----
Ameren Total 18.3 19.1 37.4 40.2
------------ ---- ---- ---- ----
Fuel Cost per kilowatthour
(cents)
Missouri Regulated 1.387 1.279 1.355 1.254
Non-rate-regulated
Generation 2.010 1.846 1.983 1.875
Gas Sales - decatherms (in
thousands)
Missouri Regulated 1,446 1,564 6,883 7,772
Illinois Regulated 11,030 13,677 54,171 64,460
Other 1,164 288 3,257 926
----- --- ----- ---
Ameren Total 13,640 15,529 64,311 73,158
------------ ------ ------ ------ ------
Net Income (Loss) by Segment (in
millions):
Missouri Regulated $82 $122 $103 $174
Illinois Regulated 15 (14) 40 2
Non-rate-regulated
Generation 75 98 168 176
Other (7) - (5) (8)
--- --- --- ---
Ameren Total $165 $206 $306 $344
------------ ---- ---- ---- ----
June 30, December 31,
2009 2008
---- ----
Common Stock:
Shares outstanding (in
millions) 214.2 212.3
Book value per share $33.36 $32.80
Capitalization Ratios:
Common equity 46.1% 45.9%
Preferred stock 1.3% 1.3%
Debt, net of cash 52.6% 52.8%
SOURCE Ameren Corporation
SOURCE: Ameren Corporation
Web site: http://www.ameren.com/