ST. LOUIS, Oct. 30 /PRNewswire-FirstCall/ -- Ameren Corporation (NYSE: AEE) today announced third quarter 2009 net income in accordance with generally accepted accounting principles (GAAP) of $227 million, or $1.04 per share, compared to third quarter 2008 GAAP net income of $204 million, or 97 cents per share. Excluding certain items in each year, Ameren recorded third quarter 2009 core (non-GAAP) net income of $255 million, or $1.16 per share, compared to third quarter 2008 core (non-GAAP) net income of $246 million, or $1.17 per share.
Factors favorably affecting core (non-GAAP) third quarter 2009 earnings per share, as compared to the same period in 2008, included utility rate adjustments in Illinois and Missouri, lower operations and maintenance expenses, as well as the revenue-leveling effect of natural gas rate redesign in the Illinois regulated utility segment. Offsetting factors included lower electricity sales in the regulated utilities and lower margins in the merchant generation segment, as a result of much cooler summer weather and economic conditions. Higher interest expense and increased average common shares outstanding also impacted comparative results.
"I am pleased to report that our third quarter core earnings per share were just one cent less than those of the year-ago quarter despite much cooler summer weather and the weak economy," said Thomas R. Voss, president and chief executive officer of Ameren Corporation. "Our entire management team is keenly focused on laying a foundation on which we can build and deliver shareholder value in the years to come. Key steps have been taken in this direction over the past few months, including reevaluating and reducing planned expenditures, further strengthening our financial profile and right-sizing our organization. We are also seeking to recover increased costs in our regulated businesses and positioning our merchant generation business to weather current power market conditions and benefit from an expected eventual recovery. We intend to lead the way to a secure energy future for our customers and our communities.
"With our most significant earnings' quarters behind us, we are narrowing our 2009 core earnings per share guidance to a range of $2.70 to $2.90 from our prior range of $2.70 to $3.05. Our new core guidance range reflects reduced sales due to much cooler-than-normal third quarter weather and continued weak economic conditions, as well as dilution from our third quarter common equity offering. The impact of these factors is partially offset by reduced operating and interest expenses, as compared to our prior guidance."
In the third quarter of 2009, at Ameren's regulated utilities, much cooler summer weather and the economic slowdown led to a 10% decrease in kilowatthour sales to residential customers and a 3% decrease in kilowatthour sales to commercial customers, compared to the year-ago quarter. These sales changes were more modest on a weather-normalized basis, with residential sales declining an estimated 2% and commercial sales declining an estimated 1%. Cooling degree-days in the 2009 third quarter were 18% below those of the 2008 third quarter and 23% below normal. The weak economy continued to affect kilowatthour sales by Ameren's regulated utilities to their industrial customers. These sales declined 13% from the year-ago quarter, excluding the impact of reduced sales to AmerenUE's largest customer, the Noranda Aluminum, Inc., smelter plant in New Madrid, Mo. 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, electric sales to industrial customers declined 18% in the third quarter of 2009, as compared to the year-ago quarter.
The following items were excluded from third quarter 2009 and third quarter 2008 core (non-GAAP) earnings, as applicable:
Net income in accordance with GAAP for the nine months ended Sept. 30, 2009, was $533 million, or $2.48 per share, compared to $548 million, or $2.61 per share, for the same period in 2008. Excluding certain items in each year, Ameren recorded nine-month 2009 core (non-GAAP) net income of $530 million, or $2.46 per share, compared to nine-month 2008 core (non-GAAP) net income of $525 million, or $2.50 per share. A reconciliation of GAAP to core (non-GAAP) earnings per share is as follows:
Third Quarter Nine Months
------------- -----------
2009 2008 2009 2008
---- ---- ---- ----
GAAP earnings per share $1.04 $0.97 $2.48 $2.61
Illinois electric rate relief
settlement, net 0.02 0.03 0.06 0.10
Net unrealized mark-to-market
activity 0.04 0.17 (0.14) (0.09)
Coal contract settlement - 2009
portion - - - (0.08)
Accounting order for 2007 severe
storms - - - (0.04)
Employee separation & generating unit
retirements 0.06 - 0.06 -
Core (non-GAAP) earnings per share $1.16 $1.17 $2.46 $2.50
2009 Earnings Guidance
As previously mentioned, Ameren has updated its expectations for full-year 2009 earnings. GAAP earnings for 2009 are now expected to be in the range of $2.57 to $2.77 per share, compared to the prior range of $2.63 to $2.98 per share. Core (non-GAAP) earnings are now expected to be in the range of $2.70 to $2.90 per share, compared to the prior range of $2.70 to $3.05. The 2009 core (non-GAAP) earnings guidance excludes an estimated 7 cents per share negative impact from the 2007 settlement agreement among parties in Illinois to provide comprehensive electric rate relief and customer assistance and an estimated 6 cents per share negative impact from the costs of employee separation programs and generating unit retirements. 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 - $1.10
Illinois Regulated 0.50 - 0.55
Merchant Generation 1.15 - 1.25
--------------
2009 Core (Non-GAAP) Earnings Guidance Range $2.70 - $2.90
These estimated segment contributions have been updated to reflect the narrowed core (non-GAAP) earnings guidance.
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 third quarter of 2009 were $145 million versus $141 million in the prior-year period. The earnings improvement was primarily a result of electric rates, which took effect March 1, 2009, and cost control efforts. Offsets included reduced electric sales due to much cooler summer weather, the weak economy and lower sales to the Noranda Aluminum smelter plant, as previously discussed, as well as higher financing costs. Missouri regulated operations recorded GAAP earnings in the 2009 third quarter of $141 million versus $98 million in the 2008 third quarter. In addition to the factors mentioned above, the increase in GAAP earnings was the result of a gain from net mark-to-market activity in the third quarter of 2009 as opposed to a loss in the year-ago quarter, partially offset by third quarter 2009 expenses for employee separation programs.
Illinois Regulated Segment Earnings
Core (non-GAAP) earnings in the third quarter of 2009 were $60 million as compared to $17 million in the third quarter of 2008. This earnings improvement was primarily due to electric and natural gas delivery service rates that took effect Oct. 1, 2008, lower bad debt expense, a seasonal natural gas rate redesign and cost control efforts. Effective Oct. 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 revenues from the first quarter to the second and third quarters with no expected impact on full-year earnings. These positives were partially offset by lower electric sales due to much cooler summer weather and the weak economy, higher financing costs and increased pension and benefit expenses, among other factors. Illinois regulated operations recorded GAAP earnings in the third quarter of 2009 of $57 million versus $13 million in the third quarter of 2008. In addition to the items noted above, this GAAP earnings increase resulted from the absence of a year-ago loss from net mark-to-market activity, partially offset by third quarter 2009 expenses for employee separation programs.
Merchant Generation Segment Earnings
Core (non-GAAP) earnings in the third quarter of 2009 were $62 million, down from $98 million earned in the third quarter of 2008. This decline was due to weaker power prices and higher fuel and related transportation and financing costs. Proactive forward hedges of 2009 generation, executed in prior years at higher-than-current market prices, have shielded merchant generation earnings from the full impact of falling market power prices. GAAP earnings from merchant generation operations in the third quarter of 2009 were $37 million, down from $108 million in the third quarter of 2008. In addition to the items noted above, a third quarter 2009 loss as opposed to a third quarter 2008 gain from net mark-to-market activity was the primary factor behind the decline in GAAP earnings. Third quarter 2009 charges related to employee separation programs and generating unit retirements also decreased GAAP earnings for the merchant generation segment.
Analyst Conference Call
Ameren will conduct a conference call for financial analysts at 9:00 a.m. Central Time on Friday, Oct. 30, to discuss third 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 "Q3 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 Oct. 30 through Nov. 6, by dialing, U.S. (877) 660-6853 or international (201) 612-7415, and entering account number 352 and ID number 334766.
About Ameren
With assets of $24 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 16,300 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, the estimated minimum benefit of an accounting order from the Missouri Public Service Commission associated with the 2007 storm costs, and the costs of employee separation programs and generating unit retirements. 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)
September 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $563 $92
Accounts receivable - trade, net 416 502
Unbilled revenue 250 427
Miscellaneous accounts and notes
receivable 182 292
Materials and supplies 857 842
Mark-to-market derivative assets 239 207
Other current assets 273 232
--- ---
Total current assets 2,780 2,594
----- -----
Property and Plant, Net 17,272 16,567
Investments and Other Assets:
Nuclear decommissioning trust
fund 280 239
Goodwill 831 831
Intangible assets 138 167
Regulatory assets 1,661 1,653
Other assets 632 606
--- ---
Total investments and other
assets 3,542 3,496
--------------------------- ----- -----
TOTAL ASSETS $23,594 $22,657
------------ ------- -------
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term
debt $128 $380
Short-term debt 435 1,174
Accounts and wages payable 443 813
Taxes accrued 135 54
Interest accrued 183 107
Customer deposits 107 126
Mark-to-market derivative
liabilities 197 155
Other current liabilities 298 254
--- ---
Total current liabilities 1,926 3,063
----- -----
Long-term Debt, Net 7,321 6,554
Deferred Credits and Other
Liabilities:
Accumulated deferred income taxes,
net 2,431 2,131
Accumulated deferred investment
tax credits 93 100
Regulatory liabilities 1,322 1,291
Asset retirement obligations 423 406
Pension and other postretirement
benefits 1,477 1,495
Other deferred credits and
liabilities 555 438
--- ---
Total deferred credits and other
liabilities 6,301 5,861
----- -----
Ameren Corporation Stockholders'
Equity:
Common stock 2 2
Other paid-in capital,
principally premium on common
stock 5,392 4,780
Retained earnings 2,467 2,181
Accumulated other comprehensive
loss (21) -
--- ---
Total Ameren Corporation
stockholders' equity 7,840 6,963
Noncontrolling Interests 206 216
--- ---
Total equity 8,046 7,179
------------ ----- -----
TOTAL LIABILITIES AND EQUITY $23,594 $22,657
---------------------------- ------- -------
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Operating Revenues:
Electric $1,679 $1,928 $4,589 $4,944
Gas 136 132 826 987
--- --- --- ---
Total operating revenues 1,815 2,060 5,415 5,931
----- ----- ----- -----
Operating Expenses:
Fuel 306 461 867 963
Coal contract settlement - - - (60)
Purchased power 256 371 708 964
Gas purchased for resale 57 73 523 697
Other operations and maintenance 422 456 1,294 1,361
Depreciation and amortization 185 173 541 513
Taxes other than income taxes 104 98 311 300
--- -- --- ---
Total operating expenses 1,330 1,632 4,244 4,738
----- ----- ----- -----
Operating Income 485 428 1,171 1,193
Other Income and Expenses:
Miscellaneous income 16 23 49 61
Miscellaneous expense (3) (10) (14) (23)
--- --- --- ---
Total other income 13 13 35 38
--- --- --- ---
Interest Charges 134 113 376 331
--- --- --- ---
Income Before Income Taxes 364 328 830 900
Income Taxes 135 113 288 319
--- --- --- ---
Net Income 229 215 542 581
Less: Net Income Attributable to
Noncontrolling Interests 2 11 9 33
--- --- --- ---
Net Income Attributable to
Ameren Corporation $227 $204 $533 $548
-------------------------- ---- ---- ---- ----
Earnings per Common Share -
Basic and Diluted $1.04 $0.97 $2.48 $2.61
Average Common Shares Outstanding 218.2 210.3 214.9 209.5
--------------------------------- ----- ----- ----- -----
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Nine Months
Ended
September 30,
-------------
2009 2008
---- ----
Cash Flows From Operating Activities:
Net income $542 $581
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 (26) (42)
Depreciation and amortization 557 528
Amortization of nuclear fuel 40 31
Amortization of debt issuance costs
and premium/discounts 16 14
Deferred income taxes and
investment tax credits, net 301 130
Other 4 (2)
Changes in assets and liabilities:
Receivables 239 144
Materials and supplies (11) (216)
Accounts and wages payable (241) (74)
Taxes accrued 81 44
Assets, other (116) 46
Liabilities, other 134 142
Pension and other postretirement benefits 30 23
Counterparty collateral, net 66 -
Taum Sauk costs, net of insurance recoveries 110 (94)
--- ---
Net cash provided by operating activities 1,726 1,253
----------------------------------------- ----- -----
Cash Flows From Investing Activities:
Capital expenditures (1,295) (1,316)
Nuclear fuel expenditures (47) (161)
Purchases of securities - nuclear
decommissioning trust fund (315) (386)
Sales of securities - nuclear
decommissioning trust fund 315 360
Purchases of emission allowances (4) (2)
Sales of emission allowances - 2
Other 1 2
--- ---
Net cash used in investing activities (1,345) (1,501)
------------------------------------- ------ ------
Cash Flows From Financing Activities:
Dividends on common stock (247) (399)
Debt issuance costs (64) (9)
Dividends paid to noncontrolling interest holders (19) (31)
Short-term debt, net (739) (65)
Redemptions, repurchases, and maturities:
Long-term debt (250) (823)
Preferred stock - (16)
Issuances:
Common stock 617 107
Long-term debt 772 1,335
--- -----
Net cash provided by financing activities 70 99
----------------------------------------- --- ---
Net change in cash and cash equivalents 451 (149)
Cash and cash equivalents at beginning of year 92 355
---------------------------------------------- --- ---
Cash and cash equivalents at end of period $543 $206
------------------------------------------ ---- ----
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Electric Sales -
kilowatthours (in millions):
Missouri Regulated
Residential 3,392 3,708 10,134 10,567
Commercial 3,932 4,020 11,026 11,205
Industrial 1,862 2,502 5,222 6,990
Other 497 210 1,119 606
--- --- ----- ---
Native load
subtotal 9,683 10,440 27,501 29,368
Off-system sales 2,718 2,490 9,019 8,531
----- ----- ----- -----
Subtotal 12,401 12,930 36,520 37,899
------ ------ ------ ------
Illinois Regulated
Residential
Generation and
delivery service 2,731 3,063 8,325 8,718
Commercial
Generation and
delivery service 1,246 1,527 4,041 4,486
Delivery
service only 1,884 1,704 4,935 4,555
Industrial
Generation and
delivery service 121 352 360 1,091
Delivery
service only 2,804 2,960 7,989 8,567
Other 122 132 400 406
--- --- --- ---
Native load
subtotal 8,908 9,738 26,050 27,823
----- ----- ------ ------
Merchant Generation
Non-affiliate
energy sales 7,277 7,245 18,990 19,560
Affiliate native
energy sales 602 1,441 2,909 4,639
--- ----- ----- -----
Subtotal 7,879 8,686 21,899 24,199
----- ----- ------ ------
Eliminate affiliate sales (602) (1,441) (2,909) (4,639)
Eliminate Illinois
Regulated/Merchant
Generation common
customers (1,394) (1,278) (4,055) (3,656)
------ ------ ------ ------
Ameren Total 27,192 28,635 77,505 81,626
------------- ------ ------ ------ ------
Electric Revenues (in millions):
Missouri Regulated
Residential $311 $311 $781 $756
Commercial 293 278 704 673
Industrial 104 125 247 295
Other 30 25 86 88
--- --- --- ---
Native load
subtotal 738 739 1,818 1,812
Off-system sales 78 114 302 418
--- --- --- ---
Subtotal 816 853 2,120 2,230
--- --- ----- -----
Illinois Regulated
Residential
Generation and
delivery service 271 312 838 825
Commercial
Generation and
delivery service 141 177 416 462
Delivery
service only 32 22 75 56
Industrial
Generation and
delivery service 7 28 15 77
Delivery
service only 9 8 26 22
Other 68 73 135 230
--- --- --- ---
Native load
subtotal 528 620 1,505 1,672
--- --- ----- -----
Merchant Generation
Non-affiliate
energy sales 369 451 995 1,057
Affiliate native
energy sales 90 99 309 309
Other (25) 40 2 84
--- --- --- ---
Subtotal 434 590 1,306 1,450
--- --- ----- -----
Eliminate affiliate
revenues (99) (135) (342) (408)
--- ---- ---- ----
Ameren Total $1,679 $1,928 $4,589 $4,944
------------ ------ ------ ------ ------
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Electric Generation -
megawatthours (in
millions):
Missouri Regulated 12.3 13.0 36.3 38.1
Merchant Generation
Ameren Energy
Generating Company
(Genco) 3.5 4.3 10.4 12.2
AmerenEnergy
Resources Generating
Company (AERG) 1.9 1.8 4.9 5.1
Electric Energy, Inc.
(EEI) 1.6 2.1 5.0 5.9
AmerenEnergy Medina
Valley Cogen, L.L.C. - 0.1 0.1 0.2
--- --- --- ---
Subtotal 7.0 8.3 20.4 23.4
--- --- ---- ----
Ameren Total 19.3 21.3 56.7 61.5
------------ ---- ---- ---- ----
Fuel Cost per
kilowatthour (cents)
Missouri Regulated 1.412 1.378 1.374 1.297
Merchant Generation 2.050 1.982 2.005 1.913
Gas Sales - decatherms
(in thousands)
Missouri Regulated 829 750 7,712 8,522
Illinois Regulated 6,327 4,662 60,498 69,122
Other 43 196 3,300 1,122
--- --- ----- -----
Ameren Total 7,199 5,608 71,510 78,766
------------ ----- ----- ------ ------
Net Income (Loss) by
Segment (in millions):
Missouri Regulated $141 $98 $244 $272
Illinois Regulated 57 13 97 15
Merchant Generation 37 108 205 284
Other (8) (15) (13) (23)
--- --- --- ---
Ameren Total $227 $204 $533 $548
------------ ---- ---- ---- ----
September 30, December 31,
2009 2008
---- ----
Common Stock:
Shares outstanding
(in millions) 236.8 212.3
Book value per share $33.11 $32.80
Capitalization Ratios:
Common equity 51.0% 45.9%
Preferred stock 1.3% 1.3%
Debt, net of cash 47.7% 52.8%
SOURCE: Ameren Corporation
Web site: http://www.ameren.com/