Ameren (NYSE: AEE) Announces Second Quarter 2014 Results and Affirms 2014 Earnings Guidance

-Second Quarter Earnings Per Share from Continuing Operations Were $0.62 in 2014 vs. $0.44 in 2013

-Guidance Range for 2014 EPS from Continuing Operations Affirmed at $2.30 to $2.50

Aug 05, 2014, 07:59 ET from Ameren Corporation

ST. LOUIS, Aug. 5, 2014 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced second quarter 2014 net income from continuing operations of $150 million, or 62 cents per share, compared to second quarter 2013 net income from continuing operations of $105 million, or 44 cents per share.

The year-over-year increase in second quarter 2014 earnings from continuing operations reflected the absence of 2013 Callaway Energy Center nuclear refueling outage expenses and a 2013 charge related to Missouri fuel adjustment clause (FAC) treatment of certain prior period wholesale sales. In 2014 the Callaway refueling outage is scheduled for the fourth quarter, whereas in 2013 the refueling outage occurred in the second quarter. The earnings comparison also benefited from warmer early summer temperatures in 2014, which drove higher Missouri native load electric sales volumes. Other factors included increased rates effective Jan. 1, 2014, for Federal Energy Regulatory Commission (FERC) regulated electric transmission and Illinois natural gas delivery services, as well as decreased interest expense.

"Continued execution of our strategy is producing solid financial and operating performance for the benefit of our customers and shareholders," said Warner L. Baxter, chairman, president and chief executive officer of Ameren Corporation. "Over the remainder of this year, we will remain focused on successfully completing several key infrastructure projects, as well as managing our costs in a disciplined fashion."

Ameren recorded net income from continuing operations for the six months ended June 30, 2014, of $247 million, or $1.02 per share, compared to net income from continuing operations for the six months ended June 30, 2013, of $159 million, or 66 cents per share. This earnings increase reflected much colder winter and warmer early summer temperatures in 2014, which drove higher native load electric and natural gas sales volumes, as well as the absence of 2013 Callaway refueling outage expenses and a 2013 Missouri FAC-related charge. The positive earnings comparison was also the result of increased rates, effective Jan. 1, 2014, for FERC-regulated electric transmission and Illinois natural gas delivery services. In addition, interest expense and Parent Company and Other operations and maintenance expenses decreased.

Guidance for Earnings from Continuing Operations

Ameren continues to expect earnings per share to be in a range of $2.30 to $2.50 for 2014 and to grow at a 7% to 10% compound annual rate through 2018 using 2013 results from continuing operations as the base. This expected five-year growth is driven primarily by infrastructure investments in FERC-regulated electric transmission and Illinois-regulated energy delivery services.

Ameren's earnings guidance assumes normal temperatures for the second half of 2014 and, along with Ameren's growth expectations, is subject to the effects of, among other things, changes in 30-year U.S. Treasury bond yields; regulatory decisions and legislative actions; energy center and energy delivery operations; energy, economic, capital and credit market 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.

Ameren Missouri Segment Results

Ameren Missouri segment second quarter 2014 earnings were $126 million, compared to second quarter 2013 earnings of $84 million. This earnings increase reflected the absence of 2013 Callaway refueling outage expenses and a 2013 charge related to FAC treatment of certain prior period wholesale sales. In addition, earnings benefited from warmer early summer temperatures in 2014, which drove higher native load electric sales volumes, as well as decreased interest expense and disciplined cost management. These factors were partially offset by higher depreciation and amortization expenses.

Ameren Illinois Segment Results

Ameren Illinois segment second quarter 2014 earnings were $28 million, compared to second quarter 2013 earnings of $31 million. This earnings decline reflected lower electric delivery service earnings under formula ratemaking as timing differences more than offset positive effects from increased infrastructure investments and a higher allowed return on equity due to increased 30-year U.S. Treasury bond yields. The earnings comparison was also negatively affected by a charge related to a June 2014 FERC order. These factors were partially offset by increased rates, effective Jan. 1, 2014, for FERC-regulated electric transmission and natural gas delivery services, as well as decreased interest expense.

Parent Company and Other

The Parent Company and Other loss from continuing operations for the second quarter of 2014 was $4 million, compared to a loss of $10 million for the second quarter of 2013. This reduced loss reflected decreased interest expense, primarily resulting from the May 2014 maturity of parent company 8.875% senior notes, and lower other operations and maintenance expenses, primarily due to the substantial elimination of business and administrative costs previously incurred in support of the divested merchant generation business. The earnings comparison also benefited from increased earnings from Ameren Transmission Company of Illinois, reflecting infrastructure investments made under FERC ratemaking.

Analyst Conference Call

Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Tuesday, Aug. 5, to discuss second quarter 2014 earnings, earnings guidance and growth expectations, and other matters. Investors, the news media and the public may listen to a live Internet broadcast of the call at Ameren.com by clicking on "Q2 2014 Ameren Corporation Earnings Conference Call," followed by the appropriate audio link. An accompanying slide presentation will be available on Ameren's website. This presentation will be posted in the "Investors" section of the website under "Webcasts & Presentations." The analyst call will 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 Aug. 5 through Aug. 12 by dialing U.S. 877.660.6853 or international 201.612.7415, and entering ID number 13587409.

About Ameren

St. Louis-based Ameren Corporation powers the quality of life for 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area through its Ameren Missouri and Ameren Illinois rate-regulated utility subsidiaries. Ameren Illinois provides electric delivery and transmission service as well as natural gas delivery service while Ameren Missouri provides vertically integrated electric service, with generating capacity of 10,300 megawatts, and natural gas delivery service. Ameren Transmission Company of Illinois develops regional electric transmission projects. Follow the company on Twitter @AmerenCorp. For more information, visit Ameren.com.

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 under Risk Factors in Ameren's Form 10-K for the year ended December 31, 2013 and elsewhere in this release and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:

  • regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the  complaint cases filed by Noranda Aluminum, Inc. and 37 residential customers with the Missouri Public Service Commission in February 2014; Ameren Missouri's July 2014 electric rate case filing; Ameren Illinois' appeals of the Illinois Commerce Commission's electric and natural gas rate orders issued in December 2013; Ameren Illinois' April 2014 annual electric delivery service formula update filing; FERC settlement procedures regarding a potential Ameren Illinois electric transmission rate refund; the complaint case filed with FERC seeking a reduction in the allowed return on common equity under the Midcontinent Independent System Operator tariff; and future regulatory, judicial, or legislative actions that seek to change regulatory recovery mechanisms;
  • the effect of Ameren Illinois participating in a performance-based formula ratemaking process under the Illinois Energy Infrastructure Modernization Act (IEIMA), including the direct relationship between Ameren Illinois' return on common equity and 30-year United States Treasury bond yields, the related financial commitments required by the IEIMA, and the resulting uncertain impact on the financial condition, results of operations and liquidity of Ameren Illinois;
  • the potential extension of the IEIMA after its current sunset provision at the end of 2017, and any changes to the performance-based formula ratemaking process or required financial commitments;
  • the effects of Ameren Illinois' expected participation, beginning in 2015, in the regulatory framework provided by the state of Illinois' Natural Gas Consumer, Safety and Reliability Act, which allows for the use of a rider to recover costs of certain natural gas infrastructure investments made between rate cases;
  • the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at either the state or federal levels and the implementation of deregulation;
  • changes in laws and other governmental actions, including monetary, fiscal, and tax policies;
  • the effects on demand for our services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
  • the timing of increasing capital expenditure and operating expense requirements and our ability to timely recover these costs;
  • the cost and availability of fuel such as coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including our ability to recover the costs for such commodities;
  • the effectiveness of our risk management strategies and the use of financial and derivative instruments;
  • business and economic conditions, including their impact on interest rates, bad debt expense, and demand for our products;
  • disruptions of the capital markets, deterioration in our credit metrics, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity;
  • our assessment of our liquidity;
  • the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;
  • actions of credit rating agencies and the effects of such actions;
  • the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages;
  • generation, transmission, and distribution asset construction, installation, performance, and cost recovery;
  • the effects of our increasing investment in electric transmission projects and uncertainty as to whether we will achieve our expected returns in a timely fashion, if at all;
  • the extent to which Ameren Missouri prevails in its claim against an insurer in connection with its Taum Sauk pumped-storage hydroelectric energy center incident;
  • the extent to which Ameren Missouri is permitted by its regulators to recover in rates the investments it made in connection with additional nuclear generation at its Callaway Energy Center;
  • operation of Ameren Missouri's Callaway Energy Center, including planned and unplanned outages, and decommissioning costs;
  • the effects of strategic initiatives, including mergers, acquisitions and divestitures, and any related tax implications;
  • the impact of current environmental regulations on utilities and power generating companies and new, more stringent or changing requirements, including those related to greenhouse gases, other emissions and discharges, cooling water intake structures, coal combustion residuals, and energy efficiency, that are enacted over time and that could limit or terminate the operation of certain of our energy centers, increase our costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
  • the impact of complying with renewable energy portfolio requirements in Missouri;
  • labor disputes, workforce reductions, future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
  • the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;
  • the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri's energy sales;
  • the inability of Dynegy Inc. and Illinois Power Holdings, LLC (IPH) to satisfy their indemnity and other obligations to Ameren in connection with the divestiture of New Ameren Energy Resources Generating Company, LLC to IPH;
  • legal and administrative proceedings; and
  • acts of sabotage, war, terrorism, cyber attacks 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 update or revise publicly any forward-looking statements to reflect new information or future events.  

AMEREN CORPORATION (AEE)

CONSOLIDATED STATEMENT OF INCOME (LOSS)

(Unaudited, in millions, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

Operating Revenues:

Electric

$    1,235

$    1,228

$    2,341

$    2,316

Gas

184

175

672

562

Total operating revenues

1,419

1,403

3,013

2,878

Operating Expenses:

Fuel

198

213

402

426

Purchased power

111

121

223

272

Gas purchased for resale

79

72

383

302

Other operations and maintenance

412

447

832

846

Depreciation and amortization

183

178

364

353

Taxes other than income taxes

114

111

241

233

Total operating expenses

1,097

1,142

2,445

2,432

Operating Income 

322

261

568

446

Other Income and Expenses:

Miscellaneous income

21

16

39

31

Miscellaneous expense

4

5

13

13

Total other income

17

11

26

18

Interest Charges

89

100

181

201

Income Before Income Taxes

250

172

413

263

Income Taxes 

99

66

163

101

Income from Continuing Operations

151

106

250

162

Loss from Discontinued Operations, Net of Taxes

(1)

(10)

(2)

(209)

Net Income (Loss)

150

96

248

(47)

Less:  Net Income from Continuing Operations Attributable to Noncontrolling Interests

1

1

3

3

Net Income (Loss) Attributable to Ameren Corporation:

Continuing Operations

150

105

247

159

Discontinued Operations

(1)

(10)

(2)

(209)

Net Income (Loss) Attributable to Ameren Corporation

$       149

$        95

$       245

$       (50)

Earnings (Loss) per Common Share – Basic:

Continuing Operations

$      0.62

$     0.44

$      1.02

$     0.66

Discontinued Operations

(0.01)

(0.05)

(0.01)

(0.87)

Earnings (Loss) per Common Share – Basic

$      0.61

$     0.39

$      1.01

$    (0.21)

Average Common Shares Outstanding – Basic 

242.6

242.6

242.6

242.6

 

AMEREN CORPORATION (AEE)

CONSOLIDATED BALANCE SHEET 

(Unaudited, in millions)

June 30,

December 31,

2014

2013

ASSETS

Current Assets:

Cash and cash equivalents

$                 46

$             30

Accounts receivable - trade (less allowance for doubtful accounts)

454

404

Unbilled revenue

299

304

Miscellaneous accounts and notes receivable

213

196

Materials and supplies

491

526

Current regulatory assets

202

156

Current accumulated deferred income taxes, net

177

106

Other current assets

68

85

Assets of discontinued operations

15

165

Total current assets

1,965

1,972

Property and Plant, Net

16,726

16,205

Investments and Other Assets:

Nuclear decommissioning trust fund

523

494

Goodwill 

411

411

Intangible assets

19

22

Regulatory assets

1,213

1,240

Other assets

731

698

Total investments and other assets

2,897

2,865

TOTAL ASSETS

$           21,588

$       21,042

LIABILITIES AND EQUITY

Current Liabilities:

Current maturities of long-term debt

$                119

$           534

Short-term debt

793

368

Accounts and wages payable

575

806

Taxes accrued

132

55

Interest accrued

92

86

Current regulatory liabilities

218

216

Other current liabilities

350

351

Liabilities of discontinued operations

33

45

Total current liabilities

2,312

2,461

Long-term Debt, Net

5,825

5,504

Deferred Credits and Other Liabilities:

Accumulated deferred income taxes, net

3,526

3,250

Accumulated deferred investment tax credits

60

63

Regulatory liabilities

1,784

1,705

Asset retirement obligations

380

369

Pension and other postretirement benefits

463

466

Other deferred credits and liabilities

524

538

Total deferred credits and other liabilities

6,737

6,391

Ameren Corporation Stockholders' Equity:

Common stock

2

2

Other paid-in capital, principally premium on common stock

5,607

5,632

Retained earnings

957

907

Accumulated other comprehensive income

6

3

Total Ameren Corporation stockholders' equity

6,572

6,544

Noncontrolling Interests

142

142

Total equity

6,714

6,686

TOTAL LIABILITIES AND EQUITY

$           21,588

$       21,042

 

AMEREN CORPORATION (AEE)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 

(Unaudited, in millions)

Six Months Ended

June 30,

2014

2013

Cash Flows From Operating Activities:

Net income (loss)

$      248

$       (47)

Loss from discontinued operations, net of taxes

2

209

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

349

334

Amortization of nuclear fuel

47

29

Amortization of debt issuance costs and premium/discounts

11

12

Deferred income taxes and investment tax credits, net

178

70

Allowance for equity funds used during construction

(16)

(16)

Stock-based compensation costs

15

14

Other 

(8)

18

Changes in assets and liabilities

(168)

106

Net cash provided by operating activities - continuing operations

658

729

Net cash provided by (used in) operating activities - discontinued operations

(4)

39

Net cash provided by operating activities

654

768

Cash Flows From Investing Activities:

Capital expenditures

(883)

(575)

Nuclear fuel expenditures

(26)

(25)

Purchases of securities - nuclear decommissioning trust fund

(290)

(97)

Sales and maturities of securities - nuclear decommissioning trust fund

283

89

Proceeds from note receivable - Illinois Power Marketing Company

70

-

Contributions to note receivable - Illinois Power Marketing Company

(78)

-

Other

2

2

Net cash used in investing activities - continuing operations

(922)

(606)

Net cash provided by (used in) investing activities - discontinued operations

152

(31)

Net cash used in investing activities

(770)

(637)

Cash Flows From Financing Activities:

Dividends on common stock

(194)

(194)

Dividends paid to noncontrolling interest holders

(3)

(3)

Short-term debt, net

425

25

Redemptions of long-term debt

(692)

-

Issuances of long-term debt

598

-

Capital issuance costs

(4)

-

Advances received for construction

2

7

Net cash provided by (used in) financing activities - continuing operations

132

(165)

Net cash used in financing activities - discontinued operations

-

-

Net cash provided by (used in) financing activities 

132

(165)

Net change in cash and cash equivalents

16

(34)

Cash and cash equivalents at beginning of year

30

209

Cash and cash equivalents at end of period

46

175

Less cash and cash equivalents at end of period - discontinued operations 

-

25

Cash and cash equivalents at end of period - continuing operations 

$        46

$      150

 

AMEREN CORPORATION (AEE)

OPERATING STATISTICS FROM CONTINUING OPERATIONS

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

Electric Sales - kilowatthours (in millions):

Ameren Missouri

Residential

2,897

2,864

7,079

6,666

Commercial

3,560

3,545

7,222

7,063

Industrial

2,191

2,170

4,278

4,249

Other

27

27

60

61

Native load subtotal

8,675

8,606

18,639

18,039

Off-system and wholesale

1,438

2,179

2,891

3,667

Subtotal

10,113

10,785

21,530

21,706

Ameren Illinois

Residential

Power supply and delivery service

935

1,171

2,241

3,145

Delivery service only

1,635

1,364

3,833

2,497

Commercial

Power supply and delivery service

591

584

1,284

1,280

Delivery service only

2,348

2,326

4,641

4,433

Industrial

Power supply and delivery service

477

428

924

856

Delivery service only

2,600

2,737

5,188

5,406

Other

123

126

267

265

Native load subtotal

8,709

8,736

18,378

17,882

Eliminate affiliate sales

(50)

-

(50)

(41)

Ameren Total from Continuing Operations

18,772

19,521

39,858

39,547

Electric Revenues (in millions):

Ameren Missouri

Residential

$           351

$           339

$           694

$           671

Commercial

317

322

563

566

Industrial

124

128

221

227

Other

32

4

59

18

Native load subtotal

$           824

$           793

$        1,537

$        1,482

Off-system and wholesale

47

67

83

110

Subtotal

$           871

$           860

$        1,620

$        1,592

Ameren Illinois

Residential

Power supply and delivery service

$           101

$           125

$           223

$           290

Delivery service only

77

66

154

108

Commercial

Power supply and delivery service

54

54

115

108

Delivery service only

48

46

88

80

Industrial

Power supply and delivery service

25

20

52

36

Delivery service only

10

12

20

23

Other

49

45

65

83

Native load subtotal

$           364

$           368

$           717

$           728

Eliminate affiliate revenues and other

-

-

4

(4)

Ameren Total from Continuing Operations

$        1,235

$        1,228

$        2,341

$        2,316

Electric Generation - megawatthours (in millions):

Ameren Missouri

10.3

10.5

22.0

21.5

Fuel Cost per kilowatthour (cents):

Ameren Missouri

1.855

1.907

1.902

1.817

Gas Sales - decatherms (in thousands):

Ameren Missouri

2,770

3,415

11,293

11,076

Ameren Illinois

28,364

29,917

106,308

95,396

Ameren Total

31,134

33,332

117,601

106,472

Net Income (Loss) by Segment (in millions):

Ameren Missouri

$           126

$            84

$           173

$           124

Ameren Illinois

28

31

81

62

Other

(4)

(10)

(7)

(27)

Ameren Total

$           150

$           105

$           247

$           159

June 30,

December 31, 

2014

2013

Common Stock:

Shares outstanding (in millions)

242.6

242.6

Book value per share

$        27.09

$        26.97

Capitalization Ratios:

Common equity

49.0%

50.1%

Preferred stock

1.1%

1.1%

Debt, net of cash

49.9%

48.8%

 

SOURCE Ameren Corporation



RELATED LINKS

http://www.ameren.com