Ameren (NYSE: AEE) Announces Second Quarter 2018 Results
ST. LOUIS, Aug. 3, 2018 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced second quarter 2018 net income attributable to common shareholders of $239 million, or $0.97 per diluted share, compared to second quarter 2017 net income attributable to common shareholders of $193 million, or $0.79 per diluted share.
The increase in year-over-year second quarter earnings reflected higher Ameren Missouri electric retail sales primarily due to extremely warm early summer temperatures compared to near-normal temperatures in the year-ago period. The comparison also benefited from earnings on increased infrastructure investments made at Ameren Transmission, Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas. These favorable factors were partially offset by increased Ameren Missouri other operations and maintenance expenses, primarily reflecting higher-than-normal scheduled non-nuclear plant outage costs. While Ameren's effective income tax rate was lower in 2018 compared to 2017 reflecting federal tax reform, this benefit was offset by a reduction in revenues reflecting the pass through of those savings to customers.
"Our team continues to successfully execute all elements of our strategy," said Warner L. Baxter, chairman, president and chief executive officer of Ameren Corporation. "Further, we have raised our 2018 guidance to a range of $3.15 to $3.35 per share, up from our prior range of $2.95 to $3.15 per share, due primarily to the benefit of extremely warm weather this quarter."
"In addition, we are very pleased Missouri has enacted forward-thinking electric grid modernization legislation that will deliver significant benefits to our customers and the state," Baxter said. "Beginning this month, rates for all customers were reduced 6 percent to pass on savings from the lower federal income tax rate. Further, this legislation supports Ameren Missouri's ability to invest approximately $1 billion of incremental capital over the next five years to modernize Missouri's electric grid and create significant jobs."
Ameren recorded net income attributable to common shareholders for the six months ended June 30, 2018, of $390 million, or $1.59 per diluted share, compared to net income attributable to common shareholders for the six months ended June 30, 2017, of $295 million, or $1.21 per diluted share.
The increase in year-over-year six-month earnings reflected higher Ameren Missouri electric retail sales, primarily due to colder winter and extremely warm early summer temperatures. The comparison also benefited from higher Ameren Missouri electric service rates, effective April 1, 2017, as well as earnings on increased infrastructure investments made at Ameren Transmission, Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas. These favorable factors were partially offset by increased Ameren Missouri other operations and maintenance expenses, primarily reflecting higher-than-normal scheduled non-nuclear plant outage costs. While Ameren's effective income tax rate was lower in 2018 compared to 2017 reflecting federal tax reform, this benefit was offset by a reduction in revenues reflecting the pass through of those savings to customers.
Earnings Guidance
Ameren now expects its 2018 earnings to be in a range of $3.15 to $3.35 per diluted share, an increase from its prior range of $2.95 to $3.15 per diluted share. This updated guidance reflects an estimated 21 cents per share increase in earnings related to both colder- and warmer-than-normal temperatures over the first half of the year, as well as solid execution of Ameren's strategy.
Earnings guidance for 2018 assumes normal temperatures for the last six months of this year and is subject to the effects of, among other things: 30-year U.S. Treasury bond yields; regulatory, judicial and legislative actions; energy center and energy distribution 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 second quarter 2018 earnings were $168 million, compared to second quarter 2017 earnings of $120 million. The increase in year-over-year earnings reflected higher electric retail sales primarily due to extremely warm early summer temperatures compared to near-normal temperatures in the year-ago period. This favorable factor was partially offset by increased other operations and maintenance expenses, primarily reflecting higher-than-normal scheduled non-nuclear plant outage costs.
Ameren Illinois Electric Distribution Segment Results
Ameren Illinois Electric Distribution second quarter earnings were $33 million for both 2018 and 2017.
Ameren Illinois Natural Gas Segment Results
Ameren Illinois Natural Gas second quarter 2018 earnings were $7 million, compared to second quarter 2017 earnings of $5 million. The year-over-year improvement reflected increased earnings on infrastructure investments.
Ameren Transmission Segment Results
Ameren Transmission second quarter 2018 earnings were $36 million, compared to second quarter 2017 earnings of $34 million. The year-over-year improvement reflected increased earnings on infrastructure investments.
Other Results
Other results, which includes items not reported in a business segment, decreased $6 million for the second quarter of 2018, compared to the second quarter of 2017. The decrease was due, in part, to higher charitable donations.
Analyst Conference Call
Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Friday, Aug. 3, to discuss 2018 earnings, earnings guidance and other matters. Investors, the news media and the public may listen to a live broadcast of the call at AmerenInvestors.com by clicking on "Webcast" under "Q2 2018 Earnings Conference Call," where an accompanying slide presentation will also be available. The conference call and presentation will be archived for one year in the "Investor News & Events" section of the website under "Events and Presentations."
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 transmission and distribution service and natural gas distribution service. Ameren Missouri provides electric generation, transmission and distribution service, as well as natural gas distribution service. Ameren Transmission Company of Illinois develops, owns and operates rate-regulated regional electric transmission projects. For more information, visit Ameren.com, or follow us on Twitter at @AmerenCorp, Facebook.com/AmerenCorp, or LinkedIn/company/Ameren.
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 Annual Report on Form 10-K for the year ended December 31, 2017, 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 the effects of
the Tax Cut and Jobs Act of 2017 (TCJA) and any changes in regulatory
policies and ratemaking determinations, such as those that may result
from the complaint case filed in February 2015 with the Federal Energy
Regulatory Commission seeking a reduction in the allowed base return on
common equity under the Midcontinent Independent System Operator tariff,
Ameren Missouri's proposed renewable energy standard rate adjustment
mechanism (RESRAM) and requested certificate of convenience and
necessity for a wind generation facility filed with the Missouri Public
Service Commission (MoPSC) in June 2018; Ameren Missouri's proposed
customer energy-efficiency plan under the Missouri Energy Efficiency
Investment Act (MEEIA) filed with the MoPSC in June 2018; Ameren
Illinois' natural gas regulatory rate review filed with the Illinois
Commerce Commission in January 2018, Ameren Illinois' April 2018 annual
electric distribution formula rate update filing, and future regulatory,
judicial, or legislative actions that change regulatory recovery
mechanisms;
-- the effect of Ameren Illinois' participation in performance-based
formula ratemaking frameworks under the Illinois Energy Infrastructure
Modernization Act and the Illinois Future Energy Jobs Act (FEJA),
including the direct relationship between Ameren Illinois' return on
common equity and 30-year United States Treasury bond yields, and the
related financial commitments;
-- the effect on Ameren Missouri of the implementation of Missouri Senate
Bill 564, including Ameren Missouri's expected election to use
plant-in-service accounting and the resulting customer rates caps;
-- the effects of changes in federal, state, or local laws and other
governmental actions, including monetary, fiscal, and energy policies;
-- the effects of changes in federal, state, or local tax laws,
regulations, interpretations, or rates, amendments or technical
corrections to the TCJA, and any challenges to the tax positions we have
taken;
-- the effects on demand for our services resulting from technological
advances, including advances in customer energy efficiency and private
generation sources, which generate electricity at the site of
consumption and are becoming more cost-competitive;
-- the effectiveness of Ameren Missouri's customer energy-efficiency
programs and the related revenues and performance incentives earned
under its MEEIA programs, including Ameren Missouri's proposed customer
energy-efficiency plan filed with the MoPSC in June 2018;
-- Ameren Illinois' ability to achieve the FEJA electric customer
energy-efficiency goals and the resulting impact on its allowed return
on program investments;
-- our ability to align overall spending, both operating and capital, with
frameworks established by our regulators and to recover these costs in a
timely manner in our attempt to earn our allowed returns on equity;
-- the cost and availability of fuel, such as ultra-low-sulfur coal,
natural gas, and enriched uranium used to produce electricity; the cost
and availability of purchased power, zero emission credits, renewable
energy credits, and natural gas for distribution; and the level and
volatility of future market prices for such commodities and credits,
including our ability to recover the costs for such commodities and
credits and our customers' tolerance for any related price increases;
-- disruptions in the delivery of fuel, failure of our fuel suppliers to
provide adequate quantities or quality of fuel, or lack of adequate
inventories of fuel, including nuclear fuel assemblies from Westinghouse
Electric Company, LLC, the Callaway Energy Center's only Nuclear
Regulatory Commission-licensed supplier of such assemblies;
-- the effectiveness of our risk management strategies and our use of
financial and derivative instruments;
-- the ability to obtain sufficient insurance, including insurance for
Ameren Missouri's Callaway Energy Center, or, in the absence of
insurance, the ability to recover uninsured losses from our customers;
-- business and economic conditions, including their impact on interest
rates, collection of our receivable balances, and demand for our
products;
-- disruptions of the capital markets, deterioration in our credit metrics,
including as a result of the implementation of the TCJA, or other events
that may have an adverse effect on the cost or availability of capital,
including short-term credit and liquidity;
-- the actions of credit rating agencies and the effects of such actions;
-- the impact of adopting new accounting guidance;
-- the impact of weather conditions and other natural phenomena on us and
our customers, including the impact of system outages;
-- the construction, installation, performance, and cost recovery of
generation, transmission, and distribution assets;
-- the effects of breakdowns or failures of equipment in the operation of
natural gas transmission and distribution systems and storage
facilities, such as leaks, explosions, and mechanical problems, and
compliance with natural gas safety regulations;
-- the effects of our increasing investment in electric transmission
projects, our ability to obtain all necessary project approvals, and the
uncertainty as to whether we will achieve our expected returns in a
timely manner;
-- 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;
-- the impact of current environmental regulations and new, more stringent,
or changing requirements, including those related to carbon dioxide and
the related proposed repeal and replacement of the Clean Power Plan,
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 Ameren
Missouri's 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 negative opinions of us or our utility services that our
customers, legislators, or regulators may have or develop, which could
result from a variety of factors, including failures in system
reliability, failure to implement our investment plans or protect
sensitive customer information, increases in rates, or negative media
coverage;
-- the impact of complying with renewable energy portfolio requirements in
Missouri and Illinois and with the zero emission standard in Illinois;
-- the effects of planned investment in renewable generation projects at
Ameren Missouri, the ability to obtain all necessary project approvals,
and the implementation of a proposed RESRAM;
-- labor disputes, work force reductions, future wage and employee benefits
costs, including changes in discount rates, mortality tables, returns on
benefit plan assets, and other assumptions;
-- 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;
-- legal and administrative proceedings;
-- the impact of cyberattacks, which could, among other things, result in
the loss of operational control of energy centers and electric and
natural gas transmission and distribution systems and/or the loss of
data, such as customer, employee, financial, and operating system
information; and
-- acts of sabotage, war, terrorism, or other intentionally disruptive
acts.
New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. 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
(Unaudited, in millions, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
Operating Revenues:
Electric $1,396 $1,382 $2,619 $2,589
Natural gas 167 155 529 463
--- --- --- ---
Total operating revenues 1,563 1,537 3,148 3,052
----- ----- ----- -----
Operating Expenses:
Fuel 186 189 374 395
Purchased power 142 150 305 330
Natural gas purchased for resale 51 41 222 171
Other operations and maintenance 439 431 870 849
Depreciation and amortization 238 222 472 443
Taxes other than income taxes 122 117 247 235
--- --- --- ---
Total operating expenses 1,178 1,150 2,490 2,423
----- ----- ----- -----
Operating Income 385 387 658 629
Other Income, Net 29 20 52 38
Interest Charges 100 99 201 198
--- --- --- ---
Income Before Income Taxes 314 308 509 469
Income Taxes 74 114 116 171
--- --- --- ---
Net Income 240 194 393 298
Less: Net Income Attributable to
Noncontrolling Interests 1 1 3 3
--- --- --- ---
Net Income Attributable to
Ameren Common Shareholders $239 $193 $390 $295
--------------------------- ---- ---- ---- ----
Earnings per Common Share -
Basic $0.98 $0.79 $1.60 $1.21
Earnings per Common Share -
Diluted $0.97 $0.79 $1.59 $1.21
Weighted-average Common Shares
Outstanding - Basic 243.7 242.6 243.3 242.6
Weighted-average Common Shares
Outstanding - Diluted 245.8 243.5 245.1 243.7
------------------------------ ----- ----- ----- -----
AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
June 30, 2018 December 31,
2017
----
ASSETS
Current Assets:
Cash and cash equivalents $29 $10
Accounts receivable -trade (less
allowance for doubtful accounts) 560 445
Unbilled revenue 371 323
Miscellaneous accounts receivable 74 70
Inventories 475 522
Current regulatory assets 104 144
Other current assets 72 98
--- ---
Total current assets 1,685 1,612
----- -----
Property, Plant, and Equipment, Net 21,998 21,466
Investments and Other Assets:
Nuclear decommissioning trust fund 714 704
Goodwill 411 411
Regulatory assets 1,205 1,230
Other assets 626 522
--- ---
Total investments and other assets 2,956 2,867
---------------------------------- ----- -----
TOTAL ASSETS $26,639 $25,945
------------ ------- -------
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt $847 $841
Short-term debt 506 484
Accounts and wages payable 565 902
Taxes accrued 139 52
Interest accrued 109 99
Customer deposits 114 108
Current regulatory liabilities 133 128
Other current liabilities 298 326
--- ---
Total current liabilities 2,711 2,940
----- -----
Long-term Debt, Net 7,613 7,094
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes,
net 2,584 2,506
Accumulated deferred investment tax
credits 46 49
Regulatory liabilities 4,540 4,387
Asset retirement obligations 641 638
Pension and other postretirement
benefits 545 545
Other deferred credits and
liabilities 431 460
--- ---
Total deferred credits and other
liabilities 8,787 8,585
----- -----
Ameren Corporation Shareholders' Equity:
Common stock 2 2
Other paid-in capital, principally
premium on common stock 5,576 5,540
Retained earnings 1,827 1,660
Accumulated other comprehensive loss (19) (18)
--- ---
Total Ameren Corporation
shareholders' equity 7,386 7,184
Noncontrolling Interests 142 142
--- ---
Total equity 7,528 7,326
------------ ----- -----
TOTAL LIABILITIES AND EQUITY $26,639 $25,945
---------------------------- ------- -------
AMEREN CORPORATION (AEE)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Six Months Ended June 30,
2018 2017
---- ----
Cash Flows From Operating Activities:
Net income $393 $298
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 463 433
Amortization of nuclear fuel 48 48
Amortization of debt issuance costs and premium/
discounts 11 11
Deferred income taxes and investment tax
credits, net 81 175
Allowance for equity funds used during
construction (14) (10)
Stock-based compensation costs 10 8
Other 11 (5)
Changes in assets and liabilities (183) (95)
---- ---
Net cash provided by operating activities 820 863
----------------------------------------- --- ---
Cash Flows From Investing Activities:
Capital expenditures (1,112) (998)
Nuclear fuel expenditures (16) (50)
Purchases of securities - nuclear
decommissioning trust fund (129) (161)
Sales and maturities of securities - nuclear
decommissioning trust fund 122 152
Other 6 (2)
--- ---
Net cash used in investing activities (1,129) (1,059)
------------------------------------- ------ ------
Cash Flows From Financing Activities:
Dividends on common stock (223) (214)
Dividends paid to noncontrolling interest
holders (3) (3)
Short-term debt, net 21 334
Maturities of long-term debt (323) (425)
Issuances of long-term debt 853 549
Issuances of common stock 40 -
Repurchases of common stock for stock-based
compensation - (24)
Employee payroll taxes related to stock-based
compensation (19) (15)
Debt issuance costs (9) (4)
Other - (1)
--- ---
Net cash provided by financing activities 337 197
Net change in cash, cash equivalents, and
restricted cash 28 1
Cash, cash equivalents, and restricted cash at
beginning of year 68 52
--- ---
Cash, cash equivalents, and restricted cash at
end of period $96 $53
---------------------------------------------- --- ---
AMEREN CORPORATION (AEE)
OPERATING STATISTICS
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Electric Sales - kilowatthours (in millions):
Ameren Missouri
Residential 3,346 2,737 7,126 5,922
Commercial 3,724 3,556 7,252 6,888
Industrial 1,137 1,144 2,190 2,171
Street lighting and public authority 25 24 54 57
Ameren Missouri retail load subtotal 8,232 7,461 16,622 15,038
Off-system 2,316 3,471 4,865 6,659
----- ----- ----- -----
Ameren Missouri total 10,548 10,932 21,487 21,697
------ ------ ------ ------
Ameren Illinois Electric Distribution
Residential 2,859 2,416 5,930 5,133
Commercial 3,137 2,934 6,114 5,851
Industrial 2,922 2,811 5,728 5,566
Street lighting and public authority 113 125 259 257
--- --- --- ---
Ameren Illinois Electric Distribution
total 9,031 8,286 18,031 16,807
----- ----- ------ ------
Eliminate affiliate sales (84) (97) (162) (265)
--- --- ---- ----
Ameren Total 19,495 19,121 39,356 38,239
------------ ------ ------ ------ ------
Electric Revenues (in millions):
Ameren Missouri
Residential $432 $358 $764 $644
Commercial 364 332 616 562
Industrial 87 84 148 142
Other, including street lighting and
public authority (15) 11 12 46
Ameren Missouri retail load subtotal $868 $785 $1,540 $1,394
Off-system 62 127 131 265
--- --- --- ---
Ameren Missouri total $930 $912 $1,671 $1,659
---- ---- ------ ------
Ameren Illinois Electric Distribution
Residential $221 $208 $440 $427
Commercial 126 129 250 262
Industrial 33 28 68 56
Other, including street lighting and
public authority 7 24 29 29
--- --- ---
Ameren Illinois Electric Distribution
total $387 $389 $787 $774
---- ---- ---- ----
Ameren Transmission
Ameren Illinois Transmission(a) $62 $65 $124 $125
ATXI 41 40 83 82
--- --- --- ---
Ameren Transmission total $103 $105 $207 $207
---- ---- ---- ----
Other and intersegment
eliminations(a) (24) (24) (46) (51)
--- --- --- ---
Ameren Total $1,396 $1,382 $2,619 $2,589
------------ ------ ------ ------ ------
(a) Includes $13 million, $12
million, $26 million and $18
million, respectively, of
electric operating revenues
from transmission services
provided to the Ameren Illinois
Electric Distribution segment.
AMEREN CORPORATION (AEE)
OPERATING STATISTICS
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Gas Sales - dekatherms (in millions):
Ameren Missouri 3 3 12 9
Ameren Illinois Natural
Gas 34 29 102 87
--- --- --- ---
Ameren Total 37 32 114 96
------------ --- --- --- ---
Gas Revenues (in millions):
Ameren Missouri $25 $22 $76 $66
Ameren Illinois Natural
Gas 142 134 453 398
Eliminate affiliate
revenues - (1) - (1)
--- --- --- ---
Ameren Total $167 $155 $529 $463
------------ ---- ---- ---- ----
June 30, December 31,
2018 2017
---- ----
Common Stock:
Shares outstanding (in millions) 244.0 242.6
Book value per share $30.27 $29.61
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SOURCE Ameren Corporation
