Ameren (NYSE: AEE) Announces Third Quarter 2019 Results
ST. LOUIS, Nov. 8, 2019 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced third quarter 2019 GAAP and core net income attributable to common shareholders of $364 million, or $1.47 per diluted share, compared to third quarter 2018 GAAP net income attributable to common shareholders of $357 million, or $1.45 per diluted share. Excluding the prior year tax-related item reflected in the table below, Ameren recorded third quarter 2018 core (non-GAAP) net income of $370 million, or $1.50 per diluted share.
The decrease in year-over-year third quarter core earnings was primarily due to lower earnings at Ameren Illinois Electric Distribution partially offset by higher earnings at Ameren Transmission. Ameren Illinois Electric Distribution results were lower due to a lower allowed return on equity under formula ratemaking. Increased infrastructure investments drove higher earnings at Ameren Transmission. Ameren Missouri and Ameren Illinois Natural Gas earnings were comparable.
"We continue to execute on all elements of our strategy, which includes significant investment in energy infrastructure and disciplined cost management in each of our business segments. Due to the strong execution of our strategy, we are narrowing our 2019 earnings guidance range to $3.23 to $3.33 per share from our initial 2019 guidance range of $3.15 to $3.35 per share, while increasing the mid-point three cents per share," said Warner L. Baxter, chairman, president and chief executive officer of Ameren Corporation. "Looking ahead, we will remain focused on executing our strategy in order to continue delivering superior value to our customers, the communities we serve and our shareholders."
Ameren recorded GAAP and core net income attributable to common shareholders for the nine months ended Sept. 30, 2019, of $734 million, or $2.97 per diluted share, compared to GAAP net income attributable to common shareholders for the nine months ended Sept. 30, 2018, of $747 million, or $3.04 per diluted share. Excluding the prior year tax-related item reflected in the table below, Ameren recorded core net income for the first nine months ended Sept. 30, 2018, of $760 million, or $3.09 per diluted share.
The decrease in year-over-year nine-month earnings was due to lower earnings at Ameren Missouri partially offset by higher earnings at Ameren's other business segments. Ameren Missouri's earnings reflected lower electric retail sales, which decreased earnings by an estimated $56 million, primarily due to near-normal temperatures in 2019 compared to colder winter and warmer summer temperatures in the year-ago period. In addition, the Callaway Energy Center refueling and maintenance outage increased Ameren Missouri's operations and maintenance expenses, which reduced earnings by $22 million compared to 2018 when there was no such outage. These factors were partially offset by higher energy efficiency performance incentives at Ameren Missouri, which increased earnings by $24 million. Higher earnings at Ameren Transmission reflected increased infrastructure investments. Ameren Illinois Electric Distribution earnings were higher reflecting increased infrastructure and energy efficiency investments that were mostly offset by a lower allowed return on equity. Ameren Illinois Natural Gas earnings also rose reflecting higher delivery service rates and increased infrastructure investments. Finally, the earnings comparison also benefited from a lower consolidated effective income tax rate in 2019.
As reflected in the table below, there was a non-cash charge for a true-up to the revaluation of deferred taxes associated with the federal Tax Cuts and Jobs Act of 2017 (TCJA) resulting primarily from proposed regulations related to bonus depreciation issued in August 2018, which decreased earnings for the third quarter and first nine months of 2018 by $13 million.
(In millions, except per share amounts)
Three Months Ended
Nine Months Ended
Sept. 30, Sept. 30,
2019 2018 2019 2018
GAAP Earnings /
Diluted EPS $
364 $
1.47 $
357 $
1.45 $
734 $
2.97 $
747 $
3.04
Charge for
revaluation of
deferred taxes
from decreased
federal income
tax rate 13 0.05 13 0.05
Less: State
income tax
benefit
Charge, net of
tax benefit 13 0.05 13 0.05
Core Earnings /
Diluted EPS $
364 $
1.47 $
370 $
1.50 $
734 $
2.97 $
760 $
3.09
---
Earnings Guidance
Today, Ameren narrowed its 2019 earnings guidance range to $3.23 to $3.33 per diluted share, compared to the prior range of $3.15 to $3.35 per diluted share. Earnings guidance for 2019 assumes normal temperatures for the last three 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 third quarter 2019 GAAP and core earnings were $300 million, compared to third quarter 2018 GAAP and core earnings of $294 million and $298 million, respectively. Core earnings in 2018 excluded a $4 million non-cash charge for the revaluation of deferred taxes. The year-over-year comparison reflected 2019 energy efficiency performance incentives of $13 million, as well as $6 million due to the comparative impacts of timing differences in 2018 between income tax expense and revenue reductions related to TCJA. These timing differences impact 2019 quarterly earnings comparisons but are not expected to impact the full-year comparison. These favorable factors were mostly offset by lower electric retail sales due primarily to milder mid-summer temperatures compared to the year-ago period, as well as higher property tax expenses.
Ameren Illinois Electric Distribution Segment Results
Ameren Illinois Electric Distribution third quarter 2019 GAAP and core earnings were $32 million, compared to third quarter 2018 GAAP and core earnings of $35 million and $38 million, respectively. Core earnings in 2018 excluded a $3 million non-cash charge for the revaluation of deferred taxes. The year-over-year comparison reflected a lower allowed return on equity due to a lower projected average 30-year U.S. Treasury bond yield in 2019 compared to 2018 partially offset by earnings on increased infrastructure and energy efficiency investments.
Ameren Illinois Natural Gas Segment Results
Ameren Illinois Natural Gas third quarter 2019 GAAP and core losses were $1 million, compared to third quarter 2018, which had no GAAP earnings and core earnings of $1 million. Core earnings in 2018 excluded a $1 million non-cash charge for the revaluation of deferred taxes. The year-over-year comparison was negatively impacted by a change in rate design, which is not expected to impact full-year results. This change in rate design was partially offset by earnings on increased infrastructure investments.
Ameren Transmission Segment Results
Ameren Transmission third quarter 2019 earnings were $53 million, compared to third quarter 2018 earnings of $48 million. The year-over-year improvement reflected earnings on increased infrastructure investments.
Ameren Parent Results (includes items not reported in a business segment)
Ameren Parent results for the third quarter of 2019 reflected a GAAP and core loss of $20 million, compared to a third quarter 2018 GAAP and core loss of $20 million and $15 million, respectively. Core results for 2018 excluded a $5 million non-cash charge for the revaluation of deferred taxes. The year-over-year core loss increased due to timing of income tax expense, which is not expected to impact full-year results.
Analyst Conference Call
Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Friday, Nov. 8, to discuss 2019 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 "Q3 2019 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, 2018, 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, 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 (FERC), a new methodology to
determine the allowed base return on common equity under the
Midcontinent Independent System Operator (MISO) tariff proposed by the
FERC in November 2018, the Notices of Inquiry issued by the FERC in
March 2019, Ameren Missouri's electric regulatory rate review filed with
the Missouri Public Service Commission (MoPSC) in July 2019, a request
for appeal filed with the Missouri Supreme Court by the Missouri Office
of Public Counsel in November 2019 related to Ameren Missouri's
renewable energy standard rate adjustment mechanism, Ameren Missouri's
request for deferral accounting treatment of maintenance expenses
related to scheduled Callaway refueling and maintenance outages filed
with the MoPSC in October 2019, Ameren Illinois' April 2019 annual
electric distribution formula rate update filing, Ameren Illinois' May
2019 annual electric energy-efficiency formula rate update, 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 the 30-year United States Treasury bond yields, and
the related financial commitments;
-- the effect of Missouri Senate Bill 564 on Ameren Missouri, including
customer rate caps pursuant to Ameren Missouri's election to use
plant-in-service accounting;
-- 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 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, energy
storage, 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 Missouri Energy Efficiency Investment Act programs;
-- Ameren Illinois' ability to achieve the performance standards applicable
to its electric distribution business and the FEJA electric customer
energy-efficiency goals and the resulting impact on its allowed return
on equity;
-- 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 the one
Nuclear Regulatory Commission-licensed supplier of Ameren Missouri's
Callaway Energy Center's assemblies;
-- 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 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;
-- the impact of cyberattacks on us or our suppliers, 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;
-- 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 inability of our counterparties to meet their obligations with
respect to contracts, credit agreements, and financial instruments;
-- 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 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 failures of electric generation, transmission, or
distribution equipment or facilities, which could result in
unanticipated liabilities or unplanned outages;
-- the operation of Ameren Missouri's Callaway Energy Center, including
planned and unplanned outages, and decommissioning costs;
-- the impact of current environmental laws and new, more stringent, or
changing requirements, including those related to the effect of New
Source Review and Clean Air Act litigation, carbon dioxide and the
adoption and implementation of the Affordable Clean Energy Rule, other
emissions and discharges, cooling water intake structures, coal
combustion residuals, and energy efficiency, that could limit or
terminate the operation of certain of Ameren Missouri's energy centers,
increase our operating 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 requirements in Missouri
and Illinois and with the zero emission standard in Illinois;
-- Ameren Missouri's ability to acquire wind and other renewable energy
generation facilities and recover its cost of investment and related
return in a timely manner, which is affected by the ability to obtain
all necessary project approvals; the availability of federal production
and investment tax credits related to renewable energy and Ameren
Missouri's ability to use such credits; the cost of wind and solar
generation technologies; and Ameren Missouri's ability to obtain timely
interconnection agreements with MISO or other regional transmission
organizations at an acceptable cost for each facility;
-- labor disputes, work force reductions, changes in future wage and
employee benefits costs, including those resulting from changes in
discount rates, mortality tables, returns on benefit plan assets, and
other assumptions;
-- 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 to protect
sensitive customer information, increases in rates, or negative media
coverage;
-- the impact of adopting new accounting guidance;
-- the effects of strategic initiatives, including mergers, acquisitions,
and divestitures;
-- legal and administrative proceedings; 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 Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Operating Revenues:
Electric $
1,528 $
1,590 $
3,928 $
4,209
Natural gas 131 134 666 663
Total operating revenues 1,659 1,724 4,594 4,872
Operating Expenses:
Fuel 147 216 409 590
Purchased power 148 148 440 453
Natural gas purchased for resale 31 30 236 252
Other operations and maintenance 434 429 1,301 1,299
Depreciation and amortization 248 241 745 713
Taxes other than income taxes 131 127 375 374
Total operating expenses 1,139 1,191 3,506 3,681
Operating Income 520 533 1,088 1,191
Other Income, Net 34 32 99 84
Interest Charges 96 101 290 302
Income Before Income Taxes 458 464 897 973
Income Taxes 92 105 158 221
Net Income 366 359 739 752
Less: Net Income Attributable to
Noncontrolling Interests 2 2 5 5
Net Income Attributable to
Ameren Common Shareholders $
364 $
357 $
734 $
747
---
Earnings per Common Share -
Basic $
1.48 $
1.46 $
2.99 $
3.06
Earnings per Common Share -
Diluted $
1.47 $
1.45 $
2.97 $
3.04
Weighted-average Common Shares
Outstanding - Basic 245.9 244.1 245.5 243.6
Weighted-average Common Shares
Outstanding - Diluted 247.5 246.3 247.0 245.5
---
AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
September 30, December 31,
2019 2018
---
ASSETS
Current Assets:
Cash and cash equivalents $
20 $
16
Accounts receivable -trade (less
allowance for doubtful accounts) 478 463
Unbilled revenue 273 295
Miscellaneous accounts receivable 56 79
Inventories 488 483
Current regulatory assets 74 134
Other current assets 106 63
Total current assets 1,495 1,533
Property, Plant, and Equipment, Net 23,894 22,810
Investments and Other Assets:
Nuclear decommissioning trust fund 798 684
Goodwill 411 411
Regulatory assets 1,168 1,127
Other assets 780 650
Total investments and other assets 3,157 2,872
---
TOTAL ASSETS $
28,546 $
27,215
---
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt $
336 $
580
Short-term debt 544 597
Accounts and wages payable 598 817
Taxes accrued 164 53
Current regulatory liabilities 121 149
Other current liabilities 522 491
Total current liabilities 2,285 2,687
Long-term Debt, Net 8,651 7,859
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and
investment tax credits, net 2,902 2,666
Regulatory liabilities 4,845 4,637
Asset retirement obligations 671 627
Pension and other postretirement
benefits 522 558
Other deferred credits and
liabilities 466 408
Total deferred credits and other
liabilities 9,406 8,896
Ameren Corporation Shareholders' Equity:
Common stock 2 2
Other paid-in capital, principally
premium on common stock 5,673 5,627
Retained earnings 2,408 2,024
Accumulated other comprehensive loss (21) (22)
Total Ameren Corporation
shareholders' equity 8,062 7,631
Noncontrolling Interests 142 142
Total equity 8,204 7,773
---
TOTAL LIABILITIES AND EQUITY $
28,546 $
27,215
---
AMEREN CORPORATION (AEE)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
2019 2018
---
Cash Flows From Operating Activities:
Net income $
739 $
752
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 745 699
Amortization of nuclear fuel 56 71
Amortization of debt issuance costs and premium/
discounts 14 16
Deferred income taxes and investment tax
credits, net 144 212
Allowance for equity funds used during
construction (20) (25)
Stock-based compensation costs 15 15
Other (11) 21
Changes in assets and liabilities (14) (75)
Net cash provided by operating activities 1,668 1,686
---
Cash Flows From Investing Activities:
Capital expenditures (1,761) (1,689)
Nuclear fuel expenditures (26) (30)
Purchases of securities - nuclear
decommissioning trust fund (192) (172)
Sales and maturities of securities - nuclear
decommissioning trust fund 184 159
Purchase of bonds (207)
Proceeds from sale of remarketed bonds 207
Other (3) 13
Net cash used in investing activities (1,798) (1,719)
---
Cash Flows From Financing Activities:
Dividends on common stock (350) (334)
Dividends paid to noncontrolling interest
holders (5) (5)
Short-term debt, net (53) 36
Maturities of long-term debt (329) (522)
Issuances of long-term debt 900 853
Issuances of common stock 54 56
Employee payroll taxes related to stock-based
compensation (29) (19)
Debt issuance costs (10) (9)
Other - 1
Net cash provided by financing activities 178 57
Net change in cash, cash equivalents, and
restricted cash 48 24
Cash, cash equivalents, and restricted cash at
beginning of year 107 68
Cash, cash equivalents, and restricted cash at
end of period $
155 $
92
---
AMEREN CORPORATION (AEE)
OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Electric Sales -kilowatthours (in millions):
Ameren Missouri
Residential 3,833 3,875 10,359 11,001
Commercial 4,022 4,100 10,997 11,352
Industrial 1,167 1,211 3,259 3,401
Street lighting and public authority 23 24 72 78
Ameren Missouri retail load subtotal 9,045 9,210 24,687 25,832
Off-system 1,275 2,413 3,830 7,278
Ameren Missouri total 10,320 11,623 28,517 33,110
Ameren Illinois Electric Distribution
Residential 3,486 3,453 9,000 9,383
Commercial 3,426 3,454 9,302 9,568
Industrial 3,034 3,035 8,799 8,770
Street lighting and public authority 124 129 377 388
Ameren Illinois Electric Distribution
total 10,070 10,071 27,478 28,109
Eliminate affiliate sales (35) (126) (84) (288)
Ameren Total 20,355 21,568 55,911 60,931
---
Electric Revenues (in millions):
Ameren Missouri
Residential $
489 $
508 $
1,134 $
1,272
Commercial 394 417 943 1,033
Industrial 94 101 226 249
Other, including street lighting and
public authority 32 13 102 25
Ameren Missouri retail load subtotal $
1,009 $
1,039 $
2,405 $
2,579
Off-system 31 72 112 203
Ameren Missouri total $
1,040 $
1,111 $
2,517 $
2,782
Ameren Illinois Electric Distribution
Residential $
224 $
223 $
640 $
663
Commercial 123 131 370 381
Industrial 27 28 94 96
Other, including street lighting and
public authority 15 10 31 39
Ameren Illinois Electric Distribution
total $
389 $
392 $
1,135 $
1,179
Ameren Transmission
Ameren Illinois Transmission(a) $
81 $
71 $
217 $
195
ATXI 47 42 134 125
Ameren Transmission total $
128 $
113 $
351 $
320
Other and intersegment
eliminations(a) (29) (26) (75) (72)
Ameren Total $
1,528 $
1,590 $
3,928 $
4,209
---
(a) Includes $18 million, $15
million, $47 million and $41
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 Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Gas Sales -dekatherms (in millions):
Ameren Missouri 3 3 15 15
Ameren Illinois Natural
Gas 25 25 128 127
Ameren Total 28 28 143 142
---
Gas Revenues (in millions):
Ameren Missouri $
19 $
18 $
98 $
94
Ameren Illinois Natural
Gas 112 116 568 569
Ameren Total $
131 $
134 $
666 $
663
---
September 30, December 31,
2019 2018
Common Stock:
Shares outstanding (in millions) 246.0 244.5
Book value per share $
32.77 $
31.21
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SOURCE Ameren Corporation
