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Ameren (NYSE: AEE) Announces Second Quarter 2018 Results

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Ameren (NYSE:AEE) Announces Second Quarter 2018 Results

- Second Quarter Diluted Earnings Per Share were $0.97 in 2018 vs. $0.79 in 2017

- Guidance Range for 2018 Diluted EPS Raised to $3.15 to $3.35 from $2.95 to $3.15

PR Newswire

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.

Ameren Logo (PRNewsfoto/Ameren Corporation)

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


 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/ameren-nyse-aee-announces-second-quarter-2018-results-300691688.html

SOURCE Ameren Corporation

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