10-KPeriod: FY2009

AMEREN CORP Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:AEE

Summary

Ameren Corporation's 2009 10-K filing indicates a company navigating a challenging economic environment. While net income remained relatively stable compared to 2008, earnings per share saw a slight decline due to factors like lower sales volumes in regulated businesses, reduced margins in merchant generation, and higher financing costs. The company focused on improving its liquidity position by extending credit facilities and reducing reliance on borrowings. Ameren's regulated utilities are actively engaged in rate cases with state regulators to recover significant investments in infrastructure and to address rising costs, aiming to achieve fair returns on invested capital. The company's financial health is underpinned by its regulated utility segments, which provide a predictable source of cash flow. However, the merchant generation segment continues to be subject to market volatility. Looking ahead, Ameren anticipates significant capital expenditures for environmental compliance, particularly for retrofitting coal-fired power plants, and ongoing investments in infrastructure reliability. The company's outlook is also influenced by evolving environmental regulations, including those related to greenhouse gas emissions, which could necessitate further capital investments and potentially impact operating costs.

Financial Highlights

47 data points
Beta

Revenue

$7.13B

Net Income

$612.00M

8.6% Net Margin

EPS (Diluted)

$2.78

Total Assets

$23.70B

Cash & Equivalents

$622.00M

Free Cash Flow

$257.00M

Financial Statements
Beta
Revenue$7.13B
Operating Expenses$5.72B
Operating Income$1.42B
Interest Expense$508.00M
Net Income$612.00M
EPS (Basic)$2.78
Shares Outstanding (Basic)220.40M

Key Highlights

  • 1Ameren reported net income of $612 million, or $2.78 per share, for 2009, a slight decrease from $605 million, or $2.88 per share, in 2008.
  • 2The company's regulated utilities are seeking rate increases to recover investments in infrastructure and higher financing costs, with rate cases pending in Illinois and Missouri.
  • 3Liquidity was strengthened in 2009, with available liquidity of approximately $1.9 billion at year-end, an increase from $1.3 billion at the end of 2008.
  • 4Capital expenditures in 2009 totaled $1.7 billion, a reduction from $1.9 billion in 2008, reflecting efforts to defer or reduce spending due to economic conditions.
  • 5Significant capital expenditures are planned for 2010-2014, including up to $8.1 billion for environmental compliance and infrastructure upgrades.
  • 6Ameren continues to monitor and adapt to potential impacts from future environmental regulations, particularly those concerning greenhouse gas emissions.
  • 7The Taum Sauk pumped-storage hydroelectric plant rebuild is nearing completion, with operations expected to resume in Q2 2010, contributing to increased margins.

Frequently Asked Questions

Ameren's 2009 financial performance was influenced by several factors, including milder weather conditions and a general economic slowdown which impacted sales volumes in its regulated businesses. The merchant generation segment faced reduced margins due to lower market prices. The company also made significant investments in infrastructure and faced higher financing costs. Rate cases in Illinois and Missouri were pursued to help recover these costs and investments.

Ameren focused on strengthening its liquidity in 2008 and 2009. This included replacing and extending its credit facilities, reducing reliance on borrowings from these facilities, increasing cash balances, and improving the equity content of its capitalization. The company also reduced planned spending, headcount, and capital investments to mitigate the impact of the weak economy and lower power prices.

Ameren plans significant capital expenditures between 2010 and 2014, estimated at $6.3 billion to $8.1 billion. These expenditures will be directed towards complying with environmental regulations (e.g., retrofitting coal-fired power plants with pollution control equipment), investing in electric and natural gas utility infrastructure to improve reliability, and upgrading power generation facilities. UE alone expects to spend up to $4.2 billion on infrastructure and environmental compliance.

Ameren anticipates increased capital expenditures and operating costs due to evolving environmental regulations, including potential federal and state legislation to limit greenhouse gas emissions. While the exact impact is uncertain, these regulations could lead to higher costs, necessitate the closure of some coal-fired facilities, or result in asset impairments. The company is monitoring legislative developments closely and is already investing in pollution control equipment to comply with existing regulations.

Ameren's regulated utilities, UE, CIPS, CILCO, and IP, are focused on improving their earnings to achieve fair returns on their investments, which have historically been below authorized levels due to regulatory lag. They are actively pursuing rate cases in Illinois and Missouri to recover investments in infrastructure, higher financing costs, and increasing fuel costs. The outcomes of these rate cases and the regulatory lag involved in getting new rates approved are critical to their financial performance.