01—Abstract
Summary
Summary of the 10-K filed February 24, 2011. Cited figures are marked; the original filing is the authoritative source.
Ameren Corporation's 2010 10-K filing reveals a year of operational resilience and strategic restructuring.
Despite facing lower wholesale power prices and increased fuel costs, the company reported a net income of $139 milliona ($0.58 per share), a decrease from $612 million ($2.78 per share) in 2009, largely due to a significant $522 million non-cash goodwill and asset impairment charge related to its Merchant Generation business. This impairment reflects the impact of sustained low power prices and potential environmental regulations. The company successfully returned its rebuilt Taum Sauk facility to service, made progress on environmental control installations, and simplified its corporate structure by merging its Illinois utilities.
Ameren's regulated utility segments, Ameren Missouri and Ameren Illinois, saw rate increases approved, which helped offset some of the challenges. Looking ahead, Ameren anticipates significant capital expenditures for environmental compliance and infrastructure upgrades, projecting between $6.4 billionb and $8.2 billion from 2011-2015, with a continued focus on regulatory outcomes and cost management to improve earned returns.
02—Key points
Key Highlights
- Net income decreased to $139 million ($0.58/share) in 2010 from $612 million ($2.78/share) in 2009, primarily due to a $522 million goodwill and asset impairment charge in the Merchant Generation segment.
- Ameren Missouri (UE) received rate increases of approximately $230 million annually for electric service and $9 million for natural gas service, and filed for a $263 million electric rate increase.
- Ameren Illinois (AIC) received a $40 million annual revenue increase for electric and natural gas delivery services and filed for an additional $111 million increase.
- The company completed a two-step corporate reorganization, merging its Illinois utilities into Ameren Illinois Company (AIC) and transferring AERG to Resources Company.
- Ameren announced plans for significant transmission infrastructure investment through its subsidiary ATX, with projected investments of $1.3 billion through 2021.
- Projected capital expenditures for 2011-2015 are between $6.4 billion and $8.2 billion, with significant investments in environmental compliance and infrastructure upgrades.
- Ameren maintained strong liquidity, with approximately $1.9 billion available at year-end 2010, similar to the previous year.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 24, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $7.64B$7.13B | +7.0% |
| Operating Expenses | $6.72B$5.72B | +17.5% |
| Operating Income | $916.00M$1.42B | −35.3% |
| Interest Expense | $497.00M$508.00M | −2.2% |
| Net Income | $139.00M$612.00M | −77.3% |
| EPS (Basic) | $0.58$2.78 | −79.1% |
| Shares Outstanding (Basic) | 238.80M220.40M | +8.3% |
05—Questions
Frequently Asked Questions
What was the primary driver for the significant decrease in net income in 2010?
The primary driver for the decrease in net income from $612 million in 2009 to $139 million in 2010 was a non-cash goodwill and other asset impairment charge of $522 million recorded in the Merchant Generation segment. This impairment was due to a sustained decline in market prices for electricity and potential impacts from more stringent environmental regulations.
What are Ameren's major capital expenditure plans for the next five years?
Ameren projects capital expenditures between $6.4 billion and $8.2 billion from 2011 through 2015. These investments are primarily directed towards its rate-regulated utilities for environmental compliance projects (like installing scrubbers), and for maintaining and expanding electric and natural gas transmission and distribution infrastructure to improve reliability.
How did regulatory actions impact Ameren's financial performance in 2010?
Regulatory actions were generally positive for Ameren's regulated utility segments. Ameren Missouri (UE) received rate increases totaling $230 million for electric service and $9 million for natural gas service, and has pending requests for further increases. Ameren Illinois (AIC) received a $40 million annual revenue increase and has filed for an additional $111 million. These rate adjustments are crucial for recovering infrastructure investments and operating costs.
What is the status of Ameren's environmental compliance initiatives?
Ameren is actively addressing evolving environmental regulations, particularly those concerning emissions from its coal-fired power plants. The company has significant capital expenditure plans for pollution control equipment, including scrubbers, to comply with existing and proposed regulations such as CAIR, CATR, and MACT standards. These investments are substantial and could impact future operating costs and potentially generation facility operations if regulations become overly burdensome.
06—Continue