10-KPeriod: FY2012

AMEREN CORP Annual Report, Year Ended Dec 31, 2012

Filed March 1, 2013For Securities:AEE

Summary

Ameren Corporation's 2012 10-K filing reveals a significant strategic shift with the announced intention to exit its Merchant Generation business. This decision, driven by the segment's volatile earnings, projected financial conditions, and debt maturities, marks a refocusing on rate-regulated utility operations. The company incurred a substantial net loss for the year, largely due to impairment charges related to the Merchant Generation assets and declining power prices. Despite the challenges in the merchant segment, Ameren's rate-regulated utilities in Missouri and Illinois are focused on improving regulatory frameworks and making investments in infrastructure. Ameren Missouri received a significant rate increase for electric service, effective January 2013. Ameren Illinois is engaged in ongoing appeals regarding the implementation of its performance-based ratemaking framework under the IEIMA and filed a request for a natural gas rate increase. The company also continues to invest in electric transmission projects, highlighting growth opportunities in this regulated area.

Financial Highlights

48 data points
Beta

Revenue

$5.78B

Net Income

-$974.00M

-16.8% Net Margin

EPS (Diluted)

$-4.01

Total Assets

$22.23B

Cash & Equivalents

$209.00M

Free Cash Flow

$627.00M

Financial Statements
Beta
Revenue$5.78B
Operating Expenses$4.59B
Operating Income$1.19B
Interest Expense$392.00M
Net Income-$974.00M
EPS (Basic)$-4.01
EPS (Diluted)$-4.01
Shares Outstanding (Basic)242.60M
Shares Outstanding (Diluted)243.00M

Key Highlights

  • 1Ameren announced its intention to exit the Merchant Generation business due to financial conditions and strategic misalignment.
  • 2The company reported a net loss of $974 million for 2012, primarily due to $2.578 billion in impairment and other charges related to the Merchant Generation segment.
  • 3Ameren Missouri received a $260 million annual revenue increase for electric service, effective January 2, 2013, from the MoPSC.
  • 4Ameren Illinois is appealing ICC orders related to its performance-based formula ratemaking under IEIMA, citing incorrect implementation.
  • 5Capital expenditures are projected between $7.4 billion and $9.5 billion from 2013-2017, primarily for rate-regulated utilities and transmission investments.
  • 6The company continues to invest in FERC-regulated electric transmission projects, with approximately $2.2 billion planned over the next five years.

Frequently Asked Questions

Ameren has determined that it intends to, and it is probable that it will, exit its Merchant Generation business before the end of the previously estimated useful lives of that business's long-lived assets. This decision stems from the segment's volatile earnings, projected financial conditions, and upcoming debt maturities. The company is planning to reduce its reliance on Ameren's financial and shared services support for this segment and may explore sale or restructuring options.

The primary driver of the net loss of $974 million in 2012 was the significant non-cash long-lived asset impairment charge of $1.95 billion recorded in the fourth quarter of 2012 related to the Merchant Generation segment's energy centers. This was a result of the decision to exit the business, coupled with a sharp decline in market power prices earlier in the year and lower generation volumes.

For Ameren Missouri, the MoPSC approved a $260 million annual revenue increase for electric service, effective January 2, 2013, and also approved energy efficiency programs and a storm restoration cost tracking mechanism. Ameren Illinois is actively involved in appealing ICC orders regarding its performance-based formula ratemaking under the IEIMA, citing implementation concerns, and has filed for a $50 million natural gas delivery service revenue increase.

Ameren projects cumulative capital expenditures between $7.4 billion and $9.5 billion from 2013 through 2017. The majority of this spending is allocated to its rate-regulated utilities, with significant investments planned for electric and natural gas infrastructure modernization, and approximately $1.2 billion dedicated to ATXI for MISO-approved regional transmission projects.