10-QPeriod: Q3 FY2003

AMEREN CORP Quarterly Report for Q3 Ended Sep 30, 2003

Filed November 14, 2003For Securities:AEE

Summary

Ameren Corporation (AEE) reported a net income of $275 million for the third quarter of 2003, a significant increase from $240 million in the same period last year. This growth was primarily driven by the acquisition of CILCORP, favorable interchange margins due to improved power prices, and lower operating expenses from a voluntary retirement program and reduced maintenance costs. The company also recorded a $31 million after-tax gain from a coal contract settlement. For the first nine months of 2003, net income rose to $486 million from $414 million in the prior year, boosted by the CILCORP acquisition, the coal contract settlement, and a gain from adopting SFAS 143. Ameren's balance sheet shows total assets increasing to $13.5 billion from $11.5 billion at the end of 2002, largely due to property and plant additions and the inclusion of goodwill from acquisitions. Long-term debt also increased, reflecting financing for acquisitions. The company's liquidity remained stable, with cash and cash equivalents at $100 million at the end of September 2003. Key operational highlights include the successful integration of CILCORP and the ongoing transfer of UE's Illinois utility operations to CIPS. The company is also navigating regulatory changes, including the FERC's proposed Standard Market Design and its impact on regional transmission organizations.

Key Highlights

  • 1Third-quarter net income increased to $275 million ($1.70 per share) from $240 million ($1.64 per share) in Q3 2002.
  • 2Nine-month net income grew to $486 million ($3.02 per share) from $414 million ($2.88 per share) in the same period last year.
  • 3The acquisition of CILCORP, completed in January 2003, significantly contributed to revenue and income growth.
  • 4A $31 million after-tax gain was recorded in Q3 2003 from the settlement of a coal contract dispute.
  • 5Total assets grew to $13.5 billion by September 30, 2003, up from $11.5 billion at the end of 2002.
  • 6Long-term debt increased, primarily due to financing activities related to the CILCORP acquisition.

Frequently Asked Questions

The primary drivers for the increased profitability were the acquisition of CILCORP, favorable interchange margins driven by higher power prices and improved generation availability, and lower operating expenses due to a voluntary retirement program and reduced maintenance costs. A significant one-time gain from a coal contract settlement also contributed.

The acquisition of CILCORP, completed in January 2003, led to a substantial increase in Ameren's total assets to $13.5 billion and a rise in long-term debt. The acquisition also contributed positively to net income and operating revenues in the third quarter and first nine months of 2003, with further synergies expected from integration.

Ameren reported cash and cash equivalents of $100 million at September 30, 2003. The company had approximately $832 million in available committed credit facilities through its money pool arrangements, indicating adequate liquidity to meet its short-term obligations and capital needs.

Ameren is involved in several regulatory matters, including the ongoing transfer of UE's Illinois operations to CIPS, and is monitoring FERC's proposed Standard Market Design which could impact regional transmission organizations. The company is also managing the integration of CILCORP and expecting future cost synergies.