10-QPeriod: Q2 FY2009

AMEREN CORP Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 10, 2009For Securities:AEE

Summary

Ameren Corporation (AEE) reported a decline in net income for the second quarter and the first six months of 2009 compared to the same periods in 2008, primarily due to higher net fuel costs, unfavorable mark-to-market adjustments on derivatives, and the absence of a significant one-time payment received in the prior year. These factors were partially offset by higher regulated rates in both Illinois and Missouri, decreased operations and maintenance expenses, and favorable weather conditions. The company's rate-regulated segments in Illinois and Missouri are experiencing below-allowable returns on equity due to regulatory lag on infrastructure investments and rising operating and financing costs. To address this, Ameren has implemented cost control measures and is seeking substantial rate increases across its utility operations in both states, totaling over $600 million. The non-rate-regulated generation segment is being impacted by lower power prices but is protected in 2009 by forward sales and has implemented significant cost reductions, including approximately $1 billion in capital expenditure reductions for 2010-2013. Ameren is actively managing its liquidity, having secured new multi-year credit facilities totaling $2.1 billion. The company is also pursuing further cost reductions across all segments, aiming to lower 2010 nonfuel operating and maintenance expenses in the non-rate-regulated generation segment by 5-10% compared to 2008 levels. The company's overall financial strategy involves a blend of equity and debt to maintain a strong capital structure and access to capital markets.

Financial Highlights

45 data points
Beta

Revenue

$1.70B

Net Income

$165.00M

9.7% Net Margin

Total Assets

$23.19B

Cash & Equivalents

$251.00M

Free Cash Flow

-$67.00M

Financial Statements
Beta
Revenue$1.70B
Operating Expenses$1.32B
Operating Income$365.00M
Interest Expense$124.00M
Net Income$165.00M
Shares Outstanding (Basic)213.60M

Key Highlights

  • 1Net income attributable to Ameren Corporation decreased to $165 million ($0.77/share) in Q2 2009 from $206 million ($0.98/share) in Q2 2008.
  • 2The Illinois Regulated segment saw a $29 million increase in net income, while the Missouri Regulated and Non-rate-regulated Generation segments experienced decreases of $40 million and $23 million, respectively.
  • 3Ameren filed for significant rate increases across its utility operations, seeking over $600 million in aggregate to recover infrastructure investments, higher operating costs, and financing costs.
  • 4The company secured new multi-year credit facilities totaling $2.1 billion by June 30, 2009, enhancing its liquidity.
  • 5Ameren identified approximately $2 billion in opportunities to reduce planned capital expenditures for 2010-2013, including $1 billion from its Non-rate-regulated Generation segment.
  • 6CILCORP recognized a significant non-cash goodwill impairment loss of $462 million in the first quarter of 2009, impacting its financial results.

Frequently Asked Questions

Ameren's net income decreased primarily due to higher net fuel costs, unfavorable mark-to-market adjustments on derivatives, and the absence of a significant one-time payment received in the prior year that compensated for increased coal costs.

Ameren is implementing cost control measures and has filed for significant rate increases across its Illinois and Missouri utility operations. These increases are intended to recover investments in infrastructure, higher operating costs, and financing costs, and to mitigate regulatory lag.

Ameren has secured new multi-year credit facilities totaling $2.1 billion, which provide significant liquidity. Additionally, the company is actively pursuing cost reduction initiatives across all segments and has reduced its common stock dividend to conserve cash and support its financial profile and access to capital markets.

CILCORP, a subsidiary, recognized a $462 million non-cash goodwill impairment charge due to the decline in its reporting units' fair values. While this significantly impacted CILCORP's standalone results, Ameren's consolidated financial statements, which aggregate reporting units, did not record an impairment charge in the first quarter of 2009. Ameren continues to monitor its reporting units for potential future impairments.