10-QPeriod: Q1 FY2010

AMEREN CORP Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 10, 2010For Securities:AEE

Summary

Ameren Corporation's (AEE) first quarter 2010 results showed a decline in net income attributable to Ameren Corporation to $102 million ($0.43 per share) from $141 million ($0.66 per share) in the first quarter of 2009. This decrease was primarily driven by lower earnings in the Merchant Generation segment due to reduced power prices and increased fuel costs, higher depreciation and financing expenses, and a $13 million charge related to the tax impact of new healthcare legislation. Partially offsetting these declines were improved weather conditions and an emerging economic recovery, which led to higher electricity and natural gas sales in the rate-regulated businesses. The company also benefited from the full-quarter impact of a March 2009 rate increase for its Missouri regulated utility (UE). Ameren's regulated utilities experienced a 7% increase in electricity sales to residential and commercial customers, reflecting colder weather and economic improvements. Industrial sales also saw an increase, particularly for those excluding a major customer that had experienced an outage in the prior year. The company is actively managing its costs, including reducing capital expenditures in its Merchant Generation segment and implementing staff reductions, to navigate the current economic environment and regulatory challenges. Ameren remains focused on aligning spending with authorized returns and pursuing constructive regulatory outcomes to improve earnings from its regulated investments.

Financial Highlights

45 data points
Beta

Revenue

$1.94B

Net Income

$102.00M

5.3% Net Margin

EPS (Diluted)

$0.43

Total Assets

$23.69B

Cash & Equivalents

$360.00M

Free Cash Flow

$91.00M

Financial Statements
Beta
Revenue$1.94B
Operating Expenses$1.64B
Operating Income$298.00M
Interest Expense$132.00M
Net Income$102.00M
EPS (Basic)$0.43
Shares Outstanding (Basic)237.60M

Key Highlights

  • 1Net income attributable to Ameren Corporation decreased to $102 million ($0.43/share) from $141 million ($0.66/share) year-over-year.
  • 2Merchant Generation segment earnings declined significantly due to lower power prices and higher fuel costs.
  • 3Rate-regulated utilities saw improved sales volumes driven by colder weather and economic recovery, partially offsetting consolidated declines.
  • 4Ameren incurred a $13 million charge due to new healthcare legislation impacting deferred taxes on retiree healthcare costs.
  • 5The company is undertaking cost-saving measures, including capital expenditure reductions and workforce adjustments in the Merchant Generation segment.
  • 6Ameren's Missouri regulated utility (UE) returned its Taum Sauk facility to service, and its Callaway nuclear plant began its scheduled refueling outage.
  • 7Illinois regulated utilities received a lower-than-requested rate increase from the ICC, prompting cost mitigation actions.

Frequently Asked Questions

The primary drivers for the decrease in net income were lower earnings from the Merchant Generation segment due to weaker power prices and higher fuel costs, increased depreciation and financing expenses, and a one-time charge related to new healthcare legislation. These were partially offset by improved sales volumes in the regulated utility businesses due to better weather and economic conditions, and the full-quarter impact of a rate increase in Missouri.

The ICC's rate order for Illinois utilities provided a smaller-than-requested increase in revenues, leading Ameren to implement cost-cutting measures and consider appeals. In Missouri, Ameren's utility (UE) is awaiting a decision on its rate increase request, which aims to recover significant investments in infrastructure and higher operating costs. The timing and outcome of these regulatory decisions are crucial for Ameren's future earnings and cash flow.

Ameren's Taum Sauk pumped-storage hydroelectric facility has returned to full service after repairs following a breach in 2005. The Callaway nuclear plant commenced its scheduled refueling and maintenance outage in April 2010, which is expected to last 35 days.

Ameren is actively managing costs across its segments. This includes reducing capital expenditures, particularly in the Merchant Generation segment, and implementing workforce reductions. The company is also focused on aligning operational spending with authorized revenue levels in its regulated businesses and seeking to improve earnings through constructive regulatory outcomes and efficient operations.