10-QPeriod: Q3 FY2014

AMEREN CORP Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 10, 2014For Securities:AEE

Summary

Ameren Corporation reported a slight decrease in net income for the third quarter of 2014 compared to the same period in 2013, primarily driven by milder summer temperatures affecting electric sales volumes, coupled with higher effective income tax rates and increased depreciation and amortization expenses. However, for the first nine months of 2014, net income saw a significant increase year-over-year, benefiting from rate increases for Ameren Illinois electric transmission and natural gas delivery services, along with reduced interest expenses and the absence of a prior year's revenue reduction from a FAC prudence review charge. The company continues to make substantial capital investments in infrastructure modernization and transmission projects, particularly through its Ameren Illinois and ATXI subsidiaries. Ameren Missouri is also focusing on key capital projects including nuclear reactor vessel head replacement and environmental control upgrades. The company's strategic focus remains on enhancing regulatory frameworks and cost recovery mechanisms to support these investments and ensure competitive returns for shareholders.

Financial Statements
Beta
Revenue$1.67B
Operating Expenses$1.11B
Operating Income$561.00M
Interest Expense$85.00M
Net Income$293.00M
EPS (Basic)$1.21
EPS (Diluted)$1.20
Shares Outstanding (Basic)242.60M
Shares Outstanding (Diluted)244.30M

Key Highlights

  • 1Net income attributable to Ameren Corporation decreased slightly in Q3 2014 to $293 million ($1.20/share diluted) from $302 million ($1.24/share diluted) in Q3 2013, primarily due to milder weather impacting electric sales.
  • 2For the first nine months of 2014, net income attributable to Ameren Corporation increased significantly to $538 million ($2.20/share diluted) from $252 million ($1.04/share diluted) in the prior year.
  • 3Ameren Missouri's electric margins decreased by $5 million in Q3 2014 but increased by $53 million for the first nine months of 2014, influenced by regulatory adjustments and the absence of a prior year's revenue charge.
  • 4Ameren Illinois' electric margins increased by $20 million in Q3 2014 and $49 million for the first nine months of 2014, driven by formula ratemaking adjustments and higher transmission revenues.
  • 5Capital expenditures increased significantly in the first nine months of 2014, with over $1.3 billion invested in projects across Ameren Missouri, Ameren Illinois, and ATXI, including transmission infrastructure and energy center upgrades.
  • 6The company maintained a strong liquidity position with $1.3 billion in available credit capacity as of September 30, 2014.
  • 7Ameren Missouri filed a rate case in July 2014 seeking a $264 million increase in annual electric revenues, while Ameren Illinois filed for a $205 million increase in its electric delivery service revenue requirement for 2015.

Frequently Asked Questions

The primary drivers for the decrease in net income in Q3 2014 compared to Q3 2013 were milder summer temperatures, which negatively impacted electric sales volumes, along with higher effective income tax rates and increased depreciation and amortization expenses.

Ameren Illinois' electric delivery service revenues are subject to an annual reconciliation under the IEIMA. For the first nine months of 2014, the reconciliation adjustments, primarily due to increased rate base and recoverable costs, led to an increase in electric margins. However, for Q3 2014, there was a reserve established for a potential transmission refund related to a FERC order, which decreased revenues.

Ameren plans significant capital expenditures through 2018, investing in utility infrastructure, environmental compliance, and transmission projects. These expenditures are planned to be financed through a mix of equity and debt, aiming to maintain an equity ratio around 50%, and the company expects to maintain access to capital markets.

Yes, Ameren Missouri filed a rate case in July 2014 seeking a $264 million increase in annual electric revenues. The outcome of this case, expected by May 2015, is uncertain and could impact the company's financial results.