10-QPeriod: Q1 FY2017

AMEREN CORP Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 5, 2017For Securities:AEE

Summary

Ameren Corporation (AEE) reported a slight decrease in net income attributable to common shareholders for the first quarter of 2017, down to $102 million ($0.42 per share) from $105 million ($0.43 per share) in the prior year. This decline was primarily attributed to an increased effective tax rate, milder winter weather impacting demand, and higher depreciation and amortization expenses. However, these headwinds were partially offset by favorable changes in revenue recognition for Ameren Illinois due to regulatory decoupling provisions, increased investments in transmission and distribution infrastructure, and decreased operating expenses. The company continues to execute its strategic plan focused on disciplined cost management and strategic capital allocation, with significant investments directed towards its regulated transmission and distribution businesses. Regulatory updates include a rate increase for Ameren Missouri effective April 1, 2017, following a rate review, and pending rate adjustments for Ameren Illinois. Management remains focused on improving regulatory frameworks and ensuring constructive regulatory outcomes to support investments and earnings growth.

Financial Highlights

48 data points
Beta

Revenue

$1.51B

Net Income

$104.00M

6.9% Net Margin

EPS (Diluted)

$0.42

Total Assets

$24.81B

Cash & Equivalents

$8.00M

Free Cash Flow

-$173.00M

Financial Statements
Beta
Revenue$1.51B
Operating Expenses$1.27B
Operating Income$242.00M
Interest Expense$99.00M
Net Income$104.00M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)242.60M

Key Highlights

  • 1Net income attributable to common shareholders decreased slightly to $102 million in Q1 2017 from $105 million in Q1 2016.
  • 2Earnings per share (diluted) also saw a minor decrease to $0.42 from $0.43 year-over-year.
  • 3Operating revenues increased to $1,514 million in Q1 2017 from $1,434 million in Q1 2016, driven primarily by electric revenues.
  • 4Total operating expenses also rose to $1,260 million from $1,214 million.
  • 5Capital expenditures increased to $504 million in Q1 2017 from $496 million in Q1 2016, reflecting continued investment in infrastructure.
  • 6Cash flow from operating activities decreased to $331 million from $349 million, partly due to the absence of an insurance receipt and refunds related to a FERC complaint case.

Frequently Asked Questions

The primary driver for the decrease in net income was an increase in the effective tax rate, primarily due to a decrease in the income tax benefit related to share-based compensation. Milder winter temperatures impacting demand and increased depreciation and amortization expenses also contributed to the decline.

For Ameren Illinois Electric Distribution, a change in the method used to recognize interim period revenue, in connection with the decoupling provisions of the FEJA, favorably impacted margins by $32 million. This change, which affects the timing of revenue recognition within the year, does not impact annual earnings but can create year-over-year quarterly fluctuations.

Ameren expects to make significant capital expenditures through 2021, totaling up to $11.2 billion, with a major focus on its electric and natural gas utility infrastructure, particularly transmission and distribution systems. These investments are aimed at improving reliability, safety, and environmental compliance.

The company is involved in various legal, tax, and regulatory proceedings. While management believes the final disposition of these proceedings will not have a material adverse effect on its financial position or liquidity, specific matters like the FERC complaint cases regarding the allowed return on equity for transmission, litigation related to the Clean Air Act, and environmental remediation matters are notable and could involve significant capital expenditures or operational changes.