10-QPeriod: Q2 FY2019

AMEREN CORP Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 2, 2019For Securities:AEE

Summary

Ameren Corporation (AEE) reported a decrease in net income attributable to common shareholders for the three months ended June 30, 2019, to $179 million ($0.72 per diluted share) from $239 million ($0.97 per diluted share) in the prior year. For the six-month period, net income attributable to common shareholders decreased to $370 million ($1.50 per diluted share) from $390 million ($1.59 per diluted share) in the prior year. This decline was primarily driven by milder weather conditions in the second quarter of 2019, which impacted electric sales, and increased operation and maintenance expenses related to a scheduled maintenance outage at the Callaway energy center. Despite these headwinds, Ameren continued its strategic capital investments, deploying over $1.1 billion in the first six months of 2019, focusing on infrastructure upgrades and renewable energy initiatives. The company's liquidity remains robust, supported by available cash and credit facilities, providing ample resources for ongoing operations and planned capital expenditures. Ameren is actively investing in its utility infrastructure across Missouri and Illinois, with a significant focus on modernizing the grid, enhancing reliability, and meeting renewable energy standards. The company reiterated its commitment to disciplined cost management and strategic capital allocation, aiming to deliver consistent shareholder value.

Financial Highlights

48 data points
Beta

Revenue

$1.38B

Net Income

$179.00M

13.0% Net Margin

EPS (Diluted)

$0.72

Total Assets

$28.10B

Cash & Equivalents

$6.00M

Free Cash Flow

-$89.00M

Financial Statements
Beta
Revenue$1.38B
Operating Expenses$1.10B
Operating Income$280.00M
Interest Expense$97.00M
Net Income$179.00M
EPS (Basic)$0.73
EPS (Diluted)$0.72
Shares Outstanding (Basic)245.60M
Shares Outstanding (Diluted)247.20M

Key Highlights

  • 1Net income attributable to common shareholders decreased year-over-year for both the three-month and six-month periods ending June 30, 2019, primarily due to milder weather and increased operational expenses.
  • 2Capital expenditures remained substantial, with over $1.1 billion invested in the first six months of 2019, underscoring the company's commitment to infrastructure improvements and modernization.
  • 3Ameren Missouri is advancing its Smart Energy Plan with significant investments planned for electric infrastructure upgrades and renewable energy integration, including proposed solar facilities.
  • 4Ameren Illinois continues its electric transmission projects (Illinois Rivers and Mark Twain) with ongoing investments to enhance system reliability.
  • 5The company's liquidity position remains strong, with $1.1 billion in net available liquidity as of June 30, 2019, providing financial flexibility.
  • 6Ameren is actively managing regulatory proceedings, including rate reviews and filings for new renewable energy projects, which are crucial for cost recovery and future investment.
  • 7The company reiterated its commitment to a dividend payout ratio between 55% and 70% of annual earnings, reflecting confidence in future profitability.

Frequently Asked Questions

The primary drivers for the decrease in net income for the three and six months ended June 30, 2019, compared to the prior year were milder early summer temperatures affecting electric sales and increased operation and maintenance expenses related to the Callaway energy center's scheduled refueling and maintenance outage that was completed in May 2019.

Ameren is funding its capital expenditures through a combination of operating cash flows, short-term borrowings (commercial paper), and long-term debt issuances. For future funding, Ameren plans to issue incremental common equity and utilize newly issued shares of common stock for employee benefit plans to support its investment strategy.

Ameren Missouri filed a request to decrease electric service revenues by $1 million and a separate request to decrease natural gas delivery service revenues by $1 million, with decisions expected in mid-2020 and August 2019, respectively. Ameren Illinois filed its annual electric distribution service formula rate update, anticipating a $7 million decrease in rates effective January 2020. The company is also actively pursuing certificates for new wind and solar generation facilities, which are subject to regulatory approval.

Ameren is investing in environmental compliance, including upgrading facilities to reduce emissions and managing coal ash disposal. The company has a plan to reduce carbon emissions by 80% by 2050 from a 2005 base level, which includes retiring coal-fired generation and investing in renewable energy sources. These compliance costs are expected to be recoverable through customer rates, subject to regulatory review.