10-QPeriod: Q3 FY2019

AMEREN CORP Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 8, 2019For Securities:AEE

Summary

Ameren Corporation (AEE) reported its third-quarter and nine-month results for 2019, showcasing a mixed financial performance. For the three months ended September 30, 2019, net income attributable to common shareholders increased to $364 million, or $1.47 per diluted share, from $357 million, or $1.45 per diluted share, in the same period last year. However, for the nine months ended September 30, 2019, net income attributable to common shareholders decreased to $734 million, or $2.97 per diluted share, from $747 million, or $3.04 per diluted share, in the prior year. The company's results were impacted by several factors, including milder summer temperatures and increased property taxes, which unfavorably affected Ameren Missouri. Higher depreciation and amortization expenses also played a role. On the positive side, benefits from MEEIA performance incentives and increased infrastructure investments, particularly in transmission and electric distribution, provided a boost. The absence of a significant non-cash charge related to the Tax Cuts and Jobs Act (TCJA) in 2018 also favorably impacted the current year's results. Ameren continued to focus on strategic capital investments, with approximately $1.8 billion invested in its utility businesses during the first nine months of 2019. The company is also advancing its Smart Energy Plan in Missouri, focusing on grid modernization and renewable energy integration, with significant capital expenditure planned over the next five years. Liquidity remains strong, supported by credit facilities and commercial paper programs, and the company expects to maintain its targeted dividend payout ratio.

Financial Highlights

49 data points
Beta

Revenue

$1.66B

Net Income

$364.00M

21.9% Net Margin

EPS (Diluted)

$1.47

Total Assets

$28.55B

Cash & Equivalents

$20.00M

Free Cash Flow

$153.00M

Financial Statements
Beta
Revenue$1.66B
Operating Expenses$1.14B
Operating Income$520.00M
Interest Expense$96.00M
Net Income$364.00M
EPS (Basic)$1.48
EPS (Diluted)$1.47
Shares Outstanding (Basic)245.90M
Shares Outstanding (Diluted)247.50M

Key Highlights

  • 1Net income attributable to Ameren common shareholders for Q3 2019 increased to $364 million ($1.47/share) from $357 million ($1.45/share) in Q3 2018.
  • 2For the nine months ended September 30, 2019, net income decreased to $734 million ($2.97/share) from $747 million ($3.04/share) in the same period of 2018.
  • 3Earnings were negatively impacted by milder weather and higher property taxes at Ameren Missouri, along with increased depreciation and amortization expenses.
  • 4Positive drivers for earnings included MEEIA performance incentives and increased infrastructure investments in transmission and electric distribution segments.
  • 5Capital expenditures for the first nine months of 2019 totaled $1.8 billion, reflecting investments in utility infrastructure and grid modernization.
  • 6Ameren Missouri is advancing its Smart Energy Plan, with approximately $6.3 billion in capital investments projected from 2019-2023, focusing on grid upgrades and renewable energy.
  • 7The company maintained strong liquidity, with $1.6 billion in net available liquidity as of September 30, 2019.

Frequently Asked Questions

The decrease in net income for the nine months ended September 30, 2019, compared to the prior year, was primarily due to decreased electric retail sales at Ameren Missouri resulting from milder weather, increased operation and maintenance expenses related to the Callaway energy center outage, and higher property taxes. These were partially offset by favorable impacts from MEEIA performance incentives, increased infrastructure investments, and the absence of a non-cash charge related to the TCJA in 2018.

Ameren Missouri's Smart Energy Plan outlines a significant five-year capital investment of approximately $6.3 billion (2019-2023) focused on upgrading its electric infrastructure, enhancing grid reliability, and accommodating more renewable energy. This includes investments in solar generation facilities and expanding wind generation capacity to meet Missouri's renewable energy standard. Additionally, Ameren Illinois is investing in electric transmission assets to improve reliability and replace aging infrastructure.

Ameren operates under various regulatory frameworks in Missouri and Illinois. The company utilizes mechanisms such as the Purchased Power Cost Recovery Mechanism (Ameren Illinois Electric Distribution), Fuel Adjustment Clause (Ameren Missouri Electric), and the Qualified Infrastructure Plant (QIP) rider (Ameren Illinois Natural Gas) to recover certain costs without traditional rate reviews. Additionally, Ameren Missouri has plans like PISA and RESRAM to mitigate regulatory lag for investments in property, plant, and equipment and renewable energy generation.

Ameren expects to make significant capital expenditures totaling approximately $13.9 billion from 2019 through 2023, primarily directed towards transmission and distribution systems, grid modernization, renewable energy, and environmental compliance. This includes substantial investments by Ameren Missouri and Ameren Illinois.