10-QPeriod: Q3 FY2021

AMEREN CORP Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 4, 2021For Securities:AEE

Summary

Ameren Corporation (AEE) reported a strong third quarter and first nine months of 2021, with net income attributable to common shareholders increasing to $425 million ($1.65 per diluted share) for the quarter and $865 million ($3.36 per diluted share) for the nine-month period, up from $367 million ($1.47 per diluted share) and $756 million ($3.04 per diluted share) respectively in the prior year periods. The positive results were driven by increased infrastructure investments across its utility segments (Ameren Missouri, Ameren Transmission, and Ameren Illinois Electric Distribution), higher electric retail sales in Missouri due to improving economic conditions and weather, and favorable rate adjustments in Illinois. These factors, combined with effective cost management and recovery mechanisms, contributed to the improved financial performance. The company continues to focus on strategic capital allocation and disciplined cost management, with significant investments planned in infrastructure upgrades and renewable energy. While the company noted continued impacts from the COVID-19 pandemic, particularly on customer receivables, it expects gradual sales volume improvement. Ameren remains committed to its long-term strategy, including investments in grid modernization and renewable energy, while navigating regulatory frameworks and cost pressures.

Financial Highlights

49 data points
Beta

Revenue

$1.81B

Net Income

$425.00M

23.5% Net Margin

EPS (Diluted)

$1.65

Total Assets

$34.66B

Cash & Equivalents

$7.00M

Free Cash Flow

-$94.00M

Financial Statements
Beta
Revenue$1.81B
Operating Expenses$1.28B
Operating Income$534.00M
Interest Expense$94.00M
Net Income$425.00M
EPS (Basic)$1.66
EPS (Diluted)$1.65
Shares Outstanding (Basic)257.30M
Shares Outstanding (Diluted)258.60M

Key Highlights

  • 1Net income attributable to common shareholders increased by 15.8% year-over-year for the quarter and 14.4% for the first nine months of 2021.
  • 2Diluted earnings per share improved to $1.65 for the quarter and $3.36 for the nine months, up from $1.47 and $3.04 respectively in the prior year.
  • 3Increased infrastructure investments across Ameren Missouri, Ameren Transmission, and Ameren Illinois Electric Distribution were a key driver of revenue and earnings growth.
  • 4Ameren Missouri saw higher electric retail sales, attributed to improved economic conditions and weather patterns.
  • 5Ameren Illinois benefited from higher delivery service rates and an improved recognized Return on Equity (ROE) in its electric distribution segment.
  • 6The company reaffirmed its commitment to strategic capital allocation and disciplined cost management, with substantial investments planned for infrastructure and renewable energy.
  • 7Ameren expects its equity-to-total capitalization ratio to remain around 45% through 2025, supporting solid investment-grade credit ratings.

Frequently Asked Questions

Ameren's improved financial performance was primarily driven by increased infrastructure investments across its utility segments, higher electric retail sales in Missouri due to improving economic conditions and weather, and favorable rate adjustments in Ameren Illinois. The company also benefited from effective cost management and the utilization of various regulatory recovery mechanisms.

Ameren continues to monitor the impacts of the COVID-19 pandemic on its business. While sales volumes are showing gradual improvement compared to 2020, the company has seen higher than normal levels of past-due customer accounts receivable. Ameren Illinois has bad debt riders for recovery, while Ameren Missouri does not, though it has not experienced material impacts to earnings from bad debt expense. The company is also assessing impacts on liquidity, supply chain operations, and is subject to potential labor shortages and increased costs due to federal vaccine mandates for government contractors.

Ameren plans significant capital expenditures, estimated at up to $17.8 billion from 2021 through 2025, primarily for electric and natural gas utility infrastructure upgrades, grid modernization, and renewable energy integration. These investments are expected to be financed through a combination of long-term debt and equity. Ameren plans to issue approximately $100 million in equity annually through 2025 under its DRPlus and employee benefit plans, and also has an at-the-market (ATM) program for up to $750 million in common stock. The company expects its equity-to-total capitalization ratio to be around 45% through 2025.

Several regulatory matters are noteworthy. Ameren Missouri has requested electric and natural gas rate increases, with decisions expected in early 2022. Ameren Illinois is evaluating new ratemaking frameworks under the recently enacted Climate and Equitable Jobs Act (CEJA), with options for multi-year rate plans (MYRPs). Ameren also faces ongoing environmental regulatory compliance requirements and potential litigation related to environmental matters, which could impact capital expenditures and operating costs.