01—Abstract
Summary
Summary of the 8-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
Ameren Corporation (NYSE: AEE) reported fourth-quarter and full-year 2023 results on February 22, 2024, with full-year 2023 GAAP diluted EPS of $4.38a, up from $4.14 in 2022.
Net income attributable to common shareholders rose to $1,152 millionb from $1,074 million. Growth was driven by infrastructure investment across all segments, new Ameren Missouri electric rates effective July 9, 2023, a higher allowed ROE at Ameren Illinois Electric Distribution tied to higher 30-year Treasury yields, and favorable COLI market returns that lowered tax expense. Headwinds included weather-driven lower Ameren Missouri electric retail sales, higher interest expense, lower energy efficiency incentives, and more weighted-average shares outstanding.
Fourth-quarter diluted EPS was $0.60c versus $0.63, as milder winter weather and higher Ameren Parent interest expense more than offset segment gains. The key forward-looking item is guidance: management expects 2024 diluted EPS of $4.52 to $4.72 (midpoint $4.62), and diluted EPS compound annual growth of 6% to 8% from 2024 through 2028 using the 2024 midpoint as the base. Management attributes this growth to projected rate base growth of roughly 8.2% compounded annually from 2023 through 2028.
Guidance assumes normal temperatures and is subject to regulatory and legislative actions, including pending Ameren Illinois multi-year rate plan matters, Ameren Missouri's securitization request for the Rush Island retirement, and the effects of the Inflation Reduction Act's minimum tax. Balance sheet growth reflects the capital program. Capital expenditures were $3.6 billiond in 2023, funded largely by $2.3 billion of long-term debt issuances and $346 million of common stock issuances.
Total assets reached $40.8 billion, long-term debt rose to $15.1 billion, and book value per share increased to $42.62 from $40.11. Operating cash flow of $2.56 billion covered dividends of $662 million, but the company remains reliant on external capital to fund its investment plan.
02—Key points
Key Highlights
- 2023 GAAP diluted EPS of $4.38, up 5.8% from $4.14 in 2022; net income attributable to common shareholders of $1,152 million vs. $1,074 million.
- Q4 2023 diluted EPS of $0.60 vs. $0.63 in Q4 2022, as lower Ameren Missouri electric sales from milder weather and higher Ameren Parent interest expense offset segment gains.
- 2024 diluted EPS guidance of $4.52 to $4.72 (midpoint $4.62), implying roughly 5.5% growth at the midpoint over 2023 results.
- Multi-year diluted EPS growth target of 6% to 8% CAGR (2024–2028), supported by projected rate base growth of about 8.2% compounded annually from 2023 through 2028.
- Segment earnings: Ameren Transmission $296M (up from $263M), Ameren Illinois Electric Distribution $258M (up from $202M), Ameren Missouri $545M (down from $562M), Ameren Illinois Natural Gas $134M (up from $123M).
- Capital spending of $3.6 billion in 2023, funded by $2.3 billion of new long-term debt and $346 million of equity issuance; long-term debt increased to $15.1 billion.
- Guidance assumes normal weather and is exposed to regulatory outcomes, including Ameren Illinois MYRP/Grid Plan proceedings, Ameren Missouri Rush Island securitization, and IRA minimum tax effects.
03—Questions
Frequently Asked Questions
How did Ameren perform in 2023 compared with 2022?
Ameren reported 2023 GAAP diluted EPS of $4.38, up from $4.14 in 2022, and net income attributable to common shareholders rose 7% to $1,152 million. Growth came from infrastructure investment across all segments, new Ameren Missouri electric rates effective July 2023, a higher allowed ROE at Ameren Illinois Electric Distribution, and favorable COLI returns that reduced tax expense. These gains were partly offset by weather-related lower Missouri electric sales and higher interest expense.
What is Ameren's 2024 earnings guidance?
Ameren expects 2024 diluted EPS of $4.52 to $4.72, with a midpoint of $4.62. This assumes normal temperatures and is subject to regulatory, legislative, market, and weather risks outlined in the release.
What long-term growth does management expect?
Management expects diluted EPS to grow 6% to 8% annually from 2024 through 2028, using the $4.62 midpoint as the base. The growth is expected to be driven by projected rate base growth of about 8.2% per year from 2023 through 2028.
Why did fourth-quarter earnings decline year over year?
Q4 2023 diluted EPS was $0.60 versus $0.63 in Q4 2022. Lower Ameren Missouri electric retail sales, driven by milder-than-normal winter temperatures compared with a colder prior-year quarter, and higher Ameren Parent interest expense more than offset gains from infrastructure investment and rate changes.
How is Ameren funding its large capital program, and what are the balance sheet implications?
Ameren spent $3.6 billion in capital expenditures in 2023 and generated $2.56 billion of operating cash flow. The gap was filled mainly by $2.3 billion of long-term debt issuances and $346 million of common stock issuances. Long-term debt rose to $15.1 billion, total assets reached $40.8 billion, and book value per share grew to $42.62. Continued capital investment will likely require ongoing external financing, which makes credit metrics and interest expense important to monitor.
04—Continue