Ameren Corp : Ameren (NYSE: AEE) Announces First Quarter 2012 Results; 2012 Core (Non-GAAP) Earnings Guidance Range Affirmed
05/04/2012| 08:05am US/Eastern
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ST. LOUIS, May 4, 2012 /PRNewswire-FirstCall/ -- Ameren Corporation (NYSE: AEE) today announced a first quarter 2012 net loss in accordance with generally accepted accounting principles (GAAP) of $403 million, or $1.66 per share, compared to first quarter 2011 GAAP net income of $71 million, or 29 cents per share. The first quarter 2012 GAAP net loss included a noncash pretax asset impairment charge of $628 million. Excluding this charge and certain other items, Ameren recorded first quarter 2012 core (non-GAAP) net income of $53 million, or 22 cents per share, compared to first quarter 2011 core (non-GAAP) net income of $60 million, or 25 cents per share.
The decrease in first quarter 2012 core (non-GAAP) earnings, compared to first quarter 2011 core (non-GAAP) earnings, primarily reflected lower regulated utility electric and natural gas sales and decreased margins at the merchant generation segment. The decline in utility sales was due to first quarter winter temperatures that were among the warmest on record, compared to somewhat colder than normal temperatures in the first quarter of 2011. The decreased merchant generation margins reflected reduced generation due to lower market prices for electricity. The effects of the above factors were partially offset by increased electric utility rates in Missouri, increased natural gas delivery rates in Illinois and lower non-fuel operations and maintenance expenses, including reduced storm-related costs.
"While first quarter results were negatively affected by unusually warm winter weather, we continue to expect that core earnings will be in the range of $2.20 to $2.50 per share for the year," said Thomas R. Voss, chairman, president and CEO of Ameren Corporation.
"Our first quarter 2012 GAAP results included a noncash write down of our Duck Creek merchant generating energy center as a result of the sharp first quarter 2012 decline in market prices for electricity," added Voss.
The following items were excluded from first quarter 2012 and 2011 core (non-GAAP) earnings, as applicable:
-- A noncash asset impairment charge related to AmerenEnergy Resources
Generating Company's Duck Creek Energy Center, which decreased net
income by $377 million in the first quarter of 2012.
-- A noncash quarterly reduction in the income tax benefit, recognized in
conjunction with the asset impairment discussed above, as a result of
seasonally low first quarter earnings coupled with the requirement to
recognize income tax expense using the annual estimated effective rate.
This reduction in the recognized tax benefit decreased net income by $85
million in the first quarter of 2012 and is projected to fully reverse
over the balance of this year.
-- The net effect of unrealized mark-to-market activity, which increased
net income by $6 million and $11 million in the first quarters of 2012
and 2011, respectively.
A reconciliation of GAAP to core (non-GAAP) earnings per share is as follows:
First Quarter
-------------
2012 2011
---- ----
GAAP (loss)/earnings per share $(1.66) $0.29
Asset impairment charge 1.55 --
Reduction of tax benefit related to asset
impairment 0.36 --
and annual estimated effective income tax
rate
Gain on net unrealized mark-to-market
activity (0.03) (0.04)
Core (Non-GAAP) earnings per share $0.22 $0.25
2012 Earnings Guidance
Ameren continues to expect 2012 core (non-GAAP) earnings to be in the range of $2.20 to $2.50 per share. GAAP 2012 earnings are now expected to be in the range of $0.65 to $0.95 per share, compared to the prior range of $2.20 to $2.50 per share, as a result of the previously discussed first quarter 2012 asset impairment charge. Any net unrealized mark-to-market gains or losses will impact GAAP earnings but are excluded from GAAP earnings guidance because the company is unable to reasonably estimate the impact of any such gains or losses. Core (non-GAAP) earnings and guidance also exclude any net unrealized mark-to-market gains or losses.
Ameren expects its businesses to provide the following contributions to 2012 core (non-GAAP) earnings per share:
Regulated Utilities $2.15 - $2.35
Merchant Generation 0.05 - 0.15
2012 Core (Non-GAAP)
Earnings Guidance Range $2.20 - $2.50
Ameren's earnings guidance for 2012 assumes normal temperatures for the remaining three quarters of the year. In addition, Ameren's future results are subject to the effects of, among other things, regulatory decisions and legislative actions; energy center operations; energy, economic, and capital and credit market conditions; severe storms; unusual or otherwise unexpected gains or losses; and other risks and uncertainties outlined, or referred to, in the Forward-looking Statements section of this press release.
Ameren Missouri Segment Results
Ameren Missouri segment first quarter 2012 GAAP earnings were $21 million, unchanged from first quarter 2011 GAAP earnings. First quarter 2012 core (non-GAAP) earnings were $20 million, compared to first quarter 2011 core (non-GAAP) earnings of $21 million. The decrease in core (non-GAAP) earnings reflected an 8 percent decline in electric sales to native load customers. These lower sales were due to near record warm winter temperatures, compared to somewhat colder than normal temperatures in the first quarter of 2011. The negative effect of warmer temperatures in the first quarter of 2012 was partially offset by increased electric rates, effective in late July 2011, and lower non-fuel operations and maintenance expenses, including reduced storm-related costs. The GAAP earnings comparison was impacted by the factors mentioned above and a gain from net unrealized mark-to-market activity in the first quarter of 2012.
Ameren Illinois Segment Results
Ameren Illinois segment first quarter 2012 GAAP earnings were $27 million, compared to first quarter 2011 GAAP earnings of $33 million. First quarter 2012 core (non-GAAP) earnings were $26 million, compared to first quarter 2011 core (non-GAAP) earnings of $33 million. The decrease in core (non-GAAP) earnings reflected a 2 percent decrease in electric sales and a 20 percent decrease in natural gas sales due to near record warm winter temperatures, compared to somewhat colder than normal temperatures in the first quarter of 2011. The earnings decrease also reflected a one-time pretax $7.5 million contribution to the Illinois Science & Energy Innovation Trust related to participation in the state's electric delivery formula ratemaking framework. This contribution is not recoverable in rates. The negative effects of these factors were partially offset by the recognition of revenue related to Illinois electric delivery formula ratemaking as well as increased natural gas delivery rates, effective in January 2012. The GAAP earnings comparison was impacted by a gain from net unrealized mark-to-market activity in the first quarter of 2012.
Merchant Generation Segment Results
Merchant generation segment first quarter 2012 GAAP losses were $363 million, compared to first quarter 2011 GAAP earnings of $20 million. Core (non-GAAP) earnings for the first quarter of 2012 were $14 million, compared to first quarter 2011 core (non-GAAP) earnings of $11 million. The increase in core (non-GAAP) earnings reflected a lower effective core income tax rate as a result of lower projected full-year 2012 core earnings, compared to 2011 core earnings. The positive effect of this factor was partially offset by decreased merchant generation margins. These lower margins reflected reduced generation due to lower market prices for electricity. The GAAP earnings comparison was affected by the factors mentioned above and the previously discussed first quarter 2012 asset impairment related to the Duck Creek Energy Center. In addition, net unrealized mark-to-market activity resulted in a lesser gain in the first quarter of 2012, compared to the first quarter of 2011.
Analyst Conference Call
Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Friday, May 4, to discuss first quarter 2012 earnings and other matters. Investors, the news media and the public may listen to a live Internet broadcast of the call at Ameren.com by clicking on "Q1 2012 Ameren Corporation Earnings Conference Call," followed by the appropriate audio link. An accompanying slide presentation will be available on Ameren's website. This presentation will be posted in the "Investors" section of the website under "Webcasts & Presentations." The analyst call will also be available for replay on the Internet for one year. In addition, a telephone playback of the conference call will be available beginning at approximately noon Central Time from May 4 through May 11, by dialing U.S. 877.660.6853 or international 201.612.7415, and entering account number 352 and ID number 392703.
With assets of $23 billion, St. Louis-based Ameren Corporation owns a diverse mix of electric energy centers strategically located in our Midwest market, with a generating capacity of 15,900 megawatts. Through our Missouri and Illinois subsidiaries, we serve 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area. Our mission is to meet our customers' energy needs in a safe, reliable, efficient and environmentally-responsible manner. For more information, visit Ameren.com.
Regulation G Statement
Ameren has presented certain information in this release on a diluted cents per share basis. These diluted per share amounts reflect certain factors that directly impact Ameren's total earnings per share. The core (non-GAAP) earnings per share and core (non-GAAP) earnings per share guidance exclude one or more of the following: asset impairment charges, reduction of income tax benefit and net unrealized mark-to-market gains or losses. Ameren uses core (non-GAAP) earnings internally for financial planning and for analysis of performance. Ameren also uses core (non-GAAP) earnings as primary performance measurements when communicating with analysts and investors regarding our earnings results and outlook, as the company believes that core (non-GAAP) earnings allow the company to more accurately compare its ongoing performance across periods.
In providing consolidated and segment core (non-GAAP) earnings guidance, there could be differences between core (non-GAAP) earnings and earnings prepared in accordance with GAAP as a result of our treatment of certain items, such as those listed above. Ameren is unable to estimate the impact, if any, on future GAAP earnings of such items.
Forward-looking Statements
Statements in this release not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors in Ameren's Form 10-K for the year ended December 31, 2011, and elsewhere in this release and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
-- regulatory, judicial, or legislative actions, including changes in
regulatory policies and ratemaking determinations, such as the outcome
of Ameren Missouri's and Ameren Illinois' electric rate cases filed in
2012; the court appeals related to Ameren Missouri's 2010 and 2011
electric rate orders; Ameren Missouri's fuel and purchased power cost
recovery mechanism prudence review; and future regulatory, judicial, or
legislative actions that seek to change regulatory recovery mechanisms,
such as the recent passage of legislation providing for formula
ratemaking in Illinois;
-- the effect of Ameren Illinois participating in a new performance-based
formula ratemaking process under the Illinois Energy Infrastructure
Modernization Act (IEIMA), the related financial commitments required by
the IEIMA and the resulting uncertain impact on the financial condition,
results of operations and liquidity of Ameren Illinois;
-- the effects of, or changes to, the Illinois power procurement process;
-- changes in laws and other governmental actions, including monetary,
fiscal, and tax policies;
-- changes in laws or regulations that adversely affect the ability of
electric distribution companies and other purchasers of wholesale
electricity to pay their suppliers, including Ameren Missouri and Ameren
Energy Marketing Company;
-- the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of our business at both the
state and federal levels, and the implementation of deregulation;
-- the effects on demand for our services resulting from technological
advances, including advances in energy efficiency and distributed
generation sources, which generate electricity at the site of
consumption;
-- increasing capital expenditure and operating expense requirements and
our ability to recover these costs;
-- the cost and availability of fuel such as coal, natural gas and enriched
uranium used to produce electricity; the cost and availability of
purchased power and natural gas for distribution; and the level and
volatility of future market prices for such commodities, including the
ability to recover the costs for such commodities;
-- the effectiveness of our risk management strategies and the use of
financial and derivative instruments;
-- the level and volatility of future prices for power in the Midwest;
-- the development of a capacity market within the Midwest Independent
Transmission System Operator, Inc.;
-- business and economic conditions, including their impact on interest
rates, bad debt expense, and demand for our products;
-- disruptions of the capital markets, deterioration in our credit metrics,
or other events that make our access to necessary capital, including
short-term credit and liquidity, impossible, more difficult, or more
costly;
-- our assessment of our liquidity;
-- the impact of the adoption of new accounting guidance and the
application of appropriate technical accounting rules and guidance;
-- actions of credit rating agencies and the effects of such actions;
-- the impact of weather conditions and other natural phenomena on us and
our customers;
-- the impact of system outages;
-- generation, transmission and distribution asset construction,
installation, performance, and cost recovery;
-- the effects of our increasing investment in electric transmission
projects and uncertainty as to whether we will achieve our expected
returns in a timely fashion, if at all;
-- the extent to which Ameren Missouri prevails in its claims against
insurers in connection with its Taum Sauk pumped-storage hydroelectric
energy center incident;
-- the extent to which Ameren Missouri is permitted by its regulators to
recover in rates the investments it made in connection with a proposed
second unit at its Callaway Energy Center;
-- impairments of long-lived assets, intangible assets, or goodwill;
-- operation of Ameren Missouri's Callaway Energy Center, including planned
and unplanned outages, decommissioning costs and potential increased
costs as a result of nuclear-related developments in Japan in 2011;
-- the effects of strategic initiatives, including mergers, acquisitions
and divestitures and any related tax implications;
-- the impact of current environmental regulations on utilities and power
generating companies and new, more stringent or changing requirements,
including those related to greenhouse gases, other emissions, cooling
water intake structures, coal combustion residuals, and energy
efficiency, that are enacted over time and that could limit or terminate
the operation of certain of our generating units, increase our costs,
result in an impairment of our assets, reduce our customers' demand for
electricity or natural gas, or otherwise have a negative financial
effect;
-- the impact of complying with renewable energy portfolio requirements in
Missouri;
-- labor disputes, workforce reductions, future wage and employee benefits
costs, including changes in discount rates and returns on benefit plan
assets;
-- the inability of our counterparties and affiliates to meet their
obligations with respect to contracts, credit facilities and financial
instruments;
-- the cost and availability of transmission capacity for the energy
generated by our energy centers or required to satisfy energy sales made
by us;
-- legal and administrative proceedings; and
-- acts of sabotage, war, terrorism, cybersecurity attacks or intentionally
disruptive acts.
Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(Unaudited, in millions, except per share amounts)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Operating Revenues:
Electric $1,310 $1,470
Gas 348 434
--- ---
Total operating revenues 1,658 1,904
----- -----
Operating Expenses:
Fuel 327 379
Purchased power 163 227
Gas purchased for resale 215 288
Other operations and maintenance 427 463
Asset impairment 628 -
Depreciation and amortization 199 195
Taxes other than income taxes 121 125
--- ---
Total operating expenses 2,080 1,677
----- -----
Operating Income (Loss) (422) 227
Other Income and Expenses:
Miscellaneous income 17 16
Miscellaneous expense 15 5
--- ---
Total other income 2 11
Interest Charges 113 119
--- ---
Income (Loss) Before Income Taxes
(Benefit) (533) 119
Income Taxes (Benefit) (130) 45
---- ---
Net Income (Loss) (403) 74
Less: Net Income Attributable to
Noncontrolling Interests - 3
--- ---
Net Income (Loss) Attributable to
Ameren Corporation $(403) $71
--------------------------------- ----- ---
Earnings (Loss) per Common Share -
Basic and Diluted $(1.66) $0.29
Average Common Shares Outstanding 242.6 240.6
--------------------------------- ----- -----
AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
March 31, December 31,
2012 2011
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $208 $255
Accounts receivable - trade, net 446 473
Unbilled revenue 232 324
Miscellaneous accounts and notes receivable 65 69
Materials and supplies 625 712
Mark-to-market derivative assets 167 115
Current regulatory assets 247 215
Other current assets 134 132
--- ---
Total current assets 2,124 2,295
----- -----
Property and Plant, Net 17,535 18,127
Investments and Other Assets:
Nuclear decommissioning trust fund 390 357
Goodwill 411 411
Intangible assets 9 7
Regulatory assets 1,657 1,603
Other assets 773 845
--- ---
Total investments and other assets 3,240 3,223
---------------------------------- ----- -----
TOTAL ASSETS $22,899 $23,645
------------ ------- -------
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt $179 $179
Short-term debt 126 148
Accounts and wages payable 366 693
Taxes accrued 101 65
Interest accrued 149 101
Customer deposits 98 98
Mark-to-market derivative liabilities 220 161
Current regulatory liabilities 138 133
Other current liabilities 237 207
Total current liabilities 1,614 1,785
----- -----
Long-term Debt, Net 6,677 6,677
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net 3,111 3,315
Accumulated deferred investment tax credits 77 79
Regulatory liabilities 1,483 1,502
Asset retirement obligations 434 428
Pension and other postretirement benefits 1,357 1,344
Other deferred credits and liabilities 567 447
Total deferred credits and other liabilities 7,029 7,115
----- -----
Ameren Corporation Stockholders' Equity:
Common stock 2 2
Other paid-in capital, principally premium on
common stock 5,596 5,598
Retained earnings 1,869 2,369
Accumulated other comprehensive loss (35) (50)
--- ---
Total Ameren Corporation stockholders' equity 7,432 7,919
Noncontrolling Interests 147 149
--- ---
Total equity 7,579 8,068
------------ ----- -----
TOTAL LIABILITIES AND EQUITY $22,899 $23,645
---------------------------- ------- -------
AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Three Months
Ended
March 31,
---------
2012 2011
---- ----
Cash Flows From Operating Activities:
Net income (loss) $(403) $74
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Loss on asset impairment 628 -
Net mark-to-market gain on
derivatives (3) (16)
Depreciation and amortization 188 187
Amortization of nuclear fuel 21 17
Amortization of debt issuance
costs and premium/discounts 5 5
Deferred income taxes and
investment tax credits, net (142) (16)
Allowance for equity funds used
during construction (9) (6)
Other (5) -
Changes in assets and liabilities:
Receivables 109 94
Materials and supplies 80 135
Accounts and wages payable (220) (213)
Taxes accrued 35 71
Assets, other 14 50
Liabilities, other 64 80
Pension and other postretirement
benefits 41 28
Counterparty collateral, net (11) 70
Net cash provided by operating
activities 392 560
------------------------------ --- ---
Cash Flows From Investing Activities:
Capital expenditures (282) (231)
Nuclear fuel expenditures (38) (22)
Purchases of securities -
nuclear decommissioning trust
fund (109) (91)
Sales of securities -nuclear
decommissioning trust fund 88 87
Proceeds from sale of property 16 -
Other (1) 1
Net cash used in investing
activities (326) (256)
-------------------------- ---- ----
Cash Flows From Financing Activities:
Dividends on common stock (90) (93)
Dividends paid to noncontrolling
interest holders (2) (2)
Short-term debt and credit
facility borrowings, net (22) (125)
Generator advances received for
construction 1 -
Repayments of generator advances
received for construction - (73)
Issuances of common stock - 17
Net cash used in financing
activities (113) (276)
-------------------------- ---- ----
Net change in cash and cash
equivalents (47) 28
Cash and cash equivalents at
beginning of year 255 545
---------------------------- --- ---
Cash and cash equivalents at end
of period $208 $573
-------------------------------- ---- ----
Noncash financing activity -
dividends on common stock $(7) $ -
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Ended
March 31,
---------
2012 2011
---- ----
Electric Sales -kilowatthours (in
millions):
Ameren Missouri
Residential 3,273 3,849
Commercial 3,352 3,525
Industrial 2,080 2,067
Other 33 36
Native load subtotal 8,738 9,477
Off-system and wholesale 2,124 2,946
Subtotal 10,862 12,423
Ameren Illinois
Residential
Power supply and delivery service 2,648 3,143
Delivery service only 142 -
Commercial
Power supply and delivery service 781 959
Delivery service only 1,939 1,873
Industrial
Power supply and delivery service 407 359
Delivery service only 2,916 2,728
Other 138 138
Native load subtotal 8,971 9,200
Merchant Generation
Energy sales 6,402 7,435
Eliminate Ameren Illinois/Merchant
Generation common customers (1,971) (1,243)
------ ------
Ameren Total 24,264 27,815
------------ ------ ------
Electric Revenues (in millions):
Ameren Missouri
Residential $255 $279
Commercial 206 216
Industrial 86 88
Other 28 18
Native load subtotal 575 601
Off-system and wholesale 61 101
Subtotal $636 $702
Ameren Illinois
Residential
Power supply and delivery service $270 $295
Delivery service only 5 -
Commercial
Power supply and delivery service 69 80
Delivery service only 35 31
Industrial
Power supply and delivery service 15 16
Delivery service only 10 10
Other 27 10
Native load subtotal $431 $442
Merchant Generation
Non-affiliate energy sales $243 $328
Affiliate native energy sales 87 46
Other 6 4
Subtotal $336 $378
Eliminate affiliate revenues and
other (93) (52)
--- ---
Ameren Total $1,310 $1,470
------------ ------ ------
AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Ended
March 31,
---------
2012 2011
---- ----
Electric Generation -megawatthours
(in millions):
Ameren Missouri 11.2 12.7
Merchant Generation
Ameren Energy Generating Company
(Genco) 4.3 5.2
AmerenEnergy Resources Generating
Company (AERG) 1.8 1.8
AmerenEnergy Medina Valley Cogen,
L.L.C. - 0.1
Subtotal 6.1 7.1
Ameren Total 17.3 19.8
------------ ---- ----
Fuel Cost per kilowatthour (cents):
Ameren Missouri 1.627 1.501
Merchant Generation 2.439 2.379
Gas Sales -decatherms (in
thousands):
Ameren Missouri 4,065 5,863
Ameren Illinois 34,091 42,442
Ameren Total 38,156 48,305
------------ ------ ------
Net Income (Loss) by Segment (in
millions):
Ameren Missouri $21 $21
Ameren Illinois 27 33
Merchant Generation (363) 20
Other (88) (3)
Ameren Total $(403) $71
------------ ----- ---
March 31, December 31,
2012 2011
---- ----
Common Stock:
Shares outstanding (in millions) 242.6 242.6
Book value per share $30.63 $32.64
SOURCE Ameren Corporation
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