PR Newswire | Nov 4, 2020 05:00PM EST

11/04 16:00 CST

Ameren Announces Third Quarter 2020 Results- Third Quarter Diluted Earnings Per Share were $1.47 in 2020 vs. $1.47 in 2019- Guidance Range for 2020 Narrowed to $3.40 to $3.55 per Diluted Share from $3.40 to $3.60 ST. LOUIS, Nov. 4, 2020

ST. LOUIS, Nov. 4, 2020 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) today announced third quarter 2020 net income attributable to common shareholders of $367 million, or $1.47 per diluted share, compared to third quarter 2019 net income attributable to common shareholders of $364 million, or $1.47 per diluted share.

Third quarter 2020 results reflected earnings on increased infrastructure investments made across all business segments driven by solid execution of the company's strategy. Earnings were positively impacted by new Ameren Missouri electric service rates effective April 1, 2020, driven in part by earnings on increased infrastructure investments. In addition, earnings benefited from lower Ameren Missouri operations and maintenance expenses due to disciplined cost management. These favorable factors were mostly offset by lower Ameren Missouri electric retail sales driven by milder-than-normal temperatures in the third quarter of 2020 compared to warmer-than-normal temperatures in the year-ago period, as well as due to the impact of COVID-19. In addition, the comparison reflected lower Ameren Missouri energy efficiency performance incentives compared to the year-ago period, as well as increased interest expense at Ameren Parent primarily due to higher long-term debt outstanding and the timing of income tax expense, which is not expected to impact full-year results. Finally, earnings were negatively impacted by a lower allowed return on equity at Ameren Illinois Electric Distribution due to a lower projected average 30-year U.S. Treasury bond yield in 2020 compared to 2019.

"While we are operating our business during unprecedented times due to COVID-19, we continue our relentless focus on the safety of our co-workers, customers and communities, as well as delivering reliable, affordable and cleaner electric and natural gas services. We are executing on all elements of our strategy, including significant investment in energy infrastructure and disciplined cost management across all of our business segments," said Warner L. Baxter, chairman, president and chief executive officer of Ameren Corporation. "Further, in September, the company announced its transformative plan that accelerates Ameren's transition toward a cleaner energy future, including our goal of net-zero carbon emissions by 2050. Our plan includes our largest-ever expansion of clean solar and wind generation while maintaining the reliability and affordability that customers expect."

Ameren recorded net income attributable to common shareholders for the nine months ended Sept. 30, 2020, of $756 million, or $3.04 per diluted share, compared to net income attributable to common shareholders for the nine months ended Sept. 30, 2019, of $734 million, or $2.97 per diluted share.

The year-over-year nine month earnings comparison benefited from increased infrastructure investments made across all business segments. Earnings were positively impacted by new Ameren Missouri electric service rates effective April 1, 2020. In addition, Ameren Missouri's operations and maintenance expenses were lower due to the absence of a scheduled nuclear refueling and maintenance outage at the Callaway Energy Center compared to the year-ago period when there was such an outage, as well as from disciplined cost management. Earnings also benefited from the impact of the May 2020 Federal Energy Regulatory Commission order addressing the Midcontinent Independent System Operator allowed base return on equity at Ameren Transmission. These favorable factors were partially offset by lower Ameren Missouri weather-driven electric retail sales and lower electric sales due to the impact of COVID-19, as well as lower energy efficiency performance incentives compared to the year-ago period. Finally, the earnings comparison reflected increased interest expense at Ameren Parent primarily due to higher long-term debt outstanding, as well as a lower allowed return on equity at Ameren Illinois Electric Distribution.

Earnings Guidance

Today, Ameren narrowed its 2020 earnings guidance range to $3.40 to $3.55 per diluted share compared to the prior range of $3.40 to $3.60 per diluted share. Earnings guidance for 2020 assumes normal temperatures for the last three months of the year and is subject to the effects of, among other things: the impacts of COVID-19; 30-year U.S. Treasury bond yields; regulatory, judicial and legislative actions; energy center and energy distribution operations; energy, economic and capital 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 third quarter 2020 earnings were $297 million, compared to third quarter 2019 earnings of $300 million. The year-over-year comparison reflected increased earnings due to new electric service rates, as well as lower operations and maintenance expenses due to disciplined cost management. These factors were more than offset by lower electric sales from milder-than-normal temperatures in the third quarter of 2020 compared to warmer-than-normal temperatures in the year-ago period, as well as due to the impact of COVID-19. In addition, the comparison was negatively impacted by lower energy efficiency performance incentives compared to the year-ago period.

Ameren Illinois Electric Distribution Segment Results

Ameren Illinois Electric Distribution third quarter 2020 earnings were $34 million, compared to third quarter 2019 earnings of $32 million. The year-over-year comparison reflected increased earnings on infrastructure and energy efficiency investments that were partially offset by a lower allowed return on equity due to a lower projected average 30-year U.S. Treasury bond yield in 2020 compared to 2019.

Ameren Illinois Natural Gas Segment Results

Ameren Illinois Natural Gas third quarter 2020 earnings were $2 million, compared to a third quarter 2019 loss of $1 million. The year-over-year comparison reflected increased earnings on infrastructure investments.

Ameren Transmission Segment Results

Ameren Transmission third quarter 2020 earnings were $62 million, compared to third quarter 2019 earnings of $53 million. The year-over-year improvement reflected increased earnings on infrastructure investments.

Ameren Parent Results (includes items not reported in a business segment)

Ameren Parent results for the third quarter of 2020 reflected a loss of $28 million, compared to a third quarter 2019 loss of $20 million. The year-over-year comparison reflected increased interest expense primarily due to higher long-term debt outstanding and the timing of income tax expense, which is not expected to impact full-year results.

Analyst Conference Call

Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Thursday, Nov. 5, to discuss 2020 earnings, earnings guidance and other matters. Investors, the news media and the public may listen to a live broadcast of the call at AmerenInvestors.com by clicking on "Webcast" under "Q3 2020 Earnings Conference Call," where an accompanying slide presentation will also be available. The conference call and presentation will be archived for one year in the "Investor News & Events" section of the website under "Events and Presentations."

About Ameren

St. Louis-based Ameren Corporation powers the quality of life for 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area through its Ameren Missouri and Ameren Illinois rate-regulated utility subsidiaries. Ameren Illinois provides electric transmission and distribution service and natural gas distribution service. Ameren Missouri provides electric generation, transmission and distribution service, as well as natural gas distribution service. Ameren Transmission Company of Illinois develops, owns and operates rate-regulated regional electric transmission projects. For more information, visit Ameren.com, or follow us on Twitter at @AmerenCorp, Facebook.com/AmerenCorp, or LinkedIn/company/Ameren.

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, projections, 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 Annual Report on Form 10-K for the year ended December 31, 2019, Form 10-Q for the quarter ended June 30, 2020, 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, and any changes in regulatory policies and ratemaking determinations, that may change regulatory recovery mechanisms, such as those that may result from potential future orders and the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and Ameren Transmission Company of Illinois (ATXI) challenging the refund period related to the May 2020 Federal Energy Regulatory Commission (FERC) order determining the allowed base return on common equity (ROE) under the Midcontinent Independent System Operator (MISO) tariff, the Notice of Inquiry issued by the FERC in March 2019 regarding its allowed base ROE policy, the Notice of Proposed Rulemaking issued by the FERC in March 2020 regarding its transmission incentives policy, the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the FERC's rehearing denials in the transmission formula rate revision cases, requests filed with the Missouri Public Service Commission (MoPSC) in October 2020 for accounting authority orders related to Ameren Missouri's electric and natural gas services to allow Ameren Missouri to accumulate certain costs incurred related to the COVID-19 pandemic, Ameren Illinois' May 2020 annual electric energy-efficiency formula rate update, Ameren Illinois' April 2020 annual electric distribution formula rate update filing, and Ameren Illinois' natural gas delivery service regulatory rate review filed with the Illinois Commerce Commission (ICC) in February 2020; * the length and severity of the COVID-19 pandemic, and its impacts on our business continuity plans and our results of operations, financial position, and liquidity, including but not limited to changes in customer demand resulting in changes to sales volumes, customers' payment for our services and their use of deferred payment arrangements, future regulatory or legislative actions that could require suspension of customer disconnections and/or late fees, among other things, for an extended period of time, the health and welfare of our workforce and contractors, supplier disruptions, delays in the completion of construction projects, which could impact our planned capital expenditures and expected planned rate base growth, Ameren Missouri's ability to recover any forgone customer late fee revenues or incremental costs, our ability to meet customer energy-efficiency program goals and earn performance incentives related to those programs, increased data security risks as a result of the transition to remote working arrangements for a significant portion of our workforce, and our ability to access the capital markets on reasonable terms and when needed; * the effect and duration of Ameren Illinois' election to participate in performance-based formula ratemaking frameworks, which, unless extended, expires at the end of 2022, for its electric distribution service and its participation in electric energy-efficiency programs, including the direct relationship between Ameren Illinois' ROE and the 30-year United States Treasury bond yields; * the effect on Ameren Missouri of any customer rate caps pursuant to Ameren Missouri's election to use the plant-in-service accounting (PISA), including an extension of use beyond 2023, if requested by Ameren Missouri and approved by the Missouri Public Service Commission; * the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, and energy policies; * the effects of changes in federal, state, or local tax laws, regulations, interpretations, or rates, including as a result of amendments or technical corrections to the TCJA, and challenges to the tax positions we have taken, if any; * the effects on energy prices and demand for our services resulting from technological advances, including advances in customer energy efficiency, electric vehicles, electrification of various industries, energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive; * the effectiveness of Ameren Missouri's customer energy-efficiency programs and the related revenues and performance incentives earned under its Missouri Energy Efficiency Investment Act (MEEIA) programs; * Ameren Illinois' ability to achieve the performance standards applicable to its electric distribution business and the FEJA electric customer energy-efficiency goals and the resulting impact on its allowed ROE; * our ability to align overall spending, both operating and capital, with frameworks established by our regulators and to recover these costs in a timely manner in our attempt to earn our allowed ROEs; * the cost and availability of fuel, such as low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power, zero emission credits, renewable energy credits, and natural gas for distribution; and the level and volatility of future market prices for such commodities and credits, including our ability to recover the costs for such commodities and credits and our customers' tolerance for any related price increases; * disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies from the one Nuclear Regulatory Commission-licensed supplier of Ameren Missouri's Callaway Energy Center assemblies; * the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri's energy sales; * the effectiveness of our risk management strategies and our use of financial and derivative instruments; * the ability to obtain sufficient insurance, including insurance for Ameren Missouri's nuclear and coal-fired energy centers, or, in the absence of insurance, the ability to recover uninsured losses from our customers; * the impact of cyberattacks on us or our suppliers, which could, among other things, result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer, employee, financial, and operating system information; * business and economic conditions, which have been affected by, and will be affected by the length and severity of, the COVID-19 pandemic, including the impact of such conditions on interest rates; * disruptions of the capital markets, deterioration in our credit metrics, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity; * the actions of credit rating agencies and the effects of such actions, including any impacts on our credit ratings that may result from the economic conditions of the COVID-19 pandemic; * the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments; * the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages; * the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets; * the effects of failures of electric generation, electric and natural gas transmission or distribution, or natural gas storage facilities systems and equipment, which could result in unanticipated liabilities or unplanned outages; * the operation of Ameren Missouri's Callaway Energy Center, including planned and unplanned outages, and decommissioning costs; * Ameren Missouri's ability to recover the remaining investment, if any, and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs; * the impact of current environmental laws and new, more stringent, or changing requirements, including those related to the New Source Review, carbon dioxide and the implementation of the Affordable Clean Energy Rule, other emissions and discharges, cooling water intake structures, coal combustion residuals, and energy efficiency, that could limit or terminate the operation of certain of Ameren Missouri's energy centers, increase our operating costs or investment requirements, result in an impairment of our assets, cause us to sell 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 standards in Missouri and Illinois and with the zero emission standard in Illinois; * Ameren Missouri's ability to acquire wind, solar, and other renewable energy generation facilities and recover its cost of investment and related return in a timely manner, which is affected by the ability to obtain all necessary project approvals; the ability of developers to meet contractual commitments and complete projects timely, which is dependent upon the availability of necessary materials and equipment, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic; and Ameren Missouri's ability to obtain a certificate of convenience and necessity from the MoPSC or any other required approvals for the addition of renewable resources, retirement of energy centers, and new or continued customer energy-efficiency programs; * the availability of federal production and investment tax credits related to renewable energy and Ameren Missouri's ability to use such credits; the cost of wind, solar, and other renewable generation and storage technologies; and our ability to obtain timely interconnection agreements with the MISO or other regional transmission organizations at an acceptable cost for each facility; * advancements in carbon-free generation and storage technologies, and constructive federal and state energy and economic policies with respect to those technologies; * labor disputes, work force reductions, changes in future wage and employee benefits costs, including those resulting from changes in discount rates, mortality tables, returns on benefit plan assets, and other assumptions; * the impact of negative opinions of us or our utility services that our customers, investors, legislators, or regulators may have or develop, which could result from a variety of factors, including failures in system reliability, failure to implement our investment plans or to protect sensitive customer information, increases in rates, negative media coverage or concerns about environmental, social, and/or governance practices; * the impact of adopting new accounting guidance; * the effects of strategic initiatives, including mergers, acquisitions, and divestitures; * legal and administrative proceedings; and * acts of sabotage, war, terrorism, or other intentionally disruptive acts.

New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. 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

(Unaudited, in millions, except per share amounts)



Three Months EndedNine Months Ended September 30, September 30,

2020 2019 2020 2019

Operating Revenues:

Electric $1,489$1,528$3,846$3,928

Natural gas 139 131 620 666

Total operating revenues 1,628 1,659 4,466 4,594

Operating Expenses:

Fuel 141 147 400 409

Purchased power 140 148 383 440

Natural gas purchased for resale 34 31 183 236

Other operations and maintenance 418 434 1,240 1,301

Depreciation and amortization 273 248 799 745

Taxes other than income taxes 128 131 372 375

Total operating expenses 1,134 1,139 3,377 3,506

Operating Income 494 520 1,089 1,088

Other Income, Net 48 34 117 99

Interest Charges 110 96 311 290

Income Before Income Taxes 432 458 895 897

Income Taxes 63 92 134 158

Net Income 369 366 761 739

Less: Net Income Attributable to 2 2 5 5 Noncontrolling Interests

Net Income Attributable to Ameren $367 $364 $756 $734 Common Shareholders



Earnings per Common Share - Basic $1.48 $1.48 $3.06 $2.99



Earnings per Common Share - Diluted $1.47 $1.47 $3.04 $2.97



Weighted-average Common Shares 247.1 245.9 246.8 245.5 Outstanding - Basic

Weighted-average Common Shares 249.2 247.5 248.4 247.0 Outstanding - Diluted

AMEREN CORPORATION (AEE)

CONSOLIDATED BALANCE SHEET

(Unaudited, in millions)



September 30,December 31, 2020 2019

ASSETS

Current Assets:

Cash and cash equivalents $ 6 $ 16

Accounts receivable - trade (less allowance for 525 393 doubtful accounts)

Unbilled revenue 221 278

Miscellaneous accounts receivable 71 63

Inventories 557 494

Other current assets 210 187

Total current assets 1,590 1,431

Property, Plant, and Equipment, Net 25,541 24,376

Investments and Other Assets:

Nuclear decommissioning trust fund 904 847

Goodwill 411 411

Regulatory assets 1,078 992

Other assets 993 876

Total investments and other assets 3,386 3,126

TOTAL ASSETS $ 30,517 $ 28,933

LIABILITIES AND EQUITY

Current Liabilities:

Current maturities of long-term debt $ 357 $ 442

Short-term debt 272 440

Accounts and wages payable 640 874

Taxes accrued 199 37

Customer deposits 109 111

Current regulatory liabilities 96 164

Other current liabilities 432 437

Total current liabilities 2,105 2,505

Long-term Debt, Net 10,172 8,915

Deferred Credits and Other Liabilities:

Accumulated deferred income taxes and investment 3,151 2,919 tax credits, net

Regulatory liabilities 4,972 4,887

Asset retirement obligations 675 638

Pension and other postretirement benefits 373 401

Other deferred credits and liabilities 438 467

Total deferred credits and other liabilities 9,609 9,312

Ameren Corporation Shareholders' Equity:

Common stock 2 2

Other paid-in capital, principally premium on 5,733 5,694 common stock

Retained earnings 2,769 2,380

Accumulated other comprehensive loss (15) (17)

Total Ameren Corporation shareholders' equity 8,489 8,059

Noncontrolling Interests 142 142

Total equity 8,631 8,201

TOTAL LIABILITIES AND EQUITY $ 30,517 $ 28,933

AMEREN CORPORATION (AEE)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited, in millions)



Nine Months Ended September 30,

2020 2019

Cash Flows From Operating Activities:

Net income $ 761$ 739

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 802 745

Amortization of nuclear fuel 68 56

Amortization of debt issuance costs and premium/discounts 16 14

Deferred income taxes and investment tax credits, net 125 144

Allowance for equity funds used during construction (25) (20)

Stock-based compensation costs 16 15

Other 14 (11)

Changes in assets and liabilities (448) (14)

Net cash provided by operating activities 1,329 1,668

Cash Flows From Investing Activities:

Capital expenditures (1,884)(1,761)

Nuclear fuel expenditures (61) (26)

Purchases of securities - nuclear decommissioning trust (169) (192) fund

Sales and maturities of securities - nuclear 135 184 decommissioning trust fund

Purchase of bonds - (207)

Proceeds from sale of remarketed bonds - 207

Other (2) (3)

Net cash used in investing activities (1,981)(1,798)

Cash Flows From Financing Activities:

Dividends on common stock (367) (350)

Dividends paid to noncontrolling interest holders (5) (5)

Short-term debt, net (168) (53)

Maturities of long-term debt (85) (329)

Issuances of long-term debt 1,263 900

Issuances of common stock 37 54

Employee payroll taxes related to stock-based compensation(20) (29)

Debt issuance costs (11) (10)

Net cash provided by financing activities 644 178

Net change in cash, cash equivalents, and restricted cash (8) 48

Cash, cash equivalents, and restricted cash at beginning 176 107 of year

Cash, cash equivalents, and restricted cash at end of $ 168$ 155period

AMEREN CORPORATION (AEE)

OPERATING STATISTICS



Three Months EndedNine Months Ended

September 30, September 30,

2020 2019 2020 2019

Electric Sales - kilowatthours (in millions):

Ameren Missouri

Residential 3,626 3,833 10,168 10,359

Commercial 3,630 4,022 10,002 10,997

Industrial 1,150 1,167 3,122 3,259

Street lighting and public authority 19 23 63 72

Ameren Missouri retail load subtotal 8,425 9,045 23,355 24,687

Off-system 2,208 1,275 6,649 3,830

Ameren Missouri total 10,633 10,320 30,004 28,517

Ameren Illinois Electric Distribution

Residential 3,371 3,486 8,879 9,000

Commercial 3,208 3,426 8,627 9,302

Industrial 2,819 3,034 8,111 8,799

Street lighting and public authority 107 124 336 377

Ameren Illinois Electric Distribution 9,505 10,070 25,953 27,478 total

Eliminate affiliate sales (123) (35) (304) (84)

Ameren Total 20,015 20,355 55,653 55,911

Electric Revenues (in millions):

Ameren Missouri

Residential $455 $489 $1,111$1,134

Commercial 343 394 828 943

Industrial 87 94 207 226

Other, including street lighting and 47 32 95 102 public authority

Ameren Missouri retail load subtotal $932 $1,009$2,241$2,405

Off-system 52 31 145 112

Ameren Missouri total $984 $1,040$2,386$2,517

Ameren Illinois Electric Distribution

Residential $234 $224 $664 $640

Commercial 127 123 365 370

Industrial 26 27 91 94

Other, including street lighting and 4 15 13 31 public authority

Ameren Illinois Electric Distribution $391 $389 $1,133$1,135total

Ameren Transmission

Ameren Illinois Transmission^(a) $92 $81 $253 $217

ATXI 49 47 147 134

Ameren Transmission total $141 $128 $400 $351

Other and intersegment eliminations^(a) (27) (29) (73) (75)

Ameren Total $1,489$1,528$3,846$3,928

Includes $15 million, $18 million, $39 million, and $47 million,(a) respectively, of electric operating revenues from transmission services provided to the Ameren Illinois Electric Distribution segment.

AMEREN CORPORATION (AEE)

OPERATING STATISTICS



Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Gas Sales - dekatherms (in millions):

Ameren Missouri 2 3 14 15

Ameren Illinois Natural Gas 28 25 123 128

Ameren Total 30 28 137 143

Gas Revenues (in millions):

Ameren Missouri $17 $ 19 $87 $98

Ameren Illinois Natural Gas 122 112 533 568

Ameren Total $139$ 131 $620$666

September 30, December 31,

2020 2019

Common Stock:

Shares outstanding (in millions) 247.2 246.2

Book value per share $ 34.34 $32.73

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SOURCE Ameren Corporation