Ameren(AEE)2024-08-05 21:10Financial Performance - Net income attributable to Ameren common shareholders for Q2 2024 was $258 million, or $0.97 per diluted share, up from $237 million, or $0.90 per diluted share in Q2 2023, reflecting a 8.8% increase [215]. - For the first half of 2024, net income attributable to Ameren common shareholders was $519 million, or $1.95 per diluted share, compared to $501 million, or $1.90 per diluted share in the same period of 2023, indicating a 3.6% increase [215]. - Net income attributable to Ameren common shareholders increased by $21 million, or $0.07 per diluted share, for the three months ended June 30, 2024, compared to the same period in 2023 [240]. - For the six months ended June 30, 2024, net income attributable to Ameren common shareholders rose by $18 million, or $0.05 per diluted share, compared to the prior year [243]. - Earnings per diluted share for the three months ended June 30, 2024, were $0.97, up from $0.90 in the same period last year [240]. - The company reported a total net income of $522 million for the first half of 2024, compared to $504 million in the first half of 2023, marking a growth of 3.6% [252]. Revenue and Sales - Electric revenues for Q2 2024 totaled $1,521 million, a decrease of 7.3% from $1,585 million in Q2 2023 [250]. - Natural gas revenues for Q2 2024 were $172 million, a slight decrease from $175 million in Q2 2023 [250]. - Electric revenues for the three months ended June 30, 2024, were $509 million, a decrease of 5.74% from $540 million in the same period last year [255]. - Natural gas revenues for the three months ended June 30, 2024, were $148 million, compared to $152 million in the same period last year, reflecting a decrease of 2.63% [255]. - For the six months ended June 30, 2024, electric revenues totaled $1,015 million, a decrease of 12.83% from $1,164 million in the same period last year [257]. - Natural gas revenues for the six months ended June 30, 2024, were $539 million, compared to $543 million in the same period last year, reflecting a decrease of 0.74% [257]. Operating Income and Expenses - Operating income for the first half of 2024 reached $732 million, compared to $680 million in the same period of 2023, reflecting a growth of 7.6% [252]. - Total operating expenses for Q2 2024 were $1,160 million, compared to $1,256 million in Q2 2023, indicating a reduction of 7.6% [250]. - Operating income for Ameren Missouri in Q2 2024 was $144 million, up from $132 million in Q2 2023, representing a 9.1% increase [250]. - The total depreciation and amortization expenses for the first half of 2024 were $737 million, compared to $655 million in the same period of 2023, reflecting an increase of 12.5% [252]. - Interest charges for the first half of 2024 amounted to $319 million, an increase from $261 million in the same period of 2023 [252]. Capital Investments and Projects - Ameren invested $1.9 billion in its rate-regulated businesses in the first half of 2024, focusing on energy infrastructure and regulatory enhancements [219]. - Ameren Missouri's Smart Energy Plan includes a five-year capital investment of approximately $12.4 billion from 2024 to 2028, aimed at upgrading electric infrastructure and accommodating renewable energy [223]. - Ameren's capital investments related to MISO long-range transmission projects are estimated at approximately $1.8 billion, with construction expected to begin in 2026 [233]. - Ameren plans to issue approximately $300 million of equity in 2024 and $600 million each year from 2025 to 2028 to support capital expenditures [332]. - The company expects to invest up to $22.8 billion in capital expenditures from 2024 through 2028, including $3.3 billion for renewable generation investments [401]. Regulatory and Rate Changes - In June 2024, Ameren Missouri requested a $446 million increase in annual revenues for electric service, based on a 10.25% return on common equity and a rate base of $14 billion [220]. - The ICC approved revenue requirements for Ameren Illinois' electric distribution services for 2024 to 2027, totaling $1,196 million, $1,282 million, $1,350 million, and $1,397 million respectively [228]. - The ICC's November 2023 order increased Ameren Illinois' annual revenues for natural gas delivery service by $112 million, based on a 9.44% allowed ROE and a rate base of approximately $2.85 billion [229]. - Ameren Illinois filed for a reconciliation adjustment requesting recovery of $158 million related to its 2023 electric distribution service revenue requirement [227]. - A proposed customer energy-efficiency plan by Ameren Missouri includes an investment of $123 million annually from 2025 to 2027, with potential performance incentives totaling $56 million if goals are met [224]. Challenges and Economic Factors - The company is experiencing elevated inflation levels affecting labor, services, materials, and supplies, alongside high interest rates [236]. - Elevated inflation levels and high interest rates are impacting cost control and investment capabilities, potentially affecting customer rates and service affordability [392]. - Increased financing costs at Ameren Missouri and Ameren (parent) negatively impacted earnings by $0.04 and $0.07 per share for the three and six months ended June 30, 2024, respectively [244]. Environmental and Sustainability Goals - The company is targeting net-zero carbon emissions by 2045, with interim goals of a 60% reduction by 2030 and an 85% reduction by 2040 based on 2005 levels [395]. - Ameren Missouri's preferred plan includes adding 800 MW of natural gas-fired generation by 2027 and 2,800 MW of renewable generation by 2030 [395]. - Ameren Missouri recorded a $20 million liability related to potential additional mitigation costs as part of ongoing environmental compliance efforts [391].