Ameren(US:AEE)2023-05-04 16:00PART I. Financial Information Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for Ameren Corporation and its principal subsidiaries for Q1 2023 Ameren Corporation Financial Statements Ameren Corporation reported a Q1 2023 net income of $264 million, or $1.00 per diluted share, with total assets reaching $38.06 billion Ameren Corporation Consolidated Statement of Income (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total Operating Revenues | $2,062 million | $1,879 million | | Operating Income | $351 million | $331 million | | Net Income Attributable to Ameren Common Shareholders | $264 million | $252 million | | Earnings per Common Share – Diluted | $1.00 | $0.97 | Ameren Corporation Consolidated Balance Sheet Highlights | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $38,064 million | $37,904 million | | Total Liabilities | $27,328 million | $27,267 million | | Total Equity | $10,736 million | $10,637 million | Ameren Corporation Consolidated Statement of Cash Flows (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $496 million | $388 million | | Net cash used in investing activities | ($964) million | ($780) million | | Net cash provided by financing activities | $489 million | $391 million | Union Electric Company (d/b/a Ameren Missouri) Financial Statements Ameren Missouri's net income decreased to $28 million in Q1 2023 from $50 million in Q1 2022, driven by higher purchased power costs Ameren Missouri Consolidated Statement of Income (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total Operating Revenues | $923 million | $818 million | | Operating Income | $60 million | $65 million | | Net Income Available to Common Shareholder | $28 million | $50 million | Ameren Illinois Company (d/b/a Ameren Illinois) Financial Statements Ameren Illinois reported an increased net income of $198 million in Q1 2023, up from $169 million year-over-year, supported by higher electric revenues Ameren Illinois Statement of Income (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total Operating Revenues | $1,101 million | $1,024 million | | Operating Income | $276 million | $246 million | | Net Income Available to Common Shareholder | $198 million | $169 million | Note 2. Rate and Regulatory Matters This note details significant regulatory activities, including rate case filings in Missouri and Illinois and a pending FERC decision on ROE - Ameren Missouri filed a nonunanimous stipulation with the MoPSC to increase annual electric service revenues by $140 million81 - Ameren Illinois filed a Multi-Year Rate Plan (MYRP) with the ICC to set electric distribution rates from 2024 through 2027, requesting a 10.5% ROE and forecasting a revenue requirement of $1.28 billion for 20249091 - Ameren Illinois also filed a request to increase annual natural gas delivery service revenues by $160 million, based on a 10.7% ROE and a $2.9 billion rate base98 - The FERC-allowed base ROE for transmission rates remains subject to complaint cases, where a 50 basis point change would impact Ameren's annual revenue by an estimated $19 million99 Note 9. Commitments and Contingencies This note outlines environmental compliance costs, ongoing litigation concerning the Rush Island Energy Center, and other site remediation obligations - Ameren and Ameren Missouri estimate capital expenditures of $90 million to $120 million from 2023 through 2027 to comply with existing environmental regulations155 - Litigation regarding the Rush Island Energy Center continues, with Ameren Missouri requesting to retire the plant, which has a net plant balance of approximately $0.6 billion, by mid-2025162163 - Ameren Illinois has an estimated remaining obligation of $58 million to $108 million for the remediation of former MGP sites, with costs recoverable from customers171 Note 14. Segment Information This note provides a breakdown of Q1 2023 financial performance and capital expenditures by business segment Ameren Net Income by Segment (Q1 2023) | Segment | Net Income Attributable to Ameren Common Shareholders (in millions) | | :--- | :--- | | Ameren Missouri | $28 | | Ameren Illinois Electric Distribution | $61 | | Ameren Illinois Natural Gas | $87 | | Ameren Transmission | $71 | | Other | $17 | | Total | $264 | Ameren Capital Expenditures by Segment (Q1 2023) | Segment | Capital Expenditures (in millions) | | :--- | :--- | | Ameren Missouri | $481 | | Ameren Illinois Electric Distribution | $170 | | Ameren Illinois Natural Gas | $51 | | Ameren Transmission | $213 | | Other / Intersegment | $16 | | Total | $931 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2023 financial results, key performance drivers, liquidity, capital resources, and the company's strategic outlook - Q1 2023 net income attributable to common shareholders was $264 million ($1.00/share), up from $252 million ($0.97/share) in Q1 2022214 - Positive earnings drivers included increased rate base investments across all segments and a higher recognized ROE at Ameren Illinois Electric Distribution214 - Negative earnings impacts included decreased electric retail sales at Ameren Missouri due to warmer winter weather and increased financing costs214 - The company invested $0.9 billion in its rate-regulated businesses in Q1 2023 as part of its strategic plan215 Results of Operations The Q1 2023 earnings per share increased by $0.03, driven by rate base investments but partially offset by lower sales and higher financing costs - Favorable EPS impact from increased rate base investments at Ameren Transmission and Ameren Illinois Electric Distribution, and a higher recognized ROE at Ameren Illinois Electric Distribution (+7 cents)233 - Unfavorable EPS impact from decreased electric retail sales at Ameren Missouri due to warmer winter temperatures (-10 cents)234 - Unfavorable EPS impact from increased financing costs due to higher debt balances and interest rates (-4 cents)234 - Other operations and maintenance expenses decreased by $13 million, partly due to a $9 million increase in the cash surrender value of COLI at Ameren Missouri265266 Liquidity and Capital Resources The company maintained $1.4 billion in net available liquidity while increasing capital expenditures and planning for future investments - Net available liquidity was $1.4 billion as of March 31, 2023, with an additional $317 million potentially available from settling forward sale agreements287 Cash Flow Summary (Q1 2023 vs Q1 2022) | Activity | Q1 2023 (in millions) | Q1 2022 (in millions) | | :--- | :--- | :--- | | Cash from Operations | $496 | $388 | | Cash used in Investing | ($964) | ($780) | | Cash from Financing | $489 | $391 | - Ameren plans to invest up to $20.5 billion in capital expenditures from 2023 through 2027358 - Ameren expects to issue approximately $500 million of equity annually from 2024 to 2027, in addition to about $100 million annually from DRPlus and employee benefit plans287 Outlook The company outlines significant capital investment plans in renewables, navigates economic pressures, and advances its net-zero emissions goal - Ameren is targeting net-zero carbon emissions by 2045, with plans to add 2,800 MW of renewable generation by 2030 and retire coal-fired plants348350 - The company plans to invest up to $20.5 billion from 2023-2027, including $2.5 billion in renewable generation and $0.8 billion in MISO long-range transmission projects358 - Ameren Missouri expects a decision by June 2023 on its request for a $140 million annual electric revenue increase331 - Based on preliminary calculations, Ameren does not expect to be subject to the 15% minimum tax on adjusted financial statement income imposed by the IRA in 2023 and 2024369 Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk disclosures are materially unchanged, and the company confirms no outstanding contracts with Russian uranium suppliers - No material changes to market risk disclosures since the last Form 10-K372 - Ameren Missouri has fulfilled its contract with a Russian uranium supplier and has no further supply contracts with Russian entities, with fuel needs secured through 2026372 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls during the quarter - As of March 31, 2023, the principal executive and financial officers concluded that the company's disclosure controls and procedures are effective373 - No material changes to internal control over financial reporting occurred during the most recent fiscal quarter374 PART II. Other Information Item 1. Legal Proceedings The company's ordinary course legal proceedings are not expected to have a material adverse financial effect - The company is involved in legal proceedings arising in the ordinary course of business and does not expect them to have a material adverse effect376 Item 1A. Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's Form 10-K - No material changes to the risk factors disclosed in the Form 10-K have occurred377 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No company equity securities were purchased by Ameren or its subsidiaries during the first quarter of 2023 - No reportable purchases of equity securities were made by Ameren Corporation, Ameren Missouri, or Ameren Illinois during the first quarter of 2023377 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including indentures, officer certifications, and XBRL data - Exhibits filed include a supplemental indenture for Ameren Missouri's new bonds, certifications by principal officers, and XBRL data files380