<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
COMMISSION FILE NUMBER 1-14756
AMEREN CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 43-1723446
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
<S> <C>
Common Stock, $ .01 par value New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates as of
March 20, 1998, based on closing prices most recently available as reported in
The Wall Street Journal: $5,805,929,236.
Shares of Common Stock, $5 par value, outstanding as of March 20, 1998:
137,215,462 shares.
DOCUMENTS INCORPORATED BY REFERENCES.
Portions of the registrant's 1997 Annual Report to Stockholders (the
"1997 Annual Report") are incorporated by reference into Parts I, II and IV.
Portions of the registrant's definitive proxy statement for the 1998
annual meeting are incorporated by reference into Part III.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
- ------ ----
<S> <C>
Item 1 - Business
General........................................................ 1
Construction Program and Financing............................. 2
Rates.......................................................... 2
Fuel Supply.................................................... 3
Regulation..................................................... 3
Industry Issues................................................ 5
Operating Statistics(1)........................................ 5
Item 2 - Properties.......................................................... 5
Item 3 - Legal Proceedings................................................... 6
Item 4 - Submission of Matters to a Vote of Security Holders(2)
Executive Officers of the Registrant (Item 401(b) of Regulation S-K)............... 6
PART II
Item 5 - Market for Registrant's Common Equity and Related
Stockholder Matters(1)......................................... 7
Item 6 - Selected Financial Data(1).......................................... 7
Item 7 - Management's Discussion and Analysis of Financial Condition
and Results of Operations(1)................................... 7
Item 8 - Financial Statements and Supplementary Data(1)...................... 7
Item 9 - Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure(2)
PART III
Item 10 - Directors and Executive Officers of the Registrant(1)............... 8
Item 11 - Executive Compensation(1)........................................... 8
Item 12 - Security Ownership of Certain Beneficial Owners
and Management(1).............................................. 8
Item 13 - Certain Relationships and Related Transactions(1)................... 8
PART IV
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K..... 9
SIGNATURES ....................................................................... 12
EXHIBITS ......................................................................... 13
</TABLE>
- --------
(1) Incorporated herein by reference.
(2) Not applicable and not included herein.
<PAGE> 3
PART I
ITEM 1. BUSINESS.
GENERAL. The Registrant, Ameren Corporation (the "Company"), was
incorporated in Missouri on August 7, 1995. On December 31, 1997, following the
receipt of all required approvals, CIPSCO Incorporated ("CIPSCO") and Union
Electric Company ("UE") combined with the result that the common shareholders of
CIPSCO and UE became the common shareholders of the Company, and the Company
became the owner of 100% of the common stock of CIPSCO's operating subsidiary,
Central Illinois Public Service Company ("CIPS") and UE. Pursuant to an
Agreement and Plan of Merger dated as of August 11, 1995 between (among others)
CIPSCO, UE, and the Company, each outstanding share of UE common stock has been
exchanged for one share of the Company's common stock and each outstanding share
of CIPSCO common stock has been exchanged for 1.03 shares of the Company's
common stock.
For additional information about the merger, see "Overview" in
"Management's Discussion and Analysis" and Notes 1 and 2 to the "Notes to
Financial Statements" on Pages 18, 29, and 30, respectively, of the 1997 Annual
Report pages incorporated herein by reference.
Ameren is a public utility holding company registered under the
Public Utility Holding Company Act of 1935 ("PUHCA") and does not own or operate
any significant assets other than the stock of its subsidiaries, including its
two operating subsidiaries, CIPS and UE. Dividends on Ameren's Common Stock are
dependent on distributions to be made to it by CIPS, UE, and its other
subsidiaries. The 1997 Annual Report Form 10-K's for CIPS and UE are available
from the Company upon request.
CIPS is an Illinois corporation organized in 1902. It supplies
electric and gas service to territories in central and southern Illinois having
an estimated population of 820,000 within an area of approximately 20,000 square
miles. UE was incorporated in Missouri in 1922, and is successor to a number of
companies, the oldest of which was organized in 1881. It is the largest electric
utility in the State of Missouri and supplies electric and gas service in
territories in Missouri and Illinois having an estimated population of 2,600,000
within an area of approximately 24,500 square miles, including the greater St.
Louis area.
The Company recorded an extraordinary charge to earnings in the
fourth quarter of 1997 for the write-off of generation-related regulatory assets
and liabilities of the Company's Illinois retail electric business as a result
of electric industry restructuring legislation enacted in Illinois in December
1997. The write-off reduced earnings $52 million, net of income taxes, or 38
cents per share (See Note 2 to the "Notes to Financial Statements " on Page 30
of the 1997 Annual Report pages incorporated herein by reference.)
On a consolidated basis, 92.1% of the Company's 1997 operating
revenues was derived from the sale of electric energy, 7.5% came from the sale
of natural gas, and 0.4% came from other sources. Consolidated electric
operating revenues as a percentage of total operating revenues for the years
1995 and 1996 were 93% and 92%, respectively.
The Company also owns all of the common stock of other subsidiary
companies as follows: (a) CIPSCO Investment Company, a non-regulated investment
company incorporated in Illinois; (b) Ameren Services Company, a Missouri
corporation which provides administrative, accounting, legal, engineering,
executive, and other support services to Ameren affiliates; (c) Ameren Energy,
Inc., a Missouri corporation which will provide power marketing, risk management
and energy services; and (d) Ameren Development Company, a non-regulated holding
company incorporated in Missouri. In addition, through its operating
subsidiaries, the Company owns 60% of
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<PAGE> 4
the Common Stock of Electric Energy, Inc., which owns and operates a generating
plant with a nominal capacity of 1,000 mW. 60% of the plant's output is
committed to the Department of Energy, 10% to UE, 5% to CIPS, and the remainder
to its other owners.
At December 31, 1997, the Company and its subsidiaries had 8,149
employees.
CONSTRUCTION PROGRAM AND FINANCING. The Company is engaged in a
construction program under which expenditures averaging approximately $333
million are anticipated during each of the next five years. Capital expenditures
for compliance with the Clean Air Act Amendments of 1990 are included in the
construction program but the estimate does not include expenditures which may be
incurred to meet new air quality standards -- also see "Regulation", below. The
Company does not anticipate a need for additional base load electric generating
capacity until after the year 2013.
In addition to the funds required for construction during the
1998-2002 period, $488 million will be required to repay long-term debt as
follows: $52 million in 1998; $209 million in 1999; $49 million in 2000; $44
million in 2001; and $134 million in 2002. Amounts for years subsequent to 1998
do not include UE's nuclear fuel lease payments since the amounts of such
payments are not currently determinable.
Financing. Historically, CIPS and UE have financed those
construction costs which exceeded available internally generated funds through
issuance of short-term debt in the form of bank loans and commercial paper. As
needed, the short-term debt would be subsequently reduced by sales of long-term
debt and equity securities.
To issue first mortgage bonds and preferred stock, CIPS and UE
each must comply with earnings tests contained in their respective mortgages and
Articles. For the issuance of additional first mortgage bonds, generally,
earnings coverage of twice the annual interest charges on first mortgage bonds
outstanding and to be issued is required. Generally, for the issuance of
additional preferred stock, earnings coverage of one and one-half times annual
interest charges and preferred stock dividends is required under the CIPS
Articles, and earnings coverage of at least two and one-half times the annual
dividend on preferred stock outstanding and to be issued is required under UE's
Articles. The ability to issue such securities in the future will depend on
coverages at that time. Currently, each company expects to have adequate
coverage ratios for anticipated requirements.
For additional information on the Company's financial needs, see
"Liquidity and Capital Resources" in "Management's Discussion and Analysis" on
Page 20, and Notes 5, 6, and 10 to the "Notes to Financial Statements" on Pages
34 and 40, of the 1997 Annual Report pages incorporated herein by reference.
RATES. For the year 1997, approximately 60%, 22%, and 18% of the
Company's electric operating revenues were based on rates regulated by the
Missouri Public Service Commission ("MoPSC"), the Illinois Commerce Commission
("ICC"), and the Federal Energy Regulatory Commission ("FERC") of the U. S.
Department of Energy, respectively.
As permitted by electric utility restructuring legislation in
Illinois, CIPS and UE have elected to eliminate the fuel adjustment clause on
sales of electricity in Illinois, thereby including a historical level of fuel
costs in base rates. The CIPS request has been approved by the ICC, and a
decision on the UE request is expected by early May, 1998.
- 2 -
<PAGE> 5
For additional information on "Rates", see Note 2 to the "Notes
to Financial Statements" on Page 30 of the 1997 Annual Report pages incorporated
herein by reference.
FUEL SUPPLY.
<TABLE>
<CAPTION>
COST OF FUELS YEAR
- ------------- -------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
UE
Per Million BTU - Coal 105.600(cent) 112.250(cent) 117.645(cent) 123.950(cent) 153.284(cent)
- Nuclear 47.472(cent) 47.499(cent) 48.592(cent) 49.932(cent) 56.848(cent)
- System 92.816(cent) 96.596(cent) 101.590(cent) 101.867(cent) 126.362(cent)
CIPS
Per Million BTU - System (Coal) 163.000(cent) 171.000(cent) 176.000(cent) 165.000(cent) 167.000(cent)
</TABLE>
Nuclear. UE has agreements to fulfill its Callaway Nuclear Plant
needs for uranium, enrichment, and fabrication services through 2002, and
agreements for conversion services are sufficient to supply the Plant through
1999. Additional contracts will have to be entered into in order to supply
nuclear fuel during the remainder of the life of the Plant, at prices which
cannot now be accurately predicted. The Callaway Plant normally requires
re-fueling at 18-month intervals and re-fuelings are presently scheduled for the
spring of 1998 and the fall of 1999. Under the Nuclear Waste Policy Act of 1982,
the U. S. Department of Energy is responsible for the permanent storage and
disposal of spent nuclear fuel. DOE currently charges one mill per nuclear
generated kilowatt-hour sold for future disposal of spent fuel. Electric rates
charged to customers provide for recovery of such costs. DOE is not expected to
have its permanent storage facility for spent fuel available until at least
2015. UE has sufficient storage capacity at the Callaway Plant site until 2004
and is pursuing a viable storage alternative. This alternative will require
Nuclear Regulatory Commission approval. The delayed availability of DOE's
disposal facility is not expected to adversely affect the continued operation of
the Callaway Plant.
For additional information on the Company's "Fuel Supply", see
Note 10 to the "Notes to Financial Statements" on Page 40 of the 1997 Annual
Report pages incorporated herein by reference.
REGULATION. As a holding company registered under the PUHCA,
Ameren, along with its subsidiaries, is subject to the regulatory provisions
of said Act, including provisions relating to the issuance of securities, sales
and acquisitions of securities and utility assets, the services performed by
Ameren Services Company, and the activities of certain other subsidiaries.
CIPS and UE are subject to regulation, as applicable, by the
MoPSC and the ICC as to rates, service, accounts, issuance of equity securities,
issuance of debt having a maturity of more than twelve months, mergers, and
various other matters. Said companies are also subject to regulation by the FERC
as to rates and charges in connection with the transmission of electric energy
in interstate commerce and the sale of such energy at wholesale in interstate
commerce, mergers, and certain other matters. Authorization to issue debt having
a maturity of twelve months or less is obtained from the Securities and Exchange
Commission.
In December 1997, the Governor of Illinois signed the Electric
Service Customer Choice and Rate Relief Law of 1997 providing for electric
utility restructuring in Illinois. This legislation introduces competition into
the supply of electric energy in Illinois and, as a result, prices for the
retail supply of electric generation are expected to transition from cost-based,
- 3 -
<PAGE> 6
regulated rates to rates determined in large part by competitive market forces.
For a discussion of the legislation, see Note 2 to the "Notes to Financial
Statements" on Page 30 of the 1997 Annual Report pages incorporated herein by
reference.
Operation of UE's Callaway Plant is subject to regulation by the
Nuclear Regulatory Commission. Its Facility Operating License for the Callaway
Plant expires on October 18, 2024. UE's Osage hydroelectric plant and its Taum
Sauk pumped-storage hydro plant, as licensed projects under the Federal Power
Act, are subject to FERC regulations affecting, among other things, the general
operation and maintenance of the projects. The license for the Osage Plant
expires on February 28, 2006, and the license for the Taum Sauk Plant expires on
June 30, 2010. UE's Keokuk Plant and dam located in the Mississippi River
between Hamilton, Illinois and Keokuk, Iowa, are operated under authority,
unlimited in time, granted by an Act of Congress in 1905.
CIPS and UE are regulated, in certain of their operations, by air
and water pollution and hazardous waste regulations at the city, county, state
and federal levels.
National Ambient Air Quality Standards. In July 1997, the United
States Environmental Protection Agency ("EPA") issued final regulations revising
the National Ambient Air Quality Standards for ozone and particulate matter.
Although specific emission control requirements are still being developed, it is
believed that the revised standards will require significant additional
reductions in nitrogen oxide and sulfur dioxide emissions from coal-fired
boilers. In October 1997, the EPA announced that Missouri and Illinois are
included in the area targeted for nitrogen oxide emissions reductions as part of
the EPA's regional control program. Reduction requirements in nitrogen oxide
emissions from UE's and CIPS' coal-fired boilers could exceed 80% from 1990
levels by the year 2002. Reduction requirements in sulfur dioxide emissions may
be up to 50% beyond that already required by Phase II acid rain control
provisions of the 1990 Clean Air Act Amendments and could be required by 2007.
Because of the magnitude of these additional reductions, the Company could be
required to incur significantly higher capital costs to meet future compliance
obligations for the coal-fired boilers or purchase power from other sources,
either of which could have significantly higher operations and maintenance
expenditures associated with compliance. At this time, the Company is unable to
determine the impact of the revised air quality standards on its future
financial condition, results of operations or liquidity.
In December 1997, the United States and numerous other countries
agreed to certain environmental provisions (the Kyoto Protocol), which would
require decreases in greenhouse gases in an effort to address the "global
warming" issue. The Company is unable to predict what requirements, if any, will
be adopted in this country. However, implementation of the Kyoto Protocol in its
present form would likely result in significantly higher capital costs and
operations and maintenance expenditures by the Company. At this time, the
Company is unable to determine the impact of these proposals on its future
financial condition, results of operations or liquidity.
For additional discussion of environmental matters, see Note 10
to the "Notes to Financial Statements" on Page 40 of the 1997 Annual Report
pages incorporated by reference.
Other aspects of the Company's business are subject to the
jurisdiction of various regulatory authorities and, for additional information
on "Regulation", see Note 2 to the "Notes to Financial Statements" on Page 30 of
the 1997 Annual Report pages incorporated herein by reference.
INDUSTRY ISSUES. The Company is facing issues common to the
electric and gas utility industries which have emerged during the past several
years. These issues include: the potential for more intense competition and for
changing the structure of regulation; changes in the
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<PAGE> 7
structure of the industry as a result of changes in federal and state laws;
on-going consideration of additional changes of the industry by federal and
state authorities; continually developing environmental laws, regulations and
issues including proposed new air quality standards; public concern about the
siting of new facilities; proposals for demand side management programs; public
concerns about nuclear decommissioning and the disposal of nuclear wastes; and
global climate issues. The Company is monitoring these issues and is unable to
predict at this time what impact, if any, these issues will have on its
operations, financial condition, or liquidity.
Also see "Outlook" in "Management's Discussion and Analysis" and
Note 10 to the "Notes to Financial Statements" on Pages 22 and 40, respectively,
of the Annual Report pages incorporated herein by reference.
OPERATING STATISTICS. The information on Pages 46 and 47 in the
Company's 1997 Annual Report is incorporated herein by reference.
ITEM 2. PROPERTIES.
The following table sets forth information with respect to the
Company's generating facilities and capability at the time of the expected 1998
peak.
<TABLE>
<CAPTION>
GROSS KILOWATT
ENERGY INSTALLED
SOURCE PLANT LOCATION CAPABILITY
------ ----- -------- ----------
<S> <C> <C> <C>
Coal Labadie Franklin County, Mo. 2,404,000
Rush Island Jefferson County, Mo. 1,214,000
Newton Newton, Ill. 1,110,000
Sioux St. Charles County, Mo. 1,008,000
Meramec St. Louis County, Mo. 927,000
Coffeen Coffeen, Ill. 900,000
Meredosia Meredosia, Ill. 339,000
Grand Tower Grand Tower, Ill. 186,000
Hutsonville Hutsonville, Ill. 153,000
----------
Total Coal 8,241,000
Nuclear Callaway Callaway County, Mo. 1,199,000
Hydro Osage Lakeside, Mo. 212,000
Keokuk Keokuk, Ia. 126,000
----------
Total Hydro 338,000
Oil and Venice Venice, Ill. 459,000
Natural Gas Other Various 554,000
----------
Total Oil and
Natural Gas 1,013,000
Pumped-
storage Taum Sauk Reynolds County, Mo. 350,000
----------
TOTAL 11,141,000
==========
</TABLE>
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<PAGE> 8
As of December 31, 1997, CIPS owned approximately 4,800 circuit
miles of electric transmission lines and substations with a transformer capacity
of approximately 19,450,000 kVA. CIPS operates one propane-air plant and 4,800
miles of gas mains. As of that date, UE owned approximately 3,304 circuit miles
of electric transmission lines and substations with a transformer capacity of
approximately 45,497,000 kVA. UE operates three propane-air plants and 2,737
miles of gas mains. Other properties of the companies include distribution
lines, underground cable, and office buildings, warehouses, garages and repair
shops.
Substantially all of the properties and plant of CIPS and UE are
subject to the direct first liens of the indentures securing their first
mortgage bonds.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in legal and administrative proceedings
before various courts and agencies with respect to matters arising in the
ordinary course of business, some of which involve substantial amounts.
Management believes that the final disposition of these proceedings will not
have a material adverse effect on its financial position, results of operations
or liquidity.
Statements made in this report which are not based on historical
facts, are 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, the Company is providing
this cautionary statement to identify important factors that could cause actual
results to differ materially from those anticipated. Factors include, but are
not limited to, the effects of: regulatory actions; changes in laws and other
governmental actions; competition; future market prices for electricity; average
rates for electricity in the Midwest; business and economic conditions; weather
conditions; fuel prices and availability; generation plant performance; monetary
and fiscal policies; and legal and administrative proceedings.
INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF
REGULATION S-K:
<TABLE>
<CAPTION>
DATE FIRST ELECTED
AGE AT OR APPOINTED TO
NAME 12/31/97 PRESENT POSITION PRESENT POSITION
---- -------- ---------------- ----------------
<S> <C> <C> <C>
Charles W. Mueller 59 Chairman, President and
Chief Executive Officer,
and Director 12/31/97
Donald E. Brandt 43 Senior Vice President 12/31/97
William E. Jaudes 60 Vice President and
General Counsel 12/31/97
Warner L. Baxter 36 Controller 12/31/97
James C. Thompson 58 Secretary 12/31/97
Jerre E. Birdsong 43 Treasurer 4/23/96
</TABLE>
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<PAGE> 9
All officers are elected or appointed annually by the Board of
Directors following the election of such Board at the annual meeting of
stockholders held in April. There are no family relationships between the
foregoing officers of the Company. Except for Mr. Baxter, each of the
above-named executive officers has been employed by the Company or its
affiliates for more than five years in executive or management positions. Mr.
Baxter was previously employed by Price Waterhouse LLP.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Information required to be reported by this item is included on Page 49
of the 1997 Annual Report and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Information for the 1993-1997 period required to be reported by this
item is included on Page 45 of the 1997 Annual Report and is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Information required to be reported by this item is included on Pages
18 through 23 of the 1997 Annual Report and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Company on Pages 24 through 44, the
report thereon of Price Waterhouse LLP appearing on Page 17 and the Selected
Quarterly Information on Page 28 of the 1997 Annual Report are incorporated
herein by reference.
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<PAGE> 10
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Any information concerning directors required to be reported by this
item is included under "Item (1): Election of Directors" in the Company's 1998
definitive proxy statement filed pursuant to Regulation 14A and is incorporated
herein by reference.
Information concerning executive officers required by this item is
reported in Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Any information required to be reported by this item is included under
"Compensation" in the Company's 1998 definitive proxy statement filed pursuant
to Regulation 14A and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Any information required to be reported by this item is included under
"Security Ownership of Management" in the Company's 1998 definitive proxy
statement filed pursuant to Regulation 14A and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Any information required to be reported by this item is included under
"Item (1): Election of Directors" in the Company's 1998 definitive proxy
statement filed pursuant to Regulation 14A and is incorporated herein by
reference.
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<PAGE> 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements: *
<TABLE>
<CAPTION>
Page From 1997
Annual Report
-------------
<S> <C>
Consolidated Report of Independent Accountants......................................... 17
Consolidated Balance Sheet - December 31, 1997 and 1996................................ 24
Consolidated Statement of Income - Years 1997, 1996, and 1995.......................... 26
Consolidated Statement of Cash Flows - Years 1997, 1996, and 1995...................... 27
Consolidated Statement of Retained Earnings
- Years 1997, 1996, and 1995......................................................... 28
Notes to Consolidated Financial Statements............................................. 29
</TABLE>
*Incorporated by reference from the indicated pages of the 1997
Annual Report
2. Financial Statement Schedule:
The following schedule, for the years ended December 31, 1997,
1996, and 1995, should be read in conjunction with the
aforementioned financial statements (schedules not included have
been omitted because they are not applicable or the required data
is shown in the aforementioned financial statements).
<TABLE>
<CAPTION>
Pages Herein
------------
<S> <C>
Report of Independent Accountants on Financial
Statement Schedule.................................................................. 10
Valuation and Qualifying Accounts (Schedule II)........................................ 11
</TABLE>
3. Exhibits: See EXHIBITS beginning on Page 13
(b) Reports on Form 8-K. During the last quarter of 1997, the Company
filed a report on Form 8-K dated December 31, 1997 reporting
completion of the merger transaction between CIPSCO and UE.
- 9 -
<PAGE> 12
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Ameren Corporation
Our audits of the financial statements referred to in our report dated February
5, 1998 appearing in the 1997 Annual Report to Shareholders of Ameren
Corporation (which report and financial statements are incorporated by reference
in this Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion,
this Financial Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
financial statements.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 5, 1998
- 10 -
<PAGE> 13
AMEREN CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Col. A. Col. B Col. C Col. D. Col. E
------- ------ ------ ------- ------
Additions
---------------------------
(1) (2)
Balance at Charged to Balance at
beginning costs and Charged to end of
Description of period expenses other accounts Deductions period
----------- ----------- ---------- -------------- ---------- ---------
Year ended December 31, 1997 (Note)
<S> <C> <C> <C> <C> <C>
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $5,795,332 $12,648,812 $ - $13,598,816 $4,845,328
========== =========== =========== =========== ==========
Year ended December 31, 1996
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $7,524,965 $12,100,000 $ - $13,829,633 $5,795,332
========== =========== =========== =========== ==========
Year ended December 31, 1995
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $6,877,378 $10,800,000 $ - $10,152,413 $7,524,965
========== =========== =========== =========== ==========
</TABLE>
Note: Uncollectible accounts charged off, less recoveries.
- 11 -
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
AMEREN CORPORATION
(Registrant)
CHARLES W. MUELLER
Chairman, President and
Chief Executive Officer
Date March 30, 1998 By /s/ James C. Thompson
----------------------- ---------------------------------------
(James C. Thompson, Attorney-in-Fact)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ C. W. Mueller Chairman, President, Chief
- -------------------------------- Executive Officer and Director
CHARLES W. MUELLER (Principal Executive Officer)
/s/ Donald E. Brandt Senior Vice President
- -------------------------------- (Principal Financial and Accounting Officer)
DONALD E. BRANDT
/s/ W. E. Cornelius
- -------------------------------------
WILLIAM E. CORNELIUS, Director
/s/ Clifford L. Greenwalt
- -------------------------------------
CLIFFORD L. GREENWALT, Director
- -------------------------------------
THOMAS A. HAYS, Director
/s/ Richard A. Liddy
- -------------------------------------
RICHARD A. LIDDY, Director
/s/ Gordon R. Lohman
- -------------------------------------
GORDON R. LOHMAN, Director
/s/ Richard A. Lumpkin
- -------------------------------------
RICHARD A. LUMPKIN, Director
- -------------------------------------
JOHN PETERS MacCARTHY, Director
/s/ Hanne M. Merriman
- -------------------------------------
HANNE M. MERRIMAN, Director
/s/ Paul L. Miller, Jr.
- -------------------------------------
PAUL L. MILLER, JR., Director
/s/ Robert H. Quenon
- -------------------------------------
ROBERT H. QUENON, Director
/s/ Harvey Saligman
- -------------------------------------
HARVEY SALIGMAN, Director
/s/ Charles J. Schukai
- -------------------------------------
CHARLES J. SCHUKAI, Director
/s/ Janet McAfee Weakley
- -------------------------------------
JANET McAFEE WEAKLEY, Director
/s/ James W. Wogsland
- -------------------------------------
JAMES W. WOGSLAND, Director
By /s/ James C. Thompson March 30, 1998
-------------------------------------
(James C. Thompson, Attorney-in-Fact)
</TABLE>
- 12 -
<PAGE> 15
EXHIBITS
EXHIBITS FILED HEREWITH
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
3(ii) - By-Laws of the Company as amended effective December 31, 1997.
13 - Those pages of the 1997 Annual Report incorporated herein by reference.
21 - Subsidiaries of the Company.
23 - Consent of Independent Accountants.
24 - Powers of Attorney.
27 - Financial Data Schedule.
</TABLE>
EXHIBITS INCORPORATED BY REFERENCE
The following exhibits heretofore have been filed with the
Securities and Exchange Commission pursuant to requirements of the Acts
administered by the Commission. Such exhibits are identified by the references
following the listing of each such exhibit, and they are hereby incorporated
herein by reference.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
2 - Agreement and Plan of Merger, dated as of August 11, 1995, by and among the
Company, CIPSCO Incorporated, UE, and Arch Merger Inc. (June 30, 1995 Form
10-Q/A (Amendment No. 1), Exhibit 2(a).)
3(i) - Restated Articles of Incorporation of the Company. (Registration No. 33-64165,
Annex F.)
</TABLE>
- 13 -
<PAGE> 1
AMEREN CORPORATION EXHIBIT 3(ii)
----------
B Y - L A W S
AS AMENDED EFFECTIVE DECEMBER 31, 1997
----------
ARTICLE I
STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the Company
shall be held on the fourth Tuesday of April in each year (or if said day be a
legal holiday, then on the next succeeding day not a legal holiday), at the
registered office of the Company in the City of St. Louis, State of Missouri, or
on such other date and at such other place within or without the state of
Missouri as may be stated in the notice of meeting, for the purpose of electing
directors and of transacting such other business as may properly be brought
before the meeting.
Section 2. Special meetings of the stockholders may be called only
by the Chief Executive Officer or, if one has not been appointed, by the
President, or by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Company would have if there
were no vacancies.
Section 3. Written or printed notice of each meeting of stockholders
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered or given not less than ten nor more than seventy days before the date
of the meeting, either personally or by mail, to each stockholder of record
entitled to vote thereat, at his address as it appears, if at all, on the
records of the Company. Such further notice shall be given by mail, publication
or otherwise as may be required by law. Meetings may be held without notice if
all the stockholders entitled to vote thereat are present or represented at the
meeting, or if notice is waived by those not present or represented.
Section 4. The holders of record of a majority of the shares of the
capital stock of the Company issued and outstanding, entitled to vote thereat,
present in person or represented by proxy, shall, except as otherwise provided
by law, constitute a quorum at all meetings of the stockholders. If at any
meeting there be no such quorum, such holders of a majority of the shares so
present or represented may successively adjourn the meeting to a specified date
not longer than ninety days after such adjournment, without notice other than
announcement at the meeting, until such quorum shall
<PAGE> 2
have been obtained, when any business may be transacted which might have been
transacted at the meeting as originally notified. The chairman of the meeting or
a majority of shares so represented may adjourn the meeting from time to time,
whether or not there is such a quorum.
Section 5. Meetings of the stockholders shall be presided over by
the Chief Executive Officer or, if he is not present, or if one has not been
appointed, by the Chairman of the Board of Directors or by the President or, if
neither the Chairman nor the President is present, by such other officer of the
Company as shall be selected for such purpose by the Board of Directors. The
Secretary of the Company or, if he is not present, an Assistant Secretary of the
Company or, if neither the Secretary nor an Assistant Secretary is present, a
secretary pro tem to be designated by the presiding officer shall act as
secretary of the meeting.
Section 6. At all meetings of the stockholders every holder of
record of the shares of the capital stock of the Company, entitled to vote
thereat, may vote either in person or by proxy.
Section 7. At all elections for directors the voting shall be by
written ballot. If the object of any meeting be to elect directors or to take a
vote of the stockholders on any proposition of which notice shall have been
given in the notice of the meeting, the person presiding at such meeting shall
appoint not less than two persons, who are not directors, inspectors to receive
and canvass the votes given at such meeting. Any inspector, before he shall
enter on the duties of his office, shall take and subscribe an oath, in the
manner provided by law, that he will execute the duties of inspector at such
meeting with strict impartiality and according to the best of his ability. The
inspectors shall take charge of the polls and after the balloting shall make a
certificate of the result of the vote taken.
Section 8. (a) (1) Nominations of persons for election to the Board
of Directors of the Company and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (i) pursuant to
the Company's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any stockholder of the Company who was a stockholder of
record at the time of giving of notice provided for in this By-Law, who is
entitled to vote at the meeting and who complies with the notice procedures set
forth in this By-Law.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1)
of this By-Law, the stockholder must have given timely notice thereof in writing
to the Secretary of the Company and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the Company
not later than the close of business on the 60th day nor earlier than the close
of business on the 90th day prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date of the
annual meeting is more than 30 days before or more than 60 days after such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the close of business on the 90th day prior to such annual
meeting and not later than the close of business on the later of the 60th day
prior to such annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made by the Company. In no
event shall the public announcement of an adjournment of an annual meeting
commence a new time period for the giving of a stockholder's notice as described
above. Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director, all
2
<PAGE> 3
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the Company's
books, and of such beneficial owner and (ii) the class and number of shares of
the Company which are owned beneficially and of record by such stockholder and
such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this By-Law to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Company is increased and there is
no public announcement by the Company naming all of the nominees for director or
specifying the size of the increased Board of Directors at least 70 days prior
to the first anniversary of the preceding year's annual meeting, a stockholder's
notice required by this By-Law shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary at the principal executive offices of the Company
not later than the close of business on the 10th day following the day on which
such public announcement is first made by the Company.
(b) Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Company's notice of meeting. Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at which directors
are to be elected pursuant to the Company's notice of meeting (1) by or at the
direction of the Board of Directors or (2) provided that the Board of Directors
has determined that directors shall be elected at such meeting, by any
stockholder of the Company who is a stockholder of record at the time of giving
of notice provided for in this By-Law, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this By-Law. In
the event the Company calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Company's notice of meeting, if the
stockholder's notice required by paragraph (a)(2) of this By-Law shall be
delivered to the Secretary at the principal executive offices of the Company not
earlier than the close of business on the 90th day prior to such special meeting
and not later than the close of business on the later of the 60th day prior to
such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.
(c) (1) Only such persons who are nominated in accordance with the
procedures set forth in this By-Law shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the
3
<PAGE> 4
procedures set forth in this By-Law. Except as otherwise provided by law, the
Articles of Incorporation of the Company (such articles, as they may be amended
and/or restated from time to time being referred to herein as the "Articles of
Incorporation") or these By-Laws, the chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this By-Law and, if any proposed
nomination or business is not in compliance with this By-Law, to declare that
such defective proposal or nomination shall be disregarded.
(2) For purposes of this By-Law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Company with the Securities and Exchange Commission pursuant to Section 13, 14
or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this By-Law, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this By-Law. Nothing in this By-Law shall be deemed to affect any
rights (A) of stockholders to request inclusion of proposals in the Company's
proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) of the
holders of any series of Preferred Stock to elect directors under specified
circumstances.
ARTICLE II
Directors
Section 1. The property and business of the Company shall be
controlled and managed by its Board of Directors. The number of directors to
constitute the Board of Directors shall be fifteen; provided, however, that such
number may be fixed by the Board of Directors, from time to time, at not less
than a minimum of three nor more than a maximum of twenty-one (21) (subject to
the rights of the holders of shares of Preferred Stock, if any, as set forth in
the Articles of Incorporation). Except as otherwise provided in the Articles of
Incorporation, the directors shall hold office until the next annual election
and until their successors shall be elected and qualified. A majority of the
members of the Board of Directors shall constitute a quorum for the transaction
of business, but if at any meeting of the Board there shall be less than a
quorum present, a majority of the directors present may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until such
quorum shall have been obtained, when any business may be transacted which might
have been transacted at the original meeting had a quorum been present.
Section 2. Vacancies in the Board of Directors, including vacancies
created by newly created directorships, shall be filled in the manner provided
in the Articles of Incorporation, and, except as otherwise provided therein, the
directors so elected shall hold office until their successors shall be elected
and qualified.
Section 3. Meetings of the Board of Directors shall be held at such
time and place within or without the State of Missouri as may from time to time
be fixed by resolution of the Board, or as
4
<PAGE> 5
may be stated in the notice of any meeting. Regular meetings of the Board shall
be held at such time as may from time to time be fixed by resolution of the
Board, and notice of such meetings need not be given. Special meetings of the
Board may be held at any time upon call of the Chief Executive Officer or, if
one has not been appointed, by the President, or by the Executive Committee, if
one shall have been appointed, by oral, telephonic (including via telecopier) or
written notice, duly given or sent or mailed to each director not less than two
(2) days before any such meeting. The notice of any meeting of the Board need
not specify the purposes thereof except as may be otherwise required by law.
Meetings may be held at any time without notice if all of the directors are
present or if those not present waive notice of the meeting, in writing.
Section 4. The Board of Directors, by the affirmative vote of a
majority of the whole Board may appoint an Executive Committee, to consist of
two or more directors as the Board may from time to time determine. The
Executive Committee shall have and may exercise to the extent permitted by law,
when the Board is not in session, all of the powers vested in the Board, except
the power to fill vacancies in the Board, the power to fill vacancies in or to
change the membership of said Committee, and the power to make or amend By-Laws
of the Company. The Board shall have the power at any time to fill vacancies in,
to change the membership of, or to dissolve, the Executive Committee. The
Executive Committee may make rules for the conduct of its business and may
appoint such committees and assistants as it shall from time to time deem
necessary. A majority of the members of the Executive Committee shall constitute
a quorum.
Section 5. The Board of Directors may also appoint one or more other
committees to consist of such number of the directors and to have such powers as
the Board may from time to time determine. The Board shall have the power at any
time to fill vacancies in, to change the membership of, or to dissolve, any such
committee. A majority of any such committee may determine its action and fix the
time and place of its meetings, unless the Board of Directors shall otherwise
provide.
ARTICLE III
OFFICERS
Section 1. As soon as is practicable after the election of directors
at the annual meeting of stockholders, the Board of Directors shall elect one of
its members President of the Company, and shall elect a Secretary. The Board may
also elect from its members a Chairman of the Board of Directors (which office
may be held by the President) and one or more Vice Chairmen of the Board of
Directors. The Board shall designate either the Chairman, if any, or the
President as the Chief Executive Officer of the Company. In addition, the Board
may elect one or more Vice Presidents (any one or more of whom may be designated
as Senior or Executive Vice Presidents), and a Treasurer, and from time to time
may appoint such Assistant Secretaries, Assistant Treasurers and other officers,
agents, and employees as it may deem proper. The offices of Secretary and
Treasurer may be held by the same person, and a Vice President of the Company
may also be either the Secretary or the Treasurer.
5
<PAGE> 6
Section 2. Between annual elections of officers, the Board of
Directors may effect such changes in Company offices as it deems necessary or
proper.
Section 3. Subject to such limitations as the Board of Directors may
from time to time prescribe, the officers of the Company shall each have such
powers and duties as generally pertain to their respective offices, as well as
such powers and duties as from time to time may be conferred by the Board of
Directors or the Executive Committee. The Treasurer and the Assistant Treasurers
may be required to give bond for the faithful discharge of their duties, in such
sum and of such character as the Board of Directors may from time to time
prescribe.
ARTICLE IV
INDEMNIFICATION
Each person who now is or hereafter becomes a director (which term
as used in this Article shall include an advisor to the Board of Directors),
officer, employee or agent of the Company, or who now is or hereafter becomes a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise at the request of the Company, shall be
entitled to indemnification as provided by law. Such right of indemnification
shall include, but not be limited to, the following:
Section 1. (a) The Company shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative
or investigative, other than an action by or in the right of the Company, by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Company shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the defense or settlement of the action or suit
6
<PAGE> 7
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Company unless and only to the extent that the
court in which the action or suit was brought determines upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
(c) The Company shall further indemnify to the maximum extent
permitted by law, any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit, or proceeding
(including appeals), whether civil, criminal, investigative (including private
Company investigations), or administrative, including an action by or in the
right of the Company, by reason of the fact that the person is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, from and
against any and all expenses incurred by such person, including, but not limited
to, attorneys' fees, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding, provided that the Company shall not indemnify any person from or on
account of such person's conduct which was finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct.
(d) To the extent that a director, officer, employee or agent of the
Company has been successful on the merits or otherwise in defense of any action,
suit, or proceeding referred to in this Section or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with the
action, suit, or proceeding.
(e) Any indemnification under this Section, unless ordered by a
court, shall be made by the Company only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in this Section. The determination shall be made by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to the action, suit, or proceeding, or if such a quorum is not
obtainable, or even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or by the
stockholders.
(f) Where full and complete indemnification is prohibited by law or
public policy, any person referred to in subsection (a) above who would
otherwise be entitled to indemnification nevertheless shall be entitled to
partial indemnification to the extent permitted by law and public policy.
Furthermore, where full and complete indemnification is prohibited by law or
public policy, any person referred to in this Section who would otherwise be
entitled to indemnification nevertheless shall have a right of contribution to
the extent permitted by law and public policy in cases where said party is held
jointly or concurrently liable with the Company.
7
<PAGE> 8
Section 2. The indemnification provided by Section 1 shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under the Articles of Incorporation or By-Laws or any agreement,
vote of stockholders or disinterested directors or otherwise both as to action
in his official capacity and as to action in another capacity while holding such
office, and the Company is hereby specifically authorized to provide such
indemnification by any agreement, vote of stockholders or disinterested
directors or otherwise. The indemnification shall continue as to a person who
has ceased to be a director, officer or employee and shall inure to the benefit
of the heirs, executors and administrators of such a person.
Section 3. The Company is authorized to purchase and maintain
insurance on behalf of, or provide another method or methods of assuring payment
to, any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any capacity, or arising out of his status as such, whether
or not the Company would have the power to indemnify him against such liability
under the provisions of this Article.
Section 4. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Company in advance of the final
disposition of the action, suit, or proceeding as authorized by the Board of
Directors in the specific case upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the Company as
authorized in this Article.
Section 5. If any provision or portion of this Article shall be held
invalid, illegal or unenforceable for any reason whatsoever, the validity,
legality and enforceability of all other provisions and portions not
specifically held to be invalid, illegal or unenforceable, shall not be affected
or impaired thereby and shall be construed according to the original intent, to
the extent not precluded by applicable law.
Section 6. For purposes of this Article:
(a) References to "the corporation" include all constituent
corporations absorbed in a consolidation or merger as well as the resulting or
surviving corporation so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Article
with respect to the resulting or surviving corporation as he would if he had
served the resulting or surviving corporation in the same capacity.
(b) The term "other enterprise" shall include employee benefit
plans; the term "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and the term "serving at the request of the
corporation" shall include any service as a director, officer, employee or agent
of the corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and the word "include" or "includes" shall
be construed in its expansive sense and
8
<PAGE> 9
not as a limiter; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
Article.
Section 7. This Article may be hereafter amended or repealed;
provided, however, that no amendment or repeal shall reduce, terminate or
otherwise adversely affect the right of a person who is or was a director,
officer, employee or agent to obtain indemnification with respect to an action,
suit, or proceeding that pertains to or arises out of actions or omissions that
occur prior to the effective date of such amendment or repeal.
ARTICLE V
CERTIFICATES OF STOCK
Section 1. The interest of each stockholder shall be evidenced by
certificates for shares of stock of the Company, in such form as the Board of
Directors may from time to time prescribe. The certificates for shares of stock
of the Company shall be signed by the Chairman, if any, or the President or a
Vice President (including Senior or Executive Vice Presidents) and by the
Secretary or Treasurer or an Assistant Secretary or an Assistant Treasurer of
the Company and sealed with the seal of the Company and shall be countersigned
and registered in such manner, if any, as the Board of Directors may from time
to time prescribe. Any or all of the signatures on the certificate may be
facsimile and the seal may be facsimile, engraved or printed. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, the certificate
may nevertheless be issued by the Company with the same effect as if the person
were an officer, transfer agent or registrar at the date of issue.
Section 2. The shares of stock of the Company shall be transferable
only on the books of the Company by the holders thereof in person or by duly
authorized attorney, upon surrender for cancellation of certificates for the
same number of shares of the same class of stock, with an assignment and power
of transfer endorsed thereon or attached thereto, duly executed, and with such
proof of the authenticity of the signatures as the Company or its agents may
reasonably require.
Section 3. No certificate for shares of stock of the Company shall
be issued in place of any certificate alleged to have been lost, stolen or
destroyed, except upon production of such evidence of such loss, theft or
destruction, and upon the Company being indemnified to such extent and in such
manner as the Board of Directors in its discretion may require.
9
<PAGE> 10
ARTICLE VI
CLOSING OF STOCK TRANSFER BOOKS OR
FIXING RECORD DATE
The Board of Directors shall have power to close the stock transfer
books of the Company for a period not exceeding seventy days preceding the date
of any meeting of stockholders or the date of payment of any dividend or the
date for the allotment of rights or the date when any change or conversion or
exchange of shares shall go into effect; provided, however, that in lieu of
closing the stock transfer books as aforesaid, the Board of Directors may fix in
advance a date, not exceeding seventy days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares shall go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or
entitled to any such allotment of rights, or entitled to exercise the rights in
respect of any such change, conversion or exchange of shares. In such case such
stockholders and only such stockholders as shall be stockholders of record on
the date of closing the stock transfer books or on the record date so fixed
shall be entitled to notice of, and to vote at, such meeting, and any
adjournments thereof, or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any shares on the books of the Company after
such date of closing of the transfer books or such record date fixed as
aforesaid.
ARTICLE VII
CHECKS, NOTES, ETC.
All checks and drafts on the Company's bank accounts and all bills
of exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers or agent or agents as shall be thereunto authorized from time to time
by the Board of Directors. The Board of Directors may authorize any such officer
or agent to sign and, when the Company's seal is on the instrument, to attest
any of the foregoing instruments by the use of a facsimile signature, engraved
or printed or otherwise affixed thereto. In case any officer or agent who has
signed or whose facsimile signature has been placed upon any such instrument for
the payment of money shall have ceased to be such officer or agent before such
instrument is issued, such instrument may nevertheless be issued by the Company
with the same effect as if such officer or agent had not ceased to be such
officer or agent at the date of its issue.
10
<PAGE> 11
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Company shall begin on the first day of
January in each year and shall end on the thirty-first day of December following
until otherwise changed by resolution of the Board, and the Board is authorized
at any time by resolution to adopt and fix a different fiscal year for the
Company.
ARTICLE IX
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
Company and the words "Corporate Seal, Missouri".
ARTICLE X
AMENDMENTS
The By-Laws of the Company may be made, altered, amended, or
repealed by the Board of Directors.
ARTICLE XI
Words used herein denoting a specific gender, shall be construed to
include any other gender, as applicable in the context.
11
<PAGE> 1
Exhibit 13
FINANCIAL TABLE OF CONTENTS
17 Responsibility for Financial Statements
and Report of Independent Accountants
18 Management's Discussion
and Analysis
24 Consolidated Balance Sheet
26 Consolidated Statement of Income
27 Consolidated Statement of Cash Flows
28 Consolidated Statement of
Retained Earnings and Selected
Quarterly Information
29 Notes to Consolidated Financial
Statements
45 Selected Consolidated Financial
Information
46 Electric Operating Statistics
47 Gas Operating Statistics
RESPONSIBILITY FOR FINANCIAL STATEMENTS
The management of Ameren Corporation is responsible for the information and
representations contained in the consolidated financial statements and in other
sections of this Annual Report. The consolidated financial statements have been
prepared in conformity with generally accepted accounting principles. Other
information included in this report is consistent, where applicable, with the
consolidated financial statements.
The Company maintains a system of internal accounting controls designed to
provide reasonable assurance as to the integrity of the financial records and
the protection of assets. Qualified personnel are selected and an organization
structure is maintained that provides for appropriate functional responsibility.
Written policies and procedures have been developed and are revised as
necessary. The Company maintains and supports an extensive program of internal
audits with appropriate management follow up.
The Board of Directors, through its Auditing Committee comprised of outside
directors, is responsible for ensuring that both management and the independent
accountants fulfill their respective responsibilities relative to the financial
statements. Moreover, the independent accountants have full and free access to
meet with the Auditing Committee, with or without management present, to discuss
auditing or financial reporting matters.
REPORT OF INDEPENDENT ACCOUNTANTS
February 5, 1998
[LOGO] PRICE WATERHOUSE LLP
800 Market Street
St. Louis, MO 63101
Telephone 314-206-8500
To the Stockholders and Board of Directors of Ameren Corporation
In our opinion, based upon our audits and the reports of other auditors, the
accompanying consolidated balance sheet and the related consolidated statements
of income, of cash flows and retained earnings appearing on pages 24-28 of this
report present fairly, in all material respects, the financial position of
Ameren Corporation and its subsidiaries at December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of Central Illinois Public Service Company and CIPSCO Investment
Company, wholly-owned subsidiaries, which combined statements reflect total
assets of $1,889,451,000 and $1,913,691,000 at December 31, 1997 and 1996,
respectively, and total revenues of $863,441,000, $891,631,000 and $837,216,000
for the three years in the period ended December 31, 1997, respectively. Those
statements were audited by other auditors whose reports thereon have been
furnished to us, and our opinion expressed herein, insofar as it relates to the
amounts included for Central Illinois Public Service Company and CIPSCO
Investment Company, is based solely on the reports of the other auditors. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis for the
opinion expressed above.
/s/ PRICE WATERHOUSE LLP
17
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OVERVIEW Ameren Corporation (Ameren) is a newly created holding company which
is registered under the Public Utility Holding Company Act of 1935
(PUHCA). In December 1997, Union Electric Company (AmerenUE) and
CIPSCO Incorporated (CIPSCO) combined to form Ameren, with AmerenUE
and CIPSCO's subsidiaries, Central Illinois Public Service Company
(AmerenCIPS) and CIPSCO Investment Company (CIC) becoming
wholly-owned subsidiaries of Ameren (the Merger). In addition,
Ameren, as a result of the Merger, has a 60% ownership interest in
Electric Energy, Inc. (EEI), which is consolidated for financial
reporting purposes.
The Merger was accounted for as a pooling of interests; therefore
the consolidated financial statements are presented as if the Merger
were consummated as of the beginning of the earliest period
presented. However, the consolidated financial statements are not
necessarily indicative of the results of operations, financial
position or cash flows that would have occurred had the Merger been
consummated for the periods for which it is given effect, nor is it
necessarily indicative of the future results of operations, financial
position or cash flows.
References to the Company are to Ameren on a consolidated basis;
however, in certain circumstances, the subsidiaries are separately
referred to in order to distinguish between their different business
activities.
RESULTS OF EARNINGS. Earnings for 1997, 1996 and 1995, were $335 million ($2.44
OPERATIONS per share), $372 million ($2.71 per share) and $373 million ($2.72
per share), respectively. Earnings and earnings per share fluctuated
due to many conditions, primarily: weather variations, electric rate
reductions, competitive market forces, credits to electric customers,
sales growth, fluctuating operating costs, including Callaway Plant
nuclear refueling outages, merger-related expenses, changes in
interest expense, changes in income and property taxes and an
extraordinary charge.
The Company recorded an extraordinary charge to earnings in the
fourth quarter of 1997 for the write-off of generation-related
regulatory assets and liabilities of the Company's Illinois retail
electric business as a result of electric industry restructuring
legislation enacted in Illinois in December 1997. The write-off
reduced earnings $52 million, net of income taxes, or 38 cents per
share. (See Note 2 - Regulatory Matters under Notes to Consolidated
Financial Statements for further information.)
ELECTRIC OPERATIONS. The impacts of the more significant items
affecting electric revenues and operating expenses during the past
three years are analyzed and discussed below:
<TABLE>
<CAPTION>
Variations from Prior Year
----------------------------
ELECTRIC REVENUES (Millions of Dollars) 1997 1996 1995
----------------------------------------------------------------------------
<S> <C> <C> <C>
Rate variations $ -- $(20) $(14)
Credit to customers 28 (15) (33)
Effect of abnormal weather 3 (28) 63
Growth and other 5 67 51
Interchange sales (43) 51 (13)
EEI 9 (2) (76)
----------------------------------------------------------------------------
$ 2 $ 53 $(22)
----------------------------------------------------------------------------
</TABLE>
Electric revenues for 1997 were flat compared to 1996, reflecting a
decrease in the Missouri electric customer credits recorded in 1997
versus 1996 (see Note 2 - Regulatory Matters under Notes to
Consolidated Financial Statements for further information), partly
offset by a 1% decrease in kilowatthour sales. The kilowatthour sales
decrease was due to a 13% decrease in interchange sales due to market
conditions and differences in the classification of certain
interchange and purchased power transactions resulting from the
Federal Energy Regulatory Commission (FERC) Order 888 and a 1%
decline in residential sales. These decreases were partly offset by
increases in commercial and industrial sales of 1% and 2%,
respectively, attributable to economic growth. In addition, sales at
EEI were up 6% over 1996.
The increase in 1996 electric revenues was primarily due to a 5%
increase in kilowatthour sales over the prior year, partly offset by
the 1.8% rate decrease for Missouri electric customers and the net
increase in Missouri electric customer credits recorded in 1996
versus 1995. (See Note 2 -- Regulatory Matters under Notes to
Consolidated Financial Statements for further information.) The
kilowatthour sales increase reflected economic growth in the service
area and increased interchange sales opportunities, partially offset
by milder weather during the period. Residential and industrial sales
each rose 2% over 1995, while commercial sales grew 3% and
interchange sales increased 32%.
The decrease in 1995 electric revenues was primarily the result of
decreased sales to the Department of Energy by EEI, a one-time $30
million credit to Missouri electric customers and rate decrease in
Missouri. (See Note 2 - Regulatory Matters under Notes to
Consolidated Financial Statements for further
18
<PAGE> 3
information.) This decrease was partially offset by increased retail
kilowatthour sales, mainly due to the unusually hot weather in the
third quarter of 1995, compared to 1994, and sales growth reflecting
the Company's healthy service area economy. Weather-sensitive
residential and commercial sales increased 6% and 3%, respectively,
over 1994, and industrial sales grew 2%.
<TABLE>
<CAPTION>
Variations from Prior Year
--------------------------------------------------------------------------------------
FUEL AND PURCHASED POWER (Millions of Dollars) 1997 1996 1995
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fuel:
Variation in generation $ 25 $43 $(10)
Price (24) (14) 2
Generation efficiencies and other (5) 2 3
Purchased power variation (50) 2 9
EEI 10 23 (42)
--------------------------------------------------------------------------------------
$(44) $56 $(38)
======================================================================================
</TABLE>
The decrease in 1997 fuel and purchased power costs was primarily due
to reduced purchased power costs, resulting from relatively flat
native load sales, lower interchange sales and lower fuel prices,
offset by greater generation.The increase in 1996 fuel and purchased
power costs was driven mainly by higher kilowatthour sales, partially
offset by lower fuel prices due to the use of lower cost coal. The
decrease in 1995 fuel and purchased power costs reflected decreased
sales by EEI, partly offset by greater retail kilowatthour sales
during the hot 1995 summer and the need for replacement power during
Callaway Plant's spring nuclear refueling outage.
GAS OPERATIONS. Gas revenues in 1997 decreased $4 million primarily
due to a 12% decrease in retail dekatherm sales. Weather-sensitive
residential and commercial sales declined 15% and 18%, respectively.
These decreases were partly offset by a 20% increase in industrial
sales and an increase in off-system sales of gas to others. The
increase in 1996 gas revenues of $37 million was primarily the result
of higher gas prices and increased sales due to colder weather.
Residential and commercial dekatherm sales increased 13% and 17%,
respectively, in 1996 versus 1995. Gas revenues decreased $8 million
in 1995 primarily as a result of lower prices and lower industrial
dekatherm sales.
Gas costs for 1997 remained flat as compared to those of 1996. The
$35 million increase in 1996 gas costs was primarily the result of a
combination of increased demand due to colder weather and an increase
in the price paid for gas in 1996 versus 1995. The decrease in 1995
gas costs of $20 million was predominantly due to lower gas prices in
1995, compared to 1994.
OTHER OPERATING EXPENSES. Other operating expense variations in 1995
through 1997 reflected recurring factors such as growth, inflation,
labor and benefit increases. In 1997, other operations expenses
increased $41 million primarily due to increases in information
system-related costs, labor and injuries and damages expenses. In
1996, other operations expenses increased $2 million primarily due to
increases in employee benefits, injuries and damages and information
system-related costs, offset by decreases resulting from several
nonrecurring costs incurred in 1995. Other operations expenses
increased $7 million in 1995, mainly due to increases in labor and
material and supplies expenses, as well as the occurrence of several
nonrecurring costs, including costs related to a voluntary separation
program and write-offs of system development costs. These increases
were partly offset by decreases in employee benefits, injuries and
damages and insurance expenses.
Maintenance expenses for 1997 increased $8 million primarily
resulting from increased scheduled fossil plant maintenance, partly
offset by decreased expenses at Callaway Plant due to the absence of
a refueling outage in 1997. In 1996, maintenance expenses decreased
$5 million primarily due to lower scheduled power plant maintenance,
partly offset by increased labor expenses at Callaway Plant. In 1995,
maintenance expenses increased $26 million mainly due to scheduled
power plant maintenance expenses, partially offset by reduced
distribution system maintenance expenses. Callaway Plant's
maintenance expenses increased $17 million primarily due to the
spring 1995 refueling outage. Maintenance expenses at other power
plants increased primarily due to scheduled maintenance outages.
Depreciation and amortization expense increased $7 million in 1997,
$12 million in 1996 and $11 million in 1995, due to increased
depreciable property.
TAXES. Income tax expense from operations decreased $19 million in
1997 principally due to lower pretax income and a lower effective tax
rate. Income tax expense from operations decreased $8 million in 1996
principally due to lower pretax income. Income tax expense from
operations decreased $2 million in 1995 primarily due to lower pretax
income, partially offset by a higher effective income tax rate.
19
<PAGE> 4
OTHER INCOME AND DEDUCTIONS. Miscellaneous, net increased $11 million
for 1997, compared to 1996, primarily due to the capitalization of
merger-related expenses. (See Note 2 - Regulatory Matters under
Notes to Consolidated Financial Statements for further information.)
Miscellaneous, net increased $2 million for 1996 primarily due to
reduced merger-related expenses. Miscellaneous, net decreased $11
million for 1995 primarily due to increased merger-related expenses.
INTEREST. Interest expense increased $5 million in 1997 primarily due
to higher debt outstanding during the year at higher interest rates.
Interest expense increased $2 million for 1996 primarily due to a
greater amount of short-term debt outstanding, offset by lower rates
on variable-rate long-term debt. In 1995, interest expense declined
$5 million as decreases in other interest expense were partly offset
by higher interest rates on variable long-term debt.
BALANCE SHEET. The $26 million decrease in other current liabilities
was primarily due to a lower accrued customer credit. (See Note 2 -
Regulatory Matters under Notes to Consolidated Financial Statements
for further information.) The $50 million increase in other deferred
credits and liabilities was attributable to increases in the accrued
pension liability and the nuclear decommissioning trust fund.
LIQUIDITY Cash provided by operating activities totaled $687 million for
AND 1997, compared to $786 million and $792 million in 1996 and 1995,
CAPITAL respectively.
RESOURCES
Cash flows used in investing activities totaled $387 million, $481
million and $468 million, for the years ended December 31, 1997, 1996
and 1995, respectively. Expenditures in 1997 for constructing new or
to improve existing facilities, purchasing rail cars and complying
with the Clean Air Act were $381 million. In addition, the Company
spent $35 million to acquire nuclear fuel.
Construction expenditures are expected to be about $315 million in
1998. For the five-year period 1998-2002, construction expenditures
are estimated at $1.7 billion. This estimate does not include any
construction expenditures which may be incurred by the Company to
meet new air quality standards for ozone and particulate matter, as
discussed below.
The Company's need for additional base load electric generating
capacity is not anticipated until after the year 2013. Under Title IV
of the Clean Air Act Amendments of 1990, the Company is required to
significantly reduce total annual sulfur dioxide emissions by the
year 2000. Significant reductions in nitrogen oxide are also
required. By switching to low-sulfur coal and early banking of
emissions credits, the Company anticipates that it can comply with
the requirements of the law without significant revenue increases
because the related capital costs are largely offset by lower fuel
costs. As of year-end 1997, estimated remaining capital costs
expected to be incurred pertaining to Clean Air Act-related projects
totaled $107 million.
In July 1997, the United States Environmental Protection Agency
(EPA) issued final regulations revising the National Ambient Air
Quality Standards for ozone and particulate matter. Although specific
emission control requirements are still being developed, it is
believed that the revised standards will require significant
additional reductions in nitrogen oxide and sulfur dioxide emissions
from coal-fired boilers. In October 1997, the EPA announced that
Missouri and Illinois are included in the area targeted for nitrogen
oxide emissions reductions as part of the EPA's regional control
program. Reduction requirements in nitrogen oxide emissions from the
Company's coal-fired boilers could exceed 80% from 1990 levels by the
year 2002. Reduction requirements in sulfur dioxide emissions may be
up to 50% beyond that already required by Phase II acid rain control
provisions of the 1990 Clean Air Act Amendments and could be required
by 2007. Because of the magnitude of these additional reductions, the
Company could be required to incur significantly higher capital costs
to meet future compliance obligations for its coal-fired boilers or
purchase power from other sources, either of which could have
significantly higher operations and maintenance expenditures
associated with compliance. At this time, the Company is unable to
determine the impact of the revised air quality standards on its
future financial condition, results of operations or liquidity.
In December 1997, the United States and numerous other countries
agreed to certain environmental provisions (the Kyoto Protocol),
which would require decreases in greenhouse gases in an effort to
address the "global warming" issue. The Company is unable to predict
what requirements, if any, will be adopted in this country. However,
implementation of the Kyoto Protocol in its present form would likely
result in significantly higher capital costs and operations and
maintenance expenditures by the Company. At this time, the Company is
unable to determine the impact of these proposals on its future
financial condition, results of operations or liquidity.
See Note 11 - Callaway Nuclear Plant under Notes to Consolidated
Financial Statements for a discussion of Callaway Plant
decommissioning costs.
Cash flows used in financing activities were $302 million for 1997,
compared to $296 million and $325 million for 1996 and 1995,
respectively. The Company's principal financing activities during
1997 included the issuance of $187 million of long-term debt, offset
by the redemption of $123 million of long-term debt and $64 million
of preferred stock and the payment of dividends.
The Company plans to continue utilizing short-term debt to support
normal operations and other tem-
20
<PAGE> 5
porary requirements. The Company's utility operating subsidiaries
are authorized by the FERC to have up to an aggregate $750 million
of short-term unsecured debt instruments outstanding at any one
time. Short-term borrowings consist of bank loans (maturities
generally on an overnight basis) and commercial paper (maturities
generally within 10 to 45 days). At December 31, 1997, the Company
had committed bank lines of credit aggregating $259 million (of
which $244 million were unused and $179 million were available at
such date) which make available interim financing at various rates
of interest based on LIBOR, the bank certificate of deposit rate
or other options. The lines of credit are renewable annually at
various dates throughout the year. At year-end, the Company had
$86 million of short-term borrowings.
AmerenUE also has bank credit agreements due 1999 which permit
the borrowing of up to $300 million and $200 million on a
long-term basis. At December 31, 1997, $35 million of such
borrowings were outstanding.
Additionally, AmerenUE has a lease agreement which provides for
the financing of nuclear fuel. At December 31, 1997, the maximum
amount that could be financed under the agreement was $120
million. Cash provided from financing for 1997 included issuances
under the lease for nuclear fuel of $40 million, offset in part by
$28 million of redemptions. At December 31, 1997, $117 million was
financed under the lease. (See Note 3 - Nuclear Fuel Lease under
Notes to Consolidated Financial Statements for further
information.)
RATE MATTERS See Note 2 - Regulatory Matters under Notes to Consolidated
Financial Statements for a discussion of rate matters.
CONTINGENCIES See Note 10 - Commitments and Contingencies under Notes to
Consolidated Financial Statements for material issues existing at
December 31, 1997.
DIVIDENDS Common stock dividends paid in 1997 resulted in a payout rate
of 99% of the Company's earnings to common stockholders (86% of
earnings before extraordinary charge). Dividends paid to common
stockholders in relation to net cash provided by operating
activities for the same period were 48%.
The Board of Directors does not set specific targets or payout
parameters for dividend payments; however, the Board considers
various issues including the Company's historic earnings and cash
flow; projected earnings, cash flow and potential cash flow
requirements; dividend payout rates at other utilities; return on
investments with similar risk characteristics; and overall
business considerations. On February 13, 1998, the Ameren Board of
Directors declared a quarterly common stock dividend of 63.5 cents
per share, payable March 31, 1998.
ELECTRIC Changes enacted and being considered at the federal and state
INDUSTRY levels continue to change the structure of the electric industry
RESTRUCTURING and utility regulation, as well as encourage increased
competition. At the federal level, the Energy Policy Act of 1992
reduced various restrictions on the operation and ownership of
independent power producers and gave the FERC the authority to
order electric utilities to provide transmission access to third
parties.
In April 1996, the FERC issued Order 888 and Order 889, which
are intended to promote competition in the wholesale electric
market. The FERC requires transmission-owning public utilities,
such as AmerenUE and AmerenCIPS, to provide transmission access
and service to others in a manner similar and comparable to that
which the utilities have by virtue of ownership. Order 888
requires that a single tariff be used by the utility in providing
transmission service. Order 888 also provides for the recovery of
stranded costs, under certain conditions, related to the wholesale
business.
Order 889 established the standards of conduct and information
requirements that transmission owners must adhere to in doing
business under the open access rule. Under Order 889, utilities
must obtain transmission service for their own use in the same
manner their customers will obtain service, thus mitigating market
power through control of transmission facilities. In addition,
under Order 889, utilities must separate their merchant function
(buying and selling wholesale power) from their transmission and
reliability functions.
The Company believes that Order 888 and Order 889, which relate
to its wholesale business, will not have a material adverse effect
on its financial condition, results of operations or liquidity.
In addition, certain states are considering proposals or have
adopted legislation that will promote competition at the retail
level. In December 1997, the Governor of Illinois signed the
Electric Service Customer Choice and Rate Relief Law of 1997 (the
Act) providing for electric utility restructuring in Illinois.
This legislation introduces competition into the supply of
electric energy in Illinois. (See Note 2 - Regulatory Matters
under Notes to Consolidated Financial Statements for further
information.)
After evaluating the impact of this legislation, the Company
determined that it was necessary to write-off the
generation-related regulatory assets and liabilities of its
Illinois retail electric business. This extraordinary charge
reduced 1997 earnings $52 million, net of income taxes, or 38
cents per share. The Company has also concluded that its remaining
net generation-related assets are not impaired and that no plant
write-downs are necessary at this time. The provisions of the Act
could
[AMEREN LOGO] 21
<PAGE> 6
also result in lower revenues, reduced profit margins and
increased costs of capital. At this time, the Company is unable to
determine any further impact of the Act on its future financial
condition, results of operations or liquidity. (See Note 2 -
Regulatory Matters under Notes to Consolidated Financial
Statements for further information.)
In Missouri, where approximately 72% of the Company's retail
electric revenues are derived, a task force appointed by the
Missouri Public Service Commission (MoPSC) is investigating
electric industry restructuring and competition and is expected to
issue a report to the MoPSC in 1998. A joint legislative committee
is also conducting hearings on these issues. Up to this point,
retail wheeling has not been allowed in Missouri; however, the
joint agreement approved by the MoPSC in February 1997 as part of
its merger authorization includes a provision that required
AmerenUE to file a proposal for a 100-megawatt experimental retail
wheeling pilot program in Missouri. AmerenUE filed its proposal
with the MoPSC in September 1997. This proposal is subject to
review and approval by the MoPSC.
The Company is unable to predict the timing or ultimate outcome
of electric industry restructuring in the state of Missouri, as
well as its impact on the Company's future financial condition,
results of operations or liquidity. The potential negative
consequences of electric industry restructuring could be
significant and include the impairment and write-down of certain
assets, including generation-related plant and net regulatory
assets, lower revenues, reduced profit margins and increased costs
of capital. (See Note 2 - Regulatory Matters under Notes to
Consolidated Financial Statements for further information.)
INFORMATION The Year 2000 issue relates to computer systems and
SYSTEMS applications that currently use two-digit date fields to designate
a year. As the century date change occurs, date-sensitive systems
will recognize the year 2000 as 1900, or not at all. This
inability to recognize or properly treat the year 2000 may cause
systems to process critical financial and operational information
incorrectly.
The Company is utilizing both internal and external resources
to identify, correct or reprogram and test information systems for
Year 2000 compliance. The Company estimates that its costs for
addressing the Year 2000 issue will range from $10 million to $15
million. These costs will be expensed as incurred.
OUTLOOK Significant changes are taking place in the electric utility
industry. The Company's management and Board of Directors
recognize that competition will likely continue to increase in the
future, especially in the energy supply portion of the business.
New air quality standards are being considered which could
significantly increase capital costs, purchased power expenses and
other operations and maintenance expenditures. In addition,
expenditures for information systems are increasing (including
those costs associated with the Year 2000 issue). These issues
will result in numerous challenges and uncertainties for Ameren
and the utility industry, including the potential for increased
earnings pressure on Ameren and other electric utilities. Due to
the factors cited above, as well as expected future rate decreases
in the Company's Illinois and Missouri jurisdictions (see Note 2 -
Regulatory Matters under Notes to Consolidated Financial
Statements for further information) and other operating conditions
(such as the refueling of Callaway Nuclear Plant), management
believes that 1998 earnings will likely be lower than 1997
earnings, excluding the extraordinary charge for the write-off of
the generation-related regulatory assets and liabilities
associated with the Company's Illinois retail electric business.
In addition, the factors cited previously may also contribute to
earnings pressure beyond 1998. At this time, management cannot
predict the ultimate timing or impact of these matters on its
future financial condition, results of operations or liquidity.
Ameren management and its Board of Directors are taking actions
to address these challenges. Efforts are underway to accelerate
merger cost savings and other expense reductions. The Company is
also analyzing the potential benefits associated with the Illinois
electric industry restructuring legislation, including the
elimination of the fuel adjustment clause and the securitization
of certain future revenues. In addition, the Company will continue
to focus on developing its core energy business for additional
growth opportunities, as evidenced by the recent formation of a
power marketing and energy services affiliate, Ameren Energy, Inc.
Through these initiatives and other strategies, the Company
intends to address these challenges, maximize the value of its
strategic generating assets and enhance shareholder value.
ACCOUNTING In June 1997, the Financial Accounting Standards Board issued
MATTERS Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS 130
establishes standards for reporting and displaying comprehensive
income. SFAS 131 establishes standards for reporting information
about operating segments in annual financial statements and
interim reports to shareholders. SFAS 130 and SFAS 131 are
effective for fiscal years beginning after December 15, 1997. SFAS
130 and SFAS 131 are not expected to have a material effect on the
Company's financial position or results of operations upon
adoption.
22
<PAGE> 7
EFFECTS OF The Company's rates for retail electric and gas service are
INFLATION AND regulated by the MoPSC and the Illinois Commerce Commission.
CHANGING PRICES Non-retail electric rates are regulated by the FERC.
The current replacement cost of the Company's utility plant
substantially exceeds its recorded historical cost. Under
existing regulatory practice, only the historical cost of
plant is recoverable from customers. As a result, cash flows
designed to provide recovery of historical costs through
depreciation may not be adequate to replace plant in future
years. However, existing regulatory practice may be modified
for the Company's generation portion of its business (see Note
2 - Regulatory Matters under Notes to Consolidated Financial
Statements for further information). In addition, the impact
on common stockholders is mitigated to the extent depreciable
property is financed with debt that is repaid with dollars of
less purchasing power.
In Illinois, changes in the cost of fuel for electric
generation and gas costs are generally reflected in billings
to customers through fuel and purchased gas adjustment
clauses. However, existing regulatory practice may be modified
in the Illinois retail jurisdiction for changes in the cost of
fuel for electric generation (see Note 2 - Regulatory Matters
under Notes to Consolidated Financial Statements for further
information). In the Missouri retail jurisdiction, the cost of
fuel for electric generation is reflected in base rates with
no provision for changes to be made through a fuel adjustment
clause. Changes in gas costs in the Missouri retail
jurisdiction are generally reflected in billings to customers
through a purchased gas adjustment clause.
Inflation continues to be a factor affecting operations,
earnings, stockholders' equity and financial performance.
SAFE HARBOR Statements made in this annual report to stockholders which
STATEMENT are not based on historical facts, are 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, the Company is providing this
cautionary statement to identify important factors that could
cause actual results to differ materially from those
anticipated. Factors include, but are not limited to, the
effects of regulatory actions; changes in laws and other
governmental actions; competition; future market prices for
electricity; average rates for electricity in the Midwest;
business and economic conditions; weather conditions; fuel
prices and availability; generation plant performance;
monetary and fiscal policies; and legal and administrative
proceedings.
[AMEREN LOGO] 23
<PAGE> 8
Consolidated Balance Sheet
<TABLE>
<CAPTION>
ASSETS
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
December 31, 1997 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
PROPERTY AND PLANT, AT ORIGINAL COST:
Electric $11,522,730 $11,252,095
Gas 447,458 428,531
Other 36,023 35,965
- ---------------------------------------------------------------------------------------------
12,006,211 11,716,591
Less accumulated depreciation and amortization 5,285,434 5,024,046
- ---------------------------------------------------------------------------------------------
6,720,777 6,692,545
Construction work in progress:
Nuclear fuel in process 134,804 96,147
Other 131,504 162,414
- ---------------------------------------------------------------------------------------------
TOTAL PROPERTY AND PLANT, NET 6,987,085 6,951,106
- ---------------------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS:
Investments 97,188 113,310
Nuclear decommissioning trust fund 122,438 96,601
Other 64,915 64,655
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS AND OTHER ASSETS 284,541 274,566
- ---------------------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents 9,696 11,899
Accounts receivable - trade (less allowance for doubtful
accounts of $4,845 and $5,795, respectively) 266,306 268,839
Unbilled revenue 102,864 106,316
Other accounts and notes receivable 49,765 55,256
Materials and supplies, at average cost -
Fossil fuel 93,431 106,153
Other 134,152 137,953
Other 55,002 42,759
- ---------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 711,216 729,175
- ---------------------------------------------------------------------------------------------
REGULATORY ASSETS:
Deferred income taxes 639,792 734,206
Other 204,913 243,514
- ---------------------------------------------------------------------------------------------
TOTAL REGULATORY ASSETS 844,705 977,720
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $8,827,547 $8,932,567
=============================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
24
<PAGE> 9
Consolidated Balance Sheet
CAPITAL AND LIABILITIES
(Thousands of Dollars)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
December 31, 1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITALIZATION:
Common stock, $.01 par value, authorized 400,000,000 shares -
outstanding 137,215,462 shares $ 1,372 $ 1,372
Other paid-in capital, principally premium on common stock 1,582,938 1,583,728
Retained earnings (see accompanying statement) 1,434,658 1,431,295
- --------------------------------------------------------------------------------------------------------------
Total common stockholders' equity 3,018,968 3,016,395
Preferred stock not subject to mandatory redemption (Note 4) 235,197 298,497
Preferred stock subject to mandatory redemption (Note 4) - 624
Long-term debt (Note 6) 2,506,068 2,335,454
- --------------------------------------------------------------------------------------------------------------
TOTAL CAPITALIZATION 5,760,233 5,650,970
- --------------------------------------------------------------------------------------------------------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 3,534 3,534
- --------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Current maturity of long-term debt 52,241 146,410
Short-term debt 86,266 69,068
Accounts and wages payable 293,391 297,017
Accumulated deferred income taxes 35,809 43,933
Taxes accrued 110,566 65,245
Other 168,727 194,239
- --------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 747,000 815,912
- --------------------------------------------------------------------------------------------------------------
Construction, Commitments and Contingencies (Notes 10 and 11)
Accumulated Deferred Income Taxes 1,556,981 1,653,095
Accumulated Deferred Investment Tax Credits 190,260 209,227
Regulatory Liability 224,225 304,172
Other Deferred Credits and Liabilities 345,314 295,657
- --------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL AND LIABILITIES $8,827,547 $8,932,567
==============================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
[AMEREN LOGO] 25
<PAGE> 10
Consolidated Statement Of Income
(Thousands of Dollars, Except Shares and per Share Amounts)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year ended December 31, 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES:
Electric $3,064,177 $3,061,856 $3,008,481
Gas 249,815 254,412 217,420
Other 12,551 12,153 9,976
- -------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING REVENUES 3,326,543 3,328,421 3,235,877
- -------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Operations
Fuel and purchased power 836,445 880,204 823,951
Gas 160,679 160,776 125,305
Other 585,214 543,998 542,386
- -------------------------------------------------------------------------------------------------------------------
1,582,338 1,584,978 1,491,642
- -------------------------------------------------------------------------------------------------------------------
Maintenance 310,241 302,203 307,546
Depreciation and amortization 346,000 339,276 327,201
Income taxes 234,179 253,005 260,940
Other taxes 271,711 273,034 270,670
- -------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 2,744,469 2,752,496 2,657,999
- -------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 582,074 575,925 577,878
- -------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 5,244 6,870 7,716
Miscellaneous, net (10,344) (21,229) (22,975)
- -------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INCOME AND (DEDUCTIONS) (5,100) (14,359) (15,259)
- -------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 576,974 561,566 562,619
- -------------------------------------------------------------------------------------------------------------------
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 185,368 180,402 178,826
Allowance for borrowed funds used during construction (7,462) (7,490) (6,179)
Preferred dividends of subsidiaries 12,532 16,970 17,100
- -------------------------------------------------------------------------------------------------------------------
NET INTEREST CHARGES AND PREFERRED DIVIDENDS 190,438 189,882 189,747
- -------------------------------------------------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY CHARGE 386,536 371,684 372,872
- -------------------------------------------------------------------------------------------------------------------
EXTRAORDINARY CHARGE, NET OF INCOME TAXES (NOTE 2) (51,820) - -
- -------------------------------------------------------------------------------------------------------------------
NET INCOME $ 334,716 $371,684 $ 372,872
- -------------------------------------------------------------------------------------------------------------------
Earnings per Common Share - Basic and Diluted
(based on average shares outstanding)
Income before extraordinary charge $2.82 $2.71 $2.72
Extraordinary charge $(.38) - -
- -------------------------------------------------------------------------------------------------------------------
Net Income $2.44 $2.71 $2.72
- -------------------------------------------------------------------------------------------------------------------
AVERAGE COMMON SHARES OUTSTANDING 137,215,462 137,215,462 137,215,462
</TABLE>
See Notes to Consolidated Financial Statements.
26
<PAGE> 11
Consolidated Statement Of Cash Flows
(Thousands of Dollars)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Year ended December 31, 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING:
Income before extraordinary charge $ 386,536 $ 371,684 $ 372,872
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 340,079 333,565 322,813
Amortization of nuclear fuel 37,126 37,792 35,140
Allowance for funds used during construction (12,706) (14,360) (13,895)
Postretirement benefit accrual -- -- 11,923
Deferred income taxes, net (24,499) 12,665 4,003
Deferred investment tax credits, net (18,967) (9,531) (9,542)
Changes in assets and liabilities:
Receivables, net 11,476 (25,468) (21,229)
Materials and supplies 16,523 2,376 (174)
Accounts and wages payable (3,626) 7,302 105,042
Taxes accrued 45,321 6,259 (7,085)
Other (89,862) 63,816 (8,212)
- ----------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 687,401 786,100 791,656
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING:
Construction expenditures (380,593) (435,904) (429,839)
Allowance for funds used during construction 12,706 14,360 13,895
Nuclear fuel expenditures (35,432) (51,176) (42,444)
Other 16,122 (7,784) (10,047)
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (387,197) (480,504) (468,435)
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING:
Dividends on common stock (331,282) (326,855) (319,875)
Environmental bond funds -- -- 4,443
Redemptions -
Nuclear fuel lease (28,292) (34,819) (70,420)
Short-term debt -- (18,300) (6,100)
Long-term debt (123,444) (35,000) (54,000)
Preferred stock (63,924) (26) (26)
Issuances -
Nuclear fuel lease 40,337 43,884 49,134
Short-term debt 17,198 9,847 52,536
Long-term debt 187,000 65,194 19,766
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (302,407) (296,075) (324,542)
- ----------------------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (2,203) 9,521 (1,321)
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,899 2,378 3,699
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 9,696 $ 11,899 $ 2,378
- ----------------------------------------------------------------------------------------------------------------
Cash paid during the periods:
- ----------------------------------------------------------------------------------------------------------------
Interest (net of amount capitalized) $ 162,459 $ 167,433 $ 173,569
Income taxes $ 242,222 $ 248,096 $ 274,820
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION:
An extraordinary charge to earnings was recorded in the fourth quarter of 1997
for the write-off of generation-related regulatory assets and liabilities of the
Company's Illinois retail electric business as a result of electric industry
restructuring legislation enacted in Illinois in December 1997. The write-off
reduced earnings $52 million, net of income taxes. (See Note 2 - Regulatory
Matters for further information.)
See Notes to Consolidated Financial Statements.
[AMEREN LOGO] 27
<PAGE> 12
Consolidated Statement Of Retained Earnings
(Thousands of Dollars)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Year ended December 31, 1997 1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Period $1,431,295 $1,385,629 $1,331,567
- ---------------------------------------------------------------------------------
Add:
Net income 334,716 371,684 372,872
Other -- 837 1,065
- ---------------------------------------------------------------------------------
334,716 372,521 373,937
- ---------------------------------------------------------------------------------
Deduct:
Common stock cash dividends 331,282 326,855 319,875
Other 71 -- --
- ---------------------------------------------------------------------------------
331,353 326,855 319,875
- ---------------------------------------------------------------------------------
BALANCE AT CLOSE OF PERIOD $1,434,658 $1,431,295 $1,385,629
- ---------------------------------------------------------------------------------
</TABLE>
Selected Quarterly Information
(Unaudited)
(Thousands of Dollars, Except per Share Amounts)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
QUARTER ENDED Operating Operating Net Income Earnings (Loss)
Revenues Income (Loss) per Common
Share
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARCH 31, 1997 (A) $ 759,663 $ 95,461 $ 44,977 $ .33
March 31, 1996 (a) 777,333 106,393 57,946 .42
- --------------------------------------------------------------------------------------------
JUNE 30, 1997 (B) 791,821 132,492 79,686 .58
June 30, 1996 (b) 785,297 123,668 72,616 .53
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1997 1,043,137 269,093 215,423 1.57
September 30, 1996 1,018,214 267,812 217,073 1.58
- --------------------------------------------------------------------------------------------
DECEMBER 31, 1997 (C) 731,922 85,028 (5,370) (.04)
December 31, 1996 (c) 747,577 78,052 24,049 .18
- --------------------------------------------------------------------------------------------
</TABLE>
(a) The first quarter of 1997 and 1996 included credits to Missouri electric
customers which reduced net income approximately $7 million, or 5 cents per
share, and $8 million, or 6 cents per share, respectively. In addition, a
1.8% rate decrease effective August 1995 for Missouri electric customers
reduced net income for the first quarter of 1996 $4 million, or 3 cents per
share.
(b) The second quarter of 1997 and 1996 included credits to Missouri electric
customers which reduced net income approximately $4 million, or 3 cents per
share, and $18 million, or 14 cents per share, respectively. In addition,
the 1995 rate decrease reduced net income for the second quarter of 1996 $5
million, or 4 cents per share.
(c) The fourth quarter of 1997 included a net reversal of merger-related
expenses of $17 million, or 13 cents per share. The fourth quarter of 1997
also included an extraordinary charge of $52 million, net of income taxes,
or 38 cents per share (see Note 2 - Regulatory Matters for further
information). Callaway Plant refueling expenses, which decreased net income
approximately $18 million, or 13 cents per share, were included in the
fourth quarter of 1996.
Other changes in quarterly earnings are due to the effect of weather on sales
and other factors that are characteristic of public utility operations.
See Notes to Consolidated Financial Statements.
28
<PAGE> 13
Notes To Consolidated Financial Statements
NOTE 1 - MERGER AND BASIS OF PRESENTATION. Effective December 31, 1997,
SUMMARY OF following the receipt of all required state and federal
SIGNIFICANT regulatory approvals, Union Electric Company (AmerenUE) and
ACCOUNTING CIPSCO Incorporated (CIPSCO) combined to form Ameren
POLICIES Corporation (Ameren) (the Merger). The accompanying
consolidated financial statements (the financial statements)
reflect the accounting for the Merger as a pooling of interests
and are presented as if the companies were combined as of the
earliest period presented. However, the financial information
is not necessarily indicative of the results of operations,
financial position or cash flows that would have occurred had
the Merger been consummated for the periods for which it is
given effect, nor is it necessarily indicative of future
results of operations, financial position or cash flows. The
outstanding preferred stock of AmerenUE and Central Illinois
Public Service Company (AmerenCIPS), a subsidiary of CIPSCO,
was not affected by the Merger.
The accompanying financial statements include the accounts
of Ameren and its consolidated subsidiaries (collectively the
Company). All subsidiaries for which the Company owns directly
or indirectly more than 50% of the voting stock are included as
consolidated subsidiaries. Ameren's primary operating
companies, AmerenUE and AmerenCIPS, are engaged principally in
the generation, transmission, distribution and sale of electric
energy and the purchase, distribution, transportation and sale
of natural gas in the states of Missouri and Illinois. The
Company also has a non-regulated investing subsidiary, CIPSCO
Investment Company (CIC). Additionally, the Company has a 60%
interest in Electric Energy, Inc. (EEI). EEI owns and operates
an electric generating and transmission facility in Illinois
that supplies electric power primarily to a uranium enrichment
plant located in Paducah, Kentucky.
All significant intercompany balances and transactions have
been eliminated from the consolidated financial statements.
Operating revenues and net income for each of the years in
the three year period ended December 31, 1997, were as follows
(in millions):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Year ended December 31, 1997: AMERENUE CIPSCO OTHER AMEREN
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenues $ 2,287 $ 863 $ 177 $ 3,327
Extraordinary charge (27) (25) -- (52)
Net income 293 42 -- 335
- ---------------------------------------------------------------------------------------
Year ended December 31, 1996:
- ---------------------------------------------------------------------------------------
Operating revenues $ 2,260 $ 891 $ 177 $ 3,328
Net income 292 80 -- 372
- ---------------------------------------------------------------------------------------
Year ended December 31, 1995:
- ---------------------------------------------------------------------------------------
Operating revenues $ 2,242 $ 837 $ 157 $ 3,236
Net income 301 72 -- 373
- ---------------------------------------------------------------------------------------
</TABLE>
REGULATION. Ameren is a registered holding company under the
Public Utility Holding Company Act of 1935 (PUHCA) and is
subject to regulation by the Securities and Exchange Commission
(SEC). AmerenUE is also regulated by the Missouri Public
Service Commission (MoPSC), Illinois Commerce Commission (ICC)
and the Federal Energy Regulatory Commission (FERC). AmerenCIPS
is also regulated by the ICC and the FERC. The accounting
policies of the Company conform to generally accepted
accounting principles (GAAP). (See Note 2 - Regulatory Matters
for further information.)
PROPERTY AND PLANT. The cost of additions to and betterments of
units of property and plant is capitalized. Cost includes
labor, material, applicable taxes and overheads, plus an
allowance for funds used during construction. Maintenance
expenditures and the renewal of items not considered units of
property are charged to income as incurred. When units of
depreciable property are retired, the original cost and removal
cost, less salvage, are charged to accumulated depreciation.
DEPRECIATION. Depreciation is provided over the estimated lives
of the various classes of depreciable property by applying
composite rates on a straight-line basis. The provision for
depreciation in 1997, 1996 and 1995 was approximately 3% of the
average depreciable cost.
FUEL AND GAS COSTS. In Illinois, changes in the cost of fuel
for electric generation and gas costs are generally reflected
in billings to customers through fuel and purchased gas
adjustment clauses. However, existing regulatory practice may
be modified in the Illinois retail jurisdiction for changes in
the cost of fuel for electric generation (see Note 2 -
Regulatory Matters for further information). In the Missouri
retail jurisdiction, the cost of fuel for electric generation
is reflected in base rates with no provision for changes to be
made through a fuel adjustment clause. Changes in gas costs in
the Missouri retail jurisdiction are generally reflected in
billings to customers through a purchased gas adjustment
clause.
NUCLEAR FUEL. The cost of nuclear fuel is amortized to fuel
expense on a unit-of-production basis. Spent fuel disposal cost
is charged to expense based on kilowatthours sold.
29
<PAGE> 14
CASH AND CASH EQUIVALENTS. Cash and cash equivalents include
cash on hand and temporary investments purchased with a
maturity of three months or less.
INCOME TAXES. The Company and its subsidiaries file a
consolidated federal tax return. Deferred tax assets and
liabilities are recognized for the tax consequences of
transactions that have been treated differently for financial
reporting and tax return purposes, measured using statutory tax
rates.
Investment tax credits utilized in prior years were deferred
and are being amortized over the useful lives of the related
properties.
ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION. Allowance for
funds used during construction (AFC) is a utility industry
accounting practice whereby the cost of borrowed funds and the
cost of equity funds (preferred and common stockholders'
equity) applicable to the Company's construction program are
capitalized as a cost of construction. AFC does not represent a
current source of cash funds. This accounting practice offsets
the effect on earnings of the cost of financing current
construction, and treats such financing costs in the same
manner as construction charges for labor and materials.
Under accepted rate-making practice, cash recovery of AFC, as
well as other construction costs, occurs when completed
projects are placed in service and reflected in customer rates.
The AFC ranges of rates used during 1997, 1996 and 1995 were
8.3% - 8.7%, 7.7% - 9.0% and 9.0% - 9.3%, respectively.
UNAMORTIZED DEBT DISCOUNT, PREMIUM AND EXPENSE. Discount,
premium and expense associated with long-term debt are
amortized over the lives of the related issues.
REVENUE. The Company accrues an estimate of electric and gas
revenues for service rendered but unbilled at the end of each
accounting period.
STOCK COMPENSATION PLANS. The Company applies Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees" (APB 25) in accounting for its plans.
LONG-LIVED ASSETS. Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" became
effective on January 1, 1996. SFAS 121 prescribes general
standards for the recognition and measurement of impairment
losses. SFAS 121 requires that regulatory assets which are no
longer probable of recovery through future revenues be charged
to earnings (see Note 2 - Regulatory Matters for further
information).
EARNINGS PER SHARE. SFAS No. 128, "Earnings per Share" became
effective on January 1, 1997. SFAS 128 established standards
for computing and presenting earnings per share (EPS) on a
basic and diluted basis (see Note 9 - Stock Options for further
information). SFAS 128 did not have an impact on the financial
position, results of operations or liquidity of the Company
upon adoption.
USE OF ESTIMATES. The preparation of financial statements in
conformity with GAAP requires management to make certain
estimates and assumptions. Such estimates and assumptions may
affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reported period. Actual results could
differ from those estimates.
RECLASSIFICATIONS. Certain reclassifications have been made to
prior-years financial statements to conform with 1997
reporting.
NOTE 2 - In July 1995, the MoPSC approved an agreement involving the
REGULATORY Company's Missouri retail electric rates. The agreement
MATTERS decreased rates 1.8% for all classes of Missouri retail
electric customers, effective August 1, 1995, reducing annual
revenues about $30 million and reducing annual earnings
approximately 13 cents per share. In addition, a one-time $30
million credit to retail Missouri electric customers reduced
1995 earnings approximately 13 cents per share. Also included
was a three-year experimental alternative regulation plan that
runs from July 1,1995 through June 30, 1998, which provides
that earnings in any future years in excess of a 12.61%
regulatory return on equity (ROE) will be shared equally
between customers and stockholders, and earnings above a 14%
ROE will be credited to customers. The formula for computing
the credit uses twelve-month results ending June 30, rather
than calendar year earnings. The agreement also provides that
no party shall file for a general increase or decrease in the
Company's Missouri retail electric rates prior to July 1, 1998,
except that the Company may file for an increase if certain
adverse events occur. During 1997, the Company recorded a $20
million credit for the second year of the plan, which reduced
earnings $11 million, or 8 cents per share. During 1996, the
Company recorded a $47 million credit, which reduced earnings
$28 million, or 20 cents per share. These credits were
reflected as reductions in electric revenues.
Included in the joint agreement approved by the MoPSC in its
February 1997 order authorizing the Merger, is a new three-year
experimental alternative regulation plan that will run from
July 1, 1998 through June 30, 2001. Like the current plan, the
new plan requires that earnings over a 12.61% ROE up to a 14%
ROE will be shared equally between customers and stockholders.
The new three-year plan will also return to customers 90% of
all earnings above a 14% ROE up to a 16% ROE. Earnings above a
16% ROE would be credited entirely to customers. Other
agreement provisions include: recovery within a 10-year period
of the merger-related expenses applicable to the Missouri
retail jurisdiction; a Missouri electric rate decrease,
effective September 1, 1998, based on the weather-adjusted
average annual credits to customers under the current
experimental alternative regulation plan; and an experimental
retail wheeling pilot program for 100
30
<PAGE> 15
megawatts of electric power. Also, as part of the agreement,
the Company did not seek to recover in Missouri the merger
premium. The exclusion of the merger premium from rates did not
result in a charge to earnings.
In September 1997, the ICC approved the Merger subject to
certain conditions. The conditions included the requirement for
AmerenUE and AmerenCIPS to file electric and gas rate cases or
alternative regulatory plans within six months after the Merger
became final to determine how net merger savings would be
shared between the ratepayers and stockholders.
In December 1997, the Governor of Illinois signed the
Electric Service Customer Choice and Rate Relief Law of 1997
(the Act) providing for electric utility restructuring in
Illinois. This legislation introduces competition into the
supply of electric energy in Illinois. The Act includes a 5%
rate decrease for the Company's Illinois residential electric
customers, effective August 1, 1998. The Company may be subject
to additional 5% residential electric rate decreases in each of
2000 and 2002 to the extent its rates exceed the Midwest
utility average at that time. The Company's rates are currently
below the Midwest utility average. The Company estimates that
the initial 5% rate decrease will result in a decrease in
annual electric revenues of about $13 million, based on
estimated levels of sales and assuming normal weather
conditions. Retail direct access, which allows customers to
choose their electric generation supplier, will be phased in
over several years. Access for commercial and industrial
customers will occur over a period from October 1999 to
December 2000, and access for residential customers will occur
after May 1, 2002. The Act also relieves the Company of the
requirement in the ICC's September 1997 Order (which approved
the Merger), requiring AmerenUE and AmerenCIPS to file electric
rate cases or alternative regulatory plans in Illinois
following consummation of the Merger to reflect the effects of
net merger savings. Other provisions of the Act include (1)
potential recovery of a portion of stranded costs through a
transition charge collected from customers who choose another
electric supplier, (2) the option to eliminate the uniform fuel
adjustment clause (FAC) and to roll into base rates a
historical level of fuel expense and (3) a mechanism to
securitize certain future revenues.
The Company's accounting policies and financial statements
conform to GAAP applicable to rate-regulated enterprises and
reflect the effects of the ratemaking process in accordance
with SFAS No. 71, "Accounting for the Effects of Certain Types
of Regulation." Such effects concern mainly the time at which
various items enter into the determination of net income in
order to follow the principle of matching costs and revenues.
For example, SFAS 71 allows the Company to record certain
assets and liabilities (regulatory assets and regulatory
liabilities) which are expected to be recovered or settled in
future rates and would not be recorded under GAAP for
nonregulated entities. In addition, reporting under SFAS 71
allows companies whose service obligations and prices are
regulated to maintain assets on their balance sheets
representing costs they reasonably expect to recover from
customers, through inclusion of such costs in future rates.
SFAS 101, "Accounting for the Discontinuance of Application of
FASB Statement No. 71," specifies how an enterprise that ceases
to meet the criteria for application of SFAS 71 for all or part
of its operations should report that event in its financial
statements. In general, SFAS 101 requires that the enterprise
report the discontinuance of SFAS 71 by eliminating from its
balance sheet all regulatory assets and liabilities related to
the portion of the business which no longer meets the SFAS 71
criteria. At its July 24, 1997 meeting, the Emerging Issues
Task Force of the Financial Accounting Standards Board (EITF)
concluded that application of SFAS 71 accounting should be
discontinued once sufficiently detailed deregulation
legislation is issued for a separable portion of a business for
which a plan of deregulation has been established. However, the
EITF further concluded that regulatory assets associated with
the deregulated portion of the business, which will be
recovered through tariffs charged to customers of a regulated
portion of the business, should be associated with the
regulated portion of the business from which future cash
recovery is expected (not the portion of the business from
which the costs originated), and can therefore continue to be
carried on the regulated entity's balance sheet to the extent
such assets are recovered. In addition, SFAS 121 establishes
accounting standards for the impairment of long-lived assets
(see Note 1 - Summary of Significant Accounting Policies for
further information).
Due to the enactment of the Act, prices for the retail
supply of electric generation are expected to transition from
cost-based, regulated rates to rates determined in large part
by competitive market forces in the state of Illinois. As a
result, the Company discontinued application of SFAS 71 for the
Illinois retail portion of its generating business (i.e., the
portion of the Company's business related to the supply of
electric energy in Illinois) in the fourth quarter of 1997. The
Company has evaluated the impact of the Act on the future
recoverability of its regulatory assets and liabilities related
to the generation portion of its business and has determined
that it is not probable that such assets and liabilities will
be recovered through the cash flows from the regulated portion
of its business. Accordingly, the Company's generation-related
regulatory assets and liabilities of its Illinois retail
electric business were written off in the fourth quarter of
1997, resulting in an extraordinary charge to earnings of $52
million, net of income taxes, or 38 cents per share. These
regulatory assets and liabilities included previously incurred
costs originally expected to be collected/refunded in future
revenues, such as fuel contract restructuring costs, deferred
charges related to a generating plant, costs associated with an
abandoned scrubber at a fossil plant, and income tax-related
regulatory assets and liabilities. In addition, the Company has
evaluated whether the recoverability of the costs associated
with its remaining net generation-related assets have been
impaired as defined under SFAS 121. The Company has concluded
that impairment, as defined under SFAS 121, does not exist and
that no plant write-downs are necessary at
31
<PAGE> 16
this time. At December 31, 1997, the Company's net investment
in generation facilities related to its Illinois retail
jurisdiction approximated $836 million and was included in
electric plant in-service on the Company's consolidated balance
sheet.
The provisions of the Act could also result in lower
revenues, reduced profit margins and increased costs of
capital. At this time, the Company is unable to determine the
impact of the Act on its future financial condition, results of
operations or liquidity.
In Missouri, where approximately 72% of the Company's retail
electric revenues are derived, a task force appointed by the
MoPSC is conducting studies of electric industry restructuring
and competition and is expected to issue a report to the MoPSC
in 1998. A joint legislative committee is also conducting
studies and is expected to report its findings and
recommendations to the Missouri General Assembly. Up to this
point, retail wheeling has not been allowed in Missouri;
however, the joint agreement approved by the MoPSC in February
1997 as part of its merger authorization includes a provision
that required AmerenUE to file a proposal for a 100-megawatt
experimental retail wheeling pilot program in Missouri.
AmerenUE filed its proposal with the MoPSC in September 1997.
This proposal is subject to review and approval by the MoPSC.
The Company is unable to predict the timing or ultimate
outcome of electric industry restructuring in the state of
Missouri, as well as its impact on the Company's future
financial condition, results of operations or liquidity. The
potential negative consequences of electric industry
restructuring could be significant and include the impairment
and write-down of certain assets, including generation-related
plant and net regulatory assets, lower revenues, reduced profit
margins and increased costs of capital. At December 31, 1997,
the Company's net investment in generation facilities related
to its Missouri jurisdiction approximated $2.7 billion and was
included in electric plant in-service on the Company's
consolidated balance sheet. In addition, at December 31, 1997,
the Company's Missouri net generation-related regulatory assets
approximated $462 million.
In accordance with SFAS 71, the Company has deferred certain
costs pursuant to actions of its regulators, and is currently
recovering such costs in electric rates charged to customers.
At December 31, the Company had recorded the following
regulatory assets and regulatory liability:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
(in millions) 1997 1996
-----------------------------------------------------------------------
<S> <C> <C>
REGULATORY ASSETS:
Income taxes $640 $734
Callaway costs 99 111
Undepreciated plant costs -- 41
Unamortized loss on reacquired debt 32 42
DOE decommissioning assessment 15 18
Deferred environmental remediation costs 13 11
Merger costs 28 --
Other 18 21
-----------------------------------------------------------------------
Regulatory Assets $845 $978
-----------------------------------------------------------------------
REGULATORY LIABILITY:
Income taxes $224 $304
-----------------------------------------------------------------------
Regulatory Liability $224 $304
-----------------------------------------------------------------------
</TABLE>
INCOME TAXES: See Note 7 - Income Taxes.
CALLAWAY COSTS: Represents Callaway Nuclear Plant operations
and maintenance expenses, property taxes and carrying costs
incurred between the plant in-service date and the date the
plant was reflected in rates. These costs are being amortized
over the remaining life of the plant (through 2024).
UNDEPRECIATED PLANT COSTS: Represents the unamortized cost of a
generating plant's scrubber plus costs of removal.
UNAMORTIZED LOSS ON REACQUIRED DEBT: Represents losses related
to refunded debt. These amounts are being amortized over the
lives of the related new debt issues or the remaining lives of
the old debt issues if no new debt was issued.
DEPARTMENT OF ENERGY (DOE) DECOMMISSIONING ASSESSMENT:
Represents fees assessed by the DOE to decommission its uranium
enrichment facility. These costs are being amortized through
2007 as payments are made to the DOE.
DEFERRED ENVIRONMENTAL REMEDIATION COSTS: Represents costs, net
of recoveries from insurers, relating to studies and
remediation at manufactured gas sites which are recovered
through environmental rate riders. (See Note 10 - Commitments
and Contingencies for further information.)
MERGER COSTS: Represents the portion of merger-related expenses
applicable to the Missouri retail jurisdiction. These costs are
being amortized within 10 years, based on a MoPSC order.
The Company continually assesses the recoverability of its
regulatory assets. Under current accounting standards,
regulatory assets are written off to earnings when it is no
longer probable that
32
<PAGE> 17
such amounts will be recovered through future revenues.
However, as noted in the above paragraphs, electric industry
restructuring legislation may impact the recoverability of
regulatory assets in the future.
In April 1996, the FERC issued Order 888 and Order 889
related to the industry's wholesale electric business. In
January 1998, the Company filed a combined open access tariff
which conforms to the FERC's orders.
NOTE 3 - The Company has a lease agreement which provides for the
NUCLEAR financing of nuclear fuel. At December 31, 1997, the maximum
FUEL LEASE amount that could be financed under the agreement was $120
million. Pursuant to the terms of the lease, the Company has
assigned to the lessor certain contracts for purchase of
nuclear fuel. The lessor obtains, through the issuance of
commercial paper or from direct loans under a committed
revolving credit agreement from commercial banks, the necessary
funds to purchase the fuel and make interest payments when due.
The Company is obligated to reimburse the lessor for all
expenditures for nuclear fuel, interest and related costs.
Obligations under this lease become due as the nuclear fuel is
consumed at the Company's Callaway Nuclear Plant. The Company
reimbursed the lessor $31 million during 1997, $37 million
during 1996 and $34 million during 1995.
The Company has capitalized the cost, including certain
interest costs, of the leased nuclear fuel and has recorded the
related lease obligation. During each of the years 1997, 1996
and 1995, the total interest charges under the lease were $6
million (based on average interest rates of 5.8%, 5.7% and
6.1%, respectively) of which $3 million was capitalized in each
respective year.
NOTE 4 - At December 31, 1997 and 1996, AmerenUE and AmerenCIPS had
PREFERRED 25 million shares and 4.6 million shares, respectively, of
STOCK OF authorized preferred stock.
SUBSIDIARIES
In 1997, AmerenUE redeemed $64 million of preferred stock
(see note (b) in table below). AmerenUE retired 260 shares,
$6.30 Series preferred stock in 1996.
Outstanding preferred stock is redeemable at the redemption
prices shown below (in millions):
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
December 31, 1997 1996
-----------------------------------------------------------------------------------------------------
PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION:
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred stock outstanding (entitled to cumulative dividends)
Redemption Price (per share)
Without par value and stated value of $100 per share --
$7.64 Series - 330,000 shares $103.82 - note (a) $ 33 $ 33
$7.44 Series - 330,001 shares 101.00 - note (b) -- 33
$6.40 Series - 300,000 shares 101.50 - note (b) -- 30
$5.50 Series A - 14,000 shares 110.00 1 1
$4.75 Series - 20,000 shares 102.176 2 2
$4.56 Series - 200,000 shares 102.47 20 20
$4.50 Series - 213,595 shares 110.00 - note (c) 21 21
$4.30 Series - 40,000 shares 105.00 4 4
$4.00 Series - 150,000 shares 105.625 15 15
$3.70 Series - 40,000 shares 104.75 4 4
$3.50 Series - 130,000 shares 110.00 13 13
With par value of $100 per share --
4.00% Series - 150,000 shares 101.00 15 15
4.25% Series - 50,000 shares 102.00 5 5
4.90% Series - 75,000 shares 102.00 8 8
4.92% Series - 50,000 shares 103.50 5 5
5.16% Series - 50,000 shares 102.00 5 5
1993 Auction - 300,000 shares 100.00 - note (d) 30 30
6.625% Series - 125,000 shares 100.00 - note (e) 12 12
Without par value and stated value of $25 per share --
$1.735 Series - 1,657,500 shares 25.00 - note (f) 42 42
-----------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION $235 $298
-----------------------------------------------------------------------------------------------------
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION:
-----------------------------------------------------------------------------------------------------
Preferred stock outstanding without par value (entitled
to cumulative dividends)
Stated value of $100 per share --
$6.30 Series - 0 and 6,240 shares
at respective dates $100.00 - note (b) $ -- $ 1
-----------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION $ -- $ 1
=====================================================================================================
</TABLE>
(a) Beginning February 15, 2003, eventually declining
to $100 per share.
(b) AmerenUE redeemed this series in 1997.
(c) In the event of voluntary liquidation, $105.50.
(d) Dividend rates, and the periods during which such
rates apply, vary depending on the Company's
selection of certain defined dividend period
lengths. The average dividend rate during 1997 was
3.98%.
(e) Not redeemable prior to October 1, 1998.
(f) Not redeemable prior to August 1, 1998.
33
<PAGE> 18
NOTE 5 - Short-term borrowings of the Company consist of bank loans
SHORT-TERM (maturities generally on an overnight basis) and commercial
BORROWINGS paper (maturities generally within 10-45 days). At December 31,
1997 and 1996, $86 million and $69 million, repectively, of
short-term borrowings were outstanding. The weighted average
interest rates on borrowings outstanding at December 31, 1997
and 1996, were 6.5% and 6.4%, respectively.
At December 31, 1997, the Company had committed bank lines of
credit aggregating $259 million (of which $244 million were
unused and $179 million were available) which make available
interim financing at various rates of interest based on LIBOR,
the bank certificate of deposit rate, or other options. These
lines of credit are renewable annually at various dates
throughout the year.
<TABLE>
<CAPTION>
NOTE 6 - Long-term debt outstanding at December 31, 1997 1996
LONG-TERM DEBT ----------------------------------------------------------------------------------------------------
OF SUBSIDIARIES (in millions)
----------------------------------------------------------------------------------------------------
First Mortgage Bonds - note (a)
----------------------------------------------------------------------------------------------------
<S> <C> <C>
5 1/2% Series paid in 1997 $ -- $ 40
6 1/8% Series X paid in 1997 -- 43
6 3/4% Series due 1999 100 100
7 1/8% Series W due 1999 50 50
8.33% Series due 2002 75 75
6 3/8% Series Z due 2003 40 40
7.65% Series due 2003 100 100
6 7/8% Series due 2004 188 188
7 3/8% Series due 2004 85 85
7 1/2% Series X due 2007 50 50
6 3/4% Series due 2008 148 148
7.61% 1997 Series due 2017 40 --
7.40% Series due 2020 - note (b) 60 60
8 3/4% Series due 2021 125 125
8% Series due 2022 85 85
8 1/4% Series due 2022 104 104
7.15% Series due 2023 75 75
7% Series due 2024 100 100
5.45% Series due 2028 - note (b) 44 44
Other 6% - 8.5% due 1999 through 2022 186 121
----------------------------------------------------------------------------------------------------
1,655 1,633
----------------------------------------------------------------------------------------------------
Environmental Improvement/Pollution Control Revenue Bonds
----------------------------------------------------------------------------------------------------
1984 Series A due 2014 - note (c) 80 80
1984 Series B due 2014 - note (c) 80 80
1985 Series A due 2015 - note (d) 70 70
1985 Series B due 2015 - note (d) 57 57
1990 Series B 7.60% due 2013 32 32
1991 Series due 2020 - note (d) 43 43
1992 Series due 2022 - note (d) 47 47
1993 Series A 6 3/8% due 2028 35 35
1993 Series C-1 due 2026 - note (e) 35 35
Other 4.375% - 7.6% due 2014 through 2028 80 80
----------------------------------------------------------------------------------------------------
559 559
----------------------------------------------------------------------------------------------------
Subordinated Deferrable Interest Debentures
----------------------------------------------------------------------------------------------------
7.69% Series A due 2036 - note (f) 66 66
----------------------------------------------------------------------------------------------------
Unsecured Loans
----------------------------------------------------------------------------------------------------
Commercial paper - note (g) 35 --
Credit agreements - note (h) 21 --
1991 Senior Medium Term Notes 8.60% due through 2005 54 60
1994 Senior Medium Term Notes 6.61% due through 2005 62 70
----------------------------------------------------------------------------------------------------
172 130
----------------------------------------------------------------------------------------------------
Nuclear Fuel Lease 117 106
----------------------------------------------------------------------------------------------------
Unamortized Discount and Premium on Debt (11) (13)
----------------------------------------------------------------------------------------------------
Maturities Due Within One Year (52) (146)
----------------------------------------------------------------------------------------------------
TOTAL LONG-TERM DEBT $2,506 $2,335
====================================================================================================
</TABLE>
(a) At December 31, 1997, substantially all of the property and
plant was mortgaged under, and subject to liens of, the
respective indentures pursuant to which the bonds were
issued.
(b) Environmental Improvement Series
(c) On June 1 of each year, the interest rate is established
for the following year, or alternatively at the option of
the Company, may be fixed until maturity. A per annum rate
of 3.95% is effective for the year ended May 31, 1998.
Thereafter, the interest rates will depend on market
conditions and the selection of an annual versus remaining
life rate by the Company. The average interest rate for the
year 1997 was 3.83%.
(d) Interest rates, and the periods during which such rates
apply, vary depending on the Company's selection of certain
defined rate modes. The average interest rates for the year
1997, for 1985 Series A, 1985 Series B, 1991 Series and
1992 Series bonds were 3.61%, 3.82%, 3.86%, and 3.83%,
respectively.
34
<PAGE> 19
(e) The interest rate for the year 1997 was 4.20%. This
interest rate will be adjusted to a then-current market
rate on August 15, 1998. Actual interest rates, and the
periods during which such rates apply, vary depending on
the Company's selection of certain defined rate modes.
(f) During the terms of the debentures, the Company may, under
certain circumstances, defer the payment of interest for up
to five years.
(g) A bank credit agreement, due 1999, permits the Company to
borrow or to support commercial paper borrowings up to $300
million. Interest rates will vary depending on market
conditions. At December 31, 1997, the outstanding
commercial paper was at an average annualized rate of
5.93%.
(h) Bank credit agreements, due 2002, permit the Company to
borrow up to $42 million. Interest rates vary depending on
market conditions and the Company's selection of various
options under the agreements. At December 31, 1997, the
average annualized interest rate was 6.15%.
(i) A bank credit agreement, due 1999, permits the Company to
borrow up to $200 million. Interest rates will vary
depending on market conditions and the Company's selection
of various options under the agreement. At December 31,
1997, no such borrowings were outstanding.
Maturities of long-term debt through 2002 are as follows:
<TABLE>
<CAPTION>
(in millions) Principal Amount
-------------------------------------------------------
<S> <C>
1998 $ 52
1999 209
2000 49
2001 44
2002 134
=======================================================
</TABLE>
Amounts for years subsequent to 1998 do not include nuclear
fuel lease payments since the amounts of such payments are not
currently determinable.
NOTE 7 - Total income tax expense for 1997 resulted in an effective tax
INCOME TAXES rate of 38% on earnings before income taxes (40% in each of
1996 and 1995).
Principal reasons such rates differ from the statutory federal
rate:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
1997 1996 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STATUTORY FEDERAL INCOME TAX RATE: 35% 35% 35%
Increases (Decreases) from:
Depreciation differences 1 1 1
State tax 4 4 4
Other (2) -- --
------------------------------------------------------------------------------------------------------
EFFECTIVE INCOME TAX RATE 38% 40% 40%
======================================================================================================
Income tax expense components:
------------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
------------------------------------------------------------------------------------------------------
TAXES CURRENTLY PAYABLE (PRINCIPALLY FEDERAL):
Included in operating expenses $261 $255 $267
Included in other income -- Miscellaneous, net -- -- (1)
------------------------------------------------------------------------------------------------------
261 255 266
DEFERRED TAXES (PRINCIPALLY FEDERAL):
Included in operating expenses --
Depreciation differences (11) 2 10
Postretirement benefits -- -- (9)
Other (7) 5 2
Included in other income --
Depreciation differences -- 1 1
Other 10 -- --
-----------------------------------------------------------------------------------------------------
(8) 8 4
DEFERRED INVESTMENT TAX CREDITS, AMORTIZATION:
Included in operating expenses (9) (9) (9)
------------------------------------------------------------------------------------------------------
TOTAL INCOME TAX EXPENSE $244 $254 $261
======================================================================================================
</TABLE>
In accordance with SFAS 109, "Accounting for Income
Taxes," a regulatory asset, representing the probable recovery
from customers of future income taxes, which is expected to
occur when temporary differences reverse, was recorded along
with a corresponding deferred tax liability. Also, a
regulatory liability, recognizing the lower expected revenue
resulting from reduced income taxes associated with amortizing
accumulated deferred investment tax credits, was recorded.
Investment tax credits have been deferred and will continue to
be credited to income over the lives of the related property.
The Company adjusts its deferred tax liabilities for
changes enacted in tax laws or rates. Recognizing that
regulators will probably reduce future revenues for deferred
tax liabilities initially recorded at rates in excess of the
current statutory rate, reductions in the deferred tax
liability were credited to the regulatory liability.
35
<PAGE> 20
Temporary differences gave rise to the following
deferred tax assets and deferred tax liabilities at
December 31:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
(in millions) 1997 1996
------------------------------------------------------------------------------------
<S> <C> <C>
ACCUMULATED DEFERRED INCOME TAXES:
Depreciation $1,045 $1,070
Regulatory assets, net 451 488
Capitalized taxes and expenses 176 210
Deferred benefit costs (46) (48)
Regulatory liabilities, net (42) (46)
Other 9 23
------------------------------------------------------------------------------------
TOTAL NET ACCUMULATED DEFERRED INCOME TAX LIABILITIES $1,593 $1,697
------------------------------------------------------------------------------------
</TABLE>
NOTE 8 - The Company has defined-benefit retirement plans
RETIREMENT covering substantially all of its employees. Benefits
BENEFITS are based on the employees' years of service and
compensation. The Company's plans are funded in
compliance with income tax regulations and federal
funding requirements.
Following is the pension plan information related to
AmerenUE's plans as of December 31:
Pension costs for the years 1997, 1996 and 1995, were
$24 million, $28 million and $26 million, respectively,
of which approximately 17%, 19% and 20%, respectively
was charged to construction accounts.
<TABLE>
<CAPTION>
FUNDED STATUS OF PENSION PLANS:
-----------------------------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACTUARIAL PRESENT VALUE OF BENEFIT OBLIGATION:
Vested benefit obligation $ 705 $ 661 $ 679
-----------------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation $ 829 $ 752 $ 758
-----------------------------------------------------------------------------------------------------------------------
Projected benefit obligation for service rendered to date $ 999 $ 919 $ 913
Less: Plan assets at fair value* 1,006 924 847
-----------------------------------------------------------------------------------------------------------------------
(Excess) Deficiency of plan assets versus
projected benefit obligation (7) (5) 66
Unrecognized net gain 115 96 22
Unrecognized prior service cost (69) (76) (82)
Unrecognized net assets at transition 7 8 9
-----------------------------------------------------------------------------------------------------------------------
ACCRUED PENSION COST AT DECEMBER 31 $ 46 $ 23 $ 15
-----------------------------------------------------------------------------------------------------------------------
* Plan assets consist principally of common stocks and fixed income securities
COMPONENTS OF NET PENSION EXPENSE:
-----------------------------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------
Service cost - benefits earned during the period $ 22 $ 22 $ 19
Interest cost on projected benefit obligation 69 65 66
Actual return on plan assets (134) (107) (166)
Net amortization and deferral 67 48 107
-----------------------------------------------------------------------------------------------------------------------
PENSION COST $ 24 $ 28 $ 26
-----------------------------------------------------------------------------------------------------------------------
ASSUMPTIONS FOR ACTUARIAL PRESENT VALUE OF PROJECTED BENEFIT OBLIGATIONS:
-----------------------------------------------------------------------------------------------------------------------
1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------
Discount rate at measurement date 7.0% 7.5% 7.25%
Increase in future compensation 4.0% 4.5% 4.25%
Plan assets long-term rate of return 8.5% 8.5% 8.5%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE> 21
AmerenCIPS uses a September 30 measurement date for its
valuation of pension plan assets and liabilities. Following is
the pension plan information related to AmerenCIPS' plan as of
December 31:
Pension costs for the years 1997, 1996 and 1995, were $5
million, $4 million and $6 million, respectively, of which
approximately 15% in 1997 and 1996 and 18% in 1995 was charged
to construction accounts.
<TABLE>
<CAPTION>
FUNDED STATUS OF PENSION PLAN:
-----------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACTUARIAL PRESENT VALUE OF BENEFIT OBLIGATION:
Vested benefit obligation $ 164 $ 148 $ 121
-----------------------------------------------------------------------------------------------------
Accumulated benefit obligation $ 190 $ 171 $ 142
-----------------------------------------------------------------------------------------------------
Projected benefit obligation for service rendered to date $ 234 $ 211 $ 181
Less: Plan assets at fair value* 315 253 221
-----------------------------------------------------------------------------------------------------
(Excess) of plan assets versus projected
benefit obligation (81) (42) (40)
Unrecognized net gain 76 40 33
Unrecognized prior service cost (11) (11) (5)
Unrecognized net assets at transition 3 3 4
-----------------------------------------------------------------------------------------------------
Prepaid pension costs at September 30 (13) (10) (8)
Expense, net of funding October to December (2) (1) --
-----------------------------------------------------------------------------------------------------
PREPAID PENSION COST AT DECEMBER 31 $ (15) $ (11) $ (8)
-----------------------------------------------------------------------------------------------------
* Plan assets consist principally of common and preferred
stocks, bonds, money market instruments and real estate.
COMPONENTS OF NET PENSION EXPENSE:
-----------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------
Service cost - benefits earned during the period $ 7 $ 7 $ 7
Interest cost on projected benefit obligation 16 13 12
Actual return on plan assets (60) (30) (34)
Net amortization and deferral 42 14 21
-----------------------------------------------------------------------------------------------------
PENSION COST $ 5 $ 4 $ 6
-----------------------------------------------------------------------------------------------------
ASSUMPTIONS FOR ACTUARIAL PRESENT VALUE OF PROJECTED
BENEFIT OBLIGATIONS:
-----------------------------------------------------------------------------------------------------
1997 1996 1995
-----------------------------------------------------------------------------------------------------
Discount rate at measurement date 7.5% 7.5% 7.5%
Increase in future compensation 4.5% 4.5% 4.5%
Plan assets long-term rate of return 8.5% 8.5% 8.0%
-----------------------------------------------------------------------------------------------------
</TABLE>
In addition to providing pension benefits, the Company
provides certain health care and life insurance benefits for
retired employees. Substantially all of the Company's employees
may become eligible for those benefits if they reach retirement
age while working for the Company. The Company accrues the
expected postretirement benefit costs during employees' years
of service.
37
<PAGE> 22
The following is information related to AmerenUE's
postretirement benefit plans as of December 31:
AmerenUE's funding policy is to annually contribute the net
periodic cost to a Voluntary Employee Beneficiary Association
trust (VEBA). Postretirement benefit costs were $44 million for
each of the years 1997, 1996 and 1995, of which approximately
17% was charged to construction accounts in 1997 and 19% in
each of 1996 and 1995. AmerenUE's transition obligation at
December 31, 1997, is being amortized over the next 15 years.
In August 1994, the MoPSC authorized the recovery of
postretirement benefit costs in rates to the extent that such
costs are funded. In December 1995, the Company established two
external trust funds for retiree health care and life insurance
benefits. For 1995, actual claims paid were approximately $15
million. In 1997 and 1996, claims were paid out of the plan
trust funds.
<TABLE>
<CAPTION>
FUNDED STATUS OF THE PLANS:
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(in millions) 1997 1996 1995
----------------------------------------------------------------------------------------------------
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION:
Active employees eligible for benefits $ 41 $ 38 $ 74
Retired employees 202 193 211
Other active employees 90 80 32
----------------------------------------------------------------------------------------------------
Total benefit obligation 333 311 317
Less: Plan assets at fair market value* 81 47 14
----------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation
in excess of plan assets 252 264 303
Unrecognized - transition obligation (187) (200) (213)
- gain/(loss) 18 19 (7)
----------------------------------------------------------------------------------------------------
POSTRETIREMENT BENEFIT LIABILITY AT DECEMBER 31 $ 83 $ 83 $ 83
----------------------------------------------------------------------------------------------------
* Plan assets consist principally of common stocks
and fixed income securities.
</TABLE>
<TABLE>
<CAPTION>
COMPONENTS OF POSTRETIREMENT BENEFIT COST:
----------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned during the period $12 $12 $10
Interest cost on projected benefit obligation 23 22 24
Actual return on plan assets (9) (4) --
Amortization - transition obligation 12 12 12
- unrecognized gain (1) (1) (2)
Deferred gain 7 3 --
----------------------------------------------------------------------------------------------------
NET PERIODIC COST $44 $44 $44
----------------------------------------------------------------------------------------------------
ASSUMPTIONS FOR THE OBLIGATION MEASUREMENTS:
----------------------------------------------------------------------------------------------------
1997 1996 1995
----------------------------------------------------------------------------------------------------
Discount rate at measurement date 7% 7.5% 7.25%
Plan assets long-term rate of return 8.5% 8.5% 8.5%
Medical cost trend rate - initial 7% 8.25% 9.25%
- ultimate 5% 5.25% 5.25%
Ultimate medical cost trend rate expected in year 2000 2000 2000
----------------------------------------------------------------------------------------------------
</TABLE>
A 1% increase in the medical cost trend rate is
estimated to increase the net periodic cost and the
accumulated postretirement benefit obligation
approximately $3 million and $23 million, respectively.
38
<PAGE> 23
The following is information related to AmerenCIPS'
postretirement benefit plans as of December 31:
AmerenCIPS' funding policy is to fund the two VEBAs
and the 401(h) account established within the AmerenCIPS
retirement income trust with the lessor of the net
periodic cost or the amount deductible for federal
income tax purposes. AmerenCIPS uses a September 30
measurement date for its valuation of postretirement
assets and liabilities.
Postretirement benefit costs were $12 million for
1997, $16 million for 1996 and $17 million for 1995, of
which approximately 17% was charged to construction
accounts in 1997 and 15% in each of 1996 and 1995.
AmerenCIPS' transition obligation at December 31, 1997,
is being amortized over the next 15 years.
<TABLE>
<CAPTION>
FUNDED STATUS OF THE PLANS:
-----------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION:
Active employees eligible for benefits $ 23 $ 20 $ 17
Retired employees 47 54 50
Other active employees 67 65 76
-----------------------------------------------------------------------------------------------------
Total benefit obligation 137 139 143
Less: Plan assets at fair market value* 106 71 49
-----------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation
in excess of plan assets 31 68 94
Unrecognized - transition obligation (84) (89) (99)
- gain 64 38 24
-----------------------------------------------------------------------------------------------------
Accrued postretirement benefit cost at September 30 11 17 19
Expense, net of funding, October to December (7) (14) (15)
-----------------------------------------------------------------------------------------------------
POSTRETIREMENT BENEFIT LIABILITY AT DECEMBER 31 $ 4 $ 3 $ 4
-----------------------------------------------------------------------------------------------------
* Plan assets consist principally of common and
preferred stocks, bonds, money market instruments
and real estate.
COMPONENTS OF POSTRETIREMENT BENEFIT COST:
-----------------------------------------------------------------------------------------------------
(in millions) 1997 1996 1995
-----------------------------------------------------------------------------------------------------
Service cost - benefits earned during the period $ 4 $ 4 $ 4
Interest cost on projected benefit obligation 10 11 10
Actual return on plan assets (21) (9) (8)
Amortization of transition obligation 6 6 6
Deferred gains 13 4 5
-----------------------------------------------------------------------------------------------------
NET PERIODIC COST $ 12 $16 $17
-----------------------------------------------------------------------------------------------------
ASSUMPTIONS FOR THE OBLIGATION MEASUREMENTS:
-----------------------------------------------------------------------------------------------------
1997 1996 1995
-----------------------------------------------------------------------------------------------------
Discount rate at measurement date 7.25% 7.5% 7.5%
Plan assets long-term rate of return 8.5% 8.5% 8.0%
Medical cost trend rate - initial 8.5% 9.8% 10.6%
- ultimate 5.5% 4.5% 4.0%
Ultimate medical cost trend rate expected in year 2005 2005 2007
-----------------------------------------------------------------------------------------------------
</TABLE>
A 1% increase in the medical cost trend rate is estimated to
increase the net periodic cost and the accumulated
postretirement benefit obligation as of September 30, 1997
approximately $3 million and $22 million, respectively.
NOTE 9 - AmerenUE has a long-term incentive plan (the Plan) for
STOCK OPTION eligible employees. The Plan provides for the grant of options,
PLANS performance awards, restricted stock, dividend equivalents and
stock appreciation rights. Under the terms of the Plan, options
may be granted at a price not less than the fair market value
of the common shares at the date of grant. Granted options vest
over a period of five years, beginning at the date of grant,
and provide for acceleration of exercisability of the options
upon the occurrence of certain events, including retirement.
Outstanding options expire on various dates through 2007. Under
the Plan, subject to adjustment as provided in the Plan, 2.5
million shares have been authorized to be issued or delivered.
39
<PAGE> 24
<TABLE>
<CAPTION>
SUMMARY OF STOCK OPTIONS:
---------------------------------------------------------------------------------------------------------------
1997 1996 1995
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Options outstanding at beginning of the year 307,390 142,500 --
Options granted during the year 195,880 165,590 142,500
Options exercised during the year -- -- --
Options expired/canceled during the year 7,200 700 --
---------------------------------------------------------------------------------------------------------------
Options outstanding at end of the year 496,070 307,390 142,500
---------------------------------------------------------------------------------------------------------------
Options exercisable at end of the year 134,785 39,710 9,800
---------------------------------------------------------------------------------------------------------------
Exercise price range of options granted $38.50 $43 $35.50-$35.875
===============================================================================================================
</TABLE>
In accordance with APB 25, no compensation cost has been
recognized for the Company's stock compensation plans. In 1996,
the Company adopted the disclosure-only method under SFAS 123,
"Accounting for Stock-Based Compensation." If the fair value
based accounting method under this statement had been used to
account for stock-based compensation cost, the effects on 1997,
1996 and 1995 net income and earnings per share would have been
immaterial.
The Company's calculation of basic and diluted earnings per
share resulted in the same earnings per share amounts for each
of the years 1997, 1996 and 1995. The reconciling item in each
of the years is comprised of assumed stock option conversions
which increased the number of shares outstanding in the diluted
earnings per share calculation by 7,318 shares, 12,879 shares
and 3,892 shares in 1997, 1996 and 1995, respectively.
NOTE 10 - The Company is engaged in a construction program under which
COMMITMENTS expenditures averaging approximately $333 million, including
CONTINGENCIES AFC, are anticipated during each of the next five years. This
estimate does not include any construction expenditures which
may be incurred by the Company to meet new air quality
standards for ozone and particulate matter, as discussed later
in this Note.
The Company has commitments for the purchase of coal under
long-term contracts. Coal contract commitments, including
transportation costs, for 1998 through 2002 are estimated to
total $1.5 billion. Total coal purchases, including
transportation costs, for 1997, 1996 and 1995 were $476
million, $514 million and $460 million, respectively. The
Company also has existing contracts with pipeline and natural
gas suppliers to provide natural gas for distribution and
electric generation. Gas-related contracted cost commitments
for 1998 through 2002 are estimated to total $212 million.
Total delivered natural gas costs for 1997, 1996 and 1995 were
$160 million, $161 million and $127 million, respectively. The
Company's nuclear fuel commitments for 1998 through 2002,
including uranium concentrates, conversion, enrichment and
fabrication, are expected to total $116 million, and are
expected to be financed under the nuclear fuel lease. Nuclear
fuel expenditures for 1997, 1996 and 1995 were $35 million, $51
million and $42 million, respectively. Additionally, the
Company has long-term contracts with other utilities to
purchase electric capacity. These commitments for 1998 through
2002 are estimated to total $187 million. During 1997, 1996 and
1995, electric capacity purchases were $34 million, $44 million
and $42 million, respectively.
During 1996, the Company restructured its contract with one
of its major coal suppliers. In 1997, the Company paid a $70
million restructuring payment to the supplier, which allows
them to purchase at market prices low-sulfur, non-Illinois coal
through the supplier (in substitution for the high-sulfur
Illinois coal the Company was obligated to purchase under the
original contract); and would receive options for future
purchases of low-sulfur, non-Illinois coal from the supplier
through 1999 at set negotiated prices.
By switching to low-sulfur coal, the Company was able to
discontinue operating a generating station scrubber. The
benefits of the restructuring include lower cost coal,
avoidance of significant capital expenditures to renovate the
scrubber and elimination of scrubber operations and maintenance
costs (offset by scrubber retirement expenses). The net
benefits of restructuring are expected to exceed $100 million
over the next 10 years. In December 1996, the ICC entered an
order approving the switch to non-Illinois coal, recovery of
the restructuring payment plus associated carrying costs
(Restructuring Charges) through the retail FAC over six years,
and continued recovery in rates of the undepreciated scrubber
investment plus costs of removal. Additionally, in May 1997 the
FERC approved recovery of the wholesale portion of the
Restructuring Charges through the wholesale FAC. As a result of
the ICC and FERC orders, the Company classified the $72 million
of the Restructuring Charges made to the coal supplier in
February 1997 as a regulatory asset and, through December 1997,
recovered approximately $10 million of the Restructuring
Charges through the retail FAC and from wholesale customers.
A group of industrial customers filed with the Illinois
Third District Appellate Court (the Court) in February 1997 an
appeal of the December 1996 order of the ICC. On November 24,
1997, the Court reversed the ICC's December 1996 order, finding
that the Restructuring Charges were not direct costs
40
<PAGE> 25
of fuel that may be recovered through the retail FAC, but
rather should be considered as a part of a review of aggregate
revenue requirements in a full rate case. Restructuring Charges
allocated to wholesale customers (approximately $7 million) are
not in question as a result of the opinion of the Court. In
December 1997, the Company requested a rehearing by the Court;
that request was denied. However, the Court did rule that all
revenues collected under the retail FAC in 1997 would not have
to be refunded to customers. The Company has appealed to the
Illinois Supreme Court the Court's decision that Restructuring
Charges may not be recovered through the retail FAC.
The recoverability of the Restructuring Charges under the
retail FAC in Illinois was also impacted by the Electric
Service Customer Choice and Rate Relief Law of 1997 (the Act).
Among other things, the Act provides utilities with the option
to eliminate the retail FAC and limits the ability of utilities
to file a full rate case for its aggregate revenue
requirements. After evaluating the impact of the Act on the
future recoverability of the Company's Restructuring Charges
through future rates, the Company concluded that the
unamortized balance of the Illinois retail portion of its
Restructuring Charges as of December 31, 1997, should be
written off ($34 million, net of income taxes). See Note 2 -
Regulatory Matters for further information.
The Company's insurance coverage for Callaway Nuclear Plant
at December 31, 1997, was as follows:
<TABLE>
<CAPTION>
TYPE AND SOURCE OF COVERAGE
----------------------------------------------------------------------
(in millions) Maximum Maximum
Coverages Assessments
for Single
Incidents
----------------------------------------------------------------------
<S> <C> <C>
Public Liability:
American Nuclear Insurers $ 200 $ --
Pool Participation 8,720 79(a)
----------------------------------------------------------------------
$ 8,920 (b) $ 79
----------------------------------------------------------------------
Nuclear Worker Liability:
American Nuclear Insurers $ 200 (c) $ 3
----------------------------------------------------------------------
Property Damage:
American Nuclear Insurers $ 500 $ --
Nuclear Electric Insurance Ltd. 2,250 (d) 11
----------------------------------------------------------------------
$ 2,750 $11
----------------------------------------------------------------------
Replacement Power:
Nuclear Electric Insurance Ltd. $ 473 (e) $ 4
=====================================================================
</TABLE>
(a) Retrospective premium under the Price-Anderson liability
provisions of the Atomic Energy Act of 1954, as amended,
(Price-Anderson). Subject to retrospective assessment with
respect to loss from an incident at any U.S. reactor, payable
at $10 million per year.
(b) Limit of liability for each incident under
Price-Anderson.
(c) Industry limit for potential liability from workers
claiming exposure to the hazard of nuclear radiation.
(d) Includes premature decommissioning costs.
(e) Weekly indemnity of $3.5 million, for 52 weeks which
commences after the first 21 weeks of an outage, plus $2.8
million per week for 104 weeks thereafter.
Price-Anderson limits the liability for claims from an
incident involving any licensed U.S. nuclear facility. The
limit is based on the number of licensed reactors and is
adjusted at least every five years based on the Consumer Price
Index. Utilities owning a nuclear reactor cover this exposure
through a combination of private insurance and mandatory
participation in a financial protection pool as established by
Price-Anderson.
If losses from a nuclear incident at Callaway Plant exceed
the limits of, or are not subject to, insurance, or if coverage
is not available, the Company will self-insure the risk.
Although the Company has no reason to anticipate a serious
nuclear incident, if one did occur it could have a material but
indeterminable adverse effect on the Company's financial
position, results of operations or liquidity.
Under the Title IV of the Clean Air Act Amendments of 1990,
the Company is required to significantly reduce total annual
sulfur dioxide emissions by the year 2000. Significant
reductions in nitrogen oxide are also required. By switching to
low-sulfur coal and early banking of emission credits, the
Company anticipates that it can comply with the requirements of
the law without significant revenue increases because the
related capital costs are largely offset by lower fuel costs.
As of year-end 1997, estimated remaining capital costs expected
to be incurred pertaining to Clean Air Act-related projects
totaled $107 million.
41
<PAGE> 26
In July 1997, the United States Environmental Protection
Agency (EPA) issued final regulations revising the National
Ambient Air Quality Standards for ozone and particulate matter.
Although specific emission control requirements are still being
developed, it is believed that the revised standards will
require significant additional reductions in nitrogen oxide and
sulfur dioxide emissions from coal-fired boilers. In October
1997, the EPA announced that Missouri and Illinois are included
in the area targeted for nitrogen oxide emissions reductions as
part of the EPA's regional control program. Reduction
requirements in nitrogen oxide emissions from the Company's
coal-fired boilers could exceed 80% from 1990 levels by the
year 2002. Reduction requirements in sulfur dioxide emissions
may be up to 50% beyond that already required by Phase II acid
rain control provisions of the 1990 Clean Air Act Amendments
and could be required by 2007. Because of the magnitude of
these additional reductions, the Company could be required to
incur significantly higher capital costs to meet future
compliance obligations for its coal-fired boilers or purchase
power from other sources, either of which could have
significantly higher operations and maintenance expenditures
associated with compliance. At this time, the Company is unable
to determine the impact of the revised air quality standards on
its future financial condition, results of operations or
liquidity.
In December 1997, the United States and numerous other
countries agreed to certain environmental provisions (the Kyoto
Protocol), which would require decreases in greenhouse gases in
an effort to address the "global warming" issue. The Company is
unable to predict what requirements, if any, will be adopted in
this country. However, implementation of the Kyoto Protocol in
its present form would likely result in significantly higher
capital costs and operations and maintenance expenditures by
the Company. At this time, the Company is unable to determine
the impact of these proposals on its future financial
condition, results of operations or liquidity.
As of December 31, 1997, the Company's utility operating
subsidiaries were designated as potentially responsible parties
(PRP) by federal and state environmental protection agencies at
five hazardous waste sites. Other hazardous waste sites have
been identified for which the Company may be responsible but
has not been designated a PRP.
Costs relating to studies and remediation and associated
legal and litigation expenses at the sites located in Illinois
are being accrued and deferred rather than expensed currently,
pending recovery through rates. Through December 31, 1997, the
total of the costs deferred, net of recoveries from insurers
and through environmental adjustment clause rate riders
approved by the ICC, was $13 million.
The ICC has instituted a reconciliation proceeding to review
the Company's environmental remediation activities in 1993,
1994 and 1995 and to determine whether the revenues collected
under the riders in 1993 were consistent with the amount of
remediation costs prudently and properly incurred. Amounts
found to have been incorrectly included under the riders would
be subject to refund. In mid-1997, the Company and the ICC
Staff submitted a stipulation with regard to all matters at
issue which concluded that the amounts collected under the
environmental rate rider were appropriate in all material
respects. A ruling from the ICC is still pending.
The Company continually reviews remediation costs that may
be required for all of these sites. Any unrecovered
environmental costs are not expected to have a material adverse
effect on the Company's financial position, results of
operations or liquidity.
The International Union of Operating Engineers Local 148 and
the International Brotherhood of Electrical Workers Local 702
filed unfair labor practice charges with the National Labor
Relations Board (NLRB) relating to the legality of the lockout
by AmerenCIPS of both unions during 1993. The NLRB has issued
complaints against AmerenCIPS concerning its lockout. Both
unions seek, among other things, back pay and other benefits
for the period of the lockout. The Company estimates the amount
of back pay and other benefits for both unions to be
approximately $17 million. An administrative law judge of the
NLRB has ruled that the lockout was unlawful. On July 23, 1996,
the Company appealed to the NLRB. The Company believes the
lockout was both lawful and reasonable and that the final
resolution of the disputes will not have a material adverse
effect on its financial position, results of operations or
liquidity.
Regulatory changes enacted and being considered at the
federal and state levels continue to change the structure of
the utility industry and utility regulation, as well as
encourage increased competition. At this time, the Company is
unable to predict the impact of these changes on its future
financial condition, results of operations or liquidity. (See
Note 2 - Regulatory Matters for further information.)
The Company is involved in other legal and administrative
proceedings before various courts and agencies with respect to
matters arising in the ordinary course of business, some of
which involve substantial amounts. The Company believes that
the final disposition of these proceedings will not have a
material adverse effect on its financial position, results of
operations or liquidity.
42
<PAGE> 27
NOTE 11 - Under the Nuclear Waste Policy Act of 1982, the DOE is
CALLAWAY responsible for the permanent storage and disposal of spent
NUCLEAR nuclear fuel. The DOE currently charges one mill per
PLANT nuclear-generated kilowatthour sold for future disposal of
spent fuel. Electric rates charged to customers provide for
recovery of such costs. The DOE is not expected to have its
permanent storage facility for spent fuel available until at
least 2015. The Company has sufficient storage capacity at
Callaway Plant site until 2004 and is pursuing a viable storage
alternative. This alternative will require Nuclear Regulatory
Commission approval. The delayed availability of the DOE's
disposal facility is not expected to adversely affect the
continued operation of Callaway Plant.
Electric rates charged to customers provide for recovery of
Callaway Plant decommissioning costs over the life of the
plant, based on an assumed 40-year life, ending with expiration
of the plant's operating license in 2024. The Callaway site is
assumed to be decommissioned using the DECON (immediate
dismantlement) method. Decommissioning costs, including
decontamination, dismantling and site restoration, are
estimated to be $451 million in current year dollars and are
expected to escalate approximately 4% per year through the end
of decommissioning activity in 2033. Decommissioning costs are
charged to depreciation expense over Callaway's service life
and amounted to $7 million in each of the years 1997, 1996 and
1995. Every three years, the MoPSC requires the Company to file
updated cost studies for decommissioning Callaway, and electric
rates may be adjusted at such times to reflect changed
estimates. The latest study was filed in 1996. Costs collected
from customers are deposited in an external trust fund to
provide for Callaway's decommissioning. Fund earnings are
expected to average 9.25% annually through the date of
decommissioning. If the assumed return on trust assets is not
earned, the Company believes it is probable that such earnings
deficiency will be recovered in rates. Trust fund earnings, net
of expenses, appear on the consolidated balance sheet as
increases in the nuclear decommissioning trust fund and in the
accumulated provision for nuclear decommissioning.
The staff of the SEC has questioned certain current
accounting practices of the electric utility industry,
regarding the recognition, measurement and classification of
decommissioning costs for nuclear generating stations in the
financial statements of electric utilities. In response to
these questions, the Financial Accounting Standards Board has
agreed to review the accounting for removal costs, including
decommissioning. The Company does not expect that changes in
the accounting for nuclear decommissioning costs will have a
material effect on its financial position, results of
operations or liquidity.
NOTE 12 - The following methods and assumptions were used to estimate the
FAIR VALUE OF fair value of each class of financial instruments for which it
FINANCIAL is practicable to estimate that value.
INSTRUMENTS
CASH AND TEMPORARY INVESTMENTS/SHORT-TERM BORROWINGS
The carrying amounts approximate fair value because of the
short-term maturity of these instruments.
MARKETABLE SECURITIES
The fair value is based on quoted market prices obtained from
dealers or investment managers.
NUCLEAR DECOMMISSIONING TRUST FUND
The fair value is estimated based on quoted market prices for
securities.
PREFERRED STOCK OF SUBSIDIARIES
The fair value is estimated based on the quoted market prices
for the same or similar issues.
LONG-TERM DEBT OF SUBSIDIARIES
The fair value is estimated based on the quoted market prices
for same or similar issues or on the current rates offered to
the Company for debt of comparable maturities.
Carrying amounts and estimated fair values of the Company's
financial instruments at December 31:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
(in millions) 1997 1997 1996 1996
CARRYING FAIR Carrying Fair
AMOUNT VALUE Amount Value
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Marketable securities $ 32 $ 32 $ 51 $ 51
Preferred stock 235 214 299 257
Long-term debt (including current portion) 2,558 2,692 2,482 2,545
----------------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE> 28
The Company has investments in debt and equity securities
that are held in trust funds for the purpose of funding the
nuclear decommissioning of Callaway Nuclear Plant (see Note 11
- Callaway Nuclear Plant). The Company has classified these
investments in debt and equity securities as available for sale
and has recorded all such investments at their fair market
value at December 31, 1997 and 1996. In 1997, 1996 and 1995,
the proceeds from the sale of investments were $24 million, $20
million and $9 million, respectively. Using the specific
identification method to determine cost, the gross realized
gains on those sales were approximately $2 million for 1997 and
$1 million each for 1996 and 1995. Net realized and unrealized
gains and losses are reflected in the accumulated provision for
nuclear decommissioning on the consolidated balance sheet,
which is consistent with the method used by the Company to
account for the decommissioning costs recovered in rates.
Costs and fair values of investments in debt and equity
securities in the nuclear decommissioning trust fund at
December 31 were as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
1997 (in millions) GROSS UNREALIZED
-----------------------------------------------------------------------------------------------------
Security Type COST GAIN (LOSS) FAIR VALUE
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt securities $34 $ 3 $ -- $ 37
Equity securities 43 40 -- 83
Cash equivalents 2 -- -- 2
-----------------------------------------------------------------------------------------------------
$79 $ 43 $ -- $ 122
=====================================================================================================
<CAPTION>
-----------------------------------------------------------------------------------------------------
1996 (in millions) Gross Unrealized
-----------------------------------------------------------------------------------------------------
Security Type Cost Gain (Loss) Fair Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt securities $29 $ 2 $ -- $31
Equity securities 40 22 -- 62
Cash equivalents 4 -- -- 4
-----------------------------------------------------------------------------------------------------
$73 $24 $-- $97
=====================================================================================================
</TABLE>
The contractual maturities of investments in debt securities
at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(in millions) Cost Fair Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
1 year to 5 years $ 4 $ 4
5 years to 10 years 6 7
Due after 10 years 24 26
-----------------------------------------------------------------------------------------------------
$ 34 $ 37
=====================================================================================================
</TABLE>
44
<PAGE> 29
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
(Millions of Dollars Except Shares and per Share Amounts and Ratios) 1997 1996 1995
- -------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
RESULTS OF OPERATIONS (Year ended December 31,)
Operating revenues $ 3,327 $ 3,328 $ 3,236
Operating expenses 2,744 2,752 2,658
Operating income 582 576 578
Income before extraordinary charge 387 372 373
Extraordinary charge, net of income taxes 52 -- --
Net income 335 372 373
Average common shares outstanding 137,215,462 137,215,462 137,215,462
------------- ------------- -------------
ASSETS, OBLIGATIONS AND EQUITY CAPITAL (December 31,)
Total assets $ 8,828 $ 8,933 $ 8,788
Long-term debt obligations 2,506 2,335 2,373
Preferred stock subject to
mandatory redemption -- 1 1
Preferred stock not subject to
mandatory redemption 235 298 298
Common equity 3,019 3,016 2,971
------------- ------------- -------------
FINANCIAL INDICES (Year ended December 31,)
Earnings per share of common stock
before extraordinary charge $ 2.82 $ 2.71 $ 2.72
Extraordinary charge, net of income taxes $ (.38) -- --
Earnings per share of common stock
(based on average shares outstanding) $ 2.44 $ 2.71 $ 2.72
Dividend payout ratio 99% 88% 86%
Return on average common stock equity 11.14% 12.51% 12.76%
Ratio earnings to fixed charges
AmerenUE 4.70 4.68 4.78
AmerenCIPS 3.64 4.30 4.41
Book value per common share $ 22.00 $ 21.98 $ 21.65
------------- ------------- -------------
CAPITALIZATION RATIOS (December 31,)
Common equity 52.4% 53.4% 52.6%
Preferred stock 4.1 5.3 5.3
Long-term debt 43.5 41.3 42.1
------------- ------------- -------------
100.0% 100.0% 100.0%
============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
(Millions of Dollars Except Shares and per Share Amounts and Ratios) 1994 1993 1992
- -------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
RESULTS OF OPERATIONS (Year ended December 31,)
Operating revenues $ 3,270 $ 3,272 $ 3,047
Operating expenses 2,685 2,724 2,514
Operating income 585 548 533
Income before extraordinary charge 391 369 361
Extraordinary charge, net of income taxes -- -- --
Net income 391 369 361
Average common shares outstanding 137,253,617 137,254,771 137,254,771
------------- ------------- -------------
ASSETS, OBLIGATIONS AND EQUITY CAPITAL (December 31,)
Total assets $ 8,629 $ 8,546 $ 7,631
Long-term debt obligations 2,413 2,301 2,213
Preferred stock subject to
mandatory redemption 1 1 1
Preferred stock not subject to
mandatory redemption 298 298 283
Common equity 2,917 2,840 2,781
------------- ------------- -------------
FINANCIAL INDICES (Year ended December 31,)
Earnings per share of common stock
before extraordinary charge $ 2.85 $ 2.69 $ 2.63
Extraordinary charge, net of income taxes -- -- --
Earnings per share of common stock
(based on average shares outstanding) $ 2.85 $ 2.69 $ 2.63
Dividend payout ratio 80% 83% 82%
Return on average common stock equity 13.69% 13.18% 13.30%
Ratio earnings to fixed charges
AmerenUE 4.68 4.66 4.66
AmerenCIPS 4.93 4.82 4.12
Book value per common share $ 21.25 $ 20.69 $ 20.26
------------- ------------- -------------
CAPITALIZATION RATIOS (December 31,)
Common equity 51.8% 52.2% 52.7%
Preferred stock 5.3 5.5 5.4
Long-term debt 42.9 42.3 41.9
------------- ------------- -------------
100.0% 100.0% 100.0%
============= ============= =============
</TABLE>
45
<PAGE> 30
ELECTRIC OPERATING STATISTICS
<TABLE>
<CAPTION>
(Year Ended December 31,) 1997 1996 1995
- ------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES (Millions)
Residential $ 1,064 $ 1,070 $ 1,073
Commercial 927 920 906
Industrial 500 500 496
Wholesale 91 91 87
Interchange 224 280 230
EEI 207 198 201
Miscellaneous 71 50 48
Credit to customers (20) (47) (33)
------------ ------------ ------------
TOTAL ELECTRIC OPERATING REVENUES $ 3,064 $ 3,062 $ 3,008
============ ============ ============
KILOWATTHOUR SALES (Millions)
Residential 14,325 14,418 14,086
Commercial 14,990 14,872 14,464
Industrial 11,404 11,191 10,971
Wholesale 2,323 2,328 2,248
Interchange 9,402 10,768 8,176
EEI 11,220 10,554 10,850
Miscellaneous 317 305 316
------------ ------------ ------------
TOTAL KILOWATTHOUR SALES 63,981 64,436 61,111
============ ============ ============
ELECTRIC CUSTOMERS (End of Year)
Residential 1,282,042 1,275,534 1,267,976
Commercial 180,206 176,621 173,810
Industrial 6,554 6,660 6,782
Wholesale 21 20 21
Miscellaneous 2,381 2,398 2,434
------------ ------------ ------------
TOTAL ELECTRIC CUSTOMERS 1,471,204 1,461,233 1,451,023
============ ============ ============
RESIDENTIAL CUSTOMER DATA (Average)
Kilowatthours used 11,215 11,354 11,152
Annual electric bill $ 833.34 $ 842.82 $ 849.62
Revenue per kilowatthour 7.38(CENT) 7.30(cent) 7.62(cent)
------------ ------------ ------------
GROSS INSTANTANEOUS PEAK DEMAND (Megawatts)
AmerenUE 8,055 8,085 7,965
------------ ------------ ------------
AmerenCIPS 1,923 1,892 1,940
------------ ------------ ------------
CAPABILITY AT TIME OF PEAK,
INCLUDING NET PURCHASES AND SALES (Megawatts)
AmerenUE 8,950 9,120 8,714
------------ ------------ ------------
AmerenCIPS 2,491 2,519 2,489
------------ ------------ ------------
GENERATING CAPABILITY AT TIME OF PEAK (Megawatts)
AmerenUE 8,279 8,244 8,184
------------ ------------ ------------
AmerenCIPS 3,033 3,033 3,018
------------ ------------ ------------
COAL BURNED (Tons) 21,392,000 20,062,000 17,715,000
------------ ------------ ------------
PRICE PER TON OF COAL (Average) $ 23.54 $ 25.25 $ 26.86
------------ ------------ ------------
SOURCE OF ENERGY SUPPLY (Percent)
Coal 83.8% 79.6% 76.3%
Nuclear 19.3 19.2 18.3
Hydro 2.7 2.8 3.6
Purchased, net (5.8) (1.6) 1.8
------------ ------------ ------------
100.0% 100.0% 100.0%
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
(Year Ended December 31,) 1994 1993 1992
- ------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
ELECTRIC OPERATING REVENUES (Millions)
Residential $ 1,014 $ 1,037 $ 952
Commercial 884 861 846
Industrial 487 486 520
Wholesale 84 81 77
Interchange 243 254 123
EEI 276 251 256
Miscellaneous 42 46 43
Credit to customers -- -- --
------------ ------------ ------------
TOTAL ELECTRIC OPERATING REVENUES $ 3,030 $ 3,016 $ 2,817
============ ============ ============
KILOWATTHOUR SALES (Millions)
Residential 13,282 13,636 12,103
Commercial 14,043 13,642 12,964
Industrial 10,728 10,407 11,371
Wholesale 2,137 2,088 1,953
Interchange 8,080 10,326 4,387
EEI 14,594 12,521 14,037
Miscellaneous 301 317 307
------------ ------------ ------------
TOTAL KILOWATTHOUR SALES 63,165 62,937 57,122
============ ============ ============
ELECTRIC CUSTOMERS (End of Year)
Residential 1,258,757 1,248,723 1,243,863
Commercial 171,072 168,566 166,912
Industrial 6,750 7,137 7,067
Wholesale 21 21 23
Miscellaneous 2,406 2,407 2,367
------------ ------------ ------------
TOTAL ELECTRIC CUSTOMERS 1,439,006 1,426,854 1,420,232
============ ============ ============
RESIDENTIAL CUSTOMER DATA (Average)
Kilowatthours used 10,606 10,946 9,683
Annual electric bill $ 809.27 $ 832.46 $ 761.08
Revenue per kilowatthour 7.63(cent) 7.61(cent) 7.86(cent)
------------ ------------ ------------
GROSS INSTANTANEOUS PEAK DEMAND (Megawatts)
AmerenUE 7,430 7,540 7,135
------------ ------------ ------------
AmerenCIPS 1,854 1,848 1,649
------------ ------------ ------------
CAPABILITY AT TIME OF PEAK,
INCLUDING NET PURCHASES AND SALES (Megawatts)
AmerenUE 8,469 8,597 8,407
------------ ------------ ------------
AmerenCIPS 2,510 2,439 2,534
------------ ------------ ------------
GENERATING CAPABILITY AT TIME OF PEAK (Megawatts)
AmerenUE 8,057 7,963 7,868
------------ ------------ ------------
AmerenCIPS 3,018 2,901 2,881
------------ ------------ ------------
COAL BURNED (Tons) 16,885,000 14,879,000 14,843,000
------------ ------------ ------------
PRICE PER TON OF COAL (Average) $ 28.02 $ 33.36 $ 33.33
------------ ------------ ------------
SOURCE OF ENERGY SUPPLY (Percent)
Coal 76.2% 70.7% 73.9%
Nuclear 23.0 19.5 19.5
Hydro 3.9 4.6 3.5
Purchased, net (3.1) 5.2 3.1
------------ ------------ ------------
100.0% 100.0% 100.0%
============ ============ ============
</TABLE>
46
<PAGE> 31
GAS OPERATING STATISTICS
<TABLE>
<CAPTION>
(Year Ended December 31): 1997 1996 1995 1994 1993 1992
- ------------------------- -------- -------- -------- -------- -------- --------
NATURAL GAS OPERATING REVENUES (Millions)
<S> <C> <C> <C> <C> <C> <C>
Residential $ 150 $ 161 $ 137 $ 138 $ 153 $ 139
Commercial 55 61 51 53 58 53
Industrial 22 21 18 24 22 13
Off system sales 13 -- -- -- -- --
Miscellaneous 10 11 11 10 12 13
-------- -------- -------- -------- -------- --------
TOTAL NATURAL GAS OPERATING REVENUES $ 250 $ 254 $ 217 $ 225 $ 245 $ 218
======== ======== ======== ======== ======== ========
DEKATHERM SALES (Millions)
Residential 23 27 24 23 26 22
Commercial 9 11 10 10 10 9
Industrial 6 5 5 6 6 3
Off system sales 5 -- -- -- -- --
-------- -------- -------- -------- -------- --------
TOTAL DEKATHERM SALES 43 43 39 39 42 34
======== ======== ======== ======== ======== ========
NATURAL GAS CUSTOMERS (End of Year)
Residential 263,588 260,989 257,848 254,328 251,171 248,707
Commercial 30,147 29,911 29,446 29,037 28,676 28,393
Industrial 412 402 378 351 307 261
-------- -------- -------- -------- -------- --------
TOTAL NATURAL GAS CUSTOMERS 294,147 291,302 287,672 283,716 280,154 277,361
======== ======== ======== ======== ======== ========
</TABLE>
47
<PAGE> 32
INVESTOR INFORMATION
COMMON STOCK AND DIVIDEND INFORMATION
Ameren's common stock is listed on the New York Stock Exchange (ticker
symbol: AEE). AEE began trading on January 2, 1998, following the merger on
December 31, 1997, and is being issued in exchange for Union Electric and CIPSCO
Incorporated common stock.
Common stockholders of record totaled 102,710 and 37,777 for Union Electric
(UEP) and CIPSCO Incorporated (CIP), respectively at December 31, 1997. The
following includes the price ranges and dividends paid per common share for UEP
and CIP during the past two years:
<TABLE>
<CAPTION>
UEP
1997
Quarter Ended High Low Dividends Paid
- ------------- --------- -------- --------------
<S> <C> <C> <C>
March 31 $39 3/4 $36 1/4 63 1/2(CENT)
--------- -------- -----------
June 30 37 13/16 34 1/2 63 1/2
--------- -------- -----------
September 30 38 7/8 36 7/16 63 1/2
--------- -------- -----------
December 31 43 3/4 35 5/8 63 1/2
</TABLE>
<TABLE>
<CAPTION>
1996
Quarter Ended High Low Dividends Paid
- ------------- --------- -------- --------------
<S> <C> <C> <C>
March 31 $44 1/8 $38 7/8 62 1/2(cent)
--------- -------- -----------
June 30 41 1/4 38 1/8 62 1/2
--------- -------- -----------
September 30 40 5/8 36 62 1/2
--------- -------- -----------
December 31 40 1/8 36 7/8 63 1/2
</TABLE>
<TABLE>
<CAPTION>
CIP
1997
Quarter Ended High Low Dividends Paid
- ------------- --------- -------- --------------
<S> <C> <C> <C>
March 31 $37 $34 7/8 52(CENT)
--------- -------- -----------
June 30 36 5/8 33 1/2 53
--------- -------- -----------
September 30 38 9/16 36 53
--------- -------- -----------
December 31 45 36 3/8 53
</TABLE>
<TABLE>
<CAPTION>
1996
Quarter Ended High Low Dividends Paid
- ------------- --------- -------- --------------
<S> <C> <C> <C>
March 31 $41 1/4 $37 1/8 51(cent)
--------- -------- -----------
June 30 38 5/8 35 7/8 52
--------- -------- -----------
September 30 38 1/2 34 7/8 52
--------- -------- -----------
December 31 38 1/4 34 7/8 52
</TABLE>
ANNUAL MEETING
The annual meeting of Ameren common stockholders and Union Electric and CIPS
preferred stockholders will convene at 9 a.m., Tuesday, April 28, 1998, at
Powell Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri.
DRPLUS
Through DRPlus -- Ameren's dividend reinvestment and stock purchase plan --
stockholders, customers and employees of Ameren and its subsidiaries can:
- - make cash investments by check or automatic cash payment, totaling up to
$120,000, in Ameren common stock annually
- - reinvest their dividends in Ameren common stock -- or receive Ameren
dividends in cash
- - place Ameren common stock certificates in safekeeping and receive regular
account statements.
If you have not yet exchanged your Union Electric or CIPSCO common stock
certificates for Ameren common stock certificates, please contact the Investor
Services Department.
This is not an offer to sell, or a solicitation of an offer to buy, any
securities.
DIRECT DEPOSIT OF DIVIDENDS
All registered Ameren common and Union Electric and CIPS preferred
stockholders can have their cash dividends automatically credited to their bank
accounts. This service gives stockholders immediate access to their dividend on
the dividend payment date and eliminates the possibility of lost or stolen
dividend checks.
AMEREN'S WEB SITE
To obtain AEE's daily stock price, recent financial statistics and other
information about the company, visit Ameren's home page on the internet.
Ameren's web site address is: http://www.ameren.com
INVESTOR SERVICES
The company's Investor Services representatives are available to help you
each business day from 7:30 a.m. to 4:30 p.m. (central time). Please write or
call:
Ameren Services Company
Investor Services Department
P.O. Box 66887
St. Louis, MO 63166-6887
St. Louis area 554-3502
Toll-free 1-800-255-2237
OFFICE
One Ameren Plaza
1901 Chouteau Avenue
St. Louis, MO 63103
314-621-3222
STOCK AND FIRST MORTGAGE
BOND TRANSFER AGENT
AND REGISTRAR
Ameren Services Company
Positioned for Success 49
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF AMEREN CORPORATION
<TABLE>
<CAPTION>
State or Jurisdiction
Name of Incorporation
- ---- ----------------
<S> <C>
Ameren Corporation Missouri
Ameren Development Company Missouri
Ameren ERC, Inc. Missouri
Ameren Energy, Inc. Missouri
Ameren Services Company Missouri
Central Illinois Public Service Company (dba Ameren CIPS) Illinois
Illinois Steam Inc. Illinois
CIPS Energy Inc. Illinois
Electric Energy, Inc.(1) Illinois
CIPSCO Investment Company Illinois
CIPSCO Securities Company Illinois
CIPSCO Leasing Company Illinois
CLC Aircraft Leasing Company Illinois
CLC Leasing Company A Illinois
CLC Leasing Company B Illinois
CLC Leasing Company C Illinois
CIPSCO Energy Company Illinois
CEC-PGE-G Co. Illinois
CEC-PGE-L Co. Illinois
CEC-APL-G Co. Illinois
CEC-APL-L Co. Illinois
CEC-PSPL-G Co. Illinois
CEC-PSPL-L Co. Illinois
CEC-MPS-G Co. Illinois
CEC-MPS-L Co. Illinois
CEC-ACE-G Co. Illinois
CEC-ACE-L Co. Illinois
CEC-ACLP Co. Illinois
CIPSCO Venture Company Illinois
Union Electric Company (dba AmerenUE) Missouri
Union Electric Development Company Missouri
Electric Energy, Inc.(2) Illinois
</TABLE>
- --------
1 Central Illinois Public Service Company owns 20% of the common stock.
2 Union Electric Company owns 40% of the common stock.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-43721) and
the Registration Statement on Form S-8 (No. 333-43737) of Ameren Corporation of
our report dated February 5, 1998, which appears on page 17 of Ameren
Corporation's 1997 Annual Report to Shareholders, which is incorporated by
reference in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page 10 of this Form 10-K.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
March 30, 1998
<PAGE> 1
EXHIBIT 24
CERTIFIED COPY OF RESOLUTION ADOPTED AT THE
REGULAR MEETING OF THE BOARD OF DIRECTORS OF
AMEREN CORPORATION
HELD ON FRIDAY, FEBRUARY 13, 1998
RESOLVED, that the proper officers and the directors of this Company be
and hereby are authorized and directed to execute the 1997 Annual Report Form
10- K ("Form 10-K") and such amendments thereto as they may deem necessary or
desirable; that the name of any officer or director of the Company required to
sign such Form 10-K or any amendment thereto, may be signed by C. W. Mueller
and/or Donald E. Brandt and/or James C. Thompson, and/or the duly appointed
substitute thereof, pursuant to duly executed powers of attorney providing said
named persons with, among other things, full power of substitution and
revocation; and that the officers of this Company be and hereby are authorized
and directed to file such Form 10-K and any amendments thereto with the
Securities and Exchange Commission when executed by or on behalf of the proper
officers and the directors of the Company.
I hereby certify that the foregoing
is a true and correct copy of resolution
adopted at the regular meeting of the Board
of Directors of Ameren Corporation, held
pursuant to due notice on Friday, February
13, 1998 at the General Office Building of
the Company, St. Louis, Missouri, and that
such resolution is still in full force and
effect.
March 30, 1998
/s/ James C. Thompson
Secretary
[CORPORATE SEAL]
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Donald E. Brandt
hereby appoints Charles W. Mueller and/or James C. Thompson the true and lawful
attorneys-in-fact of the undersigned, for and in the name, place and stead of
the undersigned, to affix the name of the undersigned as Senior Vice President
(Principal Accounting and Financial Officer) of Ameren Corporation to the 1997
Annual Report Form 10-K and any amendments thereto to be filed with the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
and, for the performance of the same acts, each with power to appoint in his
place and stead and as his substitute, one or more attorneys-in-fact for the
undersigned, with full power of revocation; hereby ratifying and confirming all
that said attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ Donald E. Brandt (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Donald E. Brandt, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Charles W. Mueller
hereby appoints Donald E. Brandt and/or James C. Thompson the true and lawful
attorneys-in-fact of the undersigned, for and in the name, place and stead of
the undersigned, to affix the name of the undersigned as President (Principal
Executive Officer) and a Director of Ameren Corporation to the 1997 Annual
Report Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ C. W. Mueller (L.S.)
------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Charles W. Mueller, known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned William E.
Cornelius hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or
James C. Thompson the true and lawful attorneys-in-fact of the undersigned, for
and in the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ W. E. Cornelius (L.S.)
--------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared William E. Cornelius, known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Richard A. Liddy
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ Richard A. Liddy (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Richard A. Liddy, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/S/ BETTY J. OLSCHER
--------------------------------
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
ST. LOUIS COUNTY
MY COMMISSION EXP. MAR. 14, 2001
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Paul L. Miller,
Jr. hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ Paul L. Miller, Jr. (L.S.)
------------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Paul L. Miller, Jr., known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Robert H. Quenon
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 11th day of March, 1998.
/s/ Robert H. Quenon (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 11th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Robert H. Quenon, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Harvey Saligman
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 11th day of March, 1998.
/s/ Harvey Saligman (L.S.)
--------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 11th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Harvey Saligman, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Theresa M. White
-----------------------------------
THERESA M. WHITE
NOTARY PUBLIC - STATE OF MISSOURI
ST. LOUIS COUNTY
MY COMMISSION EXPIRES AUG. 10, 2001
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Janet McAfee
Weakley hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James
C. Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand and seal
this 11th day of March, 1998.
/s/ Janet M. Weakley (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 11th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Janet McAfee Weakley, known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that she executed the same as her free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Kathleen D. O'Reilly
----------------------------------
KATHLEEN D. O'REILLY
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
ST. LOUIS COUNTY
MY COMMISSION EXPIRES JUNE 3, 2001
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Charles J. Schukai
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ Charles J. Schukai (L.S.)
-----------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Charles J. Schukai, known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned James W. Wogsland
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 19th day of March, 1998.
/s/ James W. Wogsland (L.S.)
----------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 19th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared James W. Wogsland, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Gordon R. Lohman
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 19th day of March, 1998.
/s/ Gordon R. Lohman (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 19th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Gordon R. Lohman, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that he executed the same as his free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Clifford L.
Greenwalt hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or
James C. Thompson the true and lawful attorneys-in-fact of the undersigned, for
and in the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of March, 1998.
/s/ C. L. Greenwalt (L.S.)
--------------------------
STATE OF ILLINOIS )
) SS.
COUNTY OF SANGAMON )
On this 16th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Clifford L. Greenwalt, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Janet K. Cooper
--------------------------------
"OFFICIAL SEAL"
JANET K. COOPER
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 3/27/99
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Richard A. Lumpkin
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 23rd day of March, 1998.
/s/ Richard A. Lumpkin (L.S.)
-----------------------------
STATE OF ILLINOIS )
) SS.
COUNTY OF COLE )
On this 23rd day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Richard A. Lumpkin, known to
me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Renee Spitz
----------------------------------
OFFICIAL SEAL
RENEE SPITZ
NOTARY PUBLIC STATE OF ILLINOIS
MY COMMISSION EXPIRES OCT. 1, 2000
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Hanne M. Merriman
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Ameren Corporation to the 1997 Annual Report Form
10-K and any amendments thereto to be filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, and, for the performance
of the same acts, each with power to appoint in his place and stead and as his
substitute, one or more attorneys-in-fact for the undersigned, with full power
of revocation; hereby ratifying and confirming all that said attorneys-in-fact
may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand and seal
this 18th day of March, 1998.
/s/ Hanne M. Merriman (L.S.)
----------------------------
Commonwealth of Virginia )
) SS.
County of Arlington )
On this 18th day of March, 1998, before me, the undersigned Notary
Public in and for said State, personally appeared Hanne M. Merriman, known to me
to be the person described in and who executed the foregoing power of attorney
and acknowledged to me that she executed the same as her free act and deed for
the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/S/ PATRICIA M. CRIGLER
-----------------------------------
MY COMMISSION EXPIRES NOV. 30, 2000
[SEAL]
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<ARTICLE> OPUR1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6,987,085
<OTHER-PROPERTY-AND-INVEST> 219,626
<TOTAL-CURRENT-ASSETS> 711,216
<TOTAL-DEFERRED-CHARGES> 64,915
<OTHER-ASSETS> 844,705
<TOTAL-ASSETS> 8,827,547
<COMMON> 1,372
<CAPITAL-SURPLUS-PAID-IN> 1,582,938
<RETAINED-EARNINGS> 1,434,658
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3,018,968
0
235,197
<LONG-TERM-DEBT-NET> 2,416,686
<SHORT-TERM-NOTES> 86,266
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 23,444
0
<CAPITAL-LEASE-OBLIGATIONS> 89,382
<LEASES-CURRENT> 28,797
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,928,807
<TOT-CAPITALIZATION-AND-LIAB> 8,827,547
<GROSS-OPERATING-REVENUE> 3,326,543
<INCOME-TAX-EXPENSE> 234,179
<OTHER-OPERATING-EXPENSES> 2,510,290
<TOTAL-OPERATING-EXPENSES> 2,744,469
<OPERATING-INCOME-LOSS> 582,074
<OTHER-INCOME-NET> (5,100)
<INCOME-BEFORE-INTEREST-EXPEN> 576,974
<TOTAL-INTEREST-EXPENSE> 177,906
<NET-INCOME> 334,716
12,532
<EARNINGS-AVAILABLE-FOR-COMM> 334,716
<COMMON-STOCK-DIVIDENDS> 348,527
<TOTAL-INTEREST-ON-BONDS> 148,758
<CASH-FLOW-OPERATIONS> 687,401
<EPS-PRIMARY> 2.44
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