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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 of (I.R.S. Employer
incorporation or organization) Identification No.)
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
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 .
Shares outstanding of each of registrant's classes of common stock as of July
31, 1999: Common Stock, $ .01 par value - 137,215,462
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Ameren Corporation
Index
Page No.
Part I Consolidated Financial Information (Unaudited)
Management's Discussion and Analysis 2
Quantitative and Qualitative Disclosures
About Market Risk 7
Consolidated Balance Sheet
- June 30, 1999 and December 31, 1998 10
Consolidated Statement of Income
- Three months, six months and 12 months ended
June 30, 1999 and 1998 11
Consolidated Statement of Cash Flows
- Six months ended June 30, 1999 and 1998 12
Notes to Consolidated Financial Statements 13
Part II Other Information 16
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PART I. CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
Ameren Corporation (Ameren or the Registrant) is a holding company 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). As a result of the Merger,
Ameren has a 60 percent ownership interest in Electric Energy, Inc. (EEI), which
is consolidated for financial reporting purposes. In 1998, Ameren formed a new
energy marketing subsidiary, AmerenEnergy, Inc., which primarily serves as a
power marketing agent for the operating companies and provides a range of energy
and risk management services to targeted customers.
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.
The following discussion and analysis should be read in conjunction with the
Notes to Consolidated Financial Statements beginning on page 13, and the
Management's Discussion and Analysis (MD&A), the Audited Consolidated Financial
Statements and the Notes to Consolidated Financial Statements appearing in the
Registrant's 1998 Annual Report to stockholders (which is incorporated by
reference in the Registrant's 1998 Form 10-K).
References to the Registrant 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 OPERATIONS
Earnings
Second quarter 1999 earnings of $87 million, or 63 cents per share, increased $3
million, or 2 cents per share, from 1998's second quarter earnings. Earnings for
the six months ended June 30, 1999, totaled $141 million, or $1.03 per share,
compared to the year-ago earnings of $124 million or 90 cents per share.
Earnings for the 12 months ended June 30, 1999, were $404 million, or $2.95 per
share, compared to $334 million, or $2.43 per share, for the preceding 12-month
period. Excluding the extraordinary charge recorded in the fourth quarter of
1997 to write off the generation-related regulatory assets and liabilities of
the Registrant's Illinois retail electric business, earnings for the 12-month
period ended June 30, 1998, were $385 million, or $2.81 per share.
Earnings and earnings per share fluctuated due to many conditions, primarily:
weather variations, credits to electric customers, sales growth, fluctuating
operating costs (including Callaway Nuclear Plant refueling outages),
merger-related expenses, changes in interest expense, changes in income and
property taxes, a charge for a targeted employee separation plan and an
extraordinary charge as noted above.
The significant items affecting revenues, costs and earnings during the
three-month, six-month, and 12-month periods ended June 30, 1999 and 1998 are
detailed on the following pages.
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Electric Operations
Electric Operating Revenues Variations for periods ended June 30, 1999
from comparable prior-year periods
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(Millions of Dollars) Three Months Six Months Twelve Months
- --------------------------------------------------------------------------------
Rate variations $ (9) $ (17) $ (30)
Credit to customers 33 23 23
Effect of abnormal weather (39) (34) (2)
Growth and other (7) 5 (4)
Interchange sales 43 72 124
EEI 22 24 6
- --------------------------------------------------------------------------------
$ 43 $ 73 $ 117
- --------------------------------------------------------------------------------
The $43 million increase in second quarter electric revenues compared to the
year-ago quarter was primarily driven by increased interchange sales due to
strong marketing efforts, as well as higher sales to the United States
Enrichment Corporation (USEC) by EEI. Interchange and EEI sales increased 120
percent and 45 percent, respectively, for the second quarter of 1999 compared to
the year-ago quarter. Also contributing to the revenue increase was a decrease
in the credits to Missouri electric customers (see Note 5 under Notes to
Consolidated Financial Statements for further information). These increases were
partially offset by a 6 percent decline in native sales due to milder weather
and rate decreases in both Missouri and Illinois (see Note 5 under Notes to
Consolidated Financial Statements for further information). Weather-sensitive
residential and commercial sales decreased 10 percent and 7 percent,
respectively, while industrial sales declined 3 percent.
Electric revenues for the first six months of 1999 increased $73 million
compared to the prior-year period, primarily due to a 14 percent increase in
total kilowatthour sales. This increase was primarily driven by a 108 percent
increase in interchange sales due to strong marketing efforts, and a 34 percent
increase in EEI sales to the USEC. Also contributing to the revenue increase was
a decrease in the credits to Missouri electric customers (see Note 5 under Notes
to Consolidated Financial Statements for further information). Partially
offsetting these increases, weather-sensitive residential and commercial sales
were each down 3 percent due to milder weather, and industrial sales declined 2
percent. In addition, revenues were lowered due to rate decreases in both
Missouri and Illinois (see Note 5 under Notes to Consolidated Financial
Statements for further information).
Electric revenues for the 12 months ended June 30, 1999, increased $117 million
compared to the prior 12-month period. The increase in revenues was primarily
driven by increased interchange sales due to strong marketing efforts. Also
contributing to the revenue increase was a decrease in the credits to Missouri
electric customers. These increases were partially offset by rate decreases in
both Missouri and Illinois. (See Note 5 under Notes to Consolidated Financial
Statements for further information.)
Fuel and Purchased Power Variations for periods ended June 30, 1999
from comparable prior-year periods
- --------------------------------------------------------------------------------
(Millions of Dollars) Three Months Six Months Twelve Months
- --------------------------------------------------------------------------------
Fuel:
Variation in generation $ 6 $ 20 $ 50
Price (16) (23) (55)
Generation efficiencies and other 2 (1) (3)
Purchased power variation 23 32 22
EEI variation 16 23 11
- --------------------------------------------------------------------------------
$ 31 $ 51 $ 25
- --------------------------------------------------------------------------------
Fuel and purchased power costs for the three, six, and 12 months ended June 30,
1999, increased $31 million, $51 million, and $25 million, respectively, versus
the comparable prior-year periods primarily due to increased generation and
purchased power, resulting from higher sales volume, partially offset by lower
fuel prices.
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Gas Operations
Gas revenues for the quarter ended June 30, 1999, decreased $5 million compared
to the year-ago quarter primarily due to a 29 percent decline in retail sales.
This decrease was partially offset by an annual $9 million Illinois gas rate
increase effective February 1999 in addition to an annual $12 million Missouri
gas rate increase effective February 1998. Gas revenues for the 12-month period
ended June 30, 1999, decreased $21 million compared to the same year-ago period
primarily due to a 6 percent decline in retail sales.
Gas costs for the quarter ended June 30, 1999, decreased $5 million primarily
due to lower sales. Gas costs for the 12 months ended June 30, 1999, decreased
$27 million compared to the year-ago period primarily due to lower sales and a
decrease in gas prices.
Other Operating Expenses
Other operating expense variations reflected recurring factors such as growth,
inflation, labor and benefit increases.
Other operations expenses increased $9 million for the three months ended June
30, 1999, compared to the comparable prior-year period primarily due to expenses
associated with deregulation in Illinois and the year 2000 project. Other
operations expenses increased $44 million for the 12-month period ended June 30,
1999 compared to the same year-ago period primarily due to the charge for the
targeted separation plan and increased expenses associated with deregulation in
Illinois and the year 2000 project.
Maintenance expenses for the three, six and 12 months ended June 30, 1999,
increased $6 million, $14 million and $10 million, respectively, compared to the
year-ago periods primarily due to increased power plant maintenance and
tree-trimming activity. These increases were partially offset by the absence of
a refueling at the Callaway Nuclear Plant in 1999.
Taxes
Income taxes increased $3 million, $8 million and $43 million, respectively, for
the three, six and 12 months ended June 30, 1999, respectively, due to higher
pretax income.
Other Income and Deductions
The variation in miscellaneous, net for the 12-month period ended June 30, 1999,
compared to the year-ago period, was primarily due to increased interest income
and gains on the sale of property.
Balance Sheet
Changes in accounts and wages payable, taxes accrued, other accruals and other
current liabilities resulted from the timing of various payments to taxing
authorities and suppliers.
The $37 million increase in other deferred credits and liabilities was primarily
due to the $20 million estimated credit to Missouri electric customers recorded
in the first quarter of 1999 under the three-year experimental alternative
regulation plan. See Note 5 under Notes to Consolidated Financial Statements for
further information.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities totaled $350 million for the six months
ended June 30, 1999, compared to $216 million during the same 1998 period.
Cash flows used in investing activities totaled $222 million and $130 million
for the six months ended June 30, 1999 and 1998, respectively. Construction
expenditures for the six months ended June 30, 1999, for constructing new or
improving existing facilities were $223 million, which included expenditures
associated with the purchase of eight new combustion turbine generators (see
Note 7 under Notes to Consolidated Financial Statements for further
information). In addition, the Registrant expended $19 million for the
acquisition of nuclear fuel. Capital requirements for the remainder of 1999 are
expected to be principally for construction expenditures and the acquisition of
nuclear fuel.
Cash flows used in financing activities were $151 million for the six months
ended June 30, 1999, compared to $78 million during the same 1998 period. The
Registrant's principal financing activities for the quarter included the
redemption of $114 million of debt and the payment of dividends, partially
offset by the issuance of $106 million of long-term debt. On April 27, 1999, the
Registrant's Board of Directors declared a quarterly dividend of 63.5 cents
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per common share that was paid to shareholders on June 30, 1999. Common stock
dividends paid for the 12 months ended June 30, 1999, resulted in a payout rate
of 86 percent of the Registrant's earnings to common stockholders. Dividends
paid to the Registrant's common shareholders relative to net cash provided by
operating activities for the same period were 37 percent.
The Registrant plans to continue utilizing short-term debt to support normal
operations and other temporary requirements. The Registrant and its subsidiaries
are authorized by the Securities and Exchange Commission under PUHCA to have up
to an aggregate $2.8 billion 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 June 30, 1999, the Registrant had committed
bank lines of credit aggregating $166 million (all of which was unused and
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. The Registrant also has a bank credit agreement due 2002, which
permits the borrowing of up to $200 million on a short-term basis. This credit
agreement is available for the Registrant's own use and for the use of its
subsidiaries. There was $42 million outstanding under this agreement as of June
30, 1999. The Registrant had no outstanding short-term borrowings as of June 30,
1999.
Additionally, AmerenUE has a bank credit agreement due 2000 which permits the
borrowing of up to $300 million on a long-term basis, all of which was unused
and $226 million of which was available at June 30, 1999.
AmerenUE also has a lease agreement that provides for the financing of nuclear
fuel. At June 30, 1999, the maximum amount that could be financed under the
agreement was $120 million. Cash used in financing activities for the six months
ended June 30, 1999, included $38 million of issuances under the lease for
nuclear fuel, offset by redemptions of $7 million. At June 30, 1999, $98 million
was financed under the lease.
RATE MATTERS
In March 1999, AmerenUE and AmerenCIPS filed delivery service tariffs with the
Illinois Commerce Commission (ICC) to comply with the requirements of the
Electric Service Customer Choice and Rate Relief Law of 1997. These tariffs
would be used by electric customers who choose to purchase their power from an
alternate supplier. Hearings were conducted in June 1999, and a hearing
examiner's proposed order was issued in July. The ICC is required to render a
decision on the delivery services tariffs by September 1, 1999.
See Note 5 under Notes to Financial Statements for further discussion of Rate
Matters.
ELECTRIC INDUSTRY RESTRUCTURING
In December 1997, the Governor of Illinois signed the Electric Service Customer
Choice and Rate Relief Law of 1997 (the Law) providing for electric utility
restructuring in Illinois. This legislation introduces competition into the
supply of electric energy in Illinois.
One of the major provisions of the Law includes the phasing-in through 2002 of
retail direct access, which allows customers to choose their electric supplier.
The phase-in of retail direct access begins on October 1, 1999, with large
commercial and industrial customers principally comprising the initial group.
The customers in this group represent approximately 10 percent of the
Registrant's total sales. Retail direct access will be offered to the remaining
commercial and industrial customers on December 31, 2000, and to residential
customers on May 1, 2002.
In conjunction with another provision of the Law, in July 1999, AmerenCIPS filed
a notice with the ICC that it intends to transfer AmerenCIPS' generating
facilities (all in Illinois) to a new unregulated subsidiary of Ameren. The
formation of the new generating subsidiary, as well as the transfer of
AmerenCIPS' generating assets and liabilities (at historical net book value) and
certain power sales contracts, will be subject to regulatory proceedings.
Regulatory approvals are required from the ICC, the Federal Energy Regulatory
Commission, and the Missouri Public Service Commission. The generating
subsidiary will include the eight new combustion turbine generators being
acquired in addition to the AmerenCIPS facilities (see Note 7 under Notes to
Consolidated Financial Statements for further information). The new subsidiary
is expected to be operational sometime in 2000, subject to the outcome of these
regulatory proceedings.
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Once the transfer is completed, a power supply agreement would be in place
between the new generating company and a nonregulated marketing subsidiary for
all generation. The marketing subsidiary would have a power supply agreement
with AmerenCIPS to supply them sufficient generation to meet native load
requirements over the term of the agreement. Power will continue to be jointly
dispatched between AmerenUE, AmerenCIPS and the new generating subsidiary.
The proposed transfer of generating assets and liabilities had no effect on the
Registrant's financial statements as of June 30, 1999.
YEAR 2000 ISSUE
The Year 2000 Issue relates to how dates are stored and used in computer
systems, applications, and embedded systems. As the century date change occurs,
certain date-sensitive systems need to be able to recognize the year as 2000 and
not as 1900. This inability to recognize and properly treat the year as 2000 may
cause these systems to process critical financial and operational information
incorrectly. The Registrant's primary concern is the potential for any
interruption in providing electric and gas service to customers, as well as the
potential inability to process critical financial and operational information on
a timely basis, including billing its customers, if appropriate steps are not
taken to address this issue. Management has developed a Year 2000 plan (Plan)
and Ameren's Board of Directors has been briefed about the Year 2000 Issue and
how it may affect the Registrant.
The Registrant's Plan to resolve the Year 2000 Issue involves three phases:
assessment, planning, and implementation/testing. Implementation of the Plan is
directly supervised by each area's responsible Vice President. A Year 2000
Project Director coordinates the implementation of the Plan among functional
teams who are addressing issues specific to a particular area, such as nuclear
and non-nuclear generation facilities, energy management systems, gas
distribution, etc. Ameren has also engaged certain outside consultants,
technicians and other external resources to aid in formulating and implementing
the Plan.
The Registrant has completed its assessment phase, which included analyzing
date-sensitive electronic hardware, software applications and embedded systems
and has developed a compliance plan to address issues that were identified. Many
of the major corporate computer systems at Ameren are relatively new and
therefore are either Year 2000 compliant or only require minor modifications.
Also, several of the operating hardware and embedded systems (i.e.,
microprocessor chips) use analog rather than digital technology and thus are
unaffected by the two-digit date issue. In addition, the Registrant has
contacted hundreds of vendors and suppliers to verify compliance.
The Registrant has also completed its planning phase. Items that have been
identified for remediation have been prioritized into groups based on their
significance to Company operations. The implementation/testing phase for all
components/applications is approximately 87 percent complete as of June 30,
1999. The Registrant expects to complete remediation of its significant
components/applications by the end of the third quarter 1999.
With respect to third parties, for areas that interface directly with
significant vendors, the Registrant has inventoried vendors and major suppliers
and is currently assessing their Year 2000 readiness through surveys, websites
and personal contact. The Registrant plans to follow up with major suppliers and
vendors and verify Year 2000 compliance, where appropriate. The Registrant has
also queried its health insurance providers. To date, the Registrant is not
aware of any problems that would materially impact its financial condition,
results of operations or liquidity. However, the Registrant has no means of
ensuring that these parties will be Year 2000 compliant. The inability of those
parties to complete their Year 2000 resolution process could materially impact
the Registrant.
The Registrant is also addressing the impact of electric power grid problems
that may occur outside of its own electric system. The Registrant has started
Year 2000 electric power grid impact planning through the system's various
electric interconnection affiliations and is working with the Mid-American
Interchange Network (MAIN) to begin planning Year 2000 operational preparedness
and restoration scenarios. As of July 1, 1999 (the latest information
available), MAIN had completed its assessment and planning phases and was 99
percent complete with its implementation/testing phase. In addition, the
Registrant provides monthly status reports to the North American Electric
Reliability Council (NERC) to assist them in assessing Year 2000 readiness of
the regional electric grid. As of July 1, 1999 (the latest information
available), NERC had completed its assessment and planning phases and was 98
percent complete with its implementation/testing phase. The Registrant
participated in a Year 2000 drill conducted by NERC in April 1999. The drill
focused on the testing of the backup systems of voice and data
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communications needed to operate the electric power grids in the event of a
partial communication loss. The results of the drill at Ameren were successful.
Additional drills are planned. Through the Electric Power Research Institute
(EPRI), an industry-wide effort has been established to deal with Year 2000
problems affecting digital systems and equipment used by the nation's electric
power companies. Under this effort, participating utilities are working together
to assess specific vendors' system problems and test plans. The assessment will
be shared by the industry as a whole to facilitate Year 2000 problem solving.
In addressing the Year 2000 Issue, the Registrant will incur internal labor
costs as well as external consulting and other expenses related to
infrastructure enhancements necessary to prepare for the new century. The
Registrant estimates that its external costs (consulting fees and related costs)
for addressing the Year 2000 Issue will range from $10 million to $15 million.
As of June 30, 1999, the Registrant has expended approximately $7 million. The
Registrant's plans to complete Year 2000 modifications are based on management's
best estimates, which are derived utilizing numerous assumptions of future
events including the continued availability of certain resources, and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.
The Registrant believes that, with appropriate modifications to existing
computer systems/components, updates by vendors and trading partners, and
conversion to new software and hardware in the ordinary course of business, the
Year 2000 Issue will not pose significant operational problems for the
Registrant. However, if such conversions are not completed in a proper and
timely manner by all affected parties, the Year 2000 Issue could result in
material adverse operational and financial consequences to the Registrant, and
there can be no assurance that the Registrant's efforts, or those of vendors and
trading partners, interconnection affiliates, NERC or EPRI to address the Year
2000 Issue will be successful. The Registrant is in the process of developing
contingency plans to address potential risks, including risks of vendor/trading
partners noncompliance, as well as noncompliance of any of the Registrant's
material operating systems. The first operational contingency plan addressing
power grid issues was completed during the first quarter of 1999. Contingency
plans related to the business areas were completed in July 1999. At this time,
the Registrant is unable to predict the ultimate impact, if any, of the Year
2000 Issue on the Registrant's financial condition, results of operations or
liquidity; however, the impact could be material.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of changes in value of a financial instrument,
derivative or non-derivative, caused by fluctuations in interest rates and
equity prices. The following discussion of the Registrant's risk management
activities includes "forward-looking" statements that involve risks and
uncertainties. Actual results could differ materially from those projected in
the forward-looking statements. The Registrant handles market risks in
accordance with established policies, which may include entering into various
derivative transactions. In the normal course of business, the Registrant also
faces risks that are either non-financial or non-quantifiable. Such risks
principally include credit risk and legal risk and are not represented in the
following analysis.
Interest Rate Risk
The Registrant is exposed to market risk through changes in interest rates,
principally at its subsidiaries, through its issuance of both long-term and
short-term variable-rate debt, fixed-rate debt, commercial paper and auction
market preferred stock. The Company manages its interest rate exposure by
controlling the amount of these instruments it holds within its total
capitalization portfolio and by monitoring the effects of market changes in
interest rates.
If interest rates increase 1 percent in 2000 as compared to 1999, the
Registrant's interest expense would increase by approximately $7 million and net
income would decrease by approximately $4 million. This amount has been
determined using the assumptions that the Registrant's outstanding variable rate
debt, commercial paper and auction market preferred stock as of June 30, 1999,
continued to be outstanding throughout 2000, and that the average interest rates
for these instruments increased 1 percent over 1999. The model does not consider
the effects of the reduced level of overall economic activity that would exist
in such an environment. In the event of a significant change in interest rates,
management would likely take actions to further mitigate its exposure to this
market risk. However, due to the uncertainty of the specific actions that would
be taken and their possible effects, the sensitivity analysis assumes no change
in the Registrant's financial structure.
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Commodity Price Risk
The Registrant is exposed to changes in market prices for natural gas and fuel
and purchased power. With regard to its natural gas utility business, the
Registrant's exposure to changing market prices is in large part mitigated by
the fact that the Registrant has a Purchased Gas Adjustment Clause (PGA) in
place in both its Missouri and Illinois jurisdictions. The PGA allows the
Registrant to pass on to its customers its prudently incurred costs of natural
gas. With approval of the Missouri Public Service Commission, AmerenUE
participated in an experimental program to control the volatility of gas prices
paid by its Missouri customers in the 1998-1999 winter months through the
purchase of financial instruments. This program concluded in April 1999.
Since the Registrant does not have a provision similar to the PGA for its
electric operations, the Registrant has entered into several long-term contracts
with various suppliers to purchase coal and nuclear fuel to manage its exposure
to fuel prices. With regard to the Registrant's exposure to commodity risk for
purchased power, the Registrant has established a subsidiary, AmerenEnergy,
Inc., whose primary responsibility includes managing market risks associated
with the changing market prices for purchased power for the Registrant's
operating subsidiaries, AmerenUE and AmerenCIPS.
AmerenEnergy utilizes several techniques to mitigate its market risk for
purchased power, including utilizing derivative financial instruments. A
derivative is a contract whose value is dependent on or derived from the value
of some underlying asset. The derivative financial instruments that AmerenEnergy
is allowed to utilize (which include forward contracts and futures contracts)
are dictated by a risk management policy, which has been reviewed with the
Auditing Committee of Ameren's Board of Directors. Compliance with the risk
management policy is the responsibility of a risk management steering committee,
consisting of Ameren officers and an independent risk management officer at
AmerenEnergy.
As of June 30, 1999, the fair value of derivative financial instruments exposed
to commodity price risk was immaterial. The Registrant expects an increase in
the derivative financial instruments used to manage risk in 1999 due to expected
growth at AmerenEnergy.
Equity Price Risk
The Registrant maintains trust funds, as required by the Nuclear Regulatory
Commission and Missouri and Illinois state laws, to fund certain costs of
nuclear decommissioning. As of June 30, 1999, these funds were invested
primarily in domestic equity securities, fixed-rate, fixed-income securities,
and cash and cash equivalents. By maintaining a portfolio that includes
long-term equity investments, the Registrant is seeking to maximize the returns
to be utilized to fund nuclear decommissioning costs. However, the equity
securities included in the Registrant's portfolio are exposed to price
fluctuations in equity markets, and the fixed-rate, fixed-income securities are
exposed to changes in interest rates. The Registrant actively monitors its
portfolio by benchmarking the performance of its investments against certain
indices and by maintaining, and periodically reviewing, established target
allocation percentages of the assets of its trusts to various investment
options. The Registrant's exposure to equity price market risk is in large part
mitigated due to the fact that the Registrant is currently allowed to recover
its decommissioning costs in its rates.
ACCOUNTING MATTERS
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes accounting and
reporting standards for derivative instruments and for hedging activities and
requires recognition of all derivatives on the balance sheet measured at fair
value. In June 1999, the FASB issued SFAS 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of FASB
Statement No. 133," which delayed the effective date of SFAS 133 to all fiscal
quarters of all fiscal years beginning after June 15, 2000. Earlier application
is still encouraged. At this time, the Registrant is unable to determine the
impact of SFAS 133 on its financial position or results of operations upon
adoption; however, SFAS 133 could increase the volatility of the Registrant's
future earnings.
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SAFE HARBOR STATEMENT
Statements made in this Form 10-Q 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,
financial performance and the Year 2000 Issue. In connection with the "Safe
Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Registrant 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 fuel and purchased power, electricity, and natural gas, including the
use of financial instruments; average rates for electricity in the Midwest;
business and economic conditions; interest rates; weather conditions; fuel
prices and availability; generation plant performance; monetary and fiscal
policies; future wages and employee benefits costs; and legal and administrative
proceedings.
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AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
UNAUDITED
(Thousands of Dollars, Except Shares)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
- ------ ------------ ------------
<S> <C> <C>
Property and plant, at original cost:
Electric $11,890 932 $11,761,306
Gas 479,723 469,216
Other 47,112 44,646
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12,417,767 12,275,168
Less accumulated depreciation and amortization 5,771,406 5,602,816
----------- -----------
6,646,361 6,672,352
Construction work in progress:
Nuclear fuel in process 127,678 108,294
Other 183,171 147,393
----------- -----------
Total property and plant, net 6,957,210 6,928,039
----------- -----------
Investments and other assets:
Investments 75,259 86,694
Nuclear decommissioning trust fund 177,402 161,877
Other 80,462 78,091
----------- -----------
Total investments and other assets 333,123 326,662
----------- -----------
Current assets:
Cash and cash equivalents 53,980 76,863
Accounts receivable - trade (less allowance for doubtful
accounts of $9,466 and $8,393, respectively) 268,320 198,193
Unbilled revenue 141,743 150,481
Other accounts and notes receivable 93,966 76,919
Materials and supplies, at average cost -
Fossil fuel 121,711 112,908
Other 134,015 132,884
Other 27,629 22,912
----------- -----------
Total current assets 841,364 771,160
----------- -----------
Regulatory assets:
Deferred income taxes 630,203 633,529
Other 174,995 188,049
----------- -----------
Total regulatory assets 805,198 821,578
----------- -----------
Total Assets $ 8,936,895 $ 8,847,439
=========== ===========
CAPITAL AND LIABILITIES
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 1,582,505 1,582,548
Retained earnings 1,438,893 1,472,200
----------- -----------
Total common stockholders' equity 3,022,770 3,056,120
Preferred stock not subject to mandatory redemption 235,197 235,197
Long-term debt 2,362,553 2,289,424
----------- -----------
Total capitalization 5,620,520 5,580,741
----------- -----------
Minority interest in consolidated subsidiary 3,534 3,534
Current liabilities:
Current maturity of long-term debt 211,123 201,713
Short-term debt -- 58,528
Accounts and wages payable 250,908 297,185
Accumulated deferred income taxes 68,577 66,299
Taxes accrued 192,862 114,106
Other 262,253 216,889
----------- -----------
Total current liabilities 985,723 954,720
----------- -----------
Accumulated deferred income taxes 1,516,398 1,521,417
Accumulated deferred investment tax credits 174,818 178,832
Regulatory liability 189,325 198,937
Other deferred credits and liabilities 446,577 409,258
----------- -----------
Total Capital and Liabilities $ 8,936,895 $ 8,847,439
=========== ===========
</TABLE>
See Notes to Consolidate Financial Statements.
-10-
<PAGE>
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
(Thousands of Dollars, Except Shares and Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
OPERATING REVENUES:
<S> <C> <C> <C> <C> <C> <C>
Electric $ 823,769 $ 780,808 $ 1,460,099 $ 1,386,908 $ 3,167,402 $ 3,050,079
Gas 34,475 39,277 131,925 131,615 216,991 237,536
Other 1,640 1,692 3,762 4,064 7,014 10,031
---------- --------- ------------ ------------ ------------ ------------
Total operating revenues 859,884 821,777 1,595,786 1,522,587 3,391,407 3,297,646
OPERATING EXPENSES:
Operations
Fuel and purchased power 237,873 207,179 422,868 372,084 830,907 806,132
Gas 18,309 23,085 73,359 75,289 116,916 144,012
Other 164,219 155,136 303,459 301,891 648,725 605,257
---------- --------- ------------ ------------ ------------ ------------
420,401 385,400 799,686 749,264 1,596,548 1,555,401
Maintenance 98,829 92,425 171,139 157,428 325,722 315,762
Depreciation and amortization 87,168 86,061 176,642 172,915 352,130 345,953
Income taxes 61,781 58,798 97,011 88,709 275,975 232,959
Other taxes 61,193 70,935 121,109 135,681 258,202 274,860
---------- --------- ------------ ------------ ------------ ------------
Total operating expenses 729,372 693,619 1,365,587 1,303,997 2,808,577 2,724,935
OPERATING INCOME 130,512 128,158 230,199 218,590 582,830 572,711
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used
during construction 2,226 1,204 4,888 2,267 7,622 5,537
Miscellaneous, net (1,669) (1,640) (3,934) (4,786) (1,757) (6,111)
---------- --------- ------------ ------------ ------------ ------------
Total other income and deductions 557 (436) 954 (2,519) 5,865 (574)
INCOME BEFORE INTEREST
CHARGES AND PREFERRED
DIVIDENDS 131,069 127,722 231,153 216,071 588,695 572,137
INTEREST CHARGES AND
PREFERRED DIVIDENDS:
Interest 43,633 42,732 88,048 90,227 179,401 182,174
Allowance for borrowed funds
used during construction (2,205) (1,728) (4,067) (3,989) (7,104) (8,024)
Preferred dividends of subsidiaries 3,122 3,086 6,294 6,274 12,582 12,555
---------- --------- ------------ ------------ ------------ ------------
Net interest charges and preferred
dividends 44,550 44,090 90,275 92,512 184,879 186,705
INCOME BEFORE
EXTRAORDINARY CHARGE 86,519 83,632 140,878 123,559 403,816 385,432
-------- --------- ------------ ------------ ------------ ------------
EXTRAORDINARY CHARGE
(NET OF INCOME TAXES) -- -- -- -- -- (51,820)
---------- --------- ------------ ------------ ------------ ------------
NET INCOME $ 86,519 $ 83,632 $ 140,878 $ 123,559 $ 403,816 $ 333,612
========== ========= ============ ============ ============ ============
EARNINGS PER COMMON SHARE -
BASIC AND DILUTED (Based on
average shares outstanding)
Income before extraordinary charge $ 0.63 $ 0.61 $ 1.03 $ 0.90 $ 2.95 $ 2.81
Extraordinary charge -- -- -- -- -- (0.38)
---------- --------- ------------ ------------- ------------- -------------
Net income $ 0.63 $ 0.61 $ 1.03 $ 0.90 $ 2.95 $ 2.43
========== ========= ============ ============= ============= =============
AVERAGE COMMON SHARES
OUTSTANDING 137,215,462 137,215,462 137,215,462 137,215,462 137,215,462 137,215,462
=========== =========== ============= ============= ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
-11-
<PAGE>
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
(Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
---- ----
<S> <C> <C>
Cash Flows From Operating:
Net income $ 140,878 $ 123,559
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 171,748 167,895
Amortization of nuclear fuel 21,025 16,182
Allowance for funds used during construction (8,955) (6,256)
Deferred income taxes, net (8,872) (11,462)
Deferred investment tax credits, net (4,014) (5,906)
Changes in assets and liabilities:
Receivables, net (78,436) (70,231)
Materials and supplies (9,934) (6,225)
Accounts and wages payable (46,277) (130,139)
Taxes accrued 78,756 65,652
Credit to customers 24,899 46,118
Other, net 68,768 26,812
--------- ---------
Net cash provided by operating activities 349,586 215,999
Cash Flows From Investing:
Construction expenditures (222,957) (138,849)
Allowance for funds used during construction 8,955 6,256
Nuclear fuel expenditures (19,313) (9,352)
Other 11,435 11,820
--------- ---------
Net cash used in investing activities (221,880) (130,125)
Cash Flows From Financing:
Dividends on common stock (174,264) (174,264)
Redemptions -
Nuclear fuel lease (7,427) (51,152)
Short-term debt (58,528) (28,763)
Long-term debt (55,000) (10,000)
Issuances -
Nuclear fuel lease 38,430 7,620
Long-term debt 106,200 178,500
--------- ---------
Net cash used in financing activities (150,589) (78,059)
Net (decrease) increase in cash and cash equivalents (22,883) 7,815
Cash and cash equivalents at beginning of year 76,863 42,425
--------- ---------
Cash and cash equivalents at end of period $ 53,980 $ 50,240
========= =========
Cash paid during the periods:
Interest (net of amount capitalized) $ 81,769 $ 88,005
Income taxes, net $ 74,947 $ 81,053
</TABLE>
See Notes to Consolidated Financial Statements
-12-
<PAGE>
AMEREN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1999
Note 1 - Ameren Corporation (Ameren) is a holding company 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). 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 AmerenCIPS were not affected by the Merger.
The accompanying financial statements include the accounts of Ameren and its
consolidated subsidiaries (collectively the Registrant). All subsidiaries for
which the Registrant owns directly or indirectly more than 50 percent 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. The operating
companies serve 1.5 million electric and 300,000 natural gas customers in a
44,500-square-mile area of Missouri and Illinois. The Registrant's non-regulated
subsidiaries include CIC, an investing subsidiary, and AmerenEnergy, Inc., an
energy marketing subsidiary. The Registrant also has a 60 percent interest in
Electric Energy, Inc. (EEI). EEI owns and operates an electric generation 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.
Note 2 - Financial statement note disclosures, normally included in consolidated
financial statements prepared in conformity with generally accepted accounting
principles, have been omitted in this Form 10-Q pursuant to the Rules and
Regulations of the Securities and Exchange Commission. However, in the opinion
of the Registrant, the disclosures contained in this Form 10-Q are adequate to
make the information presented not misleading. See Notes to Consolidated
Financial Statements included in the 1998 Annual Report to Stockholders (which
is incorporated by reference in the Registrant's 1998 Form 10-K) for information
relevant to the consolidated financial statements contained in this Form 10-Q,
including information as to the significant accounting policies of the
Registrant.
Note 3 - In the opinion of the Registrant, the interim financial statements
filed as part of this Form 10-Q reflect all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results for
the periods presented. The Registrant's consolidated financial statements were
prepared to permit the information required in the Financial Data Schedule
(FDS), Exhibit 27, to be directly extracted from the filed statements. The FDS
amounts correspond to or are calculable from the amounts reported in the
consolidated financial statements or notes thereto.
Note 4 - Due to the effect of weather on sales and other factors which are
characteristic of public utility operations, financial results for the periods
ended June 30, 1999 and 1998, are not necessarily indicative of trends for any
three-month, six-month or twelve-month period.
Note 5 - In July 1995, the Missouri Public Service Commission (MoPSC) approved
an agreement involving AmerenUE's Missouri electric rates. The Agreement
included a three-year experimental alternative regulation plan that provides
that earnings in excess of a 12.61 percent regulatory return on equity (ROE)
will be shared equally between customers and shareholders and earnings above 14
percent 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 Registrant recorded an estimated $43 million credit for the final year of
the original experimental alternative regulation plan. The MoPSC staff has
proposed adjustments to the Registrant's estimated $43 million credit, which if
ultimately accepted, could increase the Registrant's estimated credit up to
approximately $5 million. Hearings were held on this matter in June 1999, and a
final order from the MoPSC is expected by the end of 1999.
-13-
<PAGE>
A new three-year experimental alternative regulation plan was included in the
joint agreement approved by the MoPSC in its February 1997 order approving the
Merger. Like the original plan, the new plan requires that earnings over a 12.61
percent ROE up to a 14 percent ROE will be shared equally between customers and
stockholders. The new three-year plan will also return to customers 90 percent
of all earnings above a 14 percent ROE up to a 16 percent ROE. Earnings above a
16 percent ROE will be credited entirely to customers. As of June 30, 1999, the
Registrant had recorded an estimated $20 million credit for the first year of
this plan. This credit, which the Registrant expects to pay to Missouri
customers later this year, was reflected as a reduction in electric revenues.
The joint agreement approved by the MoPSC in its February 1997 order approving
the Merger also provided for a Missouri electric rate decrease, retroactive to
September 1, 1998, based on the weather-adjusted average annual credits to
customers under the original experimental alternative regulation plan. The MoPSC
staff proposed adjustments to the Registrant's methodology of calculating the
weather-adjusted credits. During the second quarter of 1999, the Registrant and
the MoPSC staff reached a settlement on the methodology for calculating the
weather-adjusted credits. This proposed settlement is subject to approval by the
MoPSC. In addition, the results of the regulatory proceeding associated with the
final year of the original experimental alternative regulation plan will impact
the final Missouri electric rate decrease as well. The Registrant estimates that
its Missouri electric rate decrease should approximate $15 million to $20
million on an annualized basis. A final order from the MoPSC is expected by the
end of 1999.
In conjunction with the Electric Service Customer Choice and Rate Relief Law of
1997 (the Law), a 5 percent residential electric rate decrease for the
Registrant's Illinois electric customers was effective August 1, 1998. This rate
decrease is expected to decrease electric revenues $14 million annually, based
on estimated levels of sales and assuming normal weather conditions. The
Registrant may be subject to additional 5 percent residential electric rate
decreases in each of 2000 and 2002, to the extent its rates exceed the Midwest
utility average at that time. The Registrant's rates are currently below the
Midwest utility average.
The Law also contains a provision requiring one-half of excess earnings from the
Illinois jurisdiction for the years 1998 through 2004 to be refunded to the
Registrant's customers. Excess earnings are defined as the portion of the
two-year average annual rate of return on common equity in excess of 1.5 percent
of the two-year average of an Index, as defined in the Law. The Index is defined
as the sum of the average for the twelve months ended September 30 of the
average monthly yields of the 30-year U.S. Treasury bonds plus prescribed
percentages ranging from 4 percent to 5 percent. In July 1999, Senate Bill 24
was passed which increased the prescribed percentages to 7 percent beginning in
2000. Filings must be made with the ICC on or before March 31 of each year 2000
through 2005. At this time, the Registrant is unable to determine the amount of
the credit it will be required to return to customers, if any, under the Law for
the two year period ended December 31, 1999.
Note 6 - Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" became effective on January 1,
1999. SOP 98-1 provides guidance on accounting for the costs of computer
software developed or obtained for internal use. Under SOP 98-1, certain costs,
may be capitalized and amortized over some future period. SOP 98-1 did not have
a material impact on the Registrant's financial position or results of
operations upon adoption.
The Emerging Issues Task Force of the Financial Accounting Standards Board
(EITF) Issue 98-10, "Accounting for Energy Trading and Risk Management
Activities" became effective on January 1, 1999. EITF 98-10 provides guidance on
the accounting for energy contracts entered into for the purchase or sale of
electricity, natural gas, capacity and transportation. The EITF reached a
consensus in EITF 98-10 that sales and purchase activities being performed need
to be classified as either trading or non-trading. Furthermore, transactions
that are determined to be trading activities would be recognized on the balance
sheet measured at fair value, with gains and losses included in earnings. EITF
98-10 includes factors or indicators to consider when determining if a
transaction is a trading or non-trading activity. Currently, AmerenEnergy, Inc.,
an energy marketing subsidiary of Ameren, enters into contracts for the sale and
purchase of energy on behalf of AmerenUE and AmerenCIPS. These transactions are
considered non-trading activities and are accounted for using the accrual or
settlement method, which represents industry practice. Should any of
AmerenEnergy's future activities be considered material trading activities based
on the indicators provided in EITF 98-10, a change in accounting practice would
be required. EITF 98-10 did not have a material impact on the Registrant's
financial position or results of operations upon adoption.
-14-
<PAGE>
Note 7 - The Registrant has committed to purchase eight new combustion turbine
generators (CTs). The CTs will add over 900 megawatts to the Registrant's net
peaking capacity and are expected to cost approximately $435 million. Two of the
CTs are expected to be installed in 2000, four in 2001 and two in 2002.
Note 8 - Segment information for the three month, six month and 12 month periods
ended June 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Regulated Reconciling
(in millions) Utilities All Other Items * Total
- -------------------------------------------------------------------------------------
Three months ended June 30, 1999:
<S> <C> <C> <C> <C>
Revenues $ 843 $ 72 $ (55) $ 860
Net Income 86 1 -- 87
- -------------------------------------------------------------------------------------
Three months ended June 30, 1998:
Revenues $ 804 $ 41 $ (23) $ 822
Net Income 81 3 -- 84
- -------------------------------------------------------------------------------------
Six months ended June 30, 1999:
Revenues $1,557 $120 $ (81) $1,596
Net Income 139 2 -- 141
- -------------------------------------------------------------------------------------
Six months ended June 30, 1998:
Revenues $1,482 $ 81 $ (40) $1,523
Net Income 119 5 -- 124
- -------------------------------------------------------------------------------------
12 months ended June 30, 1999:
Revenues $3,305 $229 $(143) $3,391
Net Income 401 3 -- 404
- -------------------------------------------------------------------------------------
12 months ended June 30, 1998:
Revenues $3,172 $202 $ (76) $3,298
Net Income 322 12 -- 334
- -------------------------------------------------------------------------------------
* Elimination of intercompany revenues.
</TABLE>
Note 9 - Certain reclassifications were made to prior-year financial statements
to conform to current-period presentation.
-15-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3. Legal Proceedings of the Registrant's Form
10-K for the year ended December 31, 1998 for information regarding unfair labor
practice charges filed with the National Labor Relations Board (NLRB) by the
International Union of Operating Engineers Local 148 and the International
Brotherhood of Electrical Workers Local 702 relating to the lockout by Central
Illinois Public Service Company (AmerenCIPS), the Registrant's subsidiary, of
both unions during 1993. In April 1999, the unions filed petitions for review
with the U.S. Court of Appeals for the District of Columbia Circuit of the
NLRB's August 1998 decision which ruled in favor of AmerenCIPS and held that the
lockout was lawful.
Reference is made to "Electric Industry Restructuring" in Management's
Discussion and Analysis and Note 2 - Regulatory Matters in the Notes to
Consolidated Financial Statements of the Registrant's 1998 Annual Report to
Stockholders which are incorporated by reference in the Registrant's Form 10-K
for the year ended December 31, 1998 for information regarding Union Electric
Company's (AmerenUE), the Registrant's subsidiary, membership in the Midwest
Independent System Operator (Midwest ISO). In May 1999, the Missouri Public
Service Commission approved a stipulation and agreement authorizing AmerenUE's
membership in the Midwest ISO for a six year transition period subject to
certain conditions and reporting requirements. The six year period will commence
on the first day that the Midwest ISO begins providing electric transmission
service.
Reference is made to Note 12 - Commitments and Contingencies in the
Notes to Consolidated Financial Statements of the Registrant's 1998 Annual
Report to Stockholders which was incorporated by reference in the Registrant's
Form 10-K for the year ended December 31, 1998 for information regarding the
United States Environmental Protection Agency's (EPA) issuance in 1997 of
National Ambient Air Quality Standards for ozone and particulate matter. In May
1997, the United States Court of Appeals for the District of Columbia Circuit
remanded the ambient air quality standards regulations to EPA for
reconsideration. At this time, the Registrant is unable to predict the ultimate
impact of those revised air quality standards on its future financial condition,
results of operations or liquidity. In further reference to Note 12 -
Commitments and Contingencies, the Registrant has been designated as a
potentially responsible party by federal and state environmental protection
agencies at seven hazardous waste sites.
ITEM 5. OTHER INFORMATION
Reference is made to Note 12 - Commitments and Contingencies in the
Notes to Consolidated Financial Statements of the Registrant's 1998 Annual
Report to Stockholders which was incorporated by reference in the Registrant's
Form 10-K for the year ended December 31, 1998 for information concerning the
expiration date of collective bargaining agreements. The Registrant is engaged
in labor negotiations with the International Brotherhood of Electrical Workers
and the International Union of Operating Engineers and the collective bargaining
agreements have been extended so as to facilitate those negotiations. At this
time, the Registrant is unable to predict the impact of these negotiations on
its future financial condition, results of operations or cash flows.
Any stockholder proposal intended for inclusion in the proxy material
for the Registrant's 2000 annual meeting of stockholders must be received by the
Registrant by November 19, 1999.
In addition, under the Registrant's By-Laws, stockholders who intend to
submit a proposal in person at an annual meeting, or who intend to nominate a
director at a meeting, must provide advance written notice along with other
prescribed information. In general, such notice must be received by the
Secretary of the Registrant not later than 60 nor earlier than 90 days prior to
the first anniversary of the
-16-
<PAGE>
preceding year's annual meeting. For the Registrant's 2000 annual meeting of
stockholders, written notice of any in-person stockholder proposal or director
nomination must be received not later than February 27, 2000 or earlier than
January 28, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements 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)
By /s/ Donald E. Brandt
------------------------------
Donald E. Brandt
Senior Vice President, Finance
(Principal Financial Officer)
Date: August 13, 1999
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
Exhibit 27
AMEREN CORPORATION
10-Q JUNE 30, 1999
FINANCIAL DATA SCHEDULE UT
PUBLIC UTILITY COMPANIES AND PUBLIC UTILITY HOLDING COMPANIES
APPENDIX E TO ITEM 601 (C) OF REGULATION S-K
(Thousands of Dollars Except Per Share Amounts)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 6,957,210
<OTHER-PROPERTY-AND-INVEST> 252,661
<TOTAL-CURRENT-ASSETS> 841,364
<TOTAL-DEFERRED-CHARGES> 80,462
<OTHER-ASSETS> 805,198
<TOTAL-ASSETS> 8,936,895
<COMMON> 1,372
<CAPITAL-SURPLUS-PAID-IN> 1,582,505
<RETAINED-EARNINGS> 1,438,893
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3,022,770
0
235,197
<LONG-TERM-DEBT-NET> 2,284,030
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 191,744
0
<CAPITAL-LEASE-OBLIGATIONS> 78,523
<LEASES-CURRENT> 19,379
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,105,252
<TOT-CAPITALIZATION-AND-LIAB> 8,936,895
<GROSS-OPERATING-REVENUE> 1,595,786
<INCOME-TAX-EXPENSE> 97,011
<OTHER-OPERATING-EXPENSES> 1,268,576
<TOTAL-OPERATING-EXPENSES> 1,365,587
<OPERATING-INCOME-LOSS> 230,199
<OTHER-INCOME-NET> 954
<INCOME-BEFORE-INTEREST-EXPEN> 231,153
<TOTAL-INTEREST-EXPENSE> 83,981
<NET-INCOME> 140,878
6,294
<EARNINGS-AVAILABLE-FOR-COMM> 140,878
<COMMON-STOCK-DIVIDENDS> 174,264
<TOTAL-INTEREST-ON-BONDS> 0 <F1>
<CASH-FLOW-OPERATIONS> 349,586
<EPS-BASIC> 1.03
<EPS-DILUTED> 1.03
<FN>
<F1> Required in fiscal year-end only.
</FN>
</TABLE>
