Exhibit 99.1
One Ameren Plaza
1901 Chouteau
Avenue
St. Louis, MO 63103
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Contact:
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Media Analysts Investors
Tim Fox Bruce Steinke Investor Services
(314) 554-3120 (314) 554-2574 (800) 255-2237
tfox2@ameren.com bsteinke@ameren.com invest@ameren.com
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FOR IMMEDIATE RELEASE
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AMEREN REPORTS THIRD QUARTER 2004 EARNINGS
Narrows 2004 Earnings Guidance
St. Louis, Mo., Oct. 22, 2004---Ameren Corporation (NYSE: AEE) today
announced third quarter 2004 net income of $232 million, or $1.20 per share,
compared to third quarter 2003 net income of $275 million, or $1.70 per share.
Net income in the third quarter of 2003 included an after-tax gain of $31
million, or 19 cents per share, related to the settlement of a dispute over
certain coal mine reclamation issues with a supplier. Excluding this item, third
quarter 2003 net income was $244 million, or $1.51 per share. Earnings per share
for the three months ended Sept. 30, 2004, were lower than the year-ago period
primarily due to abnormally mild summer weather this quarter and greater common
shares outstanding resulting from the equity financing of the Illinois Power
acquisition prior to the close of that transaction.
Net income for the first nine months of 2004 was $447 million, or $2.44 per
share, compared to $486 million, or $3.02 per share, in the first nine months of
2003. Net income for the first nine months of 2003 also included the coal mine
reclamation settlement gain along with an after-tax gain of $18 million, or 11
cents per share, that was recorded in the first quarter of 2003 for the adoption
of a new accounting standard related to the recognition of asset retirement
obligations. Excluding these two gains, net income for the first nine months of
2003 was $437 million, or $2.72 per share.
"Our solid operational performance this quarter was overshadowed by the
extremely mild summer weather conditions that we experienced," noted Gary L.
Rainwater, chairman, chief executive officer and president of Ameren
Corporation. "As a result, demand for power was significantly lower than during
2003's near-normal summer weather conditions, which negatively impacted third
quarter 2004 earnings per share by an estimated 20 cents, as compared to 2003.
Year-over-year earnings per share for the quarter were also reduced by 18 cents
due to increased shares outstanding. In July, the company issued 10.9 million
common shares, in
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addition to the 19.1 million shares it issued in February 2004, to complete the
equity financing necessary for the Illinois Power acquisition, which closed on
Sept. 30, 2004."
Revenues in the third quarter of 2004 decreased $36 million to $1.32
billion, compared to the same period in 2003. Weather-sensitive residential
electric sales decreased approximately 9 percent in the current quarter from the
third quarter of 2003 as cooling degree days in Ameren's service territory in
2004 were over 20 percent below the third quarter of 2003. According to the
National Weather Service, summer weather in Ameren's service territory was the
7th mildest in the past 109 years, and Ameren's Midwest region was the coolest
in the continental U.S. in 2004.
Weather-sensitive commercial electric sales in the third quarter of 2004
were generally flat with the same period in 2003. Industrial electric sales
decreased approximately 4 percent, or $7 million, in the third quarter of 2004
as compared to the third quarter of 2003, due to the expiration of several low
margin power contracts with customers outside of Ameren's core service
territory.
As a result of increased availability of low-cost generation due to the
milder weather and solid power plant operations, interchange electric sales in
the third quarter of 2004 increased approximately 19 percent from the comparable
2003 period. Interchange revenues increased approximately 27 percent, or $17
million, due to the increased sales and higher power prices as compared to the
year-ago period.
On Sept. 30, 2004, Ameren completed the acquisition of Decatur, Ill.-based
Illinois Power Company (IP) and a 20 percent interest in Electric Energy, Inc.
"Clearly, one of our significant achievements for the quarter was the closing of
the Illinois Power acquisition in only eight months, well ahead of our plan. Now
that the acquisition is completed, we are focusing our attention on integrating
IP with the rest of our operations to realize the expected synergies from this
transaction, and we are executing our plan to improve IP's financial condition,"
added Rainwater. "We were also pleased that immediately following the
announcement of the completion of the transaction, the three major credit rating
agencies increased IP's credit ratings to investment grade."
"Since we announced this acquisition, we have identified greater synergies
and are realizing lower financing costs than expected," added Warner L. Baxter,
executive vice president and chief financial officer of Ameren. "These
incremental benefits have been largely offset by higher-than-expected power
supply costs, including those to be recognized under purchase
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accounting, due to increases in power prices. The bottom line is that we
continue to expect the IP acquisition to be accretive to earnings by 5 to 10
cents per share in each of the first two years after closing, in line with our
original expectations."
Ameren also announced today that the company was narrowing its guidance for
2004 earnings to between $2.70 and $2.85 per share to reflect year-to-date
results, including the much milder-than-normal weather through September and the
benefit of the earlier than expected completion of the Illinois Power
acquisition. The company's guidance is subject to, among other things, plant
operations, weather conditions, energy market and economic conditions, unusual
or otherwise unexpected gains or losses and other risks and uncertainties
outlined in the company's Forward-looking Statements section of this release.
Ameren has historically included a balance sheet, and income and cash flow
statements with its quarterly earnings releases. As a result of the acquisition
of IP on September 30, 2004, and the need to complete the preliminary accounting
for this transaction, Ameren is only providing a consolidated income statement
and selected other financial data at this time. Ameren will file its cash flow
statement and balance sheet in its Quarterly Report on Form 10-Q for the quarter
ended Sept. 30, 2004, which will be filed by Nov. 9, 2004. Ameren will also file
a separate Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2004,
for Illinois Power.
Ameren will conduct a conference call for financial analysts at 9:00 a.m.
(Central Time) on Friday, October 22, 2004, to discuss third quarter and
year-to-date 2004 earnings and other matters related to the company. Investors,
the news media and the public may listen to a live Internet broadcast of the
Ameren analyst call at www.ameren.com by clicking on "Q3 2004 Ameren Corporation
Earnings Conference Call," then the appropriate audio link. A slide presentation
is also available on Ameren's Web site that reconciles earnings per share
between the third quarter and first nine months of 2004 and the same periods of
2003, and provides a summary of Ameren's updated 2004 earnings guidance. To
access this presentation, simply follow the links for the Webcast, and then
click on the link for the presentation, which is provided in a .pdf format. The
analyst call will also be available for replay on the Internet for one year.
Telephone playback of the conference call will also be available beginning at
12:00 p.m. (Central Time), Oct. 22, until Oct. 29 by dialing, U.S. (888)
203-1112; international (719) 457-0820, and entering the number: 997214.
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Ameren president, chairman and chief executive officer Gary L. Rainwater
and executive vice president and chief financial officer Warner L. Baxter will
give a presentation to analysts on Tuesday, Oct. 26, 2004 at the Edison Electric
Institute 39th Annual Financial Conference. The presentation will be at 12:45
p.m. Eastern Time (11:45 a.m. Central Time, 9:45 a.m. Pacific Time). This
presentation is being webcast and can be accessed at www.ameren.com by clicking
on "Ameren Corporation at 39th Edison Electric Institute Financial Conference,"
then the appropriate audio link.
With assets of approximately $17 billion, Ameren serves 2.3 million
electric customers and more than 900,000 natural gas customers in Missouri and
Illinois. Ameren owns a diverse mix of electric generating plants strategically
located in its Midwest market with a capacity of more than 14,800 megawatts.
Regulation G
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In addition to presenting results of operations and earnings amounts in
total, Ameren has presented certain information in this news release on a per
share basis. These per share amounts reflect certain factors that directly
impact Ameren's total earnings. Ameren believes this per share information is
useful because it enables readers to better understand the impact of these
factors on the company's earnings.
Forward-looking Statements
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Statements made in this release, 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, we are providing this
cautionary statement to identify important factors that could cause actual
results to differ materially from those anticipated. The following factors, in
addition to those discussed elsewhere in this release and in past and subsequent
securities filings, could cause actual results to differ materially from
management expectations as suggested by such "forward-looking" statements:
o the effects of the stipulation and agreement relating to the AmerenUE
Missouri electric excess earnings complaint case and other regulatory
actions, including changes in regulatory policies;
o changes in laws and other governmental actions, including monetary and
fiscal policies;
o the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of our business at both the state
and federal levels, or the implementation of deregulation, such as in
Illinois when current power supply contracts expire in 2006;
o the effects of participation in the Midwest Independent System Operator;
o the availability of fuel for the production of electricity, such as coal
and natural gas, and purchased power and natural gas for distribution, and
the level and volatility of future market prices for such commodities,
including the ability to recover any increased costs;
o the use of financial and derivative instruments;
o average rates for electricity in the Midwest;
o business and economic conditions, including their impact on interest rates;
o disruptions of the capital markets or other events making Ameren's access
to necessary capital more difficult or costly;
o the impact of the adoption of new accounting standards and the application
of appropriate technical accounting rules and guidance;
o actions of ratings agencies and the effects of such actions;
o weather conditions;
o generation plant construction, installation and performance;
o operation of nuclear power facilities, including planned and unplanned
outages, and decommissioning costs;
o the effects of strategic initiatives, including acquisitions and
divestitures;
o the impact of current environmental regulations on utilities and generating
companies and the expectation that more stringent requirements will be
introduced over time, which could potentially have a negative financial
effect;
o future wages and employee benefit costs, including changes in returns on
benefit plan assets;
o difficulties in integrating AmerenCILCO and AmerenIP with Ameren's other
businesses;
o changes in the energy markets, environmental laws or regulations, interest
rates or other factors adversely impacting assumptions in connection with
the CILCORP Inc. and Illinois Power acquisitions;
o cost and availability of transmission capacity for the energy generated by
Ameren's generating facilities or required to satisfy energy sales made by
Ameren; and
o legal and administrative proceedings.
Given these uncertainties, undue reliance should not be placed on these
forward-looking statements. Except to the extent required by the federal
securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2004 2003 2004 2003
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Operating Revenues:
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Electric $ 1,237 $ 1,269 $ 3,182 $ 3,101
Gas 78 82 498 450
Other 2 2 5 6
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Total operating revenues 1,317 1,353 3,685 3,557
Operating Expenses:
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Fuel and purchased power 330 336 890 814
Gas purchased for resale 54 51 335 316
Other operations and maintenance 307 302 956 901
Coal contract settlement - (51) - (51)
Depreciation and amortization 136 132 398 388
Taxes other than income taxes 77 83 231 238
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Total operating expenses 904 853 2,810 2,606
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Operating Income 413 500 875 951
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Other Income and (Deductions):
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Miscellaneous income 8 4 20 16
Miscellaneous expense (1) (3) (6) (14)
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Total other income and (deductions) 7 1 14 2
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Interest Charges and Preferred Dividends:
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Interest 62 69 192 204
Preferred dividends of subsidiaries 3 3 8 8
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Net interest charges and preferred dividends 65 72 200 212
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Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle 355 429 689 741
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Income Taxes 123 154 242 273
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Income Before Cumulative Effect of Change in Accounting Principle 232 275 447 468
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Cumulative Effect of Change in Accounting Principle, Net of Income Taxes - - - 18
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Net Income $ 232 $ 275 $ 447 $ 486
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Earnings per Common Share - Basic and Diluted:
Income before cumulative effect of change in accounting principle $ 1.20 $ 1.70 $ 2.44 $ 2.91
Cumulative effect of change in accounting principle, net of income taxes - - - 0.11
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Earnings per Common Share - Basic and Diluted: $ 1.20 $ 1.70 $ 2.44 $ 3.02
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Average Common Shares Outstanding 193.5 161.8 183.5 160.7
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AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
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2004 2003 2004 2003
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Electric Sales - KWH (in millions):
Residential 5,002 5,488 13,930 13,706
Commercial 5,354 5,370 15,050 14,493
Industrial 4,445 4,628 13,216 12,854
Wholesale 2,457 2,418 7,143 6,671
Other 80 74 235 225
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Native 17,338 17,978 49,574 47,949
Interchange sales 2,557 2,145 7,058 6,566
EEI (outside sales) 1,569 1,849 3,676 4,073
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Total 21,464 21,972 60,308 58,588
Electric Revenues - (in millions):
Residential $ 408 $ 452 $ 1,006 $ 1,007
Commercial 368 372 925 911
Industrial 206 213 560 541
Wholesale 92 87 256 228
Other 7 7 20 16
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Native 1,081 1,131 2,767 2,703
Interchange sales 80 63 238 221
EEI (outside sales) 40 51 87 111
Other 36 24 90 66
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Total 1,237 1,269 3,182 3,101
Power Supply (%):
Fossil 80.3 77.0 81.0 77.2
Nuclear 11.6 11.0 8.3 11.9
Hydro 1.3 0.6 1.6 0.9
Purchased 6.8 11.4 9.1 10.0
Fuel Cost per KWH (cents) 1.098 1.166 1.104 1.081
Gas Sales - MMBTU (in thousands) 6,467 6,983 53,817 50,745
September 30, December 31,
2004 2003
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Common Stock:
Shares outstanding (in millions) 194.7 162.9
Book value per share $29.95 $26.73
Capitalization Ratios (a):
Common equity 49.1% 47.5%
Preferred stock 1.8% 2.0%
Debt, net of cash 49.1% 50.5%
(a) Includes estimated impact of Illinois Power acquisition.