-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ol0jMXtbGO7mwTCXYyOwLPiejBkM8diZLfUXzmwq2EGt3aSYu/EIdA1iNTL+Lokk 0iudG8cfxtzCV/ZjKoESEg== 0000950124-01-001827.txt : 20010402 0000950124-01-001827.hdr.sgml : 20010402 ACCESSION NUMBER: 0000950124-01-001827 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMEREN CORP CENTRAL INDEX KEY: 0001002910 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 431723446 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-14756 FILM NUMBER: 1585848 BUSINESS ADDRESS: STREET 1: 1901 CHOUTEAU AVE STREET 2: MC 1370 CITY: ST LOUIS STATE: MO ZIP: 63166-6149 BUSINESS PHONE: 431723446 MAIL ADDRESS: STREET 1: 1901 CHOUTEAU AVE STREET 2: MC 1370 CITY: ST LOUIS STATE: MO ZIP: 63103 10-K405 1 c61193e10-k405.txt FORM 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR ( ) 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 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of each class Name of each exchange on which registered ------------------- ----------------------------------------- Common Stock, $ .01 par value New York Stock Exchange 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 8, 2001, based on closing prices most recently available as reported in The Wall Street Journal: $5,682,092,281. Shares of Common Stock, $ .01 par value, outstanding as of March 8, 2001: 137,215,462 shares. DOCUMENTS INCORPORATED BY REFERENCES. Portions of the registrant's 2000 Annual Report to Stockholders (the "2000 Annual Report") are incorporated by reference into Parts I, II and IV. Portions of the registrant's definitive proxy statement for the 2001 annual meeting are incorporated by reference into Part III. 2 TABLE OF CONTENTS PART I PAGE Item 1 - Business General..........................................................1 Capital Program and Financing....................................2 Rates............................................................3 Fuel Supply for Electric Generating Facilities...................3 Regulation.......................................................4 Industry Issues..................................................7 Operating Statistics(1)..........................................7 Item 2 - Properties.........................................................7 Item 3 - Legal Proceedings..................................................9 Item 4 - Submission of Matters to a Vote of Security Holders(2) Executive Officers of the Company (Item 401(b) of Regulation S-K).............10 PART II Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters(1).......................................12 Item 6 - Selected Financial Data(1) .......................................13 Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations(1).................................13 Item 7A - Quantitative and Qualitative Disclosures about Market Risk(1).....13 Item 8 - Financial Statements and Supplementary Data(1)....................13 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)............14 Item 11 - Executive Compensation(1)........................................14 Item 12 - Security Ownership of Certain Beneficial Owners and Management(1)...........................................14 Item 13 - Certain Relationships and Related Transactions(1)................14 PART IV Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K..14 SIGNATURES .................................................................18 EXHIBITS .................................................................19 - -------- (1) Incorporated herein by reference. (2) Not applicable and not included herein. 3 PART I ITEM 1. BUSINESS. GENERAL The Registrant, Ameren Corporation (Ameren or 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 (AmerenUE) combined with the result that the common shareholders of CIPSCO and AmerenUE became the common shareholders of the Company, and the Company became the owner of 100% of the common stock of AmerenUE and CIPSCO's operating subsidiaries, Central Illinois Public Service Company (AmerenCIPS) and CIPSCO Investment Company (the Merger). For additional information about the Merger, see "Overview" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Notes 1 and 2 to the "Notes to Consolidated Financial Statements" on Pages 15, 30, and 31, respectively, of the 2000 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. Dividends on Ameren's Common Stock are dependent on distributions to be made to it by its subsidiaries. Ameren's primary operating subsidiaries are AmerenCIPS, AmerenUE and AmerenEnergy Generating Company (Generating Company), which are engaged principally in the generation, transmission, distribution and sale of electric energy and the purchase, distribution, transportation and sale of natural gas. AmerenCIPS, a first tier subsidiary, is an Illinois corporation organized in 1902. It supplies electric and gas utility service to territories in central and southern Illinois having an estimated population of 820,000 within an area of approximately 20,000 square miles. AmerenCIPS supplies electric service to about 325,000 customers and natural gas service to about 175,000 customers. AmerenUE, also a first tier subsidiary, 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. AmerenUE supplies electric service to about 1.1 million customers and natural gas service to about 125,000 customers. Generating Company, a wholly owned nonregulated electric generating subsidiary of AmerenEnergy Resources Company, was incorporated in Illinois in March 2000 in conjunction with the Illinois Electric Service Customer Choice and Rate Relief Law of 1997 (the Illinois Law). This law provides for electric utility restructuring and introduces competition into the supply of electric energy at retail in Illinois. Generating Company commenced operation on May 1, 2000 when AmerenCIPS transferred all of its generating assets to it at net book value, consisting of the generating facilities described below under "Item 2. Properties", all related fuel, supply, transportation, maintenance and labor agreements, approximately 45% of AmerenCIPS' employees, and some other related rights, assets and liabilities. For additional information on the Illinois Law, its impact on the Company, and the generating assets transfer, see "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 20 and Notes 1 and 2 to the "Notes to Consolidated Financial Statements" on Pages 30 and 31, respectively, of the 2000 Annual Report pages incorporated herein by reference. The 2000 Annual Reports on Form 10-K for AmerenCIPS and AmerenUE are available from the Company upon request. On a consolidated basis, 91.4% of the Company's 2000 operating revenues were derived from the sale of electric energy, 8.4% came from the sale of natural gas, and .2% came from other sources. Consolidated electric operating revenues as a percentage of total operating revenues were 93.3% in the years 1999 and 1998. 1 4 The Company, directly or indirectly, also owns all of the common stock of the following principal subsidiary companies: (a) CIPSCO Investment Company, a nonregulated 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 and all of its subsidiaries; (c) AmerenEnergy, Inc., a Missouri corporation which primarily serves as an energy trading and marketing agent for AmerenUE and Generating Company and provides a range of energy and risk management services to targeted customers; (d) Ameren Development Company, a nonregulated holding company incorporated in Missouri encompassing Ameren's nonregulated products and services; and (e) AmerenEnergy Resources Company (until March 2000, known as Ameren Intermediate Holding Co., Inc.), a nonregulated Illinois holding company for Generating Company and its marketing affiliate (AmerenEnergy Marketing Company) and for AmerenEnergy Fuels and Services Company which manages coal, natural gas and fuel oil purchases for the Ameren companies on a centralized basis. In addition, through AmerenCIPS and AmerenUE, the Company owns 60% of the common stock of Electric Energy, Inc., which owns and/or operates electric generation and transmission facilities in Illinois that supply electric power primarily to a uranium enrichment plant located in Paducah, Kentucky. At December 31, 2000, the Company and its subsidiaries had 7,342 employees. For information on labor agreements and other labor matters, see Note 12 to the "Notes to Consolidated Financial Statements" on Page 41 of the 2000 Annual Report pages incorporated herein by reference. For additional information regarding the Company's business operations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 15-24 and the Consolidated Financial Information on Pages 25-48 of the 2000 Annual Report pages incorporated herein by reference. CAPITAL PROGRAM AND FINANCING For information on the Company's capital program and financial needs, see "Liquidity and Capital Resources" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 18, and Notes 5, 7, 8, and 12 to the "Notes to Consolidated Financial Statements" on Pages 35, 36, and 41, respectively, of the 2000 Annual Report pages incorporated herein by reference. To issue first mortgage bonds and preferred stock, AmerenCIPS and AmerenUE each must comply with earnings tests contained in their respective mortgages and Articles of Incorporation. 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 AmerenCIPS 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 AmerenUE'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. Pursuant to Generating Company's indenture relating to its senior notes issued on November 1, 2000, in order to incur additional indebtedness (other than certain intercompany borrowings and debt assumptions), Generating Company must comply with a senior debt service coverage test and a senior debt to capital test, both after giving effect to the additional indebtedness contemplated. For the senior debt service coverage test, generally, the ratio of Generating Company's earnings before interest, tax, depreciation and amortization to interest and principal payments, if any, on Generating Company's senior indebtedness must be two and one-half times or greater for the most recently ended four fiscal quarters at the time of performing the test. The senior debt to capital test, generally, requires that Generating Company's ratio of senior debt to total capital must not exceed 60% as of the most recently ended fiscal quarter for which financial statements have been prepared. However, notwithstanding the two tests described above, Generating Company may incur such additional indebtedness if each of Moody's Investors Services, Inc. and Standard & Poor's Ratings Services provides a ratings reaffirmation 2 5 after giving effect to the additional indebtedness. See "Liquidity and Capital Resources" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 18 and Note 8 to the "Notes to Consolidated Financial Statements" on Page 36 of the 2000 Annual Report pages incorporated herein by reference for information on Generating Company's senior notes. Generating Company filed a registration statement in March 2001 (File No. 333-56594) to register the senior notes under the Securities Act of 1933, as amended, to permit an exchange offer of the senior notes. RATES For the year 2000, approximately 56%, 23%, and 21% 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. For information on rate matters in these jurisdictions, see "Results of Operations", "Rate Matters" and "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 15 and 20, respectively, and Note 2 to the "Notes to Consolidated Financial Statements" on Page 31 of the 2000 Annual Report pages incorporated herein by reference. Reference is being made to "Rate Matters" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2 (Missouri Electric) to the "Notes to Consolidated Financial Statements" on Page 31 of the 2000 Annual Report pages incorporated herein by reference, for a discussion of the Missouri electric customer credits paid or recorded by the Company under its MoPSC-approved three-year experimental alternative regulation plan covering the period July 1, 1998 through June 30, 2001 (the New Plan) and the status of efforts to extend that plan. In March 2001, the MoPSC approved a stipulation and agreement of parties regarding the credit for the plan year ended June 30, 2000. In total, the Company will pay its Missouri electric customers approximately $30 million in credits. Also on March 8, 2001, the MoPSC, in response to the February 1, 2001 filings of the Company, MoPSC staff and other parties addressing the merits of a plan extension, issued an Order authorizing the MoPSC staff to file an earnings complaint to seek a rate reduction for the Company upon expiration of the New Plan on July 1, 2001, if the MoPSC staff determines such a complaint is warranted. In addition, the Order stated that the New Plan will not be continued beyond the June 30, 2001 expiration date. The Company continues to engage in discussions with the MoPSC staff and other parties in an effort to address issues associated with the expiration of the New Plan, including the development of a new alternative regulation plan. At this time, the Company cannot predict the outcome of these discussions or the timing or amount of any future rate reductions. FUEL SUPPLY FOR ELECTRIC GENERATING FACILITIES
COST OF FUELS YEAR - ------------- --------------------------------------------------------------------------- 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- AMERENUE Per Million BTU - Coal 96.004 cents 100.685 cents 100.015 cents 105.600 cents 112.250 cents - Nuclear 40.269 cents 46.552 cents 48.803 cents 47.472 cents 47.499 cents - System 84.213 cents 89.833 cents 90.378 cents 92.816 cents 96.596 cents amerencips/GENERATING COMPANY* Per Million BTU - System (Coal) 123.77 cents 139.700 cents 152.738 cents 163.000 cents 171.000 cents
* On May 1, 2000, all of AmerenCIPS' electric generating facilities and related fuel supply agreements were transferred to Generating Company (see "General" section above). Since that date, Generating Company has been responsible for fuel costs. Prior to that, fuel costs were the responsibility of AmerenCIPS. 3 6 OIL. The actual and prospective use of such fuel is minimal, and the Company has not experienced and does not expect to experience difficulty in obtaining adequate supplies. GAS. The combustion turbine generator equipment (CTs) which the Company placed into commercial operation in 2000 and the additional CTs that it has committed to purchase are fueled by natural gas or have dual fuel capability. Consequently, the prospective use of natural gas to supply the Company's generating facilities is expected to increase significantly. The Company does not expect to experience difficulty in obtaining adequate supplies to support the new generation facilities. The Company's natural gas procurement strategy is designed to ensure reliable and immediate delivery of natural gas by optimizing transportation and storage options and minimizing cost and price risk by structuring various supply agreements to maintain access to multiple gas pools and supply basins and reducing the impact of price volatility. For additional information on the purchase of CTs and related fuel matters, see "Liquidity and Capital Resources" and "Market Risk Related to Financial Instruments and Commodity Instruments" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 18 and 22, respectively, and Note 12 to the "Notes to Consolidated Financial Statements" on Page 41 of the 2000 Annual Report pages incorporated herein by reference. COAL. Because of uncertainties of supply due to potential work stoppages, delays in coal deliveries, equipment breakdowns and other factors, the Company has a policy of maintaining coal inventory consistent with its expected burn practices. Recently, the Company has experienced some delays in its coal deliveries due to certain transportation and operating constraits in the system. The Company is working closely with the transportation companies and monitoring its operating practices in order to maintain adequate levels of coal inventory for future operating purposes. NUCLEAR. The components of the nuclear fuel cycle required for nuclear generating units are as follows: (1) uranium; (2) conversion of uranium into uranium hexafluoride; (3) enrichment of uranium hexafluoride; (4) conversion of enriched uranium hexafluoride into uranium dioxide and the fabrication into nuclear fuel assemblies; and (5) disposal and/or reprocessing of spent nuclear fuel. The Company has agreements and/or inventories to fulfill its Callaway Nuclear Plant needs for uranium, enrichment, fabrication and conversion services through 2002. 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 refueling at 18-month intervals, and refuelings are presently scheduled for the spring of 2001 and the fall of 2002. Under the Nuclear Waste Policy Act of 1982, the U. S. Department of Energy (DOE) 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. The Company has sufficient storage capacity at the Callaway site until 2020 and has the capability for additional storage capacity through the licensed life of the plant in 2024. The delayed availability of the DOE's disposal facility is not expected to adversely affect the continued operation of Callaway Plant. For additional information on the Company's "Fuel Supply", see "Results of Operations", "Liquidity and Capital Resources", "Market Risk Related to Financial Instruments and Commodity Instruments" and "Effects of Inflation and Changing Prices" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 15, 18, 22 and 24, respectively, and Notes 1, 12 and 13 to the "Notes to Consolidated Financial Statements" on Pages 30, 41 and 43, respectively, of the 2000 Annual Report pages incorporated herein by reference. REGULATION GENERAL MATTERS. As a holding company registered with the Securities and Exchange Commission (SEC) 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, affiliate transactions, financial reporting requirements, the services performed by Ameren Services Company and AmerenEnergy Fuels and Services Company, and the activities of 4 7 certain other subsidiaries. Issuance of short-term and long-term debt and other securities by Ameren and issuance of debt having a maturity of twelve months or less by AmerenCIPS and AmerenUE are subject to approval by the SEC under the PUHCA. Generating Company is certified by the FERC as an "exempt wholesale generator" under the Energy Policy Act of 1992 and as a result is not a "public utility company" under the PUHCA. As an exempt wholesale generator, Generating Company is exempt from most of the provisions of PUHCA that otherwise would apply to it as a subsidiary of a registered holding company. Issuance of securities by Generating Company is not subject to approval by the SEC under the PUHCA. The SEC has no jurisdiction over the sale of electricity by Generating Company to affiliates or non-affiliates. The SEC may impose limitations on Ameren in connection with its financing for the purpose of investing in exempt wholesale generators and foreign utility companies if Ameren's aggregate investment in those activities exceeds 50% of its consolidated retained earnings. At December 31, 2000, Ameren's aggregate investment in those entities was 13% of its consolidated retained earnings. AmerenCIPS and AmerenUE 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. Generating Company is not subject to regulation by the ICC or the MoPSC. AmerenCIPS, AmerenUE and Generating Company are also subject to regulation by the FERC as to rates and charges in connection with the wholesale sale of energy and transmission in interstate commerce, mergers, affiliate transactions, issuance of securities, and certain other matters. Issuance of short-term and long-term debt by Generating Company is subject to approval by the FERC. In many states, including Illinois, companies that sell electricity directly to retail customers under deregulation legislation must be registered or licensed. AmerenEnergy Marketing Company, Generating Company's marketing affiliate, has obtained "alternative retail electricity supplier" status in Illinois and is seeking comparable status in other states where retail competition is developing. For information on regulatory matters in these jurisdictions, including the current status of electric utility restructuring in Illinois and Missouri, see "Rate Matters" and "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 20 and Note 2 to the "Notes to Consolidated Financial Statements" on Page 31 of the 2000 Annual Report pages incorporated herein by reference. Reference is being made to "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 20 and Note 2 (Midwest ISO) to the "Notes to Consolidated Financial Statements" on Page 32 of the 2000 Annual Report pages incorporated herein by reference, for a discussion of Ameren's withdrawal from the electric transmission related Midwest Independent System Operator (Midwest ISO). In February 2001, in a proceeding before the FERC, the Alliance Regional Transmission Organization (Alliance RTO) and the Midwest ISO reached an agreement that enables Ameren to withdraw from the Midwest ISO and to join the Alliance RTO. This settlement agreement remains subject to FERC approval. The Company's withdrawal from the Midwest ISO also remains subject to MoPSC approval. In addition, Ameren's transfer of control and operation of its transmission assets to the Alliance RTO is subject to MoPSC and ICC approvals. At this time, the Company is unable to determine the impact that its withdrawal from the Midwest ISO and its participation in the Alliance RTO will have on its future financial condition, results of operation or liquidity. Operation of the Company'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. The Company'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 5 8 February 28, 2006, and the license for the Taum Sauk Plant expires on June 30, 2010. The Company'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. ENVIRONMENTAL MATTERS. Ameren and its subsidiaries, in certain of their operations, are subject to federal, state and local environmental regulations relating to the safety and health of personnel, the public and the environment, including the identification, generation, storage, handling, transportation, disposal, record keeping, labeling, reporting of and emergency response in connection with hazardous and toxic materials, safety and health standards, and environmental protection requirements, including standards and limitations relating to the discharge of air and water pollutants. Failure to comply with those statutes or regulations could have material adverse effects on Ameren and its subsidiaries, including the imposition of criminal or civil liability by regulatory agencies or civil fines and liability to private parties, and the required expenditure of funds to bring the companies into compliance. These companies are in material compliance with existing regulations. On December 22, 1995, a complaint was filed in the Circuit Court for the Seventh Judicial Circuit, Sangamon County, Illinois against AmerenCIPS and several other defendants. The complaint sought unspecified monetary damages and alleged that, as a result of exposure to carcinogens contained in coal tar at the AmerenCIPS Taylorville manufactured gas plant site, plaintiffs' children had suffered from a rare form of childhood cancer known as "neuroblastoma". In 1998, a jury awarded plaintiffs $3.2 million. In March 2000, the Illinois Appellate Court, on an appeal by AmerenCIPS, upheld the plaintiffs' verdict. In October 2000, the Illinois Supreme Court granted AmerenCIPS' request to review the Illinois Appellate Court's decision. The Company believes that final disposition of this matter will not have a material adverse effect on the financial position, results of operations or liquidity of the Company. On August 24, 2000, Steven and Tina Brannon sued the Company, AmerenCIPS and Generating Company in the Circuit Court of Christian County, Illinois. The suit alleges that AmerenCIPS and others were negligent in the manner in which AmerenCIPS' manufactured gas plant site was remediated in Taylorville, Illinois, therefore, wrongfully causing the death of their son. The Brannon's son was born in 1992, diagnosed with neuroblastoma in 1996, and died in 1998. The remediation occurred in 1987. Plaintiffs seek unspecified compensatory damages in excess of $50,000. The Company believes that the final resolution of this lawsuit will not have a material adverse effect on its financial position, results of operations or liquidity. On August 2, 1996, the Illinois Attorney General filed a complaint with the Illinois Pollution Control Board alleging various violations of wastewater discharge permit conditions and ground water standards at AmerenCIPS' (now Generating Company's) Hutsonville Power Station. The complaint sought monetary penalties and the award of attorney fees. In accordance with the terms of a settlement agreement with the Illinois Environmental Protection Agency and the Illinois Attorney General, Generating Company has constructed a new lined fly ash basin at the Hutsonville Power Station and intends to close the existing unlined basin. The proposed settlement has been presented to the Board for approval. The Company believes that final disposition of this matter will not have a material adverse effect on the financial position, results of operations or liquidity of the Company. For additional discussion of environmental matters, see "Liquidity and Capital Resources" in Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 18 and Note 12 to the "Notes to Consolidated Financial Statements" on Page 41 of the 2000 Annual Report pages incorporated by reference. Reference is being made to these 2000 Annual Report pages for a discussion of regulations issued by the United States Environmental Protection Agency (EPA) in July 1997 revising the National Ambient Air Quality Standards for ozone and particulate matter. The regulations had been remanded back to the EPA for review, and the EPA appealed that decision to the U.S. Supreme Court. On February 27, 2001, the U.S. Supreme Court reversed and remanded the case to the U.S. Court of Appeals for the District of Columbia for further evaluation and opinion. The Supreme Court ruled that Congress, in enacting Clean Air Act provisions that authorized the EPA to determine air quality standards, did not unconstitutionally delegate legislative power to the agency. The Supreme Court 6 9 also rejected industry arguments that the EPA should have considered implementation costs in setting air quality standards. The ruling reaffirms the EPA's authority to establish uniform air quality standards at a level that is sufficient to protect public health. However, the manner in which the EPA proposed to implement the proposed air quality standard for ozone was ruled unlawful and the Supreme Court ordered the remand of the EPA's implementation policy to the agency for further consideration. When the proposed ambient standards are ultimately enacted, such standards will require significant additional reductions in SO2 and NOx emissions from the Company's power plants. At this time, the Company is unable to predict the ultimate impact of these revised air quality standards on its future financial condition, results of operations or liquidity. 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 structure of the industry as a result of changes in federal and state laws, including the formation of unregulated generating entities; 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 "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 20 and Notes 2 and 12 to the "Notes to Consolidated Financial Statements" on Pages 31 and 41, respectively, of the 2000 Annual Report pages incorporated herein by reference. In Missouri, the Company is participating in discussions with the state legislature regarding legislation that would not restructure the electric industry, but would allow utilities to transfer generation assets to an affiliated generating company. In addition, the legislation would allow the State's largest nonresidential customers to choose their electric supplier, among other things. At this time, the Company cannot predict whether any electric industry legislation will be passed, or what the provisions of any such legislation will be. OPERATING STATISTICS The information on Pages 47 and 48 in the Company's 2000 Annual Report is incorporated herein by reference. ITEM 2. PROPERTIES. For information on the Company's principal properties, planned additions or replacements and transfers, see "Liquidity and Capital Resources" and "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 18 and 20, respectively, and Notes 2 and 12 to the "Notes to Consolidated Financial Statements" on Pages 31 and 41, respectively, of the 2000 Annual Report pages incorporated herein by reference. Future plans regarding additional electric generating facilities referred to in the 2000 Annual Report pages are subject to change, including increasing or decreasing planned or installed future generating capacity, based on market conditions, regulatory approvals for additions, the Company's results of operations and financial condition, availability of financing and other factors determined by management. The Company is a member of one of the ten regional electric reliability councils organized for coordinating the planning and operation of the nation's bulk power supply - MAIN (Mid-America Interconnected Network) operating primarily in Wisconsin, Michigan, Illinois and Missouri. The 7 10 Company's bulk power system is operated as an Ameren-wide control area and transmission system under the FERC approved amended joint dispatch agreement between AmerenUE, Generating Company and AmerenCIPS. The amended joint dispatch agreement provides a basis upon which AmerenUE and Generating Company can participate in the coordinated operation of Ameren's transmission facilities with their generating facilities in order to achieve economies consistent with the provision of reliable electric service and an equitable sharing of the benefits and costs of that coordinated operation. Ameren has more than 30 interconnections for transmission service and the exchange of electric energy, directly and through the facilities of others. The following table sets forth information with respect to the Company's generating facilities and capability at the time of the expected 2001 peak.
GROSS KILOWATT ENERGY INSTALLED SOURCE PLANT LOCATION CAPABILITY ------ ----- -------- -------------- Coal* Labadie Franklin County, MO 2,414,000 Rush Island Jefferson County, MO 1,224,000 Newton Newton, IL 1,170,000 Sioux St. Charles County, MO 1,006,000 Meramec St. Louis County, MO 892,000 Coffeen Coffeen, IL 950,000 Meredosia Meredosia, IL 359,000 Hutsonville Hutsonville, IL 161,000 ------------ Total Coal 8,176,000 Nuclear Callaway Callaway County, MO 1,174,000 Hydro Osage Lakeside, MO 212,000 Keokuk Keokuk, IA 126,000 ------------ Total Hydro 338,000 Oil and Grand Tower** Grand Tower, IL 253,000 Natural Venice Venice, IL 368,000 Gas Other Various 1,665,000*** ------------ Total Oil and Natural Gas 2,286,000 Pumped- storage Taum Sauk Reynolds County, MO 440,000 ------------ TOTAL 12,414,000**** ============
* All of the coal plants in Illinois were transferred to Generating Company by AmerenCIPS on May 1, 2000 (see "Item 1. Business - General" above). ** The Grand Tower Plant, which was a coal plant transferred to Generating Company by AmerenCIPS on May 1, 2000, is being repowered with two gas-fired combustion turbine generating units (CTs). One CT with 163,000 gross kilowatt installed capability is scheduled to go into commercial operation before the expected 2001 peak. *** Includes 649,000 of gross kilowatt installed capability of CTs placed into service in 2000 and 450,000 of gross kilowatt installed capability of CTs scheduled for service before the expected 2001 peak (in addition to the Grand Tower CT referred to above). **** Excludes gross kilowatt installed capability of generating facilities owned by Electric Energy, Inc., of which Ameren is a 60% owner. 8 11 As of December 31, 2000, AmerenCIPS owned approximately 1,900 circuit miles of electric transmission lines. AmerenCIPS operates one propane-air plant and 4,800 miles of natural gas transmission and distribution mains. As of that date, AmerenUE owned approximately 3,500 circuit miles of electric transmission lines. AmerenUE operates three propane-air plants and 2,800 miles of gas mains. Other properties of the companies include distribution lines, underground cable, office buildings, warehouses, garages and repair shops. Substantially all of the properties and plant of AmerenCIPS and AmerenUE are subject to the direct first liens of the indentures securing their first mortgage bonds. On May 1, 2000, AmerenCIPS transferred all of its generating facilities and related assets to Generating Company. As a part of this transfer, AmerenCIPS' generating property and plant were released from the lien of the indenture securing its first mortgage bonds and such property and plant are presently unencumbered. For additional information on this asset transfer, see "General" section under "Item 1. Business" herein and "Liquidity and Capital Resources" and "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 18 and 20, respectively, and Note 2 to the "Notes to Consolidated Financial Statements" on Page 31 of the 2000 Annual Report pages incorporated herein by reference. Reference is being made to "Liquidity and Capital Resources" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 18 and Note 2 to the "Notes to Consolidated Financial Statements" on Page 31 of the 2000 Annual Report pages incorporated herein by reference, for a discussion of Ameren's plans to cause AmerenUE's Illinois electric and natural gas utility properties to be transferred to AmerenCIPS. In March 2001, Ameren decided it will no longer pursue those plans and will be taking the necessary action to withdraw its pending requests for regulatory approvals. 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. 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. For additional information on legal and administrative proceedings, see "Regulation" under Item 1 herein and "Liquidity and Capital Resources", "Rate Matters" and "Electric Industry Restructuring" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 18 and 20, respectively, and Notes 2 and 12 to the "Notes to Consolidated Financial Statements" on Pages 31 and 41, respectively, of the 2000 Annual Report pages incorporated herein by reference. -------------------------------- 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. The following factors, in addition to those discussed elsewhere in this report and in subsequent securities filings, could cause results to differ materially from management expectations as suggested by such "forward-looking" statements: the effects of regulatory actions, including changes in regulatory policy; changes in laws and other governmental actions; the impact on the Company of current regulations related to the phasing-in of the opportunity for some customers to choose alternative energy 9 12 suppliers in Illinois; the effects of increased competition in the future due to, among other things, deregulation of certain aspects of the Company's business at both the state and federal levels; the effects of withdrawal from the Midwest ISO and membership in the Alliance RTO; 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 construction, installation and performance; 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; monetary and fiscal policies; future wages and employee benefits costs; and legal and administrative proceedings. INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(B) OF REGULATION S-K:
DATE FIRST ELECTED AGE AT OR APPOINTED TO NAME 12/31/00 PRESENT POSITION PRESENT POSITION ---- -------- ---------------- ---------------- Ameren Corporation Charles W. Mueller 62 Chairman, President and Chief Executive Officer, and Director 12/31/97 Donald E. Brandt 46 Senior Vice President 12/31/97 Warner L. Baxter 39 Vice President 5/1/98 and Controller 12/31/97 Steven R. Sullivan 40 Vice President, General Counsel 7/1/98 and Secretary 9/1/98 Jerre E. Birdsong 46 Treasurer 4/23/96 AmerenUE (Subsidiary) Charles W. Mueller 62 President, 7/1/93 Chief Executive Officer 1/1/94 and Director 6/11/93 Donald E. Brandt 46 Senior Vice President 7/1/88 and Director 4/28/98 Daniel F. Cole 47 Senior Vice President 7/12/99 Garry L. Randolph 52 Senior Vice President 10/16/00 Thomas R. Voss 53 Senior Vice President 6/1/99 Ronald D. Affolter 47 Vice President 10/16/00 Warner L. Baxter 39 Vice President, 5/1/98 Controller and 8/1/96 Director 4/22/99 William J. Carr 63 Vice President 10/1/88 Michael J. Montana 54 Vice President 7/1/88 Charles D. Naslund 48 Vice President 2/1/99 William C. Shores 62 Vice President 7/1/88 Steven R. Sullivan 40 Vice President, General Counsel 7/1/98 and Secretary 9/1/98 Jerre E. Birdsong 46 Treasurer 7/1/93
10 13 INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(B) OF REGULATION S-K:
DATE FIRST ELECTED AGE AT OR APPOINTED TO NAME 12/31/00 PRESENT POSITION PRESENT POSITION ---- -------- ---------------- ---------------- AmerenCIPS (Subsidiary) Gary L. Rainwater 54 President, Chief Executive Officer 1/1/98 and Director 12/2/97 Thomas R. Voss 53 Senior Vice President 6/1/99 Warner L. Baxter 39 Vice President, 4/22/99 Controller and 12/31/97 Director 4/22/99 Michael J. Montana 54 Vice President 4/28/98 Gilbert W. Moorman 57 Vice President 6/1/88 Craig D. Nelson 47 Vice President 4/28/98 Steven R. Sullivan 40 Vice President, General Counsel and Secretary 11/7/98 Jerre E. Birdsong 46 Treasurer 12/31/97 Ameren Services Company (Subsidiary) Charles W. Mueller 62 President, Chief Executive Officer and Director 11/4/97 Paul A. Agathen 53 Senior Vice President 12/31/97 and Director 4/27/99 Donald E. Brandt 46 Senior Vice President 12/31/97 and Director 11/4/97 Daniel F. Cole 47 Senior Vice President 6/1/99 Thomas R. Voss 53 Senior Vice President 6/1/99 Warner L. Baxter 39 Vice President 4/28/98 and Controller 12/31/97 Charles A. Bremer 56 Vice President 12/31/97 William J. Carr 63 Vice President 7/7/99 J. L. Davis 53 Vice President 12/31/97 Jean M. Hannis 53 Vice President 12/31/97 Michael J. Montana 54 Vice President 12/31/97 Michael G. Mueller 37 Vice President 9/18/00 Charles D. Naslund 48 Vice President 5/1/00 Craig D. Nelson 47 Vice President 12/31/97 Gregory L. Nelson 43 Vice President 2/16/99 J. Kay Smith 55 Vice President 7/1/99 Steven R. Sullivan 40 Vice President, General Counsel 7/1/98 and Secretary 9/1/98 David A. Whiteley 44 Vice President 1/1/00 Samuel E. Willis 56 Vice President 12/31/97 Ronald C. Zdellar 56 Vice President 12/31/97 Jerre E. Birdsong 46 Treasurer 12/31/97
11 14 INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(B) OF REGULATION S-K:
DATE FIRST ELECTED AGE AT OR APPOINTED TO NAME 12/31/00 PRESENT POSITION PRESENT POSITION ---- -------- ---------------- ---------------- AmerenEnergy Resources Company (Subsidiary) Gary L. Rainwater 54 President 12/10/99 R. Alan Kelley 48 Vice President 11/13/00 Steven R. Sullivan 40 Vice President, General Counsel and Secretary 9/15/99 Jerre E. Birdsong 46 Treasurer 9/15/99 AmerenEnergy Generating Company (Subsidiary) Gary L. Rainwater 54 President and Director 3/2/00 R. Alan Kelley 48 Senior Vice President 3/2/00 Warner L. Baxter 39 Vice President and Controller 7/5/00 Michael J. Montana 54 Vice President 11/6/00 Robert L. Powers 52 Vice President 7/5/00 Jerry L. Simpson 44 Vice President 3/2/00 Steven R. Sullivan 40 Vice President, General Counsel and Secretary 3/2/00 Jerre E. Birdsong 46 Treasurer 3/2/00 AmerenEnergy Fuels and Services Company (Subsidiary) Gary L. Rainwater 54 President and Director 9/18/00 Warner L. Baxter 39 Vice President and Controller 9/18/00 Michael G. Mueller 37 Vice President 9/18/00 Steven R. Sullivan 40 Vice President, General Counsel and Secretary 9/18/00 Jerre E. Birdsong 46 Treasurer 9/18/00
All officers are elected or appointed annually by the respective Board of Directors of such company following the election of such Board at the annual meetings of stockholders. There are no family relationships between the foregoing officers of the Company or its subsidiaries except that Charles W. Mueller is the father of Michael G. Mueller. Except for Messrs. Gregory L. Nelson and Steven R. Sullivan, each of the above-named executive officers has been employed by the Company or its subsidiaries for more than five years in executive or management positions. Mr. Nelson was previously employed by the law firm of Thelen Reid & Priest LLP. Mr. Sullivan was previously employed by Anheuser Busch Companies, Inc. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. On October 9, 1998, the Company adopted a Shareholder Rights Plan and declared a dividend of one preferred share purchase right (a Right) for each outstanding share of common stock, par value $ .01 per share, of the Company. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $ .01 12 15 per share, of the Company at a price of $180 per one one-hundredth of a share of such Preferred Stock, subject to adjustment. The Rights will become exercisable if someone buys 15 percent or more of the Company's common stock. In addition, if someone buys 15 percent or more of the Company's common stock, each right will entitle its holder (other than that buyer) to purchase a number of shares of the Company's common stock having a market value of twice the Right's $180 exercise price. If the Company is acquired in a merger, each Right will entitle its holder to purchase a number of the acquiring company's common shares having a market value at the time of twice the Right's exercise price. The Rights will expire on October 9, 2008. The Rights do not have voting or dividend rights, and until they become exercisable, have no dilutive effect on the per-share earnings of the Company. The Company has 4 million shares of Preferred Stock initially reserved for issuance upon exercise of the Rights. There is no Junior Participating Preferred Stock issued or outstanding. For additional information on the Shareholder Rights Plan, see Note 6 to the "Notes to Consolidated Financial Statements" on Page 35 of the 2000 Annual Report pages incorporated herein by reference. Also see "Liquidity and Capital Resources" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 18 and Note 8 to the "Notes to Consolidated Financial Statements" on Page 36 of the 2000 Annual Report pages incorporated herein by reference for information on senior notes issued in a private placement on November 1, 2000 by AmerenEnergy Generating Company, a subtier subsidiary of the Company. Additional information required to be reported by this item is included under "Common Stock and Dividend Information" on Page 50 of the 2000 Annual Report and is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA. Information for the 1995-2000 period required to be reported by this item is included on Page 46 of the 2000 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 15 through 24 of the 2000 Annual Report and is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Information required to be reported by this item is included under "Market Risk Related to Financial Instruments and Commodity Instruments" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Page 22 and Notes 4 and 14 to the "Notes to Consolidated Financial Statements" on Pages 35 and 44, respectively, of the 2000 Annual Report and is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements of the Company on Pages 25 through 45, the report thereon of PricewaterhouseCoopers LLP appearing on Page 14 and the Selected Quarterly Information on Page 29 of the 2000 Annual Report are incorporated herein by reference. 13 16 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information concerning directors required to be reported by this item is included under "Item (1): Election of Directors" in the Company's 2001 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 "Executive Compensation" in the Company's 2001 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 2001 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 2001 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference. 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: *
Page From 2000 Annual Report ------------- Consolidated Report of Independent Accountants.................................. 14 Consolidated Statement of Income - Years 2000, 1999, and 1998................... 25 Consolidated Balance Sheet - December 31, 2000 and 1999......................... 26 Consolidated Statement of Cash Flows - Years 2000, 1999, and 1998............... 28 Consolidated Statement of Retained Earnings - Years 2000, 1999, and 1998................................................. 29 Notes to Consolidated Financial Statements...................................... 30 *Incorporated by reference from the indicated pages of the 2000 Annual Report
14 17 2. Financial Statement Schedule: The following schedule, for the years ended December 31, 2000, 1999 and 1998, 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). Pages Herein Report of Independent Accountants on Financial Statement Schedule.................................... 16 Valuation and Qualifying Accounts (Schedule II).......... 17 3. Exhibits: See EXHIBITS beginning on Page 19. (b) Reports on Form 8-K. The Company filed a report on Form 8-K dated January 11, 2001, reporting the recording of a nonrecurring charge in the fourth quarter of 2000 as a result of its decision to withdraw from the Midwest ISO. 15 18 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Ameren Corporation Our audits of the consolidated financial statements referred to in our report dated February 5, 2001 appearing in the 2000 Annual Report to Shareholders of Ameren Corporation (which report and consolidated 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 consolidated financial statements. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP St. Louis, Missouri February 5, 2001 16 19 AMEREN CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
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 ----------- --------- -------- -------------- ---------- ------ (Note) Year ended December 31, 2000 Reserves deducted in the balance sheet from assets to which they apply: Allowance for doubtful accounts $7,136,340 $11,540,000 $10,648,306 $8,028,034 ========== =========== =========== ========== Year ended December 31, 1999 Reserves deducted in the balance sheet from assets to which they apply: Allowance for doubtful accounts $8,392,655 $12,240,000 $13,496,315 $7,136,340 ========== =========== =========== ========== Year ended December 31, 1998 Reserves deducted in the balance sheet from assets to which they apply: Allowance for doubtful accounts $4,845,328 $21,167,000 $17,619,673 $8,392,655 ========== =========== =========== ==========
Note: Uncollectible accounts charged off, less recoveries. 17 20 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, 2001 By /s/ Steven R. Sullivan --------------------------- ---------------------------------------- (Steven R. Sullivan, 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. SIGNATURE TITLE /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 Officer) DONALD E. BRANDT /s/ Warner L. Baxter Vice President and Controller - ---------------------------------- (Principal Accounting Officer) WARNER L. BAXTER /s/ William E. Cornelius - ---------------------------------- WILLIAM E. CORNELIUS, Director /s/ Clifford L. Greenwalt /s/ Hanne M. Merriman - ---------------------------------- ------------------------------------------ CLIFFORD L. GREENWALT, Director HANNE M. MERRIMAN, Director /s/ Thomas A. Hays /s/ Paul L. Miller, Jr. - ---------------------------------- ------------------------------------------ THOMAS A. HAYS, Director PAUL L. MILLER, JR., Director /s/ Richard A. Liddy /s/ Robert H. Quenon - ---------------------------------- ------------------------------------------ RICHARD A. LIDDY, Director ROBERT H. QUENON, Director /s/ Gordon R. Lohman /s/ Harvey Saligman - ---------------------------------- ------------------------------------------ GORDON R. LOHMAN, Director HARVEY SALIGMAN, Director /s/ Richard A. Lumpkin /s/ Janet McAfee Weakley - ---------------------------------- ------------------------------------------ RICHARD A. LUMPKIN, Director JANET McAFEE WEAKLEY, Director /s/ John Peters MacCarthy /s/ James W. Wogsland - ---------------------------------- ------------------------------------------ JOHN PETERS MacCARTHY, Director JAMES W. WOGSLAND, Director By /s/ Steven R. Sullivan March 30, 2001 -------------------------------------- (Steven R. Sullivan, Attorney-in Fact) 18 21 EXHIBITS EXHIBITS FILED HEREWITH EXHIBIT NO. DESCRIPTION 10.1 - Ameren Corporation's (the Company) Deferred Compensation Plan for Members of the Ameren Leadership Team as amended and restated effective January 1, 2001. 10.2 - The Company's Executive Incentive Compensation Program Elective Deferral Provisions for Members of the Ameren Leadership Team as amended and restated effective January 1, 2001. 13 - Those pages of the 2000 Annual Report incorporated herein by reference. 21 - Subsidiaries of the Company. 23 - Consent of Independent Accountants. 24 - Powers of Attorney. EXHIBITS INCORPORATED BY REFERENCE The following exhibits heretofore have been filed with the Securities and Exchange Commission (SEC) 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. EXHIBIT NO. DESCRIPTION 2 - Agreement and Plan of Merger, dated as of August 11, 1995, by and among the Company, CIPSCO Incorporated, Union Electric Company d/b/a AmerenUE (AmerenUE), and Arch Merger Inc. (June 30, 1995 Form 10-Q/A (Amendment No. 1), Exhibit 2(a)). 3.1(i) - Restated Articles of Incorporation of the Company (File No. 33-64165, Annex F). 3.2(i) - Certificate of Amendment to the Restated Articles of Incorporation filed with the Secretary of State of the State of Missouri on December 14, 1998 (1998 Form 10-K, Exhibit 3(i)). 3.3(ii) - By-Laws of the Company as amended to December 31, 1997 (1997 Form 10-K, Exhibit 3(ii)). 4.1 - Indenture of Mortgage and Deed of Trust of AmerenUE dated June 15, 1937, as amended May 1, 1941, and Second Supplemental Indenture dated May 1, 1941 (File No. 2-4940, Exhibit B-1). 19 22 EXHIBIT NO. DESCRIPTION 4.2 - Supplemental Indentures to the AmerenUE Mortgage
DATED AS OF FILE REFERENCE EXHIBIT NO. ----------- -------------- ----------- March 1, 1967 2-58274 2.9 April 1, 1971 AmerenUE Form 8-K, April 1971 6 February 1, 1974 AmerenUE Form 8-K, February 1974 3 July 7, 1980 2-69821 4.6 May 1, 1990 AmerenUE Form 10-K, 1990 4.6 December 1, 1991 33-45008 4.4 December 4, 1991 33-45008 4.5 January 1, 1992 AmerenUE Form 10-K, 1991 4.6 October 1, 1992 AmerenUE Form 10-K, 1992 4.6 December 1, 1992 AmerenUE Form 10-K, 1992 4.7 February 1, 1993 AmerenUE Form 10-K, 1992 4.8 May 1, 1993 AmerenUE Form 10-K, 1993 4.6 August 1, 1993 AmerenUE Form 10-K, 1993 4.7 October 1, 1993 AmerenUE Form 10-K, 1993 4.8 January 1, 1994 AmerenUE Form 10-K, 1993 4.9 December 1, 1996 AmerenUE Form 10-K, 1996 4.36 February 1, 2000 AmerenUE Form 10-K, 2000 4.1
4.3 - Indenture of Mortgage or Deed of Trust dated October 1, 1941, from Central Illinois Public Service Company d/b/a AmerenCIPS (AmerenCIPS) to Continental Illinois National Bank and Trust Company of Chicago and Edmond B. Stofft, as Trustees (Exhibit 2.01 in File No. 2-60232). 4.4 - Supplemental Indentures dated, respectively September 1, 1947, January 1, 1949, February 1, 1952, September 1, 1952, June 1, 1954, February 1, 1958, January 1, 1959, May 1, 1963, May 1, 1964, June 1, 1965, May 1, 1967, April 1, 1970, April 1, 1971, September 1, 1971, May 1, 1972, December 1, 1973, March 1, 1974, April 1, 1975, October 1, 1976, November 1, 1976, October 1, 1978, August 1, 1979, February 1, 1980, February 1, 1986, May 15, 1992, July 1, 1992, September 15, 1992, April 1, 1993, and June 1, 1995 between AmerenCIPS and the Trustees under the Indenture of Mortgage or Deed of Trust referred to above (Amended Exhibit 7(b) in File No. 2-7341; Second Amended Exhibit 7.03 in File No. 2-7795; Second Amended Exhibit 4.07 in File No. 2-9353; Amended Exhibit 4.05 in File No. 2-9802; Amended Exhibit 4.02 in File No. 2-10944; Amended Exhibit 2.02 in File No. 2-13866; Amended Exhibit 2.02 in File No. 2-14656; Amended Exhibit 2.02 in File No.2-21345; Amended Exhibit 2.02 in File No. 2-22326; Amended Exhibit 2.02 in File No. 2-23569; Amended Exhibit 2.02 in File No. 2-26284; Amended Exhibit 2.02 in File No. 2-36388; Amended Exhibit 2.02 in File No. 2-39587; Amended Exhibit 2.02 in File No. 2-41468; Amended Exhibit 2.02 in File No. 2-43912; Exhibit 2.03 in File No. 2-60232; Amended Exhibit 2.02 in File No. 2-50146; Amended Exhibit 2.02 in File No. 2-52886; Second Amended Exhibit 2.04 in File No. 2-57141; Amended Exhibit 2.04 in File No. 2-57557; Amended Exhibit 2.06 in File No. 2-62564; Exhibit 2.02(a) in File No. 2-65914; Amended Exhibit 2.02(a) in File No. 2-66380; and Amended Exhibit 4.02 in File No. 33-3188; Exhibit 4.02 to AmerenCIPS Form 8-K dated May 15, 1992; Exhibit 4.02 to AmerenCIPS Form 8-K dated July 1, 1992; Exhibit 4.02 to AmerenCIPS Form 8-K dated September 15, 1992; Exhibit 4.02 to AmerenCIPS Form 8-K dated March 30, 1993; Exhibit 4.03 to AmerenCIPS Form 8-K dated June 5, 1995; Exhibit 4.03 to AmerenCIPS Form 8-K dated March 15, 1997; Exhibit 4.03 to AmerenCIPS Form 8-K dated June 1, 1997; and Exhibit 4.02, Post-Effective Amendment No. 1 in File No. 333-18473.) 20 23 EXHIBIT NO. DESCRIPTION 4.5 - Agreement, dated as of October 9, 1998, between the Company and First Chicago Trust Company of New York, as Rights Agent, which includes the form of Certificate of Designation of the Preferred Shares as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights as Exhibit C (October 14, 1998 Form 8-K, Exhibit 4). 4.6 - Indenture dated as of December 1, 1998 from AmerenCIPS to the Bank of New York relating to AmerenCIPS' Senior Notes, 5.375% due 2008 and 6.125% due 2028 (Exhibit 4.03, Post-Effective Amendment No. 1 to File No. 333-18473). 4.7 - Indenture dated as of November 1, 2000 from AmerenEnergy Generating Company (Generating Company) to The Bank of New York, as Trustee, relating to the issuance of senior notes (File No. 333-56594, Exhibit 4.1). 4.8 - First Supplemental Indenture dated as of November 1, 2000 to Indenture dated as of November 1, 2000 from Generating Company to The Bank of New York, as Trustee, relating to Generating Company's 7.75% Senior Notes, Series A due 2005 and 8.35% Senior Notes, Series B due 2010 (File No. 333-56594, Exhibit 4.2). 4.9 - Registration Rights Agreement, dated as of November 1, 2000, among Generating Company and the Initial Purchasers relating to Generating Company's 7.75% Senior Notes, Series A due 2005 and 8.35% Senior Notes, Series B due 2010 (File No. 333-56594, Exhibit 4.5). 10.3 - The Company's Long-Term Incentive Plan of 1998 (1998 Form 10-K, Exhibit 10.1). 10.4 - The Company's Change of Control Severance Plan (1998 Form 10-K, Exhibit 10.2). 10.5 - The Company's Deferred Compensation Plan for Members of the Board of Directors (1998 Form 10-K, Exhibit 10.4). 10.6 - Asset Purchase Agreement between Generating Company and AmerenCIPS (June 30, 2000 AmerenCIPS Form 10-Q, Exhibit 10). 10.7 - Amended Electric Power Supply Agreement between Generating Company and AmerenEnergy Marketing Company (Marketing Co.) (File No. 333-56594, Exhibit 10.2). 10.8 - Electric Power Supply Agreement between Marketing Co. and AmerenCIPS (File No. 333-56594, Exhibit 10.3). 10.9 - Amended Joint Dispatch Agreement among Generating Company, AmerenCIPS and AmerenUE (File No. 333-56594, Exhibit 10.4). 21 24 EXHIBITS AVAILABLE UPON REQUEST The following instruments defining the rights of holders of certain unregistered long-term debt of AmerenCIPS and AmerenUE have not been filed with the SEC but will be furnished upon request. - Loan Agreement dated January 1, 1993, between AmerenCIPS and Illinois Development Finance Authority (IDFA) in connection with IDFA's $35,000,000, 6-3/8% Pollution Control Revenue Refunding Bonds (Central Illinois Public Service Company Project) 1993 Series A, due January 1, 2028. - Loan Agreement dated June 1, 1993, between AmerenCIPS and IDFA in connection with IDFA's $17,500,000 Pollution Control Revenue Refunding Bonds, 1993 Series B-1 due June 1, 2028 and $17,500,000 Pollution Control Revenue Refunding Bonds, 1993 Series B-2 due June 1, 2028. - Loan Agreement dated August 15, 1993, between AmerenCIPS and IDFA in connection with IDFA's $35,000,000 Pollution Control Revenue Refunding Bonds, 1993 Series C-1 due August 15, 2026 and $25,000,000 Pollution Control Revenue Refunding Bonds, 1993 Series C-2 due August 15, 2026. - Loan Agreement dated March 1, 2000, between AmerenCIPS and IDFA in connection with the IDFA's $51,100,000 Pollution Control Revenue Refunding Bonds (AmerenCIPS Project) Series 2000A due March 1, 2014. - Loan Agreement dated March 1, 2000, between AmerenUE and the State Environmental Improvement and Energy Resources Authority of the State of Missouri (EIERA) in connection with the EIERA's $186,500,000 Environmental Improvement Revenue Refunding Bonds (AmerenUE Project) ($63,500,000 Series 2000A, $63,000,000 Series 2000B, and $60,000,000 Series 2000C) due March 1, 2035. Note: Reports of Union Electric Company on Forms 8-K, 10-Q and 10-K are on file with the SEC under File Number 1-2967. Reports of Central Illinois Public Service Company on Forms 8-K, 10-Q and Form 10-K are on file with the SEC under File Number 1-3672. Information regarding AmerenEnergy Generating Company on Form S-4 is on file with the SEC under File Number 333-56594. 22 25 EXHIBITS EXHIBITS FILED HEREWITH EXHIBIT NO. DESCRIPTION 10.1 - Ameren Corporation's (the Company) Deferred Compensation Plan for Members of the Ameren Leadership Team as amended and restated effective January 1, 2001. 10.2 - The Company's Executive Incentive Compensation Program Elective Deferral Provisions for Members of the Ameren Leadership Team as amended and restated effective January 1, 2001. 13 - Those pages of the 2000 Annual Report incorporated herein by reference. 21 - Subsidiaries of the Company. 23 - Consent of Independent Accountants. 24 - Powers of Attorney. 23 EX-10.1 2 c61193ex10-1.txt DEFERRED COMPENSATION PLAN 1 EXHIBIT 10.1 [AMEREN CORPORATION LOGO] AMEREN CORPORATION DEFERRED COMPENSATION PLAN (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001) 2 AMEREN CORPORATION DEFERRED COMPENSATION PLAN (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001) 1. PURPOSE AND AMENDMENT The purpose of the Ameren Corporation Deferred Compensation Plan ("Plan") is to provide eligible participants with the opportunity to accumulate capital of up to 30 percent of annual base salary. Participation in the Plan is voluntary. The implementation of the Plan will provide Ameren Corporation and its subsidiaries ("Ameren") with the means to attract and retain key employees by offering a competitive salary deferral program. The Plan is administered by a committee of officers ("Committee") of Ameren Services Company ("Company") who have been appointed by the Chief Executive Officer of Ameren. Effective January 1, 2001, Section 9 of the Plan is amended to provide for additional distribution options at retirement. 2. DEFINITIONS Certain words and phrases are defined when first used in later paragraphs of the Plan. In addition, the following words and phrases when used herein, unless the context clearly requires otherwise, shall have the following respective meanings: A. Ameren: As used herein shall mean Ameren Corporation and its subsidiaries. B. Board: The Board of Directors of Ameren Corporation. C. Company: As used herein shall mean Ameren Services Company, as agent for Ameren and as administrator of the Plan. D. Deferral Account: Book entries reflecting each Participant's Deferred Amounts and Interest credited thereon pursuant to the provisions of Section 7. A separate Deferral Account shall be maintained for each Deferral Commitment commenced hereunder. E. Deferral Commitment: The sum of the Salary deferrals to which the Participant obligates himself pursuant to the provisions of Section 4. 1 3 Deferred Compensation Plan (Continued) F. Deferred Amount: The amount of Salary which a Participant elects to defer pursuant to the provisions of the Plan. G. Effective Date: January 1, 1986, as restated and amended from time to time. H. Interest: The amount of interest which a Participant shall be deemed to earn on his Deferred Amounts and which shall be credited to his Deferral Account as determined pursuant to Section 8. I. Participant: Any person eligible to participate in the Plan pursuant to Section 3 who elects or has elected to defer a portion of his salary pursuant to the provisions of the Plan. A Participant who transfers employment to any subsidiary of Ameren Corporation or other business entity in which Ameren Corporation has a ten percent (10%) or greater ownership interest, shall be deemed not to have terminated employment as long as such Participant is an employee of such a subsidiary or business entity. J. Plan: The Ameren Corporation Deferred Compensation Plan, as revised and restated. K. Plan Year: The 12-month period commencing January 1 and ending on December 31, except in the case of the 1986 Plan Year in which case the 5-month period commencing August 1, 1986 and ending on December 31, 1986. L. Retirement Age: Normal Retirement Age under the provisions of the Plan shall be 65 years of age. However, retirement shall be permitted under the provisions of the Plan as early as 55 years of age. M. Salary: The annual base pay of a Participant, exclusive of any income from commissions, benefits, allowances, and/or other incentive plans paid by Ameren. 3. ELIGIBILITY The Human Resources Committee of the Ameren Corporation Board of Directors shall have sole authority to designate persons eligible to participate in the Plan; however, any member who, as a Participant in the Plan, accelerated a prior Deferral Commitment pursuant to the provisions of Section 4 shall not be eligible to commence any further Deferral Commitments. Any individual who is eligible to participate in the Plan may become a Participant by commencing a Deferral Commitment. 2 4 Deferred Compensation Plan (Continued) 4. COMMENCING A DEFERRAL COMMITMENT A Participant may commence a Deferral Commitment by making an election to defer a percentage of Salary up to a maximum of 30 percent (10 percent for Deferral Commitments commencing prior to January 1, 1991; 20 percent for Deferral Commitments commencing on or after January 1, 1991 and prior to January 1, 1995). The amount of Salary deferred may not reduce the amount of the Participant's non-deferred Salary for the year of deferral below the maximum level of "Federal Insurance Contributions Act taxable wages" (i.e., the FICA wage base). The annual dollar value of the percentage elected by the Participant must be at least $3,500. Except as described below with respect to accelerating a Deferral Commitment, during the term of a Deferral Commitment the deferral percentage elected by the Participant shall not be increased or decreased. (The dollar value of the percentage elected by the Participant will change during the term of Deferral Commitment in response to adjustments to the Participant's Salary.) The term of a normal Deferral Commitment shall be four or fewer years (except in the case of a Deferral Commitment commenced on August 1, 1986 in which case the term shall be four years and five months). Beginning on January 1, 1991, the Plan shall consist of separate and non-overlapping four-year segments, each made up of four consecutive calendar years, with all Deferral Commitments commenced on any January 1 therein terminating on the last day of such four-year segment for all purposes hereunder. The Committee may, in its absolute and sole discretion, authorize a term of less than four years. In the event that a Participant has fewer years remaining before his retirement than remain in the then current four-year segment described above, the Committee may, at the request of the Participant and in its sole discretion, agree at any time prior to the completion of a Deferral Commitment to waive the 30 percent maximum deferral percentage and the FICA wage base limitations, on terms determined by the Committee, so that such Participant may accelerate his Deferral Commitment into the period remaining before retirement. The Participant's Deferred Amounts shall be credited to his Deferral Account by no later than the end of the month in which such amounts would, but for such deferral, be payable to the Participant. 5. MULTIPLE DEFERRAL COMMITMENTS DURING A FOUR-YEAR SEGMENT In the event that a Participant has, pursuant to the provisions of this Section and Section 4, commenced one or more Deferral Commitments during a four-year segment wherein his Deferral Commitments are for less than the maximum deferral percentage of Salary otherwise permitted hereunder, the Participant may commence another Deferral Commitment effective on any subsequent January 1 3 5 Deferred Compensation Plan (Continued) prior to the end of the then current four-year segment by electing to defer an additional percentage of his prospective Salary, provided the combined Salary deferral percentages of the Participant's Deferral Commitments in effect during such four-year segment do not exceed the maximum deferral percentage of Salary, and further provided that each additional Deferral Commitment independently satisfies the requirements of Section 4. 6. TERMS OF DEFERRAL ELECTION A Participant's written election to defer Salary shall indicate the percentage amount of Salary which the Participant is electing to defer under the Plan and the method of distribution of such amounts. Such election form shall be filed by the Participant with the Company's Vice President, Human Resources, by no later than the last date specified for such filing. Such election shall be effective on the first day of the next Plan Year. 7. PARTICIPANT DEFERRAL ACCOUNT There shall be established a Deferral Account in the name of each Participant who elects to defer Salary by commencing a Deferral Commitment under the provisions of the Plan. A separate Deferral Account will be maintained for each Deferral Commitment commenced by each Participant. The Deferral Account shall reflect the value of the Participant's Deferred Amounts plus Interest credited thereon with respect to the specific Deferral Commitment. The records for each Deferral Account maintained for the Participant shall be available for inspection by the Participant at reasonable times, and the Company shall furnish the Participant on or before the first day of March of each year a statement indicating the aggregate amount credited to each of the Participant's Deferral Accounts through the last day of the preceding Plan Year and the value of each such Deferral Account on such date. 8. INTEREST ON DEFERRED AMOUNTS Interest calculated at the rate or rates, as hereinafter described, shall accrue from the date Salary deferrals are credited to the Participant's Deferral Account and shall be compounded annually and credited to the Participant's Deferral Account as of the last business day of each Plan Year for which the Participant has a Deferral Account balance. While the Participant is employed by Ameren (except where the Participant has attained 65 years of age) the Participant's Deferral Account balance shall earn Interest at the "Plan Interest Rate." After retirement (and when the Participant remains employed by Ameren after having attained 65 years of age) or following the death of the Participant, the Participant's Deferral Account balance shall earn interest at the "Base Interest Rate." 4 6 Deferred Compensation Plan (Continued) The "Plan Interest Rate" for any Plan Year shall be 150 percent of the average Mergent's Seasoned AAA Corporate Bond Yield Index ("Mergent's Index", formerly called "Moody's Index") for the previous calendar year. Interests rates are calculated annually as of the first day of the Plan Year. (For a Deferral Commitment commenced on August 1, 1986, consult the plan document then in effect.) The "Base Interest Rate" for any Plan Year shall be equal to the average Mergent's Index for the previous calendar year. 9. DISTRIBUTION AT RETIREMENT At the time that a Participant makes an election to defer Salary under the Plan, he shall select a method for the distribution of the balance of that Deferral Account. Upon retirement, the balance of each of the Participant's Deferral Account(s) shall be distributed to the Participant according to the pay-out method selected by the Participant. A Participant may elect to receive his account distribution as a lump sum or in substantially equal installments over a set period up to 15 years. Under either payment method, a Participant can elect to commence distribution at the time of retirement or defer such payment(s) until March 1 of the calendar year following retirement. (For example, a Participant who retires effective June 1, 2001, may defer payment from his Deferral Account(s) until March 1, 2002.) DISTRIBUTION ALTERNATIVES 1. The balance of the Participant's Deferral Account to be distributed in a single lump sum, payable the first day of the first month following the month in which the Participant retires. 2. The balance of the Participant's Deferral Account to be distributed in a single lump sum, payable on March 1 of the calendar year following retirement. 3. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 5 years commencing at retirement. 4. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 5 years commencing on March 1 of the calendar year following retirement. 5. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 10 years commencing at retirement. 5 7 Deferred Compensation Plan (Continued) 6. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 10 years commencing on March 1 of the calendar year following retirement. 7. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 15 years commencing at retirement. 8. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 15 years commencing on March 1 of the calendar year following retirement. Installment payments (Alternatives 3 through 8), may be received either monthly or on an annual basis. The deferral of distribution(s) to the calendar year following retirement (Alternatives 2, 4, 6 and 8) is limited to Participants who retire from Ameren. The distribution options available in circumstances where the Participant dies, either before or after retirement, or is placed on disability status prior to retirement are described in Sections 13 and 14. The deferral of payments to the calendar year following retirement (Alternatives 2, 4, 6 and 8) is not permitted in cases of death or long term disability. With respect to Deferral Commitments commenced prior to January 1, 1991, a Participant may choose to have the balance of said Deferral Account(s) distributed in substantially equal installments over the period commencing at such Participant's retirement and continuing until the Participant attains 80 years of age, provided such Participant selected this distribution option prior to October 12, 1990. Except as described in the preceding sentence, a Participant's selection of a method of distribution may be changed by the Participant as frequently as he chooses up to one year prior to the date when distributions from the Participant's Deferral Account are to commence. A change in the method of distribution must be made on a form provided by the Company which must be filed by the Participant with the Company's Vice President, Human Resources. 10. REVOCATION OF DEFERRAL ELECTION A Participant may revoke his election to defer Salary at any time prior to or after completing a Deferral Commitment. Such revocation must be made in writing and filed with the Company's Vice President, Human Resources. When the Participant revokes his deferral election, all amounts deferred pursuant to that Deferral Commitment will be distributed to the Participant in a single sum no later than 30 days after the date the notice of revocation is filed. All Interest credited to the Participant's corresponding Deferral Account will be forfeited, and the 6 8 Deferred Compensation Plan (Continued) Participant will not be permitted to commence another Deferral Commitment any sooner than one year after the next January 1. 11. RETIREMENT OR TERMINATION PRIOR TO COMPLETION OF DEFERRAL COMMITMENT If a Participant retires or terminates employment prior to completing a Deferral Commitment, all amounts thus far deferred pursuant to that Deferral Commitment will be distributed to the Participant in a single sum no later than 30 days after the date the Participant retires or terminates employment. All interest credited to the Participant's corresponding Deferral Account will be forfeited. A Participant who retires may, in order to avoid the consequences of this Section, complete a Deferral Commitment prior to retirement by accelerating his Deferral Commitment subject to the provisions of Section 4. 12. TERMINATION OF EMPLOYMENT PRIOR TO BECOMING ELIGIBLE FOR RETIREMENT A. General: Except as described in Paragraph B, if a Participant terminates employment after completing one or more Deferral Commitments but prior to becoming eligible for retirement, the balance of the Participant's corresponding Deferral Account(s) shall be distributed in a single sum to the Participant no later than 30 days after the date the Participant terminates employment, except that such balance(s) shall be reduced prior to distribution in order to reflect that all Interest earned on the Participant's Deferral Account(s) shall have been computed using the Base Interest Rate only. Interest representing the increment over the Base Interest Rate which would otherwise have been payable at or after retirement shall be forfeited. B. Change of Control: In the event that a Participant terminates employment from Ameren after completing one or more Deferral Commitments but prior to becoming eligible for retirement and after the occurrence of a Change of Control, the balance of the Participant's Deferral Account(s), including Interest calculated at the Plan Interest Rate, shall be distributed in a single sum to the Participant no later than 30 days after the date the Participant terminates employment. For the purposes of this Paragraph, Change of Control shall mean: 7 9 Deferred Compensation Plan (Continued) 1. the purchase or other acquisition, within the meaning of Section 13(d) of the Securities Exchange Act of 1934, in one or a series of transactions by a person or a group of persons acting in concert, of beneficial ownership in more than 25% of the then outstanding voting stock of Ameren Corporation; 2. the receipt of proxies for the election of directors of Ameren Corporation in opposition to the Board's slate of nominees which proxies aggregate more than 40% of the then outstanding voting stock of Ameren Corporation; or 3. the sale or issuance of such number of shares of voting stock of Ameren Corporation for consideration other than cash in any transaction or series of related transactions which constitute more than 25% of the outstanding voting power of Ameren Corporation after giving effect to such issuance or sale. HISTORICAL NOTE: A Change of Control occurred on December 31, 1997, with the merger of Union Electric Company and CIPSCO to form Ameren Corporation. Participants in the Plan as of that date vested in their completed Deferral Account(s), including interest calculated at the Plan Interest Rate, and will vest in all future Deferral Account(s), with interest calculated at the Plan Interest Rate, when the corresponding Deferral Commitments for such Deferral Account(s) are completed. 13. TOTAL DISABILITY OF PARTICIPANT In the event that it is determined by a duly licensed physician selected by the Company that, because of ill health, accident or other disability, a Participant is no longer able, properly and satisfactorily, to perform his regular duties and responsibilities, and therefore, such Participant has been placed on long term disability ("LTD"), the Company shall commence distribution of the Participant's Deferral Account(s) in accordance with the distribution method selected by the Participant. Where a Participant had elected a deferral option (Section 9, Alternatives 2, 4, 6 and 8), payments will be made in the same form as elected (i.e., lump sum or installment) but will commence no later than 30 days after the Participant's LTD effective date. Under this provision, a Participant on LTD status may receive a distribution from his Deferral Account(s) prior to attaining Retirement Age. 8 10 Deferred Compensation Plan (Continued) 14. DEATH OF PARTICIPANT A. Prior to Retirement: 1. In the event of the Participant's death prior to his retirement, the Company shall commence distribution of the Participant's Deferral Account(s) to the Participant's designated beneficiary(ies) according to the method(s) selected by the Participant pursuant to Section 9. However, where the Participant had chosen a deferral option (Section 9, Alternatives 2, 4, 6 and 8), payment will be made in the same form as elected (i.e., lump sum or installment) but will commence no later than the tenth day of the month following the Participant's death. 2. In addition, for Deferral Commitments commenced prior to January 1, 1995, the following survivor benefits will be payable: The beneficiary(ies) designated by the Participant shall receive from the Company an annual benefit for a period of 10 years, payable in either monthly or annual installments as elected by the beneficiary(ies), equal to one-half of each of the Participant's Deferral Commitments made prior to January 1, 1995 (based on the dollar value of each Deferral Commitment on the date such Deferral Commitment was commenced), except that the benefit payable hereunder shall be calculated by using no more than the first 10 percent of Salary deferred by such Participant. In the event the Participant has designated more than one beneficiary, this additional annual benefit shall be divided among such beneficiaries in the same percentages used to divide and distribute the Participant's Deferral Account(s). (The beneficiary(ies) of a Participant who is receiving or who has received distributions pursuant to either Section 13 or Section 15 is eligible for the benefit described in this paragraph.) In the event a Participant has or had more than one Deferral Commitment in effect at any one time prior to January 1, 1995, for purposes of calculating the additional survivor benefit outlined in the preceding paragraph, all such Deferral Commitments shall be aggregated for the purposes of determining the amount of the benefit payable hereunder with respect to such Deferral Commitments. 9 11 Deferred Compensation Plan (Continued) B. After Retirement: 1. In the event a Participant dies after his retirement but prior to receiving benefits under the Plan, the Company shall commence distribution of the Participant's Deferral Account(s) to the Participant's designated beneficiary(ies). Such payments will be made in the same form as elected (i.e., lump sum or installment) but will commence no later than the tenth day of the month following the Participant's death. Where a Participant who is receiving benefits dies, the Company shall continue to make distributions to the Participant's designated beneficiary(ies) in accordance with the method selected by the Participant. 2. In addition, for Deferral Commitments commenced prior to January 1, 1995, the following survivor benefits will be payable: If the Participant's death occurs within 15 years after his retirement, the Participant's surviving spouse (if any) shall receive an annual benefit for life, payable in either monthly or annual installments, as elected by the surviving spouse, equal to one-half of the annual amount the Participant would have received from each of his Deferral Accounts, based on each of the Participant's Deferral Commitments commenced prior to January 1, 1995, except that the benefit payable hereunder shall be calculated by using no more than the first 10 percent of Salary deferred by such Participant, and assuming he had selected distribution method 7 pursuant to Section 9. (For the purposes of the benefit described in the preceding sentence, the Interest rate which shall be used to calculate the amount of the annual benefit shall be the Base Interest Rate in effect for the year immediately preceding the year of the Participant's death.) In the event a Participant had more than one Deferral Commitment in effect at any one time prior to January 1, 1995, for purposes of calculating the additional survivor benefit outlined in the preceding paragraph, all such Deferral Commitments shall be aggregated for the purposes of determining the amount of the benefit payable hereunder with respect to such Deferral Commitments. 15. HARDSHIP DISTRIBUTION In the event that a Participant (or in the case of the Participant's death, his beneficiary) suffers a Financial Hardship, the Committee may, if it deems advisable in its sole and absolute discretion, distribute on behalf of the Participant, his beneficiary or legal representative, any portion of the Participant's 10 12 Deferred Compensation Plan (Continued) Deferral Account(s), but in no event more than the amount necessary to meet the Financial Hardship. Any such hardship distribution shall be made at such times as the Committee shall determine, and the Participant's Deferral Account(s) shall be reduced by the amount so distributed and/or utilized. Financial Hardship shall mean an unanticipated emergency (as defined by the Internal Revenue Service) caused by an event beyond the control of the Participant or beneficiary which would result in severe financial hardship if early withdrawal were not permitted. 16. WITHDRAWAL PRIOR TO RETIREMENT As of the date which represents the sixth anniversary of the date on which a Participant commenced a Deferral Commitment (provided such Deferral Commitment was commenced prior to January 1, 1991) and on any date thereafter, the Participant may submit a request to withdraw the balance of his corresponding Deferral Account. A request hereunder must be submitted in writing to the Company's Vice President, Human Resources, and it must state the Participant's reason for requesting the withdrawal. The request must be submitted at least one year prior to the date on which the requested withdrawal is to occur. The request may be granted or denied by the Committee in its sole and absolute discretion. In the event that such request is granted, the balance of such Participant's corresponding Deferral Account shall be reduced prior to distribution in order to reflect that all Interest earned thereon shall have been computed using the Base Interest Rate only. Interest representing the increment over the Base Interest Rate which would otherwise have been payable with respect to such Deferral Account at or after retirement shall be forfeited, and the Participant will not be permitted to commence another Deferral Commitment any sooner than one year after the next January 1. Withdrawals which are granted hereunder shall be made in a single lump sum. 17. DESIGNATION OF BENEFICIARY The Participant shall designate in writing, on a form to be furnished by the Company, one or more primary and/or secondary beneficiaries who shall receive distributions otherwise payable to the Participant or as otherwise authorized by the Plan, and such beneficiary designation shall be controlling with respect to all Deferral Accounts such Participant may have pursuant to the provisions of the Plan. The Participant's spouse, if any, must consent in writing to the designation of a primary beneficiary(ies) other than such spouse as the sole primary beneficiary. Subject to the requirement of the preceding sentence, the Participant shall have the right, at any time and for any reason, to submit a revised designation of beneficiary. Such revised designation of beneficiary shall become effective provided it is delivered to the Company's Vice President, Human Resources, prior to the death of such Participant, and it shall supersede all prior designations of beneficiary submitted by the Participant. A beneficiary 11 13 Deferred Compensation Plan (Continued) may be a natural person or an entity (such as a trust or a charitable organization). If no designation of beneficiary has been received by the Company from the Participant prior to his death, or if the beneficiary(ies) designated by the Participant has not survived the Participant or cannot otherwise be located by the Company within a reasonable period of time, distributions shall be made to the person or persons in the first of the following classes of successive preference: 1. The Participant's surviving spouse. 2. The beneficiary(ies) named by the Participant in his most recent Designation of Beneficiary Form filed with the Company pursuant to the terms of the Ameren Group Life Insurance Plan. 3. The Participant's surviving children, equally. 4. The Participant's surviving parents, equally. 5. The Participant's surviving brothers and sisters, equally. 6. The Participant's personal representative(s), executor(s) or administrator(s). 18. PAYMENTS TO MINORS OR INCOMPETENTS Whenever, in the Committee's opinion, a person entitled to receive any payment under the Plan is a minor, is under a legal or other disability or is so incapacitated as to be unable to manage his financial affairs, a distribution may be made to such person or to his legal representative or to a relative or friend of such person for his benefit, or for the benefit of such person in whatever manner the Committee considers advisable. Any payment of a benefit in accordance with the provisions of this Section shall be a complete discharge of any liability for the making of such payment under the provisions of the Plan. 19. ADMINISTRATION Except as specified otherwise in the Plan, the Committee shall have full power and discretion to administer, construe and interpret the Plan. Any authorized action or decision under the provisions of the Plan undertaken by the Committee arising out of, or in connection with the administration, construction, interpretation or effect of the Plan, or recommendations in accordance therewith, or any rules and regulations adopted by the Committee shall be conclusive and 12 14 Deferred Compensation Plan (Continued) binding on all Participants and their beneficiaries and all other persons whosoever. 20. EFFECT ON RETIREMENT PLAN BENEFITS Any reduction in benefits which would otherwise be payable to a Participant pursuant to the provisions of Ameren's retirement plans resulting from his participation in the Plan will be made up by the Company out of general assets of Ameren, as appropriate. 21. MISCELLANEOUS A. Right of Setoff: If, at such time as the Participant becomes entitled to distributions hereunder, the Participant has any debt, obligation or other liability representing an amount owing to Ameren, and if such debt, obligation, or other liability is due and owing at the time that distributions are payable hereunder, the amount owed or owing may be offset against the amount otherwise distributable hereunder. B. No Trust Created: The arrangements hereunder are unfunded for tax purposes and for the purposes of ERISA, Title I. Nothing contained in the Plan, and no action taken pursuant to its provisions shall create, or be construed to create, a trust, escrow of any kind, or a fiduciary relationship between Ameren and the Participant, his designated beneficiary(ies), other beneficiaries of the Participant or any other person. C. Unsecured General Creditor Status: Distributions to the Participant or his designated beneficiary(ies) or any other beneficiary(ies) hereunder shall be made from assets which prior to distribution shall continue, for all purposes, to be a part of the general corporate assets and no person (including Participants) shall have any interest in such assets of Ameren, including without limitation the proceeds of life or other insurance policies, by virtue of the provisions of the Plan. To the extent that any person, including the Participant, acquires a right to receive distributions under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of Ameren and the obligation to pay constitutes a mere promise of Ameren to make payments in the future. D. Recovery of Costs: In the event that the Company purchases an insurance policy or policies insuring the life of a Participant or any other property to allow Ameren to recover the costs of providing deferred compensation in whole or in part, hereunder, neither the Participant, his beneficiary(ies) nor any other person or persons shall have any rights therein whatsoever. Ameren shall be the sole owners and beneficiaries of 13 15 Deferred Compensation Plan (Continued) any such insurance policy and shall possess and may exercise all incidents of ownership therein. E. Protective Provisions: A Participant shall cooperate with the Company by providing all information requested including a medical history. In connection therewith, the Company reserves the right to require that the Participant submit to a physical examination if such examination is deemed to be necessary or appropriate. The costs of all such physical examinations will be paid by the Company. If the Participant refuses to cooperate with the Company, the Company shall have no further obligation to the Participant under the provisions of the Plan. If the Participant makes any material misstatement of information or non-disclosure of medical history, then no benefits shall be payable to the Participant or his beneficiary(ies) over and above actual Salary deferrals. F. No Contract of Employment: Nothing contained herein shall be construed to be a contract of employment for any term of years, nor a conferring upon the Participant the right to continue to be employed in his present capacity, or in any capacity. It is expressly understood that the Plan relates to the payment of deferred compensation for the Participant's services normally distributable after termination of his employment, and the Plan is not in any way intended to be an employment contract. G. Spendthrift Provisions: Neither the Participant, his beneficiary(ies), nor any other person or persons shall have any power or right to sell, alienate, attach, garnish, transfer, assign, anticipate, pledge or otherwise encumber any part or all of a Deferral Account maintained or distributable hereunder. No amounts hereunder shall be subject to seizure by any creditor of the Participant or a beneficiary, beneficiary(ies) or any other person or persons by a proceeding at law or in equity, nor shall such amounts be transferable by operation of law in the event of divorce, legal separation, bankruptcy, insolvency or death of the Participant, his beneficiary(ies), or any other person or persons. Any such attempted assignment or transfer shall be null and void. H. Withholding Taxes: To the extent required by the law in effect at the time that deferrals are made hereunder, the Company shall withhold from non-deferred compensation the payroll taxes required to be withheld by the federal or any state or local government. I. Suspension, Termination and Amendment: The Board of Directors of Ameren Corporation shall have the power to suspend or terminate the Plan in whole or in part at any time, and from time-to-time to extend, modify, amend or revise the Plan in such respects as the Board of Directors by resolution may deem advisable, provided that no such 14 16 Deferred Compensation Plan (Continued) extension, modification, amendment or revision shall deprive a Participant, or any beneficiary(ies) thereof, of any part or all of the Participant's Deferral Account. J. Conflicts: Any conflict in the language or terms or interpretation of the language or terms of the Plan between this Plan document and any other document which purports to describe the rights, benefits, duties or obligations of any Participant, Ameren or any other person or entity shall be resolved in favor of this Plan document. K. Validity: In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. L. Captions: The captions of the articles and sections of the Plan are for convenience only and shall not control nor affect the meaning or construction of any of its provisions. M. Gender and Plurals: Wherever used in the Plan, words in the masculine gender shall include masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular. N. Notice: Any election, beneficiary designation, notice, consent or demand required or permitted to be given under the provisions of the Plan shall be in writing and shall be signed by the Participant. If such election, beneficiary designation, notice, consent or demand is mailed by a Participant, it shall be sent by United States Certified Mail, postage prepaid, and addressed to the Vice President, Human Resources, Ameren Services Company, P. O. Box 66149, St. Louis, Missouri 63166-6149. The date of such mailing shall be deemed to be the date of such notice, consent or demand. O. Governing Law: The Plan, and the rights of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of Missouri. P. Disputes: Time shall be of the essence in determining whether any payments are due to the Participant or his beneficiary(ies) under the Plan. Therefore, a Participant or beneficiary(ies) may submit any claim for payment under the Plan or dispute regarding the interpretation of the Plan to arbitration. This right to select arbitration shall be solely that of the Participant or his beneficiary(ies), and the Participant or beneficiary(ies) may decide whether or not to arbitrate in his sole discretion. The "right to select arbitration" is not mandatory on the Participant or beneficiary(ies), 15 17 Deferred Compensation Plan (Continued) and the Participant or beneficiary(ies) may choose in lieu thereof to bring an action in an appropriate civil court. Once an arbitration has commenced, however, it may not be discontinued without the mutual consent of the Participant or beneficiary(ies), and the Company. During the lifetime of the Participant only the Participant can use the arbitration procedure set forth herein. Any claim for arbitration may be submitted as follows: if the Participant or his beneficiary(ies) disagrees with the Company regarding the interpretation of the Plan and the claim is finally denied by the Company in whole or in part, such claim may be filed in writing with an arbitrator of the Participant's or beneficiary(ies)'s choice who is selected by the method described in the following paragraph. The Participant or his beneficiary(ies) shall submit a list of five potential arbitrators. Each of the five arbitrators so listed must be either (1) a member of the American Arbitration Association who is also a resident of the State of Missouri or (2) a retired Missouri Circuit Court or Court of Appeals Court judge. Within one week after receipt of said list, the Company shall select one of the five arbitrators as the arbitrator for the dispute in question and notify said arbitrator of his selection. If the Company fails to select and notify an arbitrator in a timely manner, the Participant or beneficiary(ies) shall then designate one of the five arbitrators as the arbitrator for the dispute in question. The arbitration hearing shall be held within seven days (or as soon thereafter as possible) after the selection of the arbitrator. No continuance of said hearing shall be allowed without the mutual consent of the Participant or his beneficiary(ies) and the Company. Absence from or nonparticipation at the hearing by either the Participant, or beneficiary(ies), or the Company shall not prevent the issuance of an award by the arbitrator. Hearing procedures which will expedite the hearing may be ordered at the arbitrator's discretion, and the arbitrator may close the hearing in his sole discretion when he decides he has heard sufficient evidence to justify the issuance of an award. The arbitration award may be enforced in any appropriate court as soon as possible after its issuance. For the purposes of apportioning expenses and fees, the Company will be considered to be the prevailing party in a dispute if the arbitrator determines (1) that Ameren has not breached its obligations or duties under the provisions of the Plan and (2) the claim of the Participant or beneficiary(ies) was not made in good faith. Otherwise, the Participant or beneficiary(ies) will be considered to be the prevailing party. In the event that Ameren is the prevailing party, the fee of the arbitrator and all necessary expenses of the hearing (excluding any 16 18 Deferred Compensation Plan (Continued) attorneys' fees incurred by the Company) including the fees of stenographic reporting, if employed, shall be paid by the Participant or beneficiary(ies). In the event that the Participant or beneficiary(ies) is the prevailing party, the fee of the arbitrator and all necessary expenses of the hearing (including all attorneys' fees incurred by the Participant or beneficiary(ies) in pursuing his claim), including the fees of stenographic reporting, if employed, shall be paid by the Company. 17 EX-10.2 3 c61193ex10-2.txt EXECUTIVE INCENTIVE COMPENSATION PROGRAM 1 EXHIBIT 10.2 [AMEREN CORPORATION LOGO] - -------------------------------------------------------------------------------- AMEREN CORPORATION EXECUTIVE INCENTIVE COMPENSATION PROGRAM ELECTIVE DEFERRAL PROVISIONS (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001) - -------------------------------------------------------------------------------- 2 AMEREN CORPORATION EXECUTIVE INCENTIVE COMPENSATION PROGRAM ELECTIVE DEFERRAL PROVISIONS (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001) - -------------------------------------------------------------------------------- 1. PURPOSE AND AMENDMENT The purpose of the Ameren Corporation Executive Incentive Compensation Program: Elective Deferral Provisions ("Plan") is to provide the executives and other key employees of Ameren Corporation and its subsidiaries (hereinafter collectively "Ameren") with the opportunity to accumulate capital by deferring the receipt of some or all of the Incentive Awards awarded to them pursuant to the Ameren Corporation Executive Incentive Compensation Program. Participation in the Plan shall be voluntary. Implementation of the Plan provides Ameren and its Board of Directors ("Board") with the means to attract and retain officers, executives and other key employees by offering a competitive Incentive Award deferral program. Effective January 1, 2001, Section 8 of the Plan is amended to provide for additional distribution options at retirement. 2. DEFINITIONS Certain words and phrases are defined when first used in later paragraphs of the Plan. In addition, the following words and phrases when used herein, unless the context clearly requires otherwise, shall have the following respective meanings: A. Ameren: As used herein shall mean Ameren Corporation and its subsidiaries. B. Board: The Board of Directors of Ameren Corporation. C. Committee: The Human Resources Committee of the Board. D. Company: As used herein shall mean Ameren Services Company, as agent for Ameren Corporation and its subsidiaries, and as administrator of the Plan. 1 3 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) E. Deferral Account: Book entries reflecting each Participant's Deferred Amounts and Interest credited thereon pursuant to the provisions of Section 6. A separate Deferral Account shall be maintained for each Incentive Award deferred hereunder. F. Deferred Amount: The amount of an Incentive Award (whether expressed as dollars or as a percentage of an incentive award) which a Participant elects to defer pursuant to the provisions of the Plan. G. Effective Date: January 1, 1987, as restated and amended from time to time. H. Incentive Award: The portion of an incentive award awarded to an officer, executive or other employee of Ameren pursuant to the provisions of the Ameren Executive Incentive Compensation Program which is deferred pursuant to the provisions of the Plan. I. Interest: The amount of interest which a Participant shall be deemed to earn on his Deferred Amounts and which shall be credited to his Deferral Account as determined pursuant to Section 7. J. Participant: Any eligible officer, executive or other employee of Ameren who elects or has elected to defer a portion of an Incentive Award pursuant to the provisions of the Plan, and for whom the Company maintains a Deferral Account pursuant to the provisions of the Plan. A Participant who terminates employment in order to commence employment with a subsidiary of Ameren Corporation or other business entity in which Ameren Corporation has a substantial (i.e., 10% or greater) ownership interest, shall be deemed not to have terminated employment with Ameren as long as such Participant is an employee of such a subsidiary or business entity. K. Plan: The Ameren Executive Incentive Compensation Program: Elective Deferral Provisions, as revised and in effect. L. Plan Year: The 12-month period commencing January 1 and ending on December 31. M. Retirement Age: Normal Retirement Age under the provisions of the Plan shall be 65 years of age. However, retirement is permitted under the provisions of the Plan as early as 55 years of age. 2 4 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) 3. ELIGIBILITY The Committee shall designate the officers, executives and other employees of Ameren who shall be eligible to participate in the Ameren Executive Incentive Compensation Program. Any person who is so designated as eligible to participate may become a Participant in the Plan by electing, pursuant to the provisions of the Plan, to defer receiving an Incentive Award granted to such person pursuant to the Ameren Executive Incentive Compensation Program. 4. ELECTING A DEFERRAL A Participant may defer receiving some or all of an incentive award granted to such Participant, as described above, by electing to defer receiving either 25, 50, 75 or 100 percent of an incentive award otherwise payable to him. The minimum dollar value of the Incentive Award corresponding to the deferral percentage elected by the Participant must be at least $2000. In the event the actual dollar amount of a Participant's Incentive Award which is to be deferred (based on the percentage elected by the Participant as described above) is less than $2000, the Participant's Deferral Amount will be increased to $2000. In the event the actual dollar amount of a Participant's Incentive Award is less than $2000, then no deferral will be permitted hereunder. The Participant's Deferred Amounts shall be credited to his Deferral Account by no later than the date on which such amounts would, but for such deferral, be payable to the Participant. 5. TERMS OF DEFERRAL ELECTION A Participant's written election to defer an Incentive Award shall indicate the percentage amount of incentive award which the Participant is electing to defer under the Plan, and the method of distribution of such amounts. Such election form shall be filed by the Participant with the Vice President, Human Resources by no later than the last date specified for filing such form. 6. PARTICIPANT DEFERRAL ACCOUNT There shall be established a Deferral Account in the name of each Participant who elects to defer an Incentive Award pursuant to the provisions of the Plan. A separate Deferral Account will be maintained for each annual Incentive Award deferral by each Participant. The Deferral Account shall reflect the value of the Participant's Deferred Amounts plus Interest credited thereon. The records for such Deferral Account shall be available for inspection by the Participant at reasonable times, and the Company shall furnish the Participant on or before the first day of March of each year (and at such other times as the Company may 3 5 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) choose) a statement indicating the aggregate amount credited to his Deferral Account through the last day of the preceding Plan Year (or such other date as the Company may choose) and the value of his Deferral Account on such date. 7. INTEREST ON DEFERRED AMOUNTS Interest calculated at the rate or rates, as hereinafter described, shall accrue from the date an Incentive Award is credited to the Participant's Deferral Account and shall be compounded annually and credited to the Participant's Deferral Account as of the last business day of each Plan Year for which the Participant has a Deferral Account balance. While the Participant is employed by Ameren (except where the Participant has attained 65 years of age) the Participant's Deferral Account balance shall earn Interest at the "Plan Interest Rate". After retirement (and when the Participant remains employed by Ameren after having attained 65 years of age) or following the death of the Participant, the Participant's Deferral Account balance shall earn interest at the "Base Interest Rate". The "Plan Interest Rate" for any Plan Year shall be 150 percent of the average Mergent's Seasoned AAA Corporate Bond Yield Index ("Mergent's Index", formerly called "Moody's Index") for the previous calendar year. The "Base Interest Rate" for any Plan Year shall be equal to the average Mergent's Index for the previous calendar year. 8. DISTRIBUTION AT RETIREMENT At the time that a Participant makes an election to defer an Incentive Award under the Plan, he shall select a method for the distribution of the balance of that Deferral Account. Upon retirement, the balance of each of the Participant's Deferral Account(s) shall be distributed to the Participant according to the pay-out method selected by the Participant. A Participant may elect to receive his account distribution as a lump sum or in substantially equal installments over a period of 10 years. Under either payment method, a Participant can elect to commence distribution at the time of retirement or defer such payment(s) until March 1 of the calendar year following retirement. (For example, a Participant who retires effective June 1, 2001, may defer payment from his Deferral Account(s) until March 1, 2002.) DISTRIBUTION ALTERNATIVES 1. The balance of the Participant's Deferral Account to be distributed in a single lump sum, payable the first day of the first month following the month in which the Participant retires. 4 6 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) 2. The balance of the Participant's Deferral Account to be distributed in a single lump sum, payable on March 1 of the calendar year following retirement. 3. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 10 years commencing at retirement. 4. The balance of the Participant's Deferral Account to be distributed in substantially equal installments over a period of 10 years commencing on March 1 of the calendar year following retirement. Installment payments (Alternatives 3 and 4), may be received either monthly or on an annual basis. The deferral of distribution(s) to the calendar year following retirement (Alternatives 2 and 4) is limited to Participants who retire from Ameren. The distribution options available in circumstances where the Participant dies, either before or after retirement, or is placed on disability status prior to retirement are described in Sections 11 and 12. The deferral of payments to the calendar year following retirement (Alternatives 2 and 4) is not permitted in cases of death or long term disability. A Participant's selection of a method of distribution may be changed by the Participant as frequently as he chooses up to one year prior to the date when distributions from the Participant's Deferral Account are to commence. A change in the method of distribution must be made on a form provided by the Company which must be filed by the Participant with the Vice President, Human Resources. 9. REVOCATION OF DEFERRAL ELECTION A Participant may revoke his election to defer an Incentive Award no earlier than one year after the Deferred Amount has been credited to his corresponding Deferral Account. Such revocation must be made in writing and filed with the Vice President, Human Resources. When the Participant revokes his deferral election, the Incentive Award so deferred will be distributed to the Participant in a single sum no later than 30 days after the date the notice of revocation is filed. All Interest credited to the Participant's corresponding Deferral Account will be forfeited. 5 7 10. TERMINATION OF EMPLOYMENT PRIOR TO ATTAINING RETIREMENT AGE A. General: Except as described in Paragraph B, below, in the event that a Participant terminates employment with Ameren prior to becoming eligible for retirement, the balance of each of the Participant's Deferral Accounts shall be distributed in a single sum to the Participant no later than 30 days after the date the Participant terminates employment, except that each such balance shall be reduced prior to distribution in order to reflect that all Interest earned on each of the Participant's Deferral Accounts shall have been computed using the Base Interest Rate only. Interest representing the increment over the Base Interest Rate which would otherwise have been payable at or after retirement shall be forfeited. B. Change of Control: In the event that a Participant terminates employment with Ameren prior to attaining Retirement Age and after the occurrence of a Change of Control, the balance of each of the Participant's Deferral Accounts, including Interest calculated at the Plan Interest Rate, shall be distributed in a single sum to the Participant no later than 30 days after the date the Participant terminates employment. For the purposes of this Paragraph, Change of Control shall mean: 1. the purchase or other acquisition, within the meaning of Section 13(d) of the Securities Exchange Act of 1934, in one or a series of transactions by a person or a group of persons acting in concert, of beneficial ownership in more than 25% of the then outstanding voting stock of Ameren Corporation, 2. the receipt of proxies for the election of directors of Ameren Corporation in opposition to the Board's slate of nominees which proxies aggregate more than 40% of the then outstanding voting stock of Ameren Corporation, or 3. the sale or issuance of such number of shares of voting stock of Ameren Corporation for consideration other than cash in any transaction or series of related transactions which constitute more than 25% of the outstanding voting power of Ameren Corporation after giving effect to such issuance or sale. 6 8 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) HISTORICAL NOTE: A Change of Control occurred on December 31, 1997, with the merger of Union Electric Company and CIPSCO to form Ameren Corporation. Participants in the Plan as of that date vested in their completed Deferral Account(s), including interest calculated at the Plan Interest Rate, and will vest in all future Deferral Account(s), with interest calculated at the Plan Interest Rate, when the corresponding Deferral Commitments for such Deferral Account(s) are completed. 11. TOTAL DISABILITY OF PARTICIPANT In the event that it is determined by a duly licensed physician selected by the Company that, because of ill health, accident or other disability, a Participant is no longer able, properly and satisfactorily, to perform his regular duties and responsibilities, and therefore, the Company has placed such Participant on long term disability ("LTD"), the Company shall commence distribution of the Participant's Deferral Account(s) in accordance with the distribution method selected by the Participant. Where a Participant had elected a deferral option (Section 8, Alternatives 2 and 4), payments will be made in the same form as elected (i.e. lump sum or installment) but will commence no later than 30 days after the Participant's LTD effective date. Under this provision, a Participant on LTD status may receive a distribution from his Deferral Account(s) prior to attaining Retirement Age. 12. DEATH OF PARTICIPANT A. Prior to Retirement In the event of the Participant's death prior to his retirement, the Company shall commence distribution of the Participant's Deferral Account(s) to the Participant's designated beneficiary(ies) according to the method(s) selected by the Participant pursuant to Section 8. However, where the Participant had chosen a deferral option (Section 8, Alternatives 2 and 4), payment will be made in the same form as elected (i.e., lump sum or installment), but will commence no later than the tenth day of the month following the Participant's death. B. After Retirement In the event a Participant dies after his retirement but prior to receiving benefits under the Plan, the Company shall commence distribution of the Participant's Deferral Account(s) to the Participant's designated beneficiary(ies). Such payments will be made in the same form as elected (i.e. lump sum or installment) but will commence no later than the tenth day of the month following the Participant's death. Where a 7 9 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) Participant who is receiving benefits dies, the Company shall continue to make distributions to the Participant's designated beneficiary(ies) in accordance with the method selected by the Participant. 13. HARDSHIP DISTRIBUTION In the event that a Participant (or in the case of the Participant's death, his beneficiary(ies)) suffers a financial hardship, the Company may, if it deems advisable in its sole and absolute discretion, distribute on behalf of the Participant or his beneficiary(ies), legal guardian or personal representative, any portion of the Participant's Deferral Account(s), but in no event more than the amount necessary to meet the financial hardship. Any such hardship distribution shall be made at such times as the Company shall determine, and the Participant's Deferral Account(s) shall be reduced by the amount so distributed and/or utilized. Financial hardship shall mean an unanticipated emergency (as defined by the Internal Revenue Service) caused by an event beyond the control of the Participant or beneficiary which would result in severe financial hardship if early withdrawal were not permitted, caused by temporary or permanent disability or incapacity, medical expenses, a material reduction in family income, or other unforeseen circumstances. For the purposes of this Section, a financial hardship of a member of the Participant's (or his beneficiary's) household shall be deemed to be a financial hardship of the Participant (or his beneficiary(ies)). 14. WITHDRAWAL PRIOR TO RETIREMENT As of the date which represents the sixth anniversary of the date on which a Participant elected to defer an Incentive Award (provided such election was made with respect to an Incentive Award awarded with respect to a year beginning prior to January 1, 1991) and on any date thereafter, the Participant may submit a request to withdraw the balance of his corresponding Deferral Account(s). A request hereunder must be submitted in writing to the Vice President, Human Resources and it must state the Participant's reason for requesting the withdrawal. The request must be submitted at least one year prior to the date on which the requested withdrawal is to occur. The request may be granted or denied by the Committee in its sole and absolute discretion. In the event that such request is granted, the balance of such Participant's corresponding Deferral Account(s) shall be reduced prior to distribution in order to reflect that all Interest earned thereon shall have been computed using the Base Interest Rate only. Interest representing the increment over the Base Interest Rate which would otherwise have been payable at or after retirement shall be forfeited. Withdrawals which are granted hereunder shall be made in a single lump sum. 8 10 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) 15. DESIGNATION OF BENEFICIARY The Participant shall designate in writing, on a form to be furnished by the Company, one or more primary and/or secondary beneficiaries who shall receive distributions otherwise payable to the Participant or as otherwise authorized by the Plan, and such beneficiary designation shall be controlling with respect to all Deferral Accounts such Participant may have pursuant to the provisions of the Plan. The Participant's spouse, if any, must consent in writing to the designation of a primary beneficiary(ies) other than such spouse as the sole primary beneficiary. Subject to the requirement of the preceding sentence, the Participant shall have the right, at any time and for any reason, to submit a revised designation of beneficiary. Such revised designation of beneficiary shall become effective provided it is delivered to the Vice President, Human Resources prior to the death of such Participant, and it shall supersede all prior designations of beneficiary submitted by the Participant. A beneficiary may be a natural person or an entity (such as a trust or a charitable organization). If no designation of beneficiary has been received by the Company from the Participant prior to his death, or if the beneficiary(ies) designated by the Participant has not survived the Participant or cannot otherwise be located by the Company within a reasonable period of time, distributions shall be made to the person or persons in the first of the following classes of successive preference: A. The Participant's surviving spouse. B. The beneficiary(ies) named by the Participant in his most recent Designation of Beneficiary Form filed with the Company pursuant to the terms of the Ameren Group Life Insurance Plan. C. The Participant's surviving children, equally. D. The Participant's surviving parents, equally. E. The Participant's surviving brothers and sisters, equally. F. The Participant's personal representative(s), executor(s) or administrator(s). 16. PAYMENTS TO MINORS OR INCOMPETENTS Whenever, in the Company's opinion, a person entitled to receive any payment under the Plan is a minor, is under a legal or other disability or is so incapacitated as to be unable to manage his financial affairs, a distribution may 9 11 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) be made to such person or to his legal representative or to a relative or friend of such person for his benefit, or for the benefit of such person in whatever manner the Company considers advisable. Any payment of a benefit in accordance with the provisions of this Section shall be a complete discharge of any liability for the making of such payment under the provisions of the Plan. 17. ADMINISTRATION The Company shall have full power and discretion to administer, construe and interpret the Plan. Any authorized action or decision under the provisions of the Plan undertaken by the Company or the Committee arising out of, or in connection with the administration, construction, interpretation or effect of the Plan, or recommendations in accordance therewith, or any rules and regulations adopted by the Company shall be conclusive and binding on all Participants and their beneficiaries and all other persons whosoever. 18. MISCELLANEOUS A. Right of Setoff: If, at such time as the Participant becomes entitled to distributions hereunder, the Participant has any debt, obligation or other liability representing an amount owing to Ameren, and if such debt, obligation, or other liability is due and owing at the time that distributions are payable hereunder, the amount owed or owing may be offset against the amount otherwise distributable hereunder. B. No Trust Created: Nothing contained in the Plan, and no action taken pursuant to its provisions shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between Ameren and the Participant, his designated beneficiary(ies), other beneficiaries of the Participant or any other person. C. Unsecured General Creditor Status: Distributions to the Participant or his designated beneficiary(ies) or any other beneficiary(ies) hereunder shall be made from assets which prior to distribution shall continue, for all purposes, to be a part of the general assets of Ameren; no person shall have any interest in such assets by virtue of the provisions of the Plan. To the extent that any person, including the Participant, acquires a right to receive distributions from the Company under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of Ameren. D. Recovery of Costs: In the event that, in its discretion, the Company purchases an insurance policy or policies insuring the life of a Participant or any other property to allow Ameren to recover the costs of providing 10 12 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) deferred compensation in whole or in part, hereunder, neither the Participant, his beneficiary(ies) nor any other person or persons shall have any rights therein whatsoever. Ameren shall be the sole owner and beneficiary of any such insurance policy and shall possess and may exercise all incidents of ownership therein. E. Protective Provisions: Participant shall cooperate with the Company by providing all information requested by the Company including a medical history. In connection therewith, the Company reserves the right to require that the Participant submit to a physical examination if such examination is deemed to be necessary or appropriate. The costs of all such physical examinations will be paid by the Company. If the Participant refuses to cooperate with the Company, the Company shall have no further obligation to the Participant under the provisions of the Plan. If the Participant makes any material misstatement of information or non-disclosure of medical history, then no benefits shall be payable to the Participant or his beneficiary(ies) over and above his actual Incentive Award deferrals. F. No Contract of Employment: Nothing contained herein shall be construed to be a contract of employment for any term of years, nor a conferring upon the Participant the right to continue to be employed by Ameren in his present capacity, or in any capacity. It is expressly understood that the Plan relates to the payment of deferred compensation for the Participant's services normally distributable after termination of his employment, and the Plan is not in any way intended to be an employment contract. G. Spendthrift Provisions: Neither the Participant, his beneficiary(ies), nor any other person or persons shall have any power or right to sell, transfer, assign, anticipate, pledge or otherwise encumber any part or all of a Deferral Account maintained or distributable hereunder. No amounts hereunder shall be subject to seizure by any creditor, beneficiary(ies) or any other person or persons by a proceeding at law or in equity, nor shall such amounts be transferable by operation of law in the event of divorce, legal separation, bankruptcy, insolvency or death of the Participant, his beneficiary(ies), or any other person or persons. Any such attempted assignment or transfer shall be null and void. H. Withholding Taxes: To the extent required by the law in effect at the time that deferrals are made hereunder, the Company shall withhold from non-deferred compensation the payroll taxes required to be withheld by the federal or any state or local government. 11 13 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) I. Suspension, Termination and Amendment: The Board of Directors of Ameren Corporation shall have the power to suspend or terminate the Plan in whole or in part at any time, and from time-to-time to extend, modify, amend or revise the Plan in such respects as the Board by resolution may deem advisable, provided that no such extension, modification, amendment or revision shall deprive a Participant, or any beneficiary(ies) thereof, of any part or all of the Participant's Deferral Account. Subject to the foregoing, this Plan document supercedes all previous similar Plan Documents. J. Conflicts: Any conflict in the language or terms or interpretation of the language or terms of the Plan between this Plan document and any other document which purports to describe the rights, benefits, duties or obligations of any Participant, the Board, the Company, the Committee or any other person or entity shall be resolved in favor of this Plan document. K. Validity: In the event any provision of the Plan is held invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of the Plan. L. Captions: The captions of the articles and sections of the Plan are for convenience only and shall not control nor affect the meaning or construction of any of its provisions. M. Gender and Plurals: Wherever used in the Plan, words in the masculine gender shall include masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular. N. Notice: Any election, beneficiary designation, notice, consent or demand required or permitted to be given under the provisions of the Plan shall be in writing and shall be signed by the Participant. If such election, beneficiary designation, notice, consent or demand is mailed by a Participant, it shall be sent by United States Certified Mail, postage prepaid, and addressed to the Vice President, Human Resources, Ameren Services Company, P. O. Box 66149, St. Louis, Missouri 63166. The date of such mailing shall be deemed to be the date of such notice, consent or demand. O. Governing Law: The Plan, and the rights of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of Missouri. 12 14 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) P. Disputes: Time shall be of the essence in determining whether any payments are due to the Participant or his beneficiary(ies) under the Plan. Therefore, a Participant or beneficiary(ies) may, if he desires, submit any claim for payment under the Plan or dispute regarding the interpretation of the Plan to arbitration. This right to select arbitration shall be solely that of the Participant or his beneficiary(ies), and the Participant or his beneficiary(ies) may decide whether or not to arbitrate in his sole discretion. The "right to select arbitration" is not mandatory on the Participant or his beneficiary(ies), and the Participant or his beneficiary(ies) may choose in lieu thereof to bring an action in an appropriate civil court. Once an arbitration has commenced, however, it may not be discontinued without the mutual consent of the Participant, or his beneficiary(ies), and Ameren. During the lifetime of the Participant, only he can use the arbitration procedure set forth herein. Any claim for arbitration may be submitted as follows: if the Participant or his beneficiary(ies) disagrees with Ameren regarding the interpretation of the Plan and the claim is finally denied by the Company in whole or in part, such claim may be filed in writing with an arbitrator of the Participant's or his beneficiary(ies)'s choice who is selected by the method described in the following paragraph. The Participant or his beneficiary(ies) shall submit a list of five potential arbitrators to the Company. Each of the five arbitrators so listed must be either (1) a member of the American Arbitration Association who is also a resident of the State of Missouri or (2) a retired Missouri Circuit Court or Court of Appeals Court judge. Within one week after receipt of said list, the Company shall select one of the five arbitrators as the arbitrator for the dispute in question and notify said arbitrator of his selection. If the Company fails to select and notify an arbitrator in a timely manner, the Participant or his beneficiary(ies) shall then designate one of the five arbitrators as the arbitrator for the dispute in question. The arbitration hearing shall be held within seven days (or as soon thereafter as possible) after the selection of the arbitrator. No continuance of said hearing shall be allowed without the mutual consent of the Participant, or his beneficiary(ies), and the Company. Absence from or nonparticipation at the hearing by either the Participant, or his beneficiary(ies), or the Company shall not prevent the issuance of an award by the arbitrator. Hearing procedures which will expedite the hearing may be ordered at the arbitrator's discretion, and the arbitrator may close the hearing in his sole discretion when he decides he has heard sufficient evidence to justify the issuance of an award. 13 15 Executive Incentive Compensation Program Elective Deferral Provisions (Continued) The arbitration award may be enforced in any appropriate court as soon as possible after its issuance. For the purposes of apportioning expenses and fees, the Company will be considered to be the prevailing party in a dispute if the arbitrator determines (1) that Ameren has not breached its obligations or duties under the provisions of the Plan and (2) the claim of the Participant or his beneficiary(ies) was not made in good faith. Otherwise, the Participant or his beneficiary(ies) will be considered to be the prevailing party. In the event that Ameren is the prevailing party, the fee of the arbitrator and all necessary expenses of the hearing (excluding any attorneys' fees incurred by the Company) including the fees of stenographic reporting, if employed, shall be paid by the Participant or his beneficiary(ies). In the event that the Participant or his beneficiary(ies) is the prevailing party, the fee of the arbitrator and all necessary expenses of the hearing (including all attorneys' fees incurred by the Participant or his beneficiary(ies) in pursuing his claim), including the fees of stenographic reporting, if employed, shall be paid by the Company. 14 EX-13 4 c61193ex13.txt 2000 ANNUAL REPORT 1 EXHIBIT 13 REPORT OF INDEPENDENT ACCOUNTANTS TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AMEREN CORPORATION: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and retained earnings and of cash flows present fairly. In all material respects, the financial position of Ameren Corporation and its subsidiaries at December 31, 2000, and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. 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 conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, 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 provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP February 5, 2001 2 WWW.AMEREN.COM PAGE 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Ameren Corporation (Ameren or the Company) 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 subsidiaries of Ameren (the Merger). As a result of the Merger, Ameren has a 60% ownership interest in Electric Energy, Inc. (EEI). That interest is consolidated for financial reporting purposes. Since the Merger, Ameren has formed several new subsidiaries, including AmerenEnergy, Inc. (AmerenEnergy), Ameren Development Company, AmerenEnergy Resources Company (formerly known as Ameren Intermediate Holding Company, Inc.), and Ameren Services Company. AmerenEnergy, an energy trading and marketing subsidiary, primarily serves as a power marketing agent for AmerenUE and AmerenEnergy Generating Company, the non-regulated electric generating subsidiary of AmerenEnergy Resources Company, and provides a range of energy and risk management services to targeted customers. Ameren Development Company is a nonregulated subsidiary encompassing various nonregulated products and services. AmerenEnergy Resources Company holds Ameren's nonregulated generating operations (see discussion below under "Electric Industry Restructuring - Illinois" and Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). Ameren Services Company provides shared support services to Ameren and all of its subsidiaries. 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 among their different business activities. RESULTS OF OPERATIONS EARNINGS Earnings for 2000, 1999 and 1998, were $457 million ($3.33 per share), $385 million ($2.81 per share) and $386 million ($2.82 per share), respectively. Earnings and earnings per share fluctuated due to many conditions, primarily: sales growth, weather variations, credits to electric customers, electric rate reductions, gas rate increases, competitive market forces, fluctuating operating costs (including Callaway Nuclear Plant refueling outages), expenses relating to the withdrawal from the electric transmission related Midwest Independent System Operator (Midwest ISO), charges for coal contract terminations and a targeted separation plan (TSP), changes in interest expense, and changes in income and property taxes. In the fourth quarter of 2000, the Company recorded a $25 million nonrecurring charge to earnings in connection with its withdrawal from the Midwest ISO. The charge reduced earnings $15 million, net of income taxes, or 11 cents per share (see discussion below under "Electric Industry Restructuring" and Note 2 -Regulatory Matters under Notes to Consolidated Financial Statements for further information). In the fourth quarter of 1999, the Company recorded a $52 million nonrecurring charge to earnings in connection with coal contract terminations with two coal suppliers. The charge reduced earnings $31 million, net of income taxes, or 23 cents per share (see discussion below under "Electric Operations" and Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information). In 1998, the Company recorded a nonrecurring charge to earnings in connection with a targeted separation plan it offered to employees in July 1998. That charge reduced earnings $15 million, net of income taxes, or 11 cents per share (see Note 3 - Targeted Separation Plan under Notes to Consolidated Financial Statements for further information). The Company estimates that ongoing earnings per share for the year ending December 31, 2001, will range between $3.30 and $3.45 per share. This estimate is subject to, among other things, the resolution of issues associated with the experimental alternative regulation plan in Missouri; however, it does incorporate an extension of the current plan with certain modifications, including retail electric rate reductions and additional customer credits (see discussion below under "Rate Matters" and Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). The significant items affecting revenues, expenses and earnings for the years ended December 31, 2000, 1999 and 1998 are detailed in the following pages. ELECTRIC OPERATIONS ELECTRIC REVENUES
Variations from Prior Year In Millions 2000 1999 1998 - -------------------------------------------------------- Rate variations $ - $(17) $(13) Credit to customers (27) 5 (24) Effect of abnormal weather (4) (53) 61 Growth and other 147 75 45 Interchange sales 135 159 16 EEI sales (13) 24 (55) -------------------------- $238 $193 $ 30 --------------------------
3 PAGE 16 AMEREN CORPORATION 2000 ANNUAL REPORT Electric revenues for 2000 increased $238 million, compared to the prior year period, primarily due to an 8% increase in total kilowatthour sales. This increase was primarily driven by a 35% increase in interchange sales, reflecting the marketing efforts of AmerenEnergy. In addition, residential and commercial sales rose 6% and 8%, respectively, while industrial and wholesale sales rose 3% and 41%, respectively. These increases were offset in part by an increase in the estimated credits to Missouri electric customers (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). Electric revenues for 1999 increased $193 million, compared to 1998, primarily due to a 9% increase in total kilowatthour sales. This increase was primarily driven by a 53% increase in interchange sales, due to strong marketing efforts at AmerenEnergy and a 12% increase in EEI sales. Also contributing to the revenue increase was a decrease in the credit to Missouri electric customers, partially offset by the credit to Illinois electric customers (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). Partially offsetting these increases, weather-sensitive residential and commercial sales decreased 2% and 1%, respectively, while industrial sales remained flat. In addition, revenues were lower due to rate decreases in both Missouri and Illinois (see Note 2 -Regulatory Matters under Notes to Consolidated Financial Statements for further information). Electric revenues for 1998 increased $30 million, compared to 1997. Revenues increased primarily due to higher sales to retail customers within the Company's service territory, as a result of warm summer weather and economic growth in the service area. Weather-sensitive residential and commercial sales increased 6% and 4%, respectively, while industrial sales grew 2%. Additionally, interchange revenues increased 7%, despite a 14% decline in interchange sales, due to market conditions. These increases were partially offset by an increase in credits to Missouri electric customers (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information) and lower sales by EEI. FUEL AND PURCHASED POWER
Variations from Prior Year In Millions 2000 1999 1998 - ------------------------------------------------------------- Fuel: Generation $ 49 $ 10 $ 9 Price (33) (15) (23) Generation efficiencies and other (13) (8) - Coal contract termination payments (52) 52 - Purchased power 92 117 (3) EEI 9 37 (39) --------------------- $ 52 $193 $(56) ---------------------
The $52 million increase in fuel and purchased power costs for 2000, compared to 1999, was primarily due to increased generation and purchased power, resulting from higher sales volume, partially offset by lower fuel costs, due to the termination of certain coal contracts in the fourth quarter of 1999. The $193 million increase in fuel and purchased power costs for 1999, compared to 1998, was primarily due to increased generation and purchased power, resulting from higher sales volume, increased fuel and purchased power costs at EEI and coal contract termination payments discussed below, partially offset by lower fuel costs. In the fourth quarter of 1999, AmerenCIPS and two of its coal suppliers executed agreements to terminate their existing coal supply contracts effective December 31, 1999. Under these agreements, AmerenCIPS made termination payments to the suppliers totaling approximately $52 million. These termination payments were recorded as a nonrecurring charge in the fourth quarter of 1999. Total pretax fuel cost savings from these termination agreements are estimated to be $183 million (or $131 million net of the termination payments) through 2010, which is the maximum period that would have remained on any of the terminated coal supply contracts. Total estimated pretax fuel cost savings of $27 million were realized in 2000. See Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information. The $56 million decrease in fuel and purchased power costs for 1998, compared to 1997, was primarily driven by lower fuel and purchased power costs at EEI as a result of fewer sales. In addition, fuel cost reductions were realized, due to lower fuel prices, as well as through the joint dispatch of generation. Upon consummation of the Merger, AmerenUE and AmerenCIPS began jointly dispatching generation, therefore allowing the Company to utilize the most cost efficient plants of both operating companies to serve customers in either service territory. These decreases were partially offset by increased generation to serve native load demand. GAS OPERATIONS Gas revenues in 2000 and 1999 increased $96 million and $12 million, respectively, primarily due to increases in retail sales, due to unusually cold weather, an annualized $4 million Missouri gas rate increase, which became effective in November 2000, an annualized $9 million Illinois gas rate increase, which became effective in February 1999 (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information) and higher gas costs recovered through the Company's purchased gas adjustment clauses. Gas revenues in 1998 decreased $33 million, compared to 1997, primarily due to an 8% decline in retail sales, resulting from milder winter weather and lower gas costs reflected in the Company's purchased gas adjustment clauses. These decreases 4 WWW.AMEREN.COM PAGE 17 were partially offset by benefits realized from a Missouri gas rate increase, effective February 1998 (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). Gas costs in 2000 increased $78 million, compared to 1999, primarily due to higher sales and gas prices. Gas costs in 1999 increased $13 million, compared to 1998. This increase in gas costs was primarily due to higher gas prices, partially offset by lower total sales. Gas costs in 1998 declined $42 million, compared to 1997, due to lower sales and lower gas prices. OTHER OPERATING EXPENSES Other operating expense variations in 1998 through 2000 reflected recurring factors, such as growth, inflation, labor and benefit variations, the capitalization of certain costs as a result of a Missouri Public Service Commission (MoPSC) Order and charges for estimated costs relating to withdrawal from the Midwest ISO and the TSP, as discussed below. In November 2000, the Company announced that it is withdrawing from the Midwest ISO to become a member of the Alliance Regional Transmission Organization (Alliance RTO). In the fourth quarter of 2000, the Company recorded a pretax nonrecurring charge to earnings of $25 million ($15 million after income taxes, or 11 cents per share) as a result of the Company's decision to withdraw from the Midwest ISO. This charge relates to Ameren's estimated obligation under the Midwest ISO agreement for costs incurred by the Midwest ISO, plus estimated exit costs. See discussions below under "Electric Industry Restructuring" and Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information. In 1998, the Company announced plans to reduce its other operating expenses, including plans to eliminate approximately 400 employee positions by mid-1999 through a hiring freeze and the TSP. During the third quarter of 1998, a nonrecurring, pretax charge of $25 million was recorded, representing costs incurred to implement the TSP. The elimination of these positions, exclusive of the nonrecurring charge, reduced the Company's operating expenses approximately $15 million in 1998, and approximately $22 million in 1999, and is expected to reduce the Company's operating expenses by approximately $20 million to $25 million each year thereafter. See Note 3 - Targeted Separation Plan under Notes to Consolidated Financial Statements for further information. Other operating expenses, excluding the Midwest ISO-related nonrecurring charge discussed above, increased $10 million in 2000, compared to 1999. This increase was primarily due to increases in injuries and damages expense, and higher labor expenses, offset in part by lower employee benefits in 2000, resulting from changes in actuarial assumptions. Other operating expenses decreased $18 million in 1999, compared to 1998. This decrease was primarily due to the 1998 charge for the TSP and related reduced workforce and the capitalization of certain costs (including computer software costs) that had previously been expensed for the Company's Missouri electric operations. The capitalization was a result of the MoPSC Order received in December 1999 (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). These decreases were partially offset by 1999 expenses associated with electric industry deregulation in Illinois. The $62 million increase in other operations expense in 1998, compared to 1997, was primarily due to the charge for the TSP and increases in injuries and damages expense and information system-related costs. Maintenance expenses decreased $3 million in 2000, compared to 1999. This decrease was primarily the result of no Callaway Nuclear Plant outage in 2000, partially offset by increased scheduled fossil power plant maintenance and tree-trimming activity. Maintenance expenses increased $59 million in 1999, compared to 1998. This increase was primarily due to increased fossil power plant maintenance and tree-trimming activity. The expenses incurred for the 35-day refueling outage in the fall of 1999 at the Callaway Nuclear Plant were comparable to those for the 31-day spring 1998 refueling outage. Maintenance expenses increased $2 million in 1998, compared to 1997, due to the refueling outage at the Callaway Nuclear Plant, partially offset by less scheduled fossil power plant maintenance. Depreciation and amortization expense increased $32 million in 2000, compared to 1999, due to increased depreciable property, primarily resulting from the addition of combustion turbine generating facilities (see discussions below under "Liquidity and Capital Resources" and "Electric Industry Restructuring" for further information). Depreciation and amortization expense was relatively flat in 1999 and 1998, compared to the prior year periods. TAXES Income tax expense increased $42 million in 2000, compared to 1999, due to higher pretax income. Income tax expense from operations decreased $9 million in 1999, compared to 1998, due to lower pretax income. Income tax expense from operations increased $33 million in 1998, compared to 1997, due to higher pretax income and a higher effective tax rate. Other tax expense increased $18 million in 2000, compared to 1999, primarily due to a change in the property tax assessment in the state of Illinois in June 2000. Other tax expense decreased $26 million in 1999, compared to 1998, primarily due to a decrease in gross receipts taxes related to the Company's Illinois jurisdiction. This decrease is the result of the restructuring of the Illinois public utility tax whereby gross receipts taxes are no longer recorded as electric revenues and gross receipts tax expense. 5 PAGE 18 AMEREN CORPORATION 2000 ANNUAL REPORT OTHER INCOME AND DEDUCTIONS Miscellaneous, net decreased $6 million in 2000, compared to 1999, due to the prior period write-off of certain nonregulated investments, partially offset by increased charitable contributions in 2000. Miscellaneous, net increased $8 million in 1999, compared to 1998, due to the write-off of certain nonregulated investments in 1999 and gains on the sale of property realized in 1998 but not in 1999. Miscellaneous, net decreased $8 million for 1998, compared to 1997, due to increased interest income and gains on the sale of property. INTEREST Interest expense increased $10 million in 2000, compared to 1999, primarily due to increased debt levels related to the construction and purchase of combustion turbine generating facilities (see discussion below under "Liquidity and Capital Resources"). Interest expense decreased $13 million in 1999, primarily due to a lower amount of debt outstanding throughout the year. Interest expense decreased $4 million in 1998, compared to 1997, due to lower interest rates and a decrease in other interest expense, partially offset by an increase in interest on a higher amount of debt outstanding. BALANCE SHEET The $104 million increase in trade accounts receivable was due primarily to higher sales and revenues in November and December 2000, compared to the same 1999 period. The $122 million increase in accounts and wages payable, at December 31, 2000, was primarily due to an increase in deferred compensation, in addition to the timing of various payments to suppliers, including the accrual for the nonrecurring charge in connection with the Company's withdrawal from the Midwest ISO. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operating activities totaled $856 million for 2000, compared to $918 million for 1999, and $803 million for 1998. Cash flows used in investing activities totaled $910 million, $558 million and $323 million, for the years ended December 31, 2000, 1999 and 1998, respectively. Expenditures in 2000 for constructing new or improving existing facilities and purchasing rail cars were $929 million, including approximately $350 million for the purchase of new combustion turbine generating facilities. In addition, the Company spent $22 million to acquire nuclear fuel. Capital expenditures are expected to approximate $886 million in 2001. For the five-year period 2001 through 2005, construction expenditures are estimated at approximately $3 billion. This estimate includes capital expenditures that will be incurred by the Company for the purchase of new combustion turbine generating facilities (see Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information), and for the replacement of four steam generators at its Callaway Nuclear Plant, as well as expenditures to meet new air quality standards for ozone and particulate matter, as discussed below. Title IV of the Clean Air Act Amendments of 1990 required the Company to significantly reduce total annual sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions by the year 2000. By switching to low-sulfur coal, early banking of emission credits and installing advanced NOx reduction combustion technology, the Company is meeting these requirements. In July 1997, the United States Environmental Protection Agency (EPA) issued regulations revising the National Ambient Air Quality Standards for ozone and particulate matter. In May 1999, the U.S. Court of Appeals for the District of Columbia remanded the regulations back to the EPA for review. The EPA appealed the decision to the U.S. Supreme Court, and all arguments and briefs have been filed. A decision is expected in mid-2001. New ambient standards may require significant additional reductions in SO2 and NOx emissions from the Company's power plants by 2007. At this time, the Company is unable to predict the ultimate impact of these revised air quality standards on its future financial condition, results of operations or liquidity. In an attempt to lower ozone levels across the eastern United States, the EPA issued regulations in September 1998, to reduce NOx emissions from coal-fired boilers and other sources in 22 states, including Missouri and Illinois (where all of the Company's coal-fired power plant boilers are located). The regulations were challenged in a U.S. District Court. In March 2000, the Court upheld most of the regulations. However, the Court remanded the state of Missouri's regulations back to the EPA for revision. The Court further delayed the compliance date of the regulations until 2004. The regulations mandate a 75% reduction in NOx emissions from power plant boilers in Illinois by the year 2004. The final applicability of the regulations as they might apply to utility boilers in Missouri is still uncertain. The NOx emissions reductions already achieved on several of the Company's coal-fired power plants will help reduce the costs of compliance with these regulations. However, the regulations will require the installation of selective catalytic reduction technology on some of the Company's units, as well as additional controls. Currently, the Company estimates that its additional capital expenditures to comply with the final NOx regulations could range from $250 million to $300 million over the period from 2001 to 2005. Associated operations and maintenance expenditures could increase $10 million to $15 million annually, beginning in 2005. The Company is exploring alternatives to comply with these new regulations in order to minimize, to the extent possible, its capital costs and operating expenses. The Company is unable to predict the ultimate impact of these standards on its future financial condition, results of operations or liquidity. See Note 12 - Commitments and Contingencies under Notes to 6 WWW.AMEREN.COM PAGE 19 Consolidated Financial Statements for further discussion of environmental issues. See Note 13 - Callaway Nuclear Plant under Notes to Consolidated Financial Statements for a discussion of Callaway Nuclear Plant decommissioning costs. Cash flows used in financing activities were $14 million for 2000, compared to $241 million for 1999 and $446 million for 1998. The Company's principal financing activities during 2000 included the issuance of $703 million of long-term debt, the redemption of $421 million of long-term debt and the payment of dividends. On November 1, 2000, AmerenEnergy Generating Company (Generating Company), a wholly owned subsidiary of AmerenEnergy Resources Company, issued in a private placement Senior Notes, Series A due 2005 (Series A Notes) and Senior Notes, Series B due 2010 (Series B Notes) (collectively, the Senior Notes). The Series A Notes totaled $225 million. Interest will accrue on the Series A Notes at a rate of 7.75% per year and will be payable semiannually in arrears on May 1 and November 1 of each year commencing on May 1, 2001. Principal of the Series A Notes will be payable on November 1, 2005. Series B Notes totaled $200 million. Interest will accrue on the Series B Notes at a rate of 8.35% per year and will be payable semiannually in arrears on May 1 and November 1 of each year commencing on May 1, 2001. Principal of the Series B Notes will be payable on November 1, 2010. The proceeds from the Senior Notes were $423.6 million, excluding transaction costs. With the proceeds of the Senior Notes, Generating Company reduced its short-term borrowings incurred in connection with the construction of completed combustion turbine generating facilities, paid for the construction of certain combustion turbine generating facilities, and funded working capital and other capital expenditure needs. Generating Company intends to file a registration statement in the first quarter of 2001 to register the Senior Notes under the Securities Act of 1933, as amended, to permit an exchange offer of the Senior Notes. The Company anticipates securing additional permanent financing during 2001-2004 to primarily fund capital expenditure requirements for combustion turbine generating facilities. At this time, the Company is unable to determine the amount of the additional permanent financing, as well as the additional financing's impact on the Company's financial position, results of operations or liquidity. The Company plans to continue utilizing short-term debt to support normal operations and other temporary requirements. The Company and its subsidiaries are authorized by the Securities and Exchange Commission (SEC) 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 commercial paper (maturities generally within 1 to 45 days) and bank loans. At December 31, 2000, the Company had committed bank lines of credit aggregating $176 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 Company has bank credit agreements, expiring at various dates between 2001 and 2002, that support commercial paper programs totaling $763 million, $463 million of which is available for the Company's own use and for the use of its subsidiaries. The remaining $300 million is available for the use of the Company's regulated subsidiaries. At December 31, 2000, $577 million was unused and available. The Company had $203 million of short-term borrowings at year end (see Note 7 - Short-Term Borrowings under Notes to Consolidated Financial Statements for further information). AmerenUE also has a lease agreement that provides for the financing of nuclear fuel. At December 31, 2000, the maximum amount that could be financed under the agreement was $120 million. Cash used in financing for 2000 included issuances under the lease for nuclear fuel of $9 million, offset in part by $11 million of redemptions. At December 31, 2000, $114 million was financed under the lease. See Note 5 - Nuclear Fuel Lease under Notes to Consolidated Financial Statements for further information. During the course of the Company's resource planning and to satisfy regulatory load requirements for 2001 and beyond for AmerenUE, AmerenCIPS and AmerenEnergy Resources Company, the Company is seeking regulatory approvals to transfer AmerenUE's Illinois-based electric and natural gas businesses and its Illinois-based distribution and transmission assets and personnel to AmerenCIPS (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further discussion). The distribution and transmission assets and related liabilities are proposed to be transferred from AmerenUE to AmerenCIPS at historical net book value; therefore, the transfer will have no effect on the consolidated balance sheet of Ameren. In addition, the Company is considering proposals for the purchase of 450 megawatts of capacity and energy for the summer of 2001, among other things. At this time, management is unable to predict which course of action it will pursue to satisfy these requirements and their ultimate impact on the Company's financial position, results of operations or liquidity. The Company, in the ordinary course of business, explores opportunities to reduce its costs in order to remain competitive in the marketplace. Areas where the Company focuses its review include, but are not limited to, labor costs and fuel supply costs. In the labor area, over the past two years, the Company has reached agreements with all of the Company's major collective bargaining units which will permit it to manage its labor costs and practices effectively in the future. The Company also explores alternatives to effectively manage the size of its workforce. These alternatives include utilizing hiring freezes, 1 7 PAGE 20 AMEREN CORPORATION 2000 ANNUAL REPORT outsourcing and offering employee separation packages. In the fuel supply area, the Company explores alternatives to effectively manage its overall fuel costs. These alternatives include diversifying fuel and transportation sources for the Company's fossil power plants, as well as restructuring or terminating existing contracts with suppliers. Certain of these reduction alternatives could result in additional investments being made at the Company's power plants in order to utilize different types of coal, or could require nonrecurring payments of employee separation benefits or nonrecurring payments to restructure or terminate existing fuel contracts with suppliers. Management is unable to predict which (if any), and to what extent, these alternatives to reduce its overall cost structure will be executed, as well as determine the impact of these actions on the Company's future financial position, results of operations or liquidity. DIVIDENDS Common stock dividends paid in 2000 resulted in a payout rate of 76% of the Company's net income. Dividends paid to common stockholders in relation to net cash provided by operating activities for the same period were 41%. The Board of Directors does not set specific targets or pay-out 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 9, 2001, the Ameren Board of Directors declared a quarterly common stock dividend of 63.5 cents per share, payable March 31, 2001. RATE MATTERS In July 1995, the MoPSC approved an agreement establishing contractual obligations involving the Company's Missouri retail electric rates. Included was a three-year experimental alternative regulation plan (the Original Plan) that ran from July 1, 1995, through June 30, 1998. A new three-year experimental alternative regulation plan (the New Plan) was included in the joint agreement authorized by the MoPSC in its February 1997 order approving the Merger. The New Plan runs from July 1, 1998 through June 30, 2001. On February 1, 2001, the Company, MoPSC staff, and other parties submitted filings to the MoPSC addressing the merits of extending the current experimental alternative regulation plan. In its filing, the Company supported an extension of this plan with certain modifications, including retail electric rate reductions and additional customer credits. The MoPSC staff filing noted several concerns with the current plan and suggested that under traditional cost of service ratemaking, an annualized electric rate decrease of at least $100 million could be warranted. The Company has been engaged in discussions with the MoPSC staff and other parties in an effort to address issues associated with the possible extension of the New Plan. At this time, the Company cannot predict the outcome of these discussions or the timing or amount of any future electric rate reductions. See Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for a further discussion of the experimental alternative regulation plan and a discussion of other rate matters. ELECTRIC INDUSTRY RESTRUCTURING Steps taken and being considered at the federal and state levels continue to change the structure of the electric industry and utility regulation and 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 Federal Energy Regulatory Commission (FERC) the authority to order electric utilities to provide transmission access to third parties. During 2000 and in early 2001, deregulation laws established in the state of California, coupled with high energy prices, increasing demands for power by users in that state, transmission constraints, and limited generation resources, among other things, negatively impacted several major electric utilities in that state. Federal and state regulators and legislators have proposed and implemented, in part, different courses of action to attempt to address these issues. The Company does not maintain utility operations in the state of California, nor does it provide energy directly to utilities in that state. At this time, the Company is uncertain what impact, if any, changes in deregulation laws will have on future federal and state deregulation laws (including the state of Missouri), which could directly impact the Company's future financial position, results of operations or liquidity. 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 strandable 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. 8 WWW.AMEREN.COM PAGE 21 In 1998, AmerenUE and AmerenCIPS joined a group of companies that originally supported the formation of the Midwest ISO. An ISO operates, but does not own, electric transmission systems and maintains system reliability and security, while facilitating wholesale and retail competition through the elimination of "pancaked" transmission rates. The Midwest ISO is regulated by the FERC. The FERC conditionally approved the formation of the Midwest ISO in September 1998. The MoPSC and the Illinois Commerce Commission (ICC) have authorized AmerenUE and AmerenCIPS to join the Midwest ISO. In December 1999, the FERC issued Order 2000 relating to Regional Transmission Organizations (RTOs) that would meet certain characteristics such as size and independence. RTOs, including ISOs, are entities that ensure comparable and non-discriminatory access to regional electric transmission systems. Order 2000 calls on all transmission owners to join RTOs. Following the announcements of Commonwealth Edison and Illinois Power of their intent to withdraw from the Midwest ISO and join the Alliance RTO, the Company determined that the operational configuration of the Midwest ISO was unacceptable and announced its withdrawal in November 2000. The Company decided to withdraw to ensure the continued reliable and efficient operation of the Ameren transmission system. As a result of the Company's decision to withdraw from the Midwest ISO, in the fourth quarter of 2000, the Company recorded a pretax nonrecurring charge to earnings of $25 million ($15 million after income taxes, or 11 cents per share). This charge relates to the Company's estimated obligation under the Midwest ISO agreement for costs incurred by the Midwest ISO, plus estimated exit costs. In January 2001, the Company announced that it had signed an agreement to join the Alliance RTO. Also, in January 2001, the FERC conditionally approved the formation, including the rate structure, of the Alliance RTO. Ameren's withdrawal from the Midwest ISO and its membership in the Alliance RTO are subject to regulatory approvals. At this time, the Company is unable to determine the impact that its withdrawal from the Midwest ISO and its participation in the Alliance RTO will have on its future financial condition, results of operations or liquidity. ILLINOIS In December 1997, the Governor of Illinois signed the Electric Service Customer Choice and Rate Relief Law of 1997 (the Illinois Law) providing for electric utility restructuring in Illinois. This legislation introduces competition into the supply of electric energy at retail in Illinois. Major provisions of the Illinois Law include the phasing-in through 2002 of retail direct access, which allows customers to choose their electric generation suppliers. The phase-in of retail direct access began on October 1, 1999, with large commercial and industrial customers principally comprising the initial group. The remaining commercial and industrial customers in Illinois were offered choice on December 31, 2000. Commercial and industrial customers in Illinois represent approximately 13% of the Company's total sales. As of December 31, 2000, the impact of retail direct access on the Company's financial condition, results of operations and liquidity was immaterial. Retail direct access will be offered to residential customers on May 1, 2002. In addition, the Illinois Law included a 5% rate decrease for residential customers that became effective in August 1998. This rate decrease reduced electric revenues by approximately $14 million annually compared to pre-Illinois Law rates, based on estimated levels of sales and assuming normal weather conditions (see Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information). In 1998, the Company eliminated its uniform fuel adjustment clauses (FACs) as allowed by the Illinois Law, which has benefited shareholders since 1998 (see Note 1 - Summary of Significant Accounting Policies under Notes to Consolidated Financial Statements for further information). The Illinois Law contains a provision allowing for the potential recovery of a portion of strandable costs, which represent costs that would not be recoverable in a restructured environment, through a transition charge collected from customers who choose an alternate electric supplier. In addition, the Illinois Law contains a provision requiring a portion of excess earnings (as defined under the Illinois Law) for the years 1998 through 2004 to be refunded to customers. See Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information. In conjunction with another provision of the Illinois Law, on May 1, 2000, following the receipt of all required state and federal regulatory approvals, AmerenCIPS transferred its electric generating assets and liabilities, at historical net book value, to Generating Company, in exchange for a promissory note from Generating Company in the principal amount of approximately $552 million and Generating Company common stock (the Transfer). In addition, on June 30, 2000, Generating Company borrowed $50 million from Ameren to assist with the future purchase of combustion turbine generating facilities and to meet working capital needs. The promissory notes bear interest at 7% and each have a term of five years payable based on a 10-year amortization. The transferred assets represent a generating capacity of approximately 2,900 megawatts. Approximately 45% of AmerenCIPS' employees were transferred to Generating Company as part of the transaction. In conjunction with the Transfer, an electric power supply agreement was entered into between Generating Company and its newly created nonregulated affiliate, AmerenEnergy Marketing Company (Marketing Company), also a wholly owned subsidiary of AmerenEnergy Resources Company. Under this agreement, Marketing Company is entitled to purchase all of Generating Company's energy and capacity. This agreement may not be terminated until at least December 31, 2004. In addition, 9 PAGE 22 AMEREN CORPORATION 2000 ANNUAL REPORT Marketing Company entered into an electric power supply agreement with AmerenCIPS to supply it sufficient energy and capacity to meet its obligations as a public utility through December 31, 2004. This agreement expires December 31, 2004. Power will continue to be jointly dispatched between AmerenUE and Generating Company. The creation of the new subsidiaries and the transfer of AmerenCIPS' generating assets and liabilities had no effect on the financial statements of Ameren as of the date of transfer. MISSOURI In Missouri, where approximately 70% of the Company's retail electric revenues are derived, restructuring bills were introduced by the Missouri legislature in 1999 and 2000. The Company is unable to predict the timing or ultimate outcome of electric utility restructuring in the state of Missouri; however, management does not believe that comprehensive restructuring legislation will be passed in 2001. SUMMARY In summary, the potential negative consequences associated with electric industry restructuring could be significant and could include the impairment and writedown of certain assets, including generation-related plant and net regulatory assets, lower revenues, reduced profit margins and increased costs of capital and operations expenses. Conversely, a deregulated marketplace can provide earnings enhancement opportunities. The Company will continue to focus on cost control to ensure that it maintains a competitive cost structure, which includes the termination of high-cost coal supply contracts (see Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information). Also, in Illinois, the Company's actions included the establishment of a nonregulated generating subsidiary and the expansion of its generation assets, which strengthened its trading and marketing operations to maintain its current customers and obtain new customers, and the enhancement of its information systems. Management believes that these actions position the Company well in the competitive Illinois marketplace. In Missouri, the Company is actively involved in all major deliberations taking place surrounding electric industry restructuring in an effort to ensure that restructuring legislation, if any, contains an orderly transition and is equitable to the Company's shareholders. At this time, the Company is unable to predict the ultimate impact of electric industry restructuring on the Company's future financial condition, results of operations or liquidity. CONTINGENCIES See Note 2 - Regulatory Matters, Note 12 - Commitments and Contingencies and Note 13 - Callaway Nuclear Plant under Notes to Consolidated Financial Statements for material issues existing at December 31, 2000. MARKET RISK RELATED TO FINANCIAL INSTRUMENTS AND COMMODITY INSTRUMENTS Market risk represents the risk of changes in value of a physical asset or a financial instrument, derivative or non-derivative, caused by fluctuations in market variables (e.g., interest rates, equity prices, commodity prices, etc.). The following discussion of the Company'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 Company handles market risks in accordance with established policies, which may include entering into various derivative transactions. In the normal course of business, the Company also faces risks that are either non-financial or non-quantifiable. Such risks principally include business, legal, operational and credit risk and are not represented in the following analysis. The Company's risk management objective is to optimize its physical generating assets within prudent risk parameters. Risk management policies are set by a Risk Management Steering Committee, which is comprised of senior-level Ameren officers. INTEREST RATE RISK The Company is exposed to market risk through changes in interest rates through its issuance of both long-term and short-term variable-rate debt and fixed-rate debt, commercial paper and auction-rate 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% in 2001, as compared to 2000, the Company's interest expense would increase by approximately $9 million and net income would decrease by approximately $5 million. This amount has been determined using the assumptions that the Company's outstanding variable-rate debt, commercial paper and auction-rate preferred stock, as of December 31, 2000, continued to be outstanding throughout 2001, and that the average interest rates for these instruments increased 1% over 2000. The model does not consider the effects of the reduced level of potential 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 Company's financial structure. COMMODITY PRICE RISK The Company is exposed to changes in market prices for natural gas, fuel and electricity. Several techniques are utilized to mitigate the Company's risk, including utilizing derivative 10 WWW.AMEREN.COM PAGE 23 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 the Company uses (primarily forward contracts, futures contracts and option contracts) are dictated by risk management policies. With regard to its natural gas utility business, the Company's exposure to changing market prices is in large part mitigated by the fact that the Company has purchased gas adjustment clauses (PGAs) in place in both its Missouri and Illinois jurisdictions. The PGA allows the Company to pass on to its customers its prudently incurred costs of natural gas. The Company has a subsidiary, AmerenEnergy Fuels and Services Company, a wholly owned subsidiary of AmerenEnergy Resources Company, which is responsible for providing fuel procurement and gas supply services on behalf of the Company's operating subsidiaries, and for managing fuel and natural gas price risks. Fixed price forward contracts, as well as futures and options, are all instruments, which may be used to manage these risks. The majority of the Company's fuel supply contracts are physical forward contracts. Since the Company does not have a provision similar to the PGA for its electric operations, the Company has entered into several long-term contracts with various suppliers to purchase coal and nuclear fuel to manage its exposure to fuel prices (see Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information). With regard to the Company's nonregulated electric generation operations, the Company is exposed to changes in market prices for natural gas to the extent it must purchase natural gas to run its combustion turbine generators. The Company's natural gas procurement strategy is designed to ensure reliable and immediate delivery of natural gas to its intermediate and peaking units by optimizing transportation and storage options and minimizing cost and price risk by structuring various supply agreements to maintain access to multiple gas pools and supply basins and reducing the impact of price volatility. With regard to the Company's exposure to commodity price risk for purchased power and excess electricity sales, the Company has a subsidiary, AmerenEnergy, whose primary responsibility includes managing market risks associated with changing market prices for electricity purchased and sold on behalf of AmerenUE and Generating Company. Although the Company cannot completely eliminate the effects of elevated prices and price volatility, its strategy is designed to minimize the effect of these market conditions on the results of operations. The Company's gas procurement strategy includes procuring natural gas under a portfolio of agreements with price structures, including fixed price, indexed price and embedded price hedges such as caps and collars. The Company's strategy also utilizes physical assets through storage, operator and balancing agreements to minimize price volatility. The Company's electric marketing strategy is to extract additional value from its generation facilities by selling energy in excess of needs for term sales and purchasing energy when the market price is less than the cost of generation. The Company's primary use of derivatives has been limited to transactions that are expected to reduce price risk exposure for the Company. EQUITY PRICE RISK The Company maintains trust funds, as required by the Nuclear Regulatory Commission and Missouri and Illinois state laws, to fund certain costs of nuclear decommissioning (see Note 13 - Callaway Nuclear Plant under Notes to Consolidated Financial Statements for further information). As of December 31, 2000, 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 Company is seeking to maximize the returns to be utilized to fund nuclear decommissioning costs. However, the equity securities included in the Company'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 Company 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 Company's exposure to equity price market risk is, in large part, mitigated, due to the fact that the Company 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) No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities and requires recognition of all derivatives as either assets or liabilities on the balance sheet measured at fair value. The intended use of the derivatives and their designation as either a fair value hedge, a cash flow hedge, or a foreign currency hedge will determine when the gains or losses on the derivatives are to be reported in earnings and when they are to be reported as a component of other comprehensive income in stockholders' equity. In June 1999, the FASB issued SFAS No. 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. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - 11 PAGE 24 AMEREN CORPORATION 2000 ANNUAL REPORT an amendment of FASB Statement No. 133," which amended certain accounting and reporting standards of SFAS 133. The Company is adopting SFAS 133 in the first quarter of 2001. The Company expects the impact of this standard to result in a cumulative charge as of January 1, 2001 of $7 million after income taxes to the income statement and a cumulative adjustment of $11 million to decrease stockholders' equity. However, the Derivatives Implementation Group (DIG), a committee of the FASB responsible for providing guidance on the implementation of SFAS 133, has not reached a conclusion regarding the appropriate accounting treatment of certain types of energy contracts under SFAS 133. The Company is unable to predict when this issue will ultimately be resolved and the impact the resolution will have on the Company's future financial position, results of operations or liquidity. Implementation of SFAS 133 will likely increase the volatility of the Company's earnings in future periods. EFFECTS OF INFLATION AND CHANGING PRICES The Company's rates for retail electric and gas utility service are generally regulated by the MoPSC and the ICC. 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 might not be adequate to replace plants in future years. Regulatory practice has been modified for the Company's generation portion of its business in its Illinois jurisdiction and may be modified in the future for the Company's Missouri jurisdiction (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 the Illinois retail jurisdiction, the cost of fuel for electric generation, which was previously reflected in billings to customers through uniform fuel adjustment clauses, has been added to base rates as provided for in the Illinois Law (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. In Illinois and Missouri, changes in gas costs relating to retail gas utility services are generally reflected in billings to customers through purchased gas adjustment clauses. The Company is impacted by changes in market prices for natural gas to the extent it must purchase natural gas to run its combustion turbine generators. The Company has structured various supply agreements to maintain access to multiple gas pools and supply basins to minimize the impact to the financial statements (see discussion above under "Commodity Price Risk" for further information). Inflation continues to be a factor affecting operations, earnings, stockholders' equity and financial performance. SAFE HARBOR STATEMENT Statements made in this annual report to stockholders 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. The following factors, in addition to those discussed elsewhere in this report and in subsequent securities filings, could cause results to differ materially from management expectations as suggested by such "forward-looking" statements: the effects of regulatory actions, including changes in regulatory policy; changes in laws and other governmental actions; the impact on the Company of current regulations related to the phasing-in of the opportunity for some customers to choose alternative energy suppliers in Illinois; the effects of increased competition in the future, due to, among other things, deregulation of certain aspects of the Company's business at both the state and federal levels; the effects of withdrawal from the Midwest ISO and membership in the Alliance RTO; 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 construction, installation and performance; 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; monetary and fiscal policies; future wages and employee benefits costs; and legal and administrative proceedings. 12 WWW.AMEREN.COM PAGE 25 CONSOLIDATED STATEMENT OF INCOME
Thousands of Dollars, Except Share and Per Share Amounts Year Ended December 31, 2000 1999 1998 - -------------------------------------------------------------------------------------------------------- OPERATING REVENUES: Electric $ 3,525,597 $ 3,287,590 $ 3,094,211 Gas 323,886 228,298 216,681 Other 6,366 7,743 7,316 ----------------------------------------------- TOTAL OPERATING REVENUES 3,855,849 3,523,631 3,318,208 ----------------------------------------------- OPERATING EXPENSES: Operations: Fuel and purchased power 1,025,221 973,277 780,123 Gas 209,467 131,449 118,846 Other 664,544 629,482 647,157 ----------------------------------------------- 1,899,232 1,734,208 1,546,126 Maintenance 367,921 370,873 312,011 Depreciation and amortization 382,129 350,539 348,403 Income taxes 301,192 258,870 267,673 Other taxes 265,065 246,592 272,774 ----------------------------------------------- TOTAL OPERATING EXPENSES 3,215,539 2,961,082 2,746,987 ----------------------------------------------- OPERATING INCOME 640,310 562,549 571,221 ----------------------------------------------- OTHER INCOME AND (DEDUCTIONS): Allowance for equity funds used during construction 5,298 7,161 5,001 Miscellaneous, net (4,400) (10,813) (2,609) ----------------------------------------------- TOTAL OTHER INCOME AND (DEDUCTIONS) 898 (3,652) 2,392 ----------------------------------------------- INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 641,208 558,897 573,613 ----------------------------------------------- INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 179,706 168,275 181,580 Allowance for borrowed funds used during construction (8,292) (7,123) (7,026) Preferred dividends of subsidiaries 12,700 12,650 12,562 ----------------------------------------------- NET INTEREST CHARGES AND PREFERRED DIVIDENDS 184,114 173,802 187,116 ----------------------------------------------- NET INCOME $ 457,094 $ 385,095 $ 386,497 EARNINGS PER COMMON SHARE - BASIC AND DILUTED ----------------------------------------------- (BASED ON AVERAGE SHARES OUTSTANDING) $ 3.33 $ 2.81 $ 2.82 ----------------------------------------------- AVERAGE COMMON SHARES OUTSTANDING 137,215,462 137,215,462 137,215,462 -----------------------------------------------
See Notes to Consolidated Financial Statements. 13 PAGE 26 AMEREN CORPORATION 2000 ANNUAL REPORT CONSOLIDATED BALANCE SHEET
Thousands of Dollars December 31, 2000 1999 - -------------------------------------------------------------------------------------------------------------------- ASSETS PROPERTY AND PLANT, AT ORIGINAL COST: Electric $12,684,366 $12,053,411 Gas 509,746 491,708 Other 97,214 92,696 ------------------------------ 13,291,326 12,637,815 Less accumulated depreciation and amortization 6,204,367 5,891,340 ------------------------------ 7,086,959 6,746,475 Construction work in progress: Nuclear fuel in process 117,789 88,830 Other 500,924 329,880 ------------------------------ TOTAL PROPERTY AND PLANT, NET 7,705,672 7,165,185 ------------------------------ INVESTMENTS AND OTHER ASSETS: Investments 40,235 66,476 Nuclear decommissioning trust fund 190,625 186,760 Other 97,630 80,737 ------------------------------ TOTAL INVESTMENTS AND OTHER ASSETS 328,490 333,973 ------------------------------ CURRENT ASSETS: Cash and cash equivalents 125,968 194,882 Accounts receivable - trade (less allowance for doubtful accounts of $8,028 and $7,136, respectively) 474,425 370,441 Other accounts and notes receivable 56,529 20,668 Materials and supplies, at average cost: Fossil fuel 107,572 123,143 Other 119,478 130,081 Other 37,210 39,791 ------------------------------ TOTAL CURRENT ASSETS 921,182 879,006 ------------------------------ REGULATORY ASSETS: Deferred income taxes 600,100 622,520 Other 158,986 176,931 ------------------------------ TOTAL REGULATORY ASSETS 759,086 799,451 ------------------------------ TOTAL ASSETS $ 9,714,430 $ 9,177,615 ------------------------------
See Notes to Consolidated Financial Statements. 14 WWW.AMEREN.COM PAGE 27
Thousands of Dollars, Except Share and Per Share Amounts December 31, 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- CAPITAL AND LIABILITIES CAPITALIZATION: Common stock, $.01 par value, 400,000,000 shares authorized - 137,215,462 shares outstanding (Note 6) $ 1,372 $ 1,372 Other paid-in capital, principally premium on common stock 1,581,339 1,582,501 Retained earnings (see accompanying statement) 1,613,960 1,505,827 ------------------------------ Total Common Stockholders' Equity 3,196,671 3,089,700 Preferred stock not subject to mandatory redemption (Note 6) 235,197 235,197 Long-term debt (Note 8) 2,745,068 2,448,448 ------------------------------ TOTAL CAPITALIZATION 6,176,936 5,773,345 ------------------------------ MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 3,940 4,010 ------------------------------ CURRENT LIABILITIES: Current maturity of long-term debt (Note 8) 44,444 60,867 Short-term debt 203,260 148,165 Accounts and wages payable 462,924 341,274 Accumulated deferred income taxes 49,829 70,719 Taxes accrued 124,706 155,396 Other 300,798 300,747 ------------------------------ TOTAL CURRENT LIABILITIES 1,185,961 1,077,168 ------------------------------ Commitments and Contingencies (Notes 2, 12 and 13) Accumulated deferred income taxes 1,540,536 1,493,634 Accumulated deferred investment tax credits 164,120 170,834 Regulatory liability 183,541 188,404 Other deferred credits and liabilities 459,396 470,220 ------------------------------ TOTAL CAPITAL AND LIABILITIES $ 9,714,430 $ 9,177,615 ------------------------------
See Notes to Consolidated Financial Statements. 15 PAGE 28 AMEREN CORPORATION 2000 ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of Dollars Year Ended December 31, 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING: Net income $457,094 $385,095 $386,497 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 369,795 340,329 338,488 Amortization of nuclear fuel 37,101 36,068 36,855 Allowance for funds used during construction (13,590) (14,284) (12,027) Deferred income taxes, net 1,699 (22,578) (24,849) Deferred investment tax credits, net (6,714) (7,998) (11,428) Changes in assets and liabilities: Receivables, net (139,845) 34,484 (6,658) Materials and supplies 26,174 (7,432) (18,209) Accounts and wages payable 121,650 56,456 (8,573) Taxes accrued (30,690) 41,290 3,540 Other, net 32,908 76,145 119,608 ---------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 855,582 917,575 803,244 ---------------------------------- CASH FLOWS FROM INVESTING: Construction expenditures (928,727) (570,807) (324,905) Allowance for funds used during construction 13,590 14,284 12,027 Nuclear fuel expenditures (21,527) (21,901) (20,432) Other 26,241 20,218 10,494 ---------------------------------- NET CASH USED IN INVESTING ACTIVITIES (910,423) (558,206) (322,816) ---------------------------------- CASH FLOWS FROM FINANCING: Dividends on common stock (348,527) (348,527) (348,527) Redemptions: Nuclear fuel lease (11,356) (15,138) (67,720) Short-term debt -- -- (17,738) Long-term debt (420,994) (174,444) (273,444) Issuances: Nuclear fuel lease 9,109 64,972 16,439 Short-term debt 55,095 79,637 -- Long-term debt 702,600 152,150 245,000 ---------------------------------- NET CASH USED IN FINANCING ACTIVITIES (14,073) (241,350) (445,990) ---------------------------------- NET CHANGE IN CASH AND CASH EQUIVALENTS (68,914) 118,019 34,438 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 194,882 76,863 42,425 ---------------------------------- CASH AND CASH EQUIVALENTS AT END OF YEAR $125,968 $194,882 $76,863 ---------------------------------- Cash paid during the periods: Interest (net of amount capitalized) $168,650 $162,705 $175,168 Income taxes $311,848 $247,428 $298,589
See Notes to Consolidated Financial Statements. 16 WWW.AMEREN.COM PAGE 29 CONSOLIDATED STATEMENT OF RETAINED EARNINGS
Thousands of Dollars Year Ended December 31, 2000 1999 1998 - --------------------------------------------------------------------------------------------------------------------- BALANCE AT BEGINNING OF PERIOD $1,505,827 $1,472,200 $1,434,658 Add: Net income 457,094 385,095 386,497 Deduct: Dividends 348,961 351,468 348,955 --------------------------------------------- BALANCE AT CLOSE OF PERIOD $1,613,960 $1,505,827 $1,472,200 =============================================
SELECTED QUARTERLY INFORMATION (Unaudited) Thousands of Dollars, Except Per Share Amounts
- ---------------------------------------------------------------------------------------------------------- QUARTER ENDED: Operating Operating Net Income Earnings (Loss) Revenues Income (Loss) Per Common Share MARCH 31, 2000 (A) $825,376 $108,578 $61,393 $.45 March 31, 1999 (a) 735,902 99,687 54,359 .40 ------------------------------------------------------------ JUNE 30, 2000 (B) 940,304 159,206 113,585 .83 June 30, 1999 859,884 130,512 86,519 .63 ------------------------------------------------------------ SEPTEMBER 30, 2000 (C) 1,195,411 305,685 256,137 1.87 September 30, 1999 1,193,462 296,727 249,819 1.82 ------------------------------------------------------------ DECEMBER 31, 2000 (D) 894,758 66,841 25,979 .19 December 31, 1999 (e) 734,383 35,623 (5,602) (.04) ------------------------------------------------------------
(a) The first quarter of 2000 and 1999 included credits to Missouri electric customers that reduced net income approximately $6 million, or 4 cents per share and $11 million, or 8 cents per share, respectively. (b) The second quarter of 2000 included credits to Missouri electric customers that reduced net income approximately $3 million, or 2 cents per share. (c) The third quarter of 2000 included credits to Missouri electric customers that reduced net income approximately $11 million, or 8 cents per share. (d) The fourth quarter of 2000 included credits to Missouri electric customers that reduced net income approximately $17 million, or 12 cents per share. The fourth quarter of 2000 also included a nonrecurring charge related to the withdrawal from the Midwest ISO that reduced net income $15 million, or 11 cents per share. (See Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information.) (e) The fourth quarter of 1999 included adjustments that increased earnings $9 million, or 6 cents per share as a result of a Report and Order received from the Missouri Public Service Commission relating to the Company's electric alternative regulation plan. (See Note 2 - Regulatory Matters under Notes to Consolidated Financial Statements for further information.) The fourth quarter of 1999 also included a $31 million, or 23 cents per share charge for coal supply contract terminations. (See Note 12 - Commitments and Contingencies under Notes to Consolidated Financial Statements for further information.) In addition, Callaway Nuclear Plant refueling expenses, which decreased net income approximately $22 million, or 16 cents per share, were included in the fourth quarter of 1999. Other changes on 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. 17 PAGE 30 AMEREN CORPORATION 2000 ANNUAL REPORT NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION Ameren Corporation (Ameren or the Company) 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 subsidiaries of Ameren (the Merger). The outstanding preferred shares of AmerenUE and AmerenCIPS were not affected by the Merger. The accompanying consolidated financial statements include the accounts of Ameren and its 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, AmerenCIPS, and AmerenEnergy Generating Company (Generating Company), a wholly owned subsidiary of AmerenEnergy Resources Company, 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 Company's other principal subsidiaries include: CIC, an investing subsidiary; AmerenEnergy, Inc., an energy trading and marketing subsidiary; Ameren Development Company, a nonregulated products and services subsidiary; AmerenEnergy Resources Company, a holding company for the Company's nonregulated generating operations; and Ameren Services Company, a shared support services subsidiary. The Company also has a 60% interest in Electric Energy, Inc. (EEI). EEI owns and/or operates electric generation and transmission facilities in Illinois that supply 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. 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 among their different business activities. In conjunction with the Illinois Electric Service Customer Choice and Rate Relief Law of 1997, on May 1, 2000, following the receipt of all required state and federal regulatory approvals, AmerenCIPS transferred its electric generating assets and liabilities, at historical net book value, to Generating Company (see Note 2 - Regulatory Matters for further discussion). The transfer of AmerenCIPS' generating assets and liabilities had no effect on the financial statements of Ameren as of the date of transfer. REGULATION Ameren is subject to regulation by the Securities and Exchange Commission (SEC). Certain of Ameren's subsidiaries are also regulated by the Missouri Public Service Commission (MoPSC), Illinois Commerce Commission (ICC) and the Federal Energy Regulatory Commission (FERC). The accounting policies of the Company conform to U.S. 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. An allowance for funds used during construction is also added for the Company's regulated assets, and interest during construction is added for nonregulated assets. 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 value, 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 2000, 1999, and 1998 was approximately 3% of the average depreciable cost. FUEL AND GAS COSTS In the Missouri and Illinois retail electric utility jurisdictions, the cost of fuel for electric generation is reflected in base rates with no provision for changes to be made through fuel adjustment clauses. (See Note 2 - Regulatory Matters for further information.) In the Illinois and Missouri retail gas utility jurisdictions, changes in gas costs are generally reflected in billings to gas customers through purchased gas adjustment clauses. 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 net kilowatthours generated and sold. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand and temporary investments purchased with an original 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. 18 WWW.AMEREN.COM PAGE 31 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 regulated 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 ratemaking 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 were 6% - 10% during 2000, 5% - 10% during 1999, and 6% - 9% during 1998. 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. ENERGY CONTRACTS 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 changes in fair market value included in earnings. AmerenEnergy, Inc. enters into contracts for the sale and purchase of energy on behalf of AmerenUE and Generating Company. Currently, virtually all of AmerenEnergy's transactions are considered non-trading activities and are accounted for using the accrual or settlement method, which represents industry practice. See Note 15 - Statement of Financial Accounting Standards No. 133 for information related to adoption of a new accounting standard in 2001. SOFTWARE 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. EVALUATION OF ASSETS FOR IMPAIRMENT 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" prescribes general standards for the recognition and measurement of impairment losses. The Company determines if long-lived assets are impaired by comparing their undiscounted expected future cash flows to their carrying amount. An impairment loss is recognized if the undiscounted expected future cash flows are less than the carrying amount of the asset. SFAS 121 also 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). As of December 31, 2000, no impairment was identified. STOCK COMPENSATION PLANS The Company applies Accounting Principles Board Opinion (APB) 25, "Accounting for Stock Issued to Employees" in accounting for its plans. See Note 11 - Stock Option Plans for further information. EARNINGS PER SHARE The Company's calculation of basic and diluted earnings per share resulted in the same earnings per share amounts for each of the years 2000, 1999 and 1998. 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 183,201 shares, 38,786 shares and 29,787 shares in 2000, 1999 and 1998, respectively. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions 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 2000 reporting. NOTE 2 - REGULATORY MATTERS MISSOURI ELECTRIC In July 1995, the MoPSC approved an agreement establishing contractual obligations involving the Company's Missouri retail electric rates. Included was a three-year experimental alternative regulation plan (the Original Plan) that ran from July 1, 1995, through June 30, 1998, which provided that earnings in those years in excess of a 12.61% regulatory return on equity (ROE) be shared equally between customers and stockholders, and earnings above a 14% ROE be credited to customers. The formula for computing the credit used twelve-month results ending June 30, rather than calendar year earnings. In 1998, the Company recorded an estimated $43 million credit for the final year of the Original Plan, which reduced earnings $26 million, or 18 cents per share. 19 PAGE 32 AMEREN CORPORATION 2000 ANNUAL REPORT The MoPSC staff proposed adjustments to the Company's estimated customer credit for the final year of the Original Plan ended June 30, 1998, which were the subject of regulatory proceedings before the MoPSC in 1999. In December 1999, the MoPSC issued a Report and Order (Order) concerning these proposed adjustments. Based on the provisions of that Order, the Company revised its estimated final year credit of the Original Plan to $31 million in the quarter ended December 31, 1999. Subsequently, the Company filed a request for rehearing of the Order with the MoPSC, asking that it reconsider its decision to adopt certain of the MoPSC staff's adjustments. The request was denied by the MoPSC and in February 2000, the Company filed a Petition for Writ of Review with the Circuit Court of Cole County, Missouri, requesting that the Order be reversed. The appeal is pending and the ultimate outcome cannot be predicted; however, the final decision is not expected to materially impact the financial condition, results of operations or liquidity of the Company. A partial stay of the Order was granted by the Court pending the appeal. A new three-year experimental alternative regulation plan (the New Plan) was included in the joint agreement authorized 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% ROE up to a 14% ROE be shared equally between customers and stockholders. The New Plan also returns to customers 90% of all earnings above a 14% ROE up to a 16% ROE. Earnings above a 16% ROE are credited entirely to customers. The New Plan runs from July 1, 1998 through June 30, 2001. In November 2000, the MoPSC approved a stipulation and agreement of the parties regarding the credit for the plan year ended June 30, 1999 of $22 million, which was paid. At December 31, 2000, the Company has recorded estimated credits that the Company expects to pay its Missouri electric customers of $50 million and $35 million for the plan years ended June 30, 2001 and June 30, 2000, respectively. During the year ended December 31, 2000, the Company recorded estimated credits in total of $65 million for plan years under the New Plan, compared to $33 million in the year ago period. These credits were reflected as a reduction in electric revenues. The final amount of the credits will depend on several factors, including the Company's earnings for the respective 12 months ended June 30, 2001. 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 Plan. The rate decrease was impacted by the Order issued by the MoPSC in December 1999 relating to the estimated credit for the third year of the Original Plan and a settlement reached between Ameren, the MoPSC staff and other parties relating to the calculation of the weather-adjusted credits. Based on those results, Ameren estimates that its Missouri electric rate decrease will be $17 million on an annualized basis. This estimate is subject to the final outcome of the above-referenced court appeal of the Order. On February 1, 2001, the Company, MoPSC staff, and other parties submitted filings to the MoPSC addressing the merits of extending the current experimental alternative regulation plan. In its filing, the Company supported an extension of this plan with certain modifications, including retail electric rate reductions and additional customer credits. The MoPSC staff filing noted several concerns with the current plan and suggested that under traditional cost of service ratemaking, an annualized electric rate decrease of at least $100 million could be warranted. The Company has been engaged in discussions with the MoPSC staff and other parties in an effort to address issues associated with possible extension of the New Plan. At this time, the Company cannot predict the outcome of these discussions or the timing or amount of any future electric rate reductions. GAS In October 2000, the MoPSC approved a $4 million annual rate increase for natural gas service in AmerenUE's Missouri jurisdiction. The rate increase became effective November 1, 2000. In February 1999, the ICC approved a $9 million total annual rate increase for natural gas service in AmerenUE's and AmerenCIPS' Illinois jurisdictions. The increase became effective in February 1999. MIDWEST ISO In 1998, AmerenUE and AmerenCIPS joined a group of companies that originally supported the formation of the Midwest Independent System Operator (Midwest ISO). An ISO operates, but does not own, electric transmission systems and maintains system reliability and security, while facilitating wholesale and retail competition through the elimination of "pancaked" transmission rates. The Midwest ISO is regulated by the FERC. The FERC conditionally approved the formation of the Midwest ISO in September 1998. The MoPSC and the ICC have authorized AmerenUE and AmerenCIPS to join the Midwest ISO. In December 1999, the FERC issued Order 2000 relating to Regional Transmission Organizations (RTOs) that would meet certain characteristics such as size and independence. RTOs, including ISOs, are entities that ensure comparable and non-discriminatory access to regional electric transmission systems. Order 2000 calls on all transmission owners to join RTOs. Following the announcements of Commonwealth Edison and Illinois Power of their intent to withdraw from the Midwest ISO and join the Alliance Regional Transmission Organization (Alliance RTO), the Company determined that the operational configuration of the Midwest ISO was unacceptable and announced its withdrawal in November 2000. The Company decided to withdraw to ensure the continued reliable and efficient operation of the Ameren transmission system. As a result of the Company's decision to withdraw from the Midwest ISO, in the fourth quarter of 2000, the Company recorded a pretax nonrecurring charge to earnings of $25 million ($15 million after income taxes, or 11 cents per share). This charge relates to the Company's estimated obligation under the Midwest 20 WWW.AMEREN.COM PAGE 33 ISO agreement for costs incurred by the Midwest ISO, plus estimated exit costs. In January 2001, the Company announced that it had signed an agreement to join the Alliance RTO. Also, in January 2001, the FERC conditionally approved the formation, including the rate structure, of the Alliance RTO. Ameren's withdrawal from the Midwest ISO and its membership in the Alliance RTO are subject to regulatory approvals. At this time, the Company is unable to determine the impact that its withdrawal from the Midwest ISO and its participation in the Alliance RTO will have on its future financial condition, results of operations or liquidity. ILLINOIS ELECTRIC RESTRUCTURING AND RELATED MATTERS In December 1997, the Governor of Illinois signed the Electric Service Customer Choice and Rate Relief Law of 1997 (the Illinois Law) providing for electric utility restructuring in Illinois. This legislation introduces competition into the supply of electric energy at retail in Illinois. Under the Illinois Law, retail direct access, which allows customers to choose their electric generation suppliers, will be phased in over several years. Access for commercial and industrial customers occurred over a period from October 1999 to December 2000, and access for residential customers will occur after May 1, 2002. As a requirement of the Illinois Law, in March 1999, AmerenUE and AmerenCIPS filed delivery service tariffs with the ICC. These tariffs would be used by electric customers who choose to purchase their power from alternate suppliers. In August 1999, the ICC issued an order approving the delivery services tariffs, with an allowed rate of return on equity of 10.45%. AmerenUE and AmerenCIPS filed a joint petition for rehearing of that order requesting the ICC to alter its conclusions on a number of issues. In January 2000, the ICC issued an order resolving the issues set for rehearing. In December 2000, AmerenUE and AmerenCIPS filed revised Illinois delivery services tariffs with the ICC. The purpose of the filing was to update financial information that was used to establish the initial rates and to propose new rates. Additionally, the filing establishes tariffs for residential customers who may choose to purchase their power from alternate suppliers beginning in May 2002. These tariffs are subject to ICC approval. The Company expects that the ICC will issue its decision with respect to the tariffs in early 2002. The Illinois Law included a 5% residential electric rate decrease for the Company's Illinois electric customers, effective August 1, 1998. This rate decrease reduced electric revenues approximately $8 million in 1999. Under the Illinois Law, the Company was subject to an additional 5% residential electric rate decrease in 2000 and is subject to an additional 5% residential electric rate decrease in 2002, to the extent its rates exceed the Midwest utility average at that time. In 2000, the Company's Illinois electric rates were below the Midwest utility average. As a result of the Illinois Law, AmerenUE and AmerenCIPS filed proposals with the ICC to eliminate their electric fuel adjustment clauses for Illinois retail customers, thereby including historical levels of fuel costs in base rates. The ICC approved AmerenUE's and AmerenCIPS' filings in early 1998. The Illinois Law also contains a provision requiring that one-half of excess earnings from the Illinois jurisdiction for the years 1998 through 2004 be refunded to Ameren's Illinois 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% of the two-year average of an Index, as defined in the Illinois 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% to 7%. Filings must be made with the ICC on, or before, March 31 of each year 2000 through 2005. The Company did not record any estimated refunds to Illinois customers in 2000. In conjunction with another provision of the Illinois Law, on May 1, 2000, following the receipt of all required state and federal regulatory approvals, AmerenCIPS transferred its electric generating assets and liabilities, at historical net book value, to Generating Company, in exchange for a promissory note from Generating Company in the principal amount of approximately $552 million and Generating Company common stock (the Transfer). In addition, on June 30, 2000, Generating Company borrowed $50 million from Ameren to assist with the future development of combustion turbine generating facilities and to meet working capital needs. The promissory notes bear interest at 7% and each have a term of five years payable based on a 10-year amortization. The transferred assets represent a generating capacity of approximately 2,900 megawatts. Approximately 45% of AmerenCIPS' employees were transferred to Generating Company as part of the transaction. In conjunction with the Transfer, an electric power supply agreement was entered into between Generating Company and its newly created nonregulated affiliate, AmerenEnergy Marketing Company (Marketing Company), also a wholly owned subsidiary of AmerenEnergy Resources Company. Under this agreement, Marketing Company is entitled to purchase all of the Generating Company's energy and capacity. This agreement may not be terminated until at least December 31, 2004. In addition, Marketing Company entered into an electric power supply agreement with AmerenCIPS to supply it sufficient energy and capacity to meet its obligations as a public utility through December 31, 2004. This agreement expires December 31, 2004. Power will continue to be jointly dispatched between AmerenUE and Generating Company. The creation of the new subsidiaries and the transfer of AmerenCIPS' generating assets and liabilities had no effect on the financial statements of Ameren as of the date of transfer. Other provisions of the Illinois Law include (1) potential recovery of a portion of strandable costs, which represent costs which would not be recoverable in a restructured environment, through a transition charge collected from customers who choose another 21 PAGE 34 AMEREN CORPORATION 2000 ANNUAL REPORT electric supplier; (2) a mechanism to securitize certain future revenues; and (3) a provision relieving the Company of the requirement to file electric rate cases or alternative regulatory plans in Illinois, following the consummation of the Merger to reflect the effects of net merger savings. In August 1999, the Company filed a transmission system rate case with the FERC. This filing was primarily designed to implement rates, terms and conditions for transmission service for wholesale customers and those retail customers in Illinois who choose other suppliers as allowed under the Illinois Law. In January 2000, the Company and other parties to the rate case entered into a settlement agreement resolving all issues pending before the FERC. In May 2000, the FERC approved the settlement and allowed the settlement rates to become effective as of the first quarter of 2000. The provisions of the Illinois Law could also result in lower revenues, reduced profit margins and increased costs of capital and operations expense. At this time, the Company is unable to determine the impact of the Illinois Law on the Company's future financial condition, results of operations or liquidity. In September 2000, AmerenUE and AmerenCIPS filed a request with the ICC seeking authorization to transfer AmerenUE's Illinois-based electric and natural gas businesses and its Illinois-based distribution and transmission assets and personnel to AmerenCIPS. The distribution and transmission assets and related liabilities are proposed to be transferred from AmerenUE to AmerenCIPS at historical net book value, estimated to be approximately $102 million at December 31, 2000. In October 2000, AmerenUE filed with the MoPSC, and in December 2000, Ameren filed with the SEC for approval of this transfer. The transfer is also subject to approval by the FERC. The ICC issued an order in December 2000 approving the request as it relates to AmerenUE's electric business. The proposed transfer of AmerenUE's gas business is pending before the ICC in a separate proceeding. The transfer is not expected to have a material effect on the financial statements of Ameren as of the date of transfer. MISSOURI ELECTRIC RESTRUCTURING In Missouri, where approximately 70% of the Company's retail electric revenues are derived, restructuring bills were introduced by the Missouri legislature in 1999 and 2000. The Company is unable to predict the timing or ultimate outcome of electric utility restructuring in the state of Missouri or the impact of potential electric industry restructuring matters 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 writedown of certain assets, including generation-related plant and net regulatory assets, lower revenues, reduced profit margins and increased costs of capital and operations expense. At December 31, 2000, 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 balance sheet. In addition, at December 31, 2000, the Company's Missouri net generation-related regulatory assets approximated $442 million. REGULATORY ASSETS AND LIABILITIES In accordance with SFAS No. 71, "Accounting for the Effects of Certain Types of Regulation," 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:
In Millions 2000 1999 - ----------------------------------------------------------- REGULATORY ASSETS: Income taxes $ 600 $ 623 Callaway costs 88 92 Unamortized loss on reacquired debt 31 31 Merger costs 17 27 Other 23 26 ---------------- Regulatory Assets $ 759 $ 799 ---------------- REGULATORY LIABILITY: Income taxes $ 184 $ 188 ---------------- Regulatory Liability $ 184 $ 188 ----------------
Income taxes: See Note 9 - 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). 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. 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 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. NOTE 3 - TARGETED SEPARATION PLAN In July 1998, the Company offered separation packages to employees whose positions were eliminated through a targeted separation plan (TSP). During the third quarter of 1998, a nonrecurring, pretax charge of $25 million was recorded, reducing earnings $15 million, or 11 cents per share. This represented costs incurred to implement the TSP. 22 WWW.AMEREN.COM PAGE 35 NOTE 4 - CONCENTRATION OF RISK MARKET RISK The Company engages in price risk management activities related to electricity and fuel. In addition to buying and selling these commodities, the Company uses derivative financial instruments to manage market risks and to reduce exposure resulting from fluctuations in interest rates and the prices of electricity and fuel. Hedging instruments used include futures, forward contracts and options. The use of these types of contracts allows the Company to manage and hedge its contractual commitments and reduce exposure related to the volatility of commodity market prices. CREDIT RISK Credit risk represents the loss that would be recognized if counterparties fail to perform as contracted. New York Mercantile Exchange (NYMEX) traded futures contracts are supported by the financial and credit quality of the clearing members of the NYMEX and have nominal credit risk. On all other transactions, the Company is exposed to credit risk in the event of nonperformance by the counterparties in the transaction. The Company's financial instruments subject to credit risk consist primarily of trade accounts receivables and forward contracts. The risk associated with trade receivables is mitigated by the large number of customers in a broad range of industry groups comprising the Company's customer base. No customer represents greater than 10% of the Company's accounts receivable. The Company's revenues are primarily derived from sales of electricity and natural gas to customers in Missouri and Illinois. For each counterparty in forward contracts, the Company analyzes the counterparty's financial condition prior to entering into an agreement, establishes credit limits and monitors the appropriateness of these limits on an ongoing basis through a credit risk management program. NOTE 5 - NUCLEAR FUEL LEASE The Company has a lease agreement that provides for the financing of nuclear fuel. At December 31, 2000, the maximum 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 $13 million in 2000, $16 million during 1999 and $23 million during 1998. The Company has capitalized the cost, including certain interest costs, of the leased nuclear fuel and has recorded the related lease obligation. Total interest charges under the lease were $8 million in 2000 and $5 million in 1999 and 1998. Interest charges for these years were based on average interest rates of approximately 7%. Interest charges of $6 million were capitalized in 2000, and $4 million and $3 million, respectively, were capitalized in 1999 and 1998. NOTE 6 - SHAREHOLDER RIGHTS PLAN AND PREFERRED STOCK OF SUBSIDIARIES In October 1998, the Company's Board of Directors approved a share purchase rights plan designed to assure shareholders of fair and equal treatment in the event of a proposed takeover. The rights will be exercisable only if a person or group acquires 15% or more of Ameren's common stock or announces a tender offer, the consummation of which would result in ownership by a person or group of 15% or more of the common stock. Each right will entitle the holder to purchase one one-hundredth of a newly issued preferred stock at an exercise price of $180. If a person or group acquires 15% or more of Ameren's outstanding common stock, each right will entitle its holder (other than such person or members of such group) to purchase, at the right's then-current exercise price, a number of Ameren's common shares having a market value of twice such price. In addition, if Ameren is acquired in a merger or other business combination transaction after a person or group has acquired 15% or more of the Company's outstanding common stock, each right will entitle its holder to purchase, at the right's then-current exercise price, a number of the acquiring company's common shares having a market value of twice such price. The acquiring person or group will not be entitled to exercise these rights. The SEC approved the plan under PUHCA in December 1998. The rights were issued as a dividend payable January 8, 1999, to shareholders of record on that date; these rights expire in 2008. One right will accompany each new share of Ameren common stock issued prior to such expiration date. At December 31, 2000 and 1999, AmerenUE and AmerenCIPS had 25 million shares and 4.6 million shares respectively, of authorized preferred stock. Outstanding preferred stock is entitled to cumulative dividends and is redeemable at the prices shown in the following table:
Redemption Price December 31, Dollars In Millions (per share) 2000 1999 - ----------------------------------------------------------------- PREFERRED STOCK OUTSTANDING NOT SUBJECT TO MANDATORY REDEMPTION: Without par value and stated value of $100 per share-- $7.64 Series -330,000 shares $103.82 - note(a) $ 33 $ 33 $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
23 PAGE 36 AMEREN CORPORATION 2000 ANNUAL REPORT
REDEMPTION PRICE DECEMBER 31, DOLLARS IN MILLIONS (PER SHARE) 2000 1999 - ------------------------------------------------------------------------------ PREFERRED STOCK OUTSTANDING NOT SUBJECT TO MANDATORY REDEMPTION (CONTINUED): $4.50 Series -213,595 shares 110.00 - note(b) 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 (c) 30 30 6.625% Series -125,000 shares 100.00 12 12 Without par value and stated value of $25 per share-- $1.735 Series -1,657,500 shares 25.00 42 42 ----------- TOTAL PREFERRED STOCK OUTSTANDING NOT SUBJECT TO MANDATORY REDEMPTION $235 $235 ===========
(a) Beginning February 15, 2003, eventually declining to $100 per share. (b) In the event of voluntary liquidation, $105.50. (c) 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 2000 was 4.86%. NOTE 7 - SHORT-TERM BORROWINGS Short-term borrowings of the Company consist of commercial paper (maturities generally within 1-45 days) and bank loans. At December 31, 2000 and 1999, $203 million and $148 million, respectively, of short-term borrowings were outstanding. The weighted average interest rates on borrowings outstanding at December 31, 2000 and 1999, were 6.7% and 6.3%, respectively. At December 31, 2000, the Company had committed bank lines of credit, aggregating $176 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. These lines of credit are renewable annually at various dates throughout the year. The Company also has bank credit agreements totaling $463 million, expiring at various dates between 2001 and 2002, that support a portion of the Company's commercial paper program. At December 31, 2000, all was unused and $296 million of such borrowing was available. The Company has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. Separate money pools are maintained between regulated and nonregulated businesses. Interest is calculated at varying rates of interest depending on the composition of internal and external funds in the money pools. This debt and the related interest represent intercompany balances, which are eliminated at the Ameren Corporation consolidated level. NOTE 8 - LONG-TERM DEBT
December 31, In Millions 2000 1999 - ---------------------------------------------------------------- FIRST MORTGAGE BONDS - note (a) 7.40% Series paid in 2000 $ - $ 60 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 40 8 3/4% Series due 2021 125 125 8 1/4% Series due 2022 104 104 8% Series due 2022 85 85 7.15% Series due 2023 75 75 7% Series due 2024 100 100 6.125% Series due 2028 60 60 5.45% Series due 2028 - note (b) 44 44 Other 5.375% - 7.05% due 2001 through 2008 123 158 ------------- 1,442 1,537 ------------- ENVIRONMENTAL IMPROVEMENT/POLLUTION CONTROL REVENUE BONDS 1985 Series A paid in 2000 - 70 1985 Series B paid in 2000 - 57 1990 Series B paid in 2000 - 32 1991 Series due 2020 - note (c) 43 43 1992 Series due 2022 - note (c) 47 47 1993 Series A 6 3/8% due 2028 35 35 1993 Series C-1 due 2026 - note (c) 35 35 1998 Series A due 2033 - note (c) 60 60 1998 Series B due 2033 - note (c) 50 50 1998 Series C due 2033 - note (c) 50 50 2000 Series A due 2014 - note (c) 51 - 2000 Series A due 2035 - note (c) 64 - 2000 Series B due 2035 - note (c) 63 - 2000 Series C due 2035 - note (c) 60 - Other 4.13% - 7.60% due 2014 through 2028 60 80 -------------- 618 559 -------------- SUBORDINATED DEFERRABLE INTEREST DEBENTURES 7.69% Series A due 2036 - note (d) 66 66 -------------- UNSECURED LOANS Commercial paper - note (e) 19 152 1991 Senior Medium Term Notes 8.60% due through 2005 33 41 1994 Senior Medium Term Notes 6.61% due through 2005 39 46 2000 Senior Notes 7.61% due 2004 40 - 2000 Senior Notes Series A 7 3/4% due 2005 - note (f) 225 - 2000 Senior Notes Series B 8.35% due 2010 - note (g) 200 - -------------- 556 239 -------------- NUCLEAR FUEL LEASE 114 116 -------------- UNAMORTIZED DISCOUNT AND PREMIUM ON DEBT (7) (8) -------------- MATURITIES DUE WITHIN ONE YEAR (44) (61) -------------- TOTAL LONG-TERM DEBT $2,745 $2,448 ==============
24 WWW.AMEREN.COM PAGE 37 (a) At December 31, 2000, a majority 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) 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 2000 are as follows: 1991 Series 4.39% 1992 Series 4.31% 1993 Series 4.19% 1998 Series A 4.31% 1998 Series B 4.28% 1998 Series C 4.33% 2000 Series A, 2014 4.34% 2000 Series A, 2035 4.57% 2000 Series B 4.57% 2000 Series C 4.56%
(d) During the terms of the debentures, the Company may, under certain circumstances, defer the payment of interest for up to five years. (e) A bank credit agreement, due 2002, permits AmerenUE to borrow or to support commercial paper borrowings up to $300 million. Interest rates will vary depending on market conditions. At December 31, 2000, $19 million of such borrowings were outstanding. (f) Interest is payable semiannually in arrears on May 1 and November 1 of each year, commencing May 1, 2001. Principal will be payable on November 1, 2005. (g) Interest is payable semiannually in arrears on May 1 and November 1 of each year, commencing May 1, 2001. Principal will be payable on November 1, 2010. Maturities of long-term debt through 2005 are as follows:
In Millions Principal Amount - -------------------------------- 2001 $44 2002 142 2003 160 2004 328 2005 258
Amounts for years subsequent to 2001 do not include nuclear fuel lease payments since the amounts of such payments are not currently determinable. NOTE 9 - INCOME TAXES Total income tax expense for 2000 resulted in an effective tax rate of 39% on earnings before income taxes (39% in 1999 and 40% in 1998). Principal reasons such rates differ from the statutory federal rate:
2000 1999 1998 - ------------------------------------------------------------- STATUTORY FEDERAL INCOME TAX RATE: 35% 35% 35% Increases (Decreases) from: Depreciation differences 2 1 1 State tax 3 4 4 Other (1) (1) - ----------------------- EFFECTIVE INCOME TAX RATE 39% 39% 40% ======================= Income tax expense components: In Millions 2000 1999 1998 - ------------------------------------------------------------ TAXES CURRENTLY PAYABLE (PRINCIPALLY FEDERAL): Included in operating expenses $307 $287 $303 Included in other income-- Miscellaneous, net (2) (3) (6) ------------------------ 305 284 297 ------------------------ Income tax expense components (continued): In Millions 2000 1999 1998 - ------------------------------------------------------------- DEFERRED TAXES (PRINCIPALLY FEDERAL): Included in operating expenses-- Depreciation differences (5) 3 (10) Other 7 (23) (17) Included in other income-- Other - (2) 2 ------------------------- 2 (22) (25) ------------------------- DEFERRED INVESTMENT TAX CREDITS, AMORTIZATION: Included in operating expenses (8) (8) (8) ------------------------- TOTAL INCOME TAX EXPENSE $299 $254 $264 =========================
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. Temporary differences gave rise to the following deferred tax assets and deferred tax liabilities at December 31:
In Millions 2000 1999 - ------------------------------------------------------------ ACCUMULATED DEFERRED INCOME TAXES: Depreciation $1,043 $1,038 Regulatory assets, net 417 433 Capitalized taxes and expenses 181 130 Deferred benefit costs (73) (58) Other 22 21 -------------------- TOTAL NET ACCUMULATED DEFERRED INCOME TAX LIABILITIES $1,590 $1,564 ====================
NOTE 10 - RETIREMENT BENEFITS The Company has defined benefit retirement plans covering substantially all employees of AmerenUE, AmerenCIPS, and Ameren Services Company and certain employees of AmerenEnergy Resources Company and its subsidiaries. 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. On January 1, 1999, the AmerenUE and the AmerenCIPS pension plans combined to form the Ameren Retirement Plans. The AmerenUE and AmerenCIPS pension plans' information for 1998 is presented separately. Following is the pension plan information related to Ameren's plans as of December 31. 25 PAGE 38 AMEREN CORPORATION 2000 ANNUAL REPORT Pension costs for 2000 and 1999 were $3 million and $24 million, respectively, of which 21% and 18%, respectively, were charged to construction accounts. FUNDED STATUS OF AMEREN'S PENSION PLANS:
In Millions 2000 1999 - -------------------------------------------------------------------------------- CHANGE IN BENEFIT OBLIGATION Net benefit obligation at beginning of year $ 1,257 $ 1,321 Service cost 30 33 Interest cost 98 91 Plan amendments 28 -- Actuarial (gain)/loss 38 (95) Benefits paid (89) (93) ------- ------- Net benefit obligation at end of year 1,362 1,257 ------- ------- CHANGE IN PLAN ASSETS* Fair value of plan assets at beginning of year 1,427 1,372 Actual return on plan assets 20 146 Employer contributions 1 2 Benefits paid (89) (93) ------- ------- Fair value of plan assets at end of year 1,359 1,427 ------- ------- Funded status - deficiency/(excess) 3 (170) Unrecognized net actuarial gain 160 310 Unrecognized prior service cost (82) (62) Unrecognized net transition asset 6 7 ------- ------- ACCRUED PENSION COST AT DECEMBER 31 $ 87 $ 85 ======= =======
* Plan assets consist principally of common stocks and fixed income securities. COMPONENTS OF AMEREN'S NET PERIODIC PENSION BENEFIT COST:
In Millions 2000 1999 - -------------------------------------------------------------------------------- Service cost $ 30 $ 33 Interest cost 98 91 Expected return on plan assets (110) (104) Amortization of: Transition asset (1) (1) Prior service cost 7 7 Actuarial gain (21) (2) ----- ----- NET PERIODIC BENEFIT COST $ 3 $ 24 ===== =====
WEIGHTED-AVERAGE ASSUMPTIONS FOR ACTUARIAL PRESENT VALUE OF PROJECTED BENEFIT OBLIGATIONS:
2000 1999 - -------------------------------------------------------------------------------- Discount rate at measurement date 7.50% 7.75% Expected return on plan assets 8.50% 8.50% Increase in future compensation 4.50% 4.75%
AmerenUE's plans cover substantially all employees of AmerenUE as well as certain employees of Ameren Services Company. Pension costs for AmerenUE's plans for the year 1998 were $28 million, of which approximately 19% were charged to construction accounts. COMPONENTS OF AMERENUE'S NET PERIODIC PENSION BENEFIT COST:
In Millions 1998 - -------------------------------------------------------------------------------- Service cost $ 24 Interest cost 70 Expected return on plan assets (75) Amortization of: Transition asset (1) Prior service cost 6 Actuarial gain (3) Special termination benefit charge 7 ---- NET PERIODIC BENEFIT COST $ 28 ====
AmerenCIPS' plans cover substantially all employees of AmerenCIPS as well as certain employees of Ameren Services Company. Pension costs for AmerenCIPS' plans for the year 1998 were $9 million, of which approximately 19% were charged to construction accounts. COMPONENTS OF AMERENCIPS' NET PERIODIC PENSION BENEFIT COST:
In Millions 1998 - -------------------------------------------------------------------------------- Service cost $ 8 Interest cost 17 Expected return on plan assets (22) Amortization of prior service cost 1 Special termination benefit charge 5 ---- NET PERIODIC BENEFIT COST $ 9 ====
In addition to providing pension benefits, the Company provides certain health care and life insurance benefits for retired employees. The Company accrues the expected postretirement benefit costs during employees' years of service. On January 1, 2000, the AmerenUE and the AmerenCIPS postretirement benefit plans combined to form the Ameren Plans. The Ameren Plans cover substantially all employees of AmerenUE, AmerenCIPS, and Ameren Services Company and certain employees of AmerenEnergy Resources Company and its subsidiaries. The AmerenUE and AmerenCIPS postretirement plans' information for 1999 and 1998 is presented separately. Following is the postretirement plan information related to Ameren's plans as of December 31, 2000. Ameren's funding policy is to annually fund the Voluntary Employee Beneficiary Association trusts (VEBA) with the lesser of the net periodic cost or the amount deductible for federal income tax purposes. Postretirement benefit costs were $58 million for 2000, of which approximately 17% were charged to construction accounts. Ameren's transition obligation at December 31, 2000, is being amortized over the next 12 years. The MoPSC and the ICC allow the recovery of postretirement benefit costs in rates to the extent that such costs are funded. 26 WWW.AMEREN.COM PAGE 39 FUNDED STATUS OF AMEREN'S POSTRETIREMENT BENEFIT PLANS:
In Millions 2000 - -------------------------------------------------------------------------------- CHANGE IN BENEFIT OBLIGATION Net benefit obligation at beginning of year $ 492 Service cost 20 Interest cost 43 Plan amendments (26) Actuarial loss 94 Benefits paid (34) ----- Net benefit obligation at end of year 589 ----- CHANGE IN PLAN ASSETS* Fair value of plan assets at beginning of year 269 Actual return on plan assets (4) Employer contributions 59 Benefits paid (34) ----- Fair value of plan assets at end of year 290 ----- Funded status - deficiency 299 Unrecognized net actuarial gain (14) Unrecognized prior service cost 2 Unrecognized net transition obligation (196) ----- POSTRETIREMENT BENEFIT LIABILITY AT DECEMBER 31 $ 91 =====
* Plan assets consist principally of common stocks, bonds, and money market instruments. COMPONENTS OF AMEREN'S NET PERIODIC POSTRETIREMENT BENEFIT COST:
In Millions 2000 - -------------------------------------------------------------------------------- Service cost $ 19 Interest cost 43 Expected return on plan assets (18) Amortization of: Transition obligation 16 Actuarial gain (2) ---- NET PERIODIC BENEFIT COST $ 58 ====
ASSUMPTIONS FOR THE OBLIGATION MEASUREMENTS:
2000 - -------------------------------------------------------------------------------- Discount rate at measurement date 7.50% Expected return on plan assets 8.50% Medical cost trend rate - initial -- - ultimate 5.0% Ultimate medical cost trend rate expected in year 2000
A 1% increase in the medical cost trend rate is estimated to increase the net periodic cost and the accumulated postretirement benefit obligation approximately $7 million and $51 million, respectively. A 1% decrease in the medical cost trend rate is estimated to decrease the net periodic cost and the accumulated postretirement benefit obligation approximately $6 million and $46 million, respectively. AmerenUE's plans cover substantially all employees of AmerenUE as well as certain employees of Ameren Services Company. Postretirement benefit costs were $46 million for 1999 and $43 million in 1998, of which approximately 18% in 1999 and 17% in 1998 were charged to construction accounts. FUNDED STATUS OF AMERENUE'S POSTRETIREMENT BENEFIT PLANS:
In Millions 1999 - -------------------------------------------------------------------------------- CHANGE IN BENEFIT OBLIGATION Net benefit obligation at beginning of year $ 360 Service cost 15 Interest cost 25 Actuarial gain (20) Benefits paid (26) ----- Net benefit obligation at end of year 354 ----- CHANGE IN PLAN ASSETS* Fair value of plan assets at beginning of year 110 Actual return on plan assets 4 Employer contributions 46 Benefits paid (26) ----- Fair value of plan assets at end of year 134 ----- Funded status - deficiency 220 Unrecognized net actuarial gain 29 Unrecognized prior service cost (3) Unrecognized net transition obligation (162) ----- POSTRETIREMENT BENEFIT LIABILITY AT DECEMBER 31 $ 84 =====
* Plan assets consist principally of common stocks, bonds, and money market instruments. COMPONENTS OF AMERENUE'S NET PERIODIC POSTRETIREMENT BENEFIT COST:
In Millions 1999 1998 - -------------------------------------------------------------------------------- Service cost $ 15 $ 14 Interest cost 25 24 Expected return on plan assets (6) (5) Amortization of: Transition obligation 12 12 Actuarial gain -- (2) ---- ---- NET PERIODIC BENEFIT COST $ 46 $ 43 ==== ====
ASSUMPTIONS FOR THE OBLIGATION MEASUREMENTS:
1999 - -------------------------------------------------------------------------------- Discount rate at measurement date 7.75% Expected return on plan assets 8.50% Medical cost trend rate - initial -- - ultimate 5.25% Ultimate medical cost trend rate expected in year 2000
AmerenCIPS' plans cover substantially all employees of AmerenCIPS as well as certain employees of Ameren Services Company. Postretirement benefit costs were $3 million for 1999 and $6 million for 1998, of which approximately 10% and 20% were charged to construction accounts, respectively. 27 PAGE 40 AMEREN CORPORATION 2000 ANNUAL REPORT FUNDED STATUS OF AMERENCIPS' POSTRETIREMENT BENEFIT PLANS:
In Millions 1999 - -------------------------------------------------------------------------------- CHANGE IN BENEFIT OBLIGATION Net benefit obligation at beginning of year $ 152 Service cost 3 Interest cost 9 Actuarial gain (22) Benefits paid (4) ----- Net benefit obligation at end of year 138 ----- CHANGE IN PLAN ASSETS* Fair value of plan assets at beginning of year 128 Actual return on plan assets 10 Employer contributions 1 Benefits paid (4) ----- Fair value of plan assets at end of year 135 ----- Funded status - deficiency 3 Unrecognized net actuarial gain 75 Unrecognized net transition obligation (71) ----- POSTRETIREMENT BENEFIT LIABILITY AT DECEMBER 31 $ 7 =====
* Plan assets consist principally of common stocks, bonds, and money market instruments. COMPONENTS OF AMERENCIPS' NET PERIODIC POSTRETIREMENT BENEFIT COST:
In Millions 1999 1998 - -------------------------------------------------------------------------------- Service cost $ 3 $ 3 Interest cost 9 10 Expected return on plan assets (9) (8) Amortization of: Transition obligation 6 5 Actuarial gain (6) (4) ---- ---- NET PERIODIC BENEFIT COST $ 3 $ 6 ==== ====
ASSUMPTIONS FOR THE OBLIGATION MEASUREMENTS:
1999 - -------------------------------------------------------------------------------- Discount rate at measurement date 7.75% Expected return on plan assets 8.50% Medical cost trend rate - initial -- - ultimate 5.25% Ultimate medical cost trend rate expected in year 2000
NOTE 11 - STOCK OPTION PLANS The Company has a long-term incentive plan (the Plan) for eligible employees, which provides for the grant of options, 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 2010. Under the Plan, subject to adjustment as provided in the Plan, four million shares have been authorized to be issued or delivered under the Company's Plan. In accordance with APB 25, no compensation cost has been recognized for the Company's stock compensation plans. The Company has adopted the disclosure-only method of fair value data 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 2000, 1999, and 1998 net income and earnings per share would have been immaterial. The following table summarizes stock option activity during 2000, 1999 and 1998:
2000 ------------------------ Weighted Average Exercise Shares Price - -------------------------------------------------------------------------------- Outstanding at beginning of year 1,834,108 $ 38.22 Granted 957,100 31.00 Exercised 295,693 38.41 Cancelled or expired 57,183 37.88 --------- --------- OUTSTANDING AT END OF YEAR 2,438,332 $ 35.37 ========= ========= EXERCISABLE AT END OF YEAR 312,663 $ 39.58 ========= =========
1999 1998 ------------------------ ---------------------- Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price - -------------------------------------------------------------------------------- Outstanding at beginning of year 1,095,180 $ 39.41 496,070 $ 39.24 Granted 768,100 36.63 700,600 39.25 Exercised 11,162 37.20 72,390 36.81 Cancelled or expired 18,010 42.45 29,100 39.28 --------- -------- --------- -------- OUTSTANDING AT END OF YEAR 1,834,108 $ 38.22 1,095,180 $ 39.41 ========= ======== ========= ======== EXERCISABLE AT END OF YEAR 391,456 $ 39.06 173,653 $ 39.91 ========= ======== ========= ========
28 WWW.AMEREN.COM PAGE 41 Additional information about stock options outstanding at December 31, 2000:
Weighted Average Exercise Price Outstanding Shares Life (Years) Exercisable Shares - ----------------------------------------------------------------------------------- $31.00 945,100 9.1 -- 35.50 800 4.6 800 35.875 44,400 4.2 44,400 36.625 689,100 8.1 3,800 38.50 125,565 6.0 57,455 39.25 521,313 7.2 122,601 39.8125 5,300 7.5 1,325 43.00 106,754 4.6 82,282 - -----------------------------------------------------------------------------------
The fair values of stock options were estimated using a binomial option-pricing model with the following assumptions:
Grant Risk-free Option Expected Expected Date Interest Rate Term Volatility Dividend Yield - ---------------------------------------------------------------------------------- 2/11/00 6.81% 10 years 17.39% 6.61% 2/12/99 5.44% 10 years 18.80% 6.51% 6/16/98 5.63% 10 years 17.68% 6.55% 4/28/98 6.01% 10 years 17.63% 6.55% 2/10/97 5.70% 10 years 13.17% 6.53% 2/7/96 5.87% 10 years 13.67% 6.32% - ----------------------------------------------------------------------------------
NOTE 12 - COMMITMENTS AND CONTINGENCIES The Company is engaged in a capital program under which expenditures averaging approximately $676 million, including AFC and capitalized interest, are anticipated during each of the next five years. This estimate includes capital expenditures for the purchase of new combustion turbine generating facilities and for the replacement of four steam generators at its Callaway Nuclear Plant, as well as expenditures that will 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 committed to purchase combustion turbine generator equipment (CTs), which will add more than 2,300 megawatts to its net peaking capacity and are expected to cost approximately $1.1 billion. CTs with a total capacity of approximately 850 megawatts are planned to be installed in 2001, 515 megawatts in 2002, and 325 megawatts each in 2003, 2004 and 2005. The new capacity is expected to be operated by Generating Company (see Note 2 - Regulatory Matters for further information). The Company has commitments for the purchase of coal under long-term contracts. Coal contract commitments, including transportation costs, for 2001 through 2005 are estimated to total $1.6 billion. Total coal purchases, including transportation costs, for 2000, 1999 and 1998 were $507 million, $603 million and $567 million, respectively. The Company also has existing contracts with pipeline and natural gas suppliers to provide, transport and store natural gas for distribution and electric generation. Gas-related contract cost commitments for 2001 through 2005 are estimated to total $207 million. Total delivered natural gas costs were $209 million for 2000, $131 million for 1999, and $119 million for 1998. The Company's nuclear fuel commitments for 2001 through 2005, including uranium concentrates, conversion, enrichment and fabrication, are expected to total $111 million, and are expected to be substantially financed under the nuclear fuel lease. Nuclear fuel expenditures were $22 million in each of the years 2000 and 1999, and $20 million for 1998. Additionally, the Company has long-term contracts with other utilities to purchase electric capacity. These commitments for 2001 through 2005 are estimated to total $161 million. During 2000, 1999 and 1998, electric capacity purchases were $40 million, $44 million and $38 million, respectively. In the fourth quarter of 1999, AmerenCIPS and two of its coal suppliers executed agreements to terminate their existing coal supply contracts, effective December 31, 1999. Under these agreements, AmerenCIPS has made termination payments to the suppliers totaling approximately $52 million. These termination payments were recorded as a nonrecurring charge in the fourth quarter of 1999, equivalent to $31 million, after income taxes, or 23 cents per share. Total pretax fuel cost savings from these termination agreements are estimated to be $183 million (or $131 million net of the termination payments) through 2010, which is the maximum period that would have remained on any of the terminated coal supply contracts. Total estimated pretax fuel cost savings of $27 million were realized in 2000. The Company's insurance coverage for Callaway Nuclear Plant at December 31, 2000, was as follows: TYPE AND SOURCE OF COVERAGE
Maximum Assessments Maximum for Single In Millions Coverages Incidents - ---------------------------------------------------------------------------- Public Liability: American Nuclear Insurers $ 200 $ -- Pool Participation 9,338 88 (a) ---------- -------- $ 9,538 (b) $ 88 ---------- -------- Nuclear Worker Liability: American Nuclear Insurers $ 200 (c) $ 3 ---------- -------- Property Damage: Nuclear Electric Insurance Ltd. $ 2,750 (d) $ 11 ---------- -------- Replacement Power: Nuclear Electric Insurance Ltd. $ 490 (e) $ 2 ========== ========
(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. Price-Anderson expires in 2002. (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 12 weeks of an outage, plus $2.8 million per week for 110 weeks thereafter. 29 PAGE 42 AMEREN CORPORATION 2000 ANNUAL REPORT 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 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. Title IV of the Clean Air Act Amendments of 1990 required the Company to significantly reduce total annual sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions by the year 2000. By switching to low-sulfur coal, early banking of emission credits and installing advanced NOx reduction combustion technology, the Company is meeting these requirements. In July 1997, the United States Environmental Protection Agency (EPA) issued regulations revising the National Ambient Air Quality Standards for ozone and particulate matter. In May 1999, the U.S. Court of Appeals for the District of Columbia remanded the regulations back to the EPA for review. The EPA appealed the decision to the U.S. Supreme Court, and all arguments and briefs have been filed. A decision is expected in mid-2001. New ambient standards may require significant additional reductions in SO2 and NOx emissions from the Company's power plants by 2007. At this time, the Company is unable to predict the ultimate impact of these revised air quality standards on its future financial condition, results of operations or liquidity. In an attempt to lower ozone levels across the eastern United States, the EPA issued regulations in September 1998 to reduce NOx emissions from coal-fired boilers and other sources in 22 states, including Missouri and Illinois (where all of the Company's coal-fired power plant boilers are located). The regulations were challenged in a U.S. District Court. In March 2000, the Court upheld most of the regulations. However, the Court remanded the state of Missouri's regulations back to the EPA, for revision. The Court further delayed the compliance date of the regulations until 2004. The regulations mandate a 75% reduction in NOx emissions from utility boilers in Illinois by the year 2004. The final applicability of the rules as they might apply to power plant boilers in Missouri is still uncertain. The NOx emissions reductions already achieved on several of the Company's coal-fired power plants will help reduce the costs of compliance with these regulations. However, the regulations will require the installation of selective catalytic reduction technology on some of the Company's units, as well as additional controls. Currently, the Company estimates that its additional capital expenditures to comply with the final NOx regulations could range from $250 million to $300 million over the period from 2001 to 2005. Associated operations and maintenance expenditures could increase $10 million to $15 million annually, beginning in 2005. The Company is exploring alternatives to comply with these new regulations in order to minimize, to the extent possible, its capital costs and operating expenses. The Company is unable to predict the ultimate impact of these standards on its future financial condition, results of operations or liquidity. The Company is involved in a number of remediation actions to clean up hazardous waste sites as required by federal and state law. Such statutes require that responsible parties fund remediation actions regardless of fault, legality of original disposal, or ownership of a disposal site. AmerenUE and AmerenCIPS have been identified by the federal or state governments as a potentially responsible party (PRP) at several contaminated sites, including three sites that have been listed on the National Priorities List (NPL). The ICC permits the recovery of remediation and litigation costs associated with former manufactured gas plant (MGP) sites located in Illinois from the Company's Illinois electric and natural gas utility customers through environmental adjustment clause rate riders. To be recoverable, such costs must be prudently and properly incurred and are subject to annual reconciliation review by the ICC. Through December 31, 2000, the total costs deferred, net of recoveries from insurers and through environmental adjustment clause rate riders, was $6 million. The Company owns or is otherwise responsible for 14 MGP sites in Illinois. In addition, the Company owns or is otherwise responsible for 10 MGP sites in Missouri and 1 in Iowa. Unlike Illinois, the Company does not have in effect in Missouri a rate rider mechanism which permits remediation costs associated with MGP sites to be recovered from utility customers, and the Company has no retail utility operations in Iowa. In June 2000, the EPA notified AmerenUE and numerous other companies that certain properties in Sauget, Illinois, may contain soil and groundwater contamination. From approximately 1926 until 1976, AmerenUE operated a power generating facility and currently owns and operates electric transmission facilities in the area. At this time, the Company is unable to predict the ultimate impact of the Sauget site on its financial position, results of operations or liquidity. In September 2000, the United States Department of Justice was granted leave by the United States District Court - Southern District of Illinois to add numerous additional parties, including AmerenUE, to a preexisting lawsuit between the government and Monsanto Chemical Company and others. The government seeks recovery of response costs under the Comprehensive Environmental Response Compensation Liability Act of 1980 (commonly known as CERCLA or Superfund), incurred in connection with an Illinois 30 WWW.AMEREN.COM PAGE 43 Superfund site. The Company believes that the final resolution of this lawsuit will not have a material adverse effect on its financial position, results of operations or liquidity. In addition, the Company's operations, or that of its predecessor companies, involve the use, disposal and, in appropriate circumstances, the cleanup of substances regulated under environmental protection laws. The Company is unable to determine the impact these actions may have 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 1993 lockout of both unions by AmerenCIPS. The NLRB issued complaints against AmerenCIPS concerning its lockout. Both unions sought, among other things, back pay and other benefits for the period of the lockout. At that time, the Company estimated the amount of back pay and other benefits for both unions to be approximately $17 million. In August 1998, a three-member panel of the NLRB reversed the May 1996 decision of its administrative law judge and ruled in favor of AmerenCIPS holding that the lockout was lawful. In May 2000, the U.S. Court of Appeals for the District of Columbia Circuit issued a ruling upholding the NLRB's August 1998 decision. In December 2000, the U.S. Supreme Court denied the unions' request to review the U.S. Court of Appeals ruling. With this action by the U.S. Supreme Court, the unions have no further appeals available and the lawfulness of AmerenCIPS' 1993 lockout is upheld. Certain employees of the Company are represented by the International Brotherhood of Electrical Workers and the International Union of Operating Engineers. These employees comprise approximately 66% of the Company's workforce. New contracts with collective bargaining units representing approximately 59% of these employees were ratified in 1999 with terms expiring in 2002. New contracts with collective bargaining units representing approximately 41% of these employees were ratified in 2000 with terms expiring in 2003. In December 1996, a lawsuit was filed in the Circuit Court of Madison County, Illinois, alleging negligence on behalf of AmerenCIPS and one of its subcontractors for injuries arising out of an elevator accident which occurred at the AmerenCIPS' Newton Power Plant in November 1996. In October 2000, a settlement agreement was entered into between the parties. The settlement is the subject of a confidentiality agreement; however, AmerenCIPS has adequate insurance to cover the settlement and the judgment entered in these proceedings. As such, the final resolution of this lawsuit will not have a material adverse effect on the Company's 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 the Company's 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. NOTE 13 - CALLAWAY NUCLEAR PLANT Under the Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible for the permanent storage and disposal of spent nuclear fuel. The DOE currently charges one mill per nuclear-generated kilowatthour sold for future disposal of spent fuel. Electric utility 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 the Callaway Nuclear Plant site until 2020 and has the capability for additional storage capacity through the licensed life of the plant. The delayed availability of the DOE's disposal facility is not expected to adversely affect the continued operation of the Callaway Nuclear Plant. Electric utility rates charged to customers provide for recovery of Callaway Nuclear 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 $554 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 approximately $7 million in each of the years 2000, 1999 and 1998. Every three years, the MoPSC and ICC require 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 studies were filed in 1999. Costs collected from customers are deposited in an external trust fund to provide for Callaway's decommissioning. Fund earnings are expected to average approximately 9% annually through the date of decommissioning. If the assumed return on trust assets is not earned, the Company believes it is probable that any 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, 31 PAGE 44 AMEREN CORPORATION 2000 ANNUAL REPORT 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 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: 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 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. DERIVATIVE FINANCIAL INSTRUMENTS Market prices used to determine fair value are based on management's estimates, which take into consideration factors like closing exchange prices, over-the-counter prices, and time value of money and volatility factors. Carrying amounts and estimated fair values of the Company's financial instruments at December 31:
2000 1999 --------------------------------------------- Carrying Fair Carrying Fair In Millions Amount Value Amount Value - ---------------------------------------------------------------------------------- Preferred stock $ 235 $ 186 $ 235 $ 192 Long-term debt (Including current portion) 2,789 2,841 2,509 2,484 ===== ===== ===== =====
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 13 - 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, 2000 and 1999. In 2000, 1999 and 1998, the proceeds from the sale of investments were $61 million, $83 million and $29 million, respectively. Using the specific identification method to determine cost, the gross realized gains on those sales were approximately $1 million for 2000, and $11 million for 1999 and $2 million for 1998. 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:
Gross Unrealized 2000 In Millions ---------------- Security Type Cost Gain (Loss) Fair Value - ----------------------------------------------------------------------------- Debt securities $ 71 $ 3 $ -- $ 74 Equity securities 52 61 -- 113 Cash equivalents 4 -- -- 4 ------- ------- ------ ------- $ 127 $ 64 $ -- $ 191 ======= ======= ====== =======
Gross Unrealized 1999 In Millions ---------------- Security Type Cost Gain (Loss) Fair Value - ----------------------------------------------------------------------------- Debt securities $ 67 $ -- $ -- $ 67 Equity securities 45 73 -- 118 Cash equivalents 2 -- -- 2 ------- ------- ------ ------- $ 114 $ 73 $ -- $ 187 ======= ======= ====== =======
The contractual maturities of investments in debt securities at December 31, 2000 were as follows:
In Millions Cost Fair Value - -------------------------------------------------------------------------------- 1 year to 5 years $ 7 $ 7 5 years to 10 years 32 34 Due after 10 years 32 33 ----- ----- $ 71 $ 74 ===== =====
NOTE 15 - STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 133 In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities and requires recognition of all derivatives as either assets or liabilities on the balance sheet measured at fair value. The intended use of the derivatives and their designation as either a fair value hedge, a cash flow hedge, or a foreign currency hedge will determine when the gains or losses on the derivatives are to be reported in earnings and when they are to be reported as a component of other comprehensive income in stockholders' equity. In June 1999, the FASB issued 32 WWW.AMEREN.COM PAGE 45 SFAS No. 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. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of FASB Statement No. 133," which amended certain accounting and reporting standards of SFAS 133. The Company is adopting SFAS 133 in the first quarter of 2001. The Company expects the impact of this standard to result in a cumulative charge as of January 1, 2001 of $7 million after income taxes to the income statement and a cumulative adjustment of $11 million to decrease stockholders' equity. However, the Derivatives Implementation Group (DIG), a committee of the FASB responsible for providing guidance on the implementation of SFAS 133, has not reached a conclusion regarding the appropriate accounting treatment of certain types of energy contracts under SFAS 133. The Company is unable to predict when this issue will ultimately be resolved and the impact the resolution will have on the Company's future financial position, results of operations or liquidity. Implementation of SFAS 133 will likely increase the volatility of the Company's earnings in future periods. NOTE 16 - SEGMENT INFORMATION In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." Ameren's principal business segment is comprised of the utility operating companies that provide electric and gas service in portions of Missouri and Illinois. The other reportable segment includes the nonutility subsidiaries, as well as the Company's 60% interest in Electric Energy, Inc. The accounting policies of the segments are the same as those described in Note 1 - Summary of Significant Accounting Policies. Segment data includes intersegment revenues, as well as a charge allocating costs of administrative support services to each of the operating companies. These costs are accumulated in a separate subsidiary, Ameren Services Company, which provides a variety of support services to Ameren and its subsidiaries. The Company evaluates the performance of its segments and allocates resources to them, based on revenues, operating income and net income. The table below presents information about the reported revenues, net income, and total assets of Ameren for the years ended December 31:
Utility All Reconciling 2000 In Millions Operations Other Items Total - ----------------------------------------------------------------------------------- Revenues $ 4,119 $ 294 $ (557)* $ 3,856 Net income 457 -- -- 457 Total assets 10,777 287 (1,350) 9,714 ======= ===== ======== =======
* Elimination of intercompany revenues.
Utility All Reconciling 1999 In Millions Operations Other Items Total - ------------------------------------------------------------------------------------ Revenues $ 3,455 $ 243 $ (174)* $ 3,524 Net income 384 1 -- 385 Total assets 8,825 435 (82) 9,178 ======= ===== ======== ======= 1998 In Millions - ------------------------------------------------------------------------------------ Revenues $ 3,230 $ 190 $ (102)* $ 3,318 Net income 380 6 -- 386 Total assets 8,594 237 16 8,847 ======= ===== ======== =======
* Elimination of intercompany revenues. Specified items included in segment profit/loss for the years ended December 31:
Utility All 2000 In Millions Operations Other Total - -------------------------------------------------------------------------------- Interest expense $ 205 $ 12 $ 217 Depreciation, depletion and amortization expense 359 13 372 Income tax expense 297 4 301 ===== ====== ===== 1999 In Millions - -------------------------------------------------------------------------------- Interest expense $ 163 $ 9 $ 172 Depreciation, depletion and amortization expense 337 12 349 Income tax expense 261 (2) 259 ===== ====== ===== 1998 In Millions - -------------------------------------------------------------------------------- Interest expense $ 170 $ 9 $ 179 Depreciation, depletion and amortization expense 334 14 348 Income tax expense 263 5 268 ===== ====== =====
Specified items related to segment assets as of December 31:
Utility All 2000 In Millions Operations Other Total - -------------------------------------------------------------------------------- Expenditures for additions to long-lived assets $ 872 $ 45 $ 917 ===== ====== ===== 1999 In Millions - -------------------------------------------------------------------------------- Expenditures for additions to long-lived assets $ 342 $ 179 $ 521 ===== ====== ===== 1998 In Millions - -------------------------------------------------------------------------------- Expenditures for additions to long-lived assets $ 290 $ 31 $ 321 ===== ====== =====
33 PAGE 46 AMEREN CORPORATION 2000 ANNUAL REPORT SELECTED CONSOLIDATED FINANCIAL INFORMATION
Millions of Dollars, Except Share and Per Share Amounts and Ratios 2000 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- RESULTS OF OPERATIONS Year Ended December 31, Operating revenues $ 3,856 $ 3,524 $ 3,318 $ 3,327 $ 3,328 $ 3,236 Operating expenses 3,216 2,961 2,747 2,744 2,752 2,658 Operating income 640 563 571 582 576 578 Income before extraordinary charge 457 385 386 387 372 373 Extraordinary charge, net of income taxes -- -- -- 52 -- -- Net income 457 385 386 335 372 373 Average common shares outstanding 137,215,462 137,215,462 137,215,462 137,215,462 137,215,462 137,215,462 ------------ ------------ ------------ ------------ ------------ ------------ ASSETS, OBLIGATIONS AND EQUITY CAPITAL December 31, Total assets $ 9,714 $ 9,178 $ 8,847 $ 8,828 $ 8,933 $ 8,788 Long-term debt obligations 2,745 2,448 2,289 2,506 2,335 2,373 Preferred stock subject to mandatory redemption -- -- -- -- 1 1 Preferred stock not subject to mandatory redemption 235 235 235 235 298 298 Common equity 3,197 3,090 3,056 3,019 3,016 2,971 ------------ ------------ ------------ ------------ ------------ ------------ FINANCIAL INDICES Year Ended December 31, Earnings per share of common stock before extraordinary charge $ 3.33 $ 2.81 $ 2.82 $ 2.82 $ 2.71 $ 2.72 Extraordinary charge, net of income taxes -- -- -- $ (.38) -- -- Earnings per share of common stock (based on average shares outstanding) $ 3.33 $ 2.81 $ 2.82 $ 2.44 $ 2.71 $ 2.72 Dividend payout ratio 76% 90% 90% 99% 88% 86% Return on average common stock equity 14.60% 12.56% 12.82% 11.14% 12.51% 12.76% Ratio earnings to fixed charges AmerenUE 5.33 5.64 4.99 4.70 4.68 4.78 AmerenCIPS 4.05 2.98 4.13 3.64 4.30 4.41 Book value per common share $ 23.30 $ 22.52 $ 22.27 $ 22.00 $ 21.98 $ 21.65 ------------ ------------ ------------ ------------ ------------ ------------ CAPITALIZATION RATIOS December 31, Common equity 51.8% 53.5% 54.8% 52.4% 53.4% 52.6% Preferred stock 3.8 4.1 4.2 4.1 5.3 5.3 Long-term debt 44.4 42.4 41.0 43.5 41.3 42.1 ------------ ------------ ------------ ------------ ------------ ------------ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ============ ============ ============ ============ ============ ============
34 WWW.AMEREN.COM PAGE 47 ELECTRIC OPERATING STATISTICS
Year Ended December 31, 2000 1999 1998 - ------------------------------------------------------------------------------------------------------- ELECTRIC OPERATING REVENUES Millions Residential $ 1,142 $ 1,097 $ 1,125 Commercial 997 956 966 Industrial 505 505 511 Wholesale 151 108 91 Other 24 24 23 ----------- ----------- ----------- Native 2,819 2,690 2,716 Interchange 534 399 240 EEI 164 177 152 Miscellaneous 74 60 29 Credit to customers (65) (38) (43) ----------- ----------- ----------- TOTAL ELECTRIC OPERATING REVENUES $ 3,526 $ 3,288 $ 3,094 =========== =========== =========== KILOWATTHOUR SALES Millions Residential 15,683 14,863 15,188 Commercial 16,644 15,418 15,555 Industrial 11,914 11,549 11,582 Wholesale 4,230 3,002 2,446 Other 307 303 303 ----------- ----------- ----------- Native 48,778 45,135 45,074 Interchange 16,693 12,371 8,075 EEI 6,914 9,270 8,296 ----------- ----------- ----------- TOTAL KILOWATTHOUR SALES 72,385 66,776 61,445 =========== =========== =========== ELECTRIC CUSTOMERS End of Year Residential 1,307,237 1,298,008 1,289,548 Commercial 190,399 186,598 179,773 Industrial 5,957 6,188 5,926 Wholesale 24 20 20 Miscellaneous 4,295 4,293 4,098 ----------- ----------- ----------- TOTAL ELECTRIC CUSTOMERS 1,507,912 1,495,107 1,479,365 =========== =========== =========== RESIDENTIAL CUSTOMER DATA Average Kilowatthours used 12,579 11,827 11,986 Annual electric bill $ 895.20 $ 859.53 $ 873.28 Revenue per kilowatthour 7.12 cents 7.27 cents 7.29 cents ----------- ----------- ----------- GROSS INSTANTANEOUS PEAK DEMAND Megawatts AmerenUE 8,706 8,831 8,429 AmerenEnergy Resources/AmerenCIPS 2,829 2,217 2,163 ----------- ----------- ----------- CAPABILITY AT TIME OF PEAK, INCLUDING NET PURCHASES AND SALES Megawatts AmerenUE 9,359 9,141 9,027 AmerenEnergy Resources/AmerenCIPS 3,560 2,556 2,417 ----------- ----------- ----------- GENERATING CAPABILITY AT TIME OF PEAK Megawatts AmerenUE 8,320 8,352 8,282 AmerenEnergy Resources/AmerenCIPS 3,443 3,027 3,040 ----------- ----------- ----------- COAL BURNED Millions of Tons 25,267 23,638 22,959 ----------- ----------- ----------- PRICE PER TON OF COAL Average $ 18.94 $ 20.34 $ 21.29 ----------- ----------- ----------- SOURCE OF ENERGY SUPPLY Fossil 83.2% 85.4% 83.5% Nuclear 18.8 17.9 17.7 Hydro 1.6 3.1 3.8 Purchased and interchanged, net (3.6) (6.4) (5.0) ----------- ----------- ----------- 100.0% 100.0% 100.0% =========== =========== ===========
ELECTRIC OPERATING STATISTICS
Year Ended December 31, 1997 1996 1995 - ------------------------------------------------------------------------------------------------------- ELECTRIC OPERATING REVENUES Millions Residential $ 1,064 $ 1,070 $ 1,073 Commercial 927 920 906 Industrial 500 500 496 Wholesale 91 91 87 Other 24 28 28 ----------- ----------- ----------- Native 2,606 2,609 2,590 Interchange 224 280 230 EEI 207 198 201 Miscellaneous 47 22 20 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 Other 317 305 316 ----------- ----------- ----------- Native 43,359 43,114 42,085 Interchange 9,402 10,768 8,176 EEI 11,220 10,554 10,850 ----------- ----------- ----------- 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 178,301 174,716 171,905 Industrial 6,554 6,660 6,782 Wholesale 21 20 21 Miscellaneous 4,286 4,303 4,339 ----------- ----------- ----------- 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 cents 7.30 cents 7.62 cents ----------- ----------- ----------- GROSS INSTANTANEOUS PEAK DEMAND Megawatts AmerenUE 8,055 8,085 7,965 AmerenEnergy Resources/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 AmerenEnergy Resources/AmerenCIPS 2,491 2,519 2,489 ----------- ----------- ----------- GENERATING CAPABILITY AT TIME OF PEAK Megawatts AmerenUE 8,279 8,244 8,184 AmerenEnergy Resources/AmerenCIPS 3,033 3,033 3,018 ----------- ----------- ----------- COAL BURNED Millions of Tons 21,392 20,062 17,715 ----------- ----------- ----------- PRICE PER TON OF COAL Average $ 23.54 $ 25.25 $ 26.86 ----------- ----------- ----------- SOURCE OF ENERGY SUPPLY Fossil 83.8% 79.6% 76.3% Nuclear 19.3 19.2 18.3 Hydro 2.7 2.8 3.6 Purchased and interchanged, net (5.8) (1.6) 1.8 ----------- ----------- ----------- 100.0% 100.0% 100.0% =========== =========== ===========
35 PAGE 48 AMEREN CORPORATION 2000 ANNUAL REPORT GAS OPERATING STATISTICS
Year Ended December 31, 2000 1999 1998 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------------ NATURAL GAS OPERATING REVENUES Millions Residential $ 204 $ 146 $ 135 $ 150 $ 161 $ 137 Commercial 69 52 50 55 61 51 Industrial 17 18 19 22 21 18 Off system sales 18 4 3 13 -- -- Miscellaneous 16 8 10 10 11 11 -------- -------- -------- -------- -------- -------- TOTAL NATURAL GAS OPERATING REVENUES $ 324 $ 228 $ 217 $ 250 $ 254 $ 217 ======== ======== ======== ======== ======== ======== MMBTU SALES Millions Residential 25 21 21 23 27 24 Commercial 9 8 8 9 11 10 Industrial 3 4 6 6 5 5 Off system sales 4 1 1 5 -- -- -------- -------- -------- -------- -------- -------- TOTAL MMBTU SALES 41 34 36 43 43 39 -------- -------- -------- -------- -------- -------- NATURAL GAS CUSTOMERS End of Year Residential 269,477 267,086 265,405 263,588 260,989 257,848 Commercial 30,964 29,247 30,245 30,147 29,911 29,446 Industrial 386 436 407 412 402 378 -------- -------- -------- -------- -------- -------- TOTAL NATURAL GAS CUSTOMERS 300,827 296,769 296,057 294,147 291,302 287,672 ======== ======== ======== ======== ======== ======== PEAK DAY THROUGHPUT Thousands of MMBtus AmerenCIPS 226 247 229 281 302 270 AmerenUE 169 184 157 181 189 159 -------- -------- -------- -------- -------- -------- TOTAL PEAK DAY THROUGHPUT 395 431 386 462 491 429 ======== ======== ======== ======== ======== ========
36 PAGE 50 AMEREN CORPORATION 2000 ANNUAL REPORT 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 of Union Electric Company and CIPSCO Incorporated on December 31, 1997. Common stockholders of record totaled 107,587 for Ameren at December 31, 2000. The following includes the price ranges and dividends paid per common share for AEE during 2000 and 1999.
AEE 2000 Quarter Ended High Low Close Dividends Paid - -------------------------------------------------------------------------------- March 31 $34 1/4 $27 9/16 $30 15/16 63 1/2 cents June 30 38 30 5/8 33 3/4 63 1/2 September 30 43 11/16 34 1/16 41 7/8 63 1/2 December 31 46 15/16 37 3/8 46 5/16 63 1/2
AEE 1999 Quarter Ended High Low Close Dividends Paid - -------------------------------------------------------------------------------- March 31 $42 15/16 $36 3/16 $36 3/16 63 1/2 cents June 30 40 15/16 35 13/16 38 3/8 63 1/2 September 30 40 3/4 36 7/8 37 13/16 63 1/2 December 31 39 7/8 32 32 3/4 63 1/2
ANNUAL MEETING The annual meeting of Ameren, Union Electric Company and Central Illinois Public Service Company stockholders will convene at 9 a.m., Tuesday, April 24, 2001, at Powell Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri. DRPLUS Through DRPlus -- Ameren's dividend reinvestment and stock purchase plan -- any person of legal age or entity, whether or not an Ameren stockholder, is eligible to participate in DRPlus. Participants can: |_| make cash investments by check or automatic direct debit to their bank accounts to purchase Ameren common stock, totaling up to $120,000 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 Company or CIPSCO Incorporated common stock certificates for Ameren 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 Company and Central Illinois Public Service Company 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 standard time). Please write or call: Ameren Services Company Investor Services P.O. Box 66887 St. Louis, MO 63166-6887 St. Louis area 314-554-3502 Toll-free 1-800-255-2237 TRANSFER AGENT, REGISTRAR AND PAYING AGENT The Transfer Agent, Registrar and Paying Agent for Ameren Corporation Common Stock and Union Electric Company and Central Illinois Public Service Company Preferred Stock is Ameren Services Company. OFFICE One Ameren Plaza 1901 Chouteau Avenue St. Louis, MO 63103 314-621-3222 EX-21 5 c61193ex21.txt SUBSIDIARIES OF THE REGISTRANT 1 EXHIBIT 21 SUBSIDIARIES OF AMEREN CORPORATION AT DECEMBER 31, 2000
State or Jurisdiction Name of Incorporation - ----------------------------------------------------- --------------------- Ameren Corporation Missouri Ameren Development Company Missouri Ameren Energy Communications, Inc. Missouri Ameren ERC, Inc. Missouri Missouri Central Railroad(l) Delaware Ameren Energy, Inc. Missouri Ameren Energy Resources Co. Illinois Ameren Energy Development Company Illinois Ameren Energy Generating Company Illinois Ameren Energy Fuels and Services Company Illinois Ameren Energy Marketing Company Illinois Illinois Materials Supply Co. Illinois Ameren Services Company Missouri Central Illinois Public Service Company (CIPS) Illinois CIPS Energy Inc. 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 CIPSCO Energy Company Illinois CEC-PGE-G Co. Illinois CEC-PGE-L Co. Illinois CEC-APL-G Co.(2) Illinois CEC-APL-L Co.(2) Illinois Massac Energy, L.L.C. 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 (UE) Missouri Union Electric Development Corporation Missouri Electric Energy, Inc.(3) Illinois
- --------------------- (1) Ameren ERC owns 95% of the common stock. (2) 50% ownership of Massac Energy. (3) Ameren owns 60% of the common stock. EX-23 6 c61193ex23.txt CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 33-43721) and the Registration Statements on Form S-8 (No. 333-43737 and No. 333-50793) of Ameren Corporation of our report dated February 5, 2001 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated February 5, 2001 relating to the financial statement schedule, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP St. Louis, Missouri March 30, 2001 EX-24 7 c61193ex24.txt POWERS OF ATTORNEY 1 [AMEREN CORPORATION LETTERHEAD] EXHIBIT 24 POWER OF ATTORNEY WHEREAS, AMEREN CORPORATION, a Missouri corporation (herein referred to as the "Company"), is required to file with the Securities and Exchange Commission, under the provisions of the Securities Exchange Act of 1934, as amended, its annual report on Form 10-K for the year ended December 31, 2000; and WHEREAS, each of the below undersigned holds the office or offices in the Company set opposite his or her name; NOW, THEREFORE, each of the undersigned hereby constitutes and appoints Charles W. Mueller and/or Donald E. Brandt and/or Steven R. Sullivan 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 to said Form 10-K and any amendments thereto, and, for the performance of the same acts, each with power to appoint in their place and stead and as their 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 have hereunto set their hands this 9th day of February 2001: [AMEREN LOGO] Charles W. Mueller, Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) /s/ Charles W. Mueller ----------------------------------------------- William E. Cornelius, Director /s/ William E. Cornelius ----------------------------------------------- Clifford L. Greenwalt, Director /s/ Clifford L. Greenwalt ----------------------------------------------- Thomas A. Hays, Director /s/ Thomas A. Hays ----------------------------------------------- Richard A. Liddy, Director /s/ Richard A. Liddy ----------------------------------------------- Gordon R. Lohman, Director /s/ Gordon R. Lohman ----------------------------------------------- Richard A. Lumpkin, Director /s/ Richard A. Lumpkin ----------------------------------------------- John Peters MacCarthy, Director /s/ John Peters MacCarthy ----------------------------------------------- Hanne M. Merriman, Director /s/ Hanne M. Merriman ----------------------------------------------- Paul L. Miller, Jr., Director /s/ Paul L. Miller, Jr. ----------------------------------------------- Robert H. Quenon, Director /s/ Robert H. Quenon ----------------------------------------------- Harvey Saligman, Director /s/ Harvey Saligman ----------------------------------------------- Janet McAfee Weakley, Director /s/ Janet McAfee Weakley ----------------------------------------------- James W. Wogsland, Director /s/ James W. Wogsland ----------------------------------------------- Donald E. Brandt, Senior Vice President (Principal Financial Officer) /s/ Donald E. Brandt ----------------------------------------------- Warner L. Baxter, Vice President and Controller (Principal Accounting Officer) /s/ Warner L. Baxter -----------------------------------------------
2 [AMEREN CORPORATION LETTERHEAD] STATE OF MISSOURI ) ) SS. CITY OF ST. LOUIS ) On this 9th day of February, 2001, before me, the undersigned Notary Public in and for said State, personally appeared the above-named officers and directors of Ameren Corporation, known to me to be the persons described in and who executed the foregoing power of attorney and acknowledged to me that they executed the same as their free act and deed for the purposes therein stated. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal. /s/ K. A. Bell -------------------------------------------- K. A. BELL [AMEREN LOGO] Notary Public - Notary Seal STATE OF MISSOURI St. Louis County My Commission Expires: October 13, 2002 -----END PRIVACY-ENHANCED MESSAGE-----