SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 10, 2002
AMEREN CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 1-14756 43-1723446
(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) 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
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
1. Reference is made to Note 7 - CILCORP Acquisition to the "Notes to
Consolidated Financial Statements (Unaudited)" in the Registrant's Form 10-Q for
the quarterly period ended September 30, 2002. The transaction remains subject
to the approval of the Securities and Exchange Commission (SEC) under the Public
Utility Holding Company Act of 1935, clearance from the Department of Justice
under the Hart-Scott-Rodino Antitrust Improvements Act and other customary
closing conditions. The Registrant has received the necessary consents and
approvals from the Illinois Commerce Commission, the Federal Energy Regulatory
Commission and the Federal Communications Commission.
The Registrant cannot be certain that it will obtain the required approval
of the SEC, that it will receive the necessary clearance from the Department of
Justice or that the other closing conditions will be satisfied and cannot
predict what terms and conditions, if any, may be imposed by these authorities.
2. Reference is made to Note 8 - Subsequent Event to the "Notes to
Consolidated Financial Statements (Unaudited)" in the Registrant's Form 10-Q for
the quarterly period ended September 30, 2002. The voluntary retirement program
was offered to approximately 1,000 of the Registrant's 7,400 employees. Eligible
employees had until December 20, 2002 to accept or decline the voluntary
retirement program. Based on the number of acceptances (approximately 550
employees), the Registrant incurred a one-time, after-tax charge to earnings in
the fourth quarter of 2002 of approximately $50 million related to the voluntary
retirement program.
3. Reference is made to Note 1 - Summary of Significant Accounting Policies
- Employee Benefit Plans to the "Notes to Consolidated Financial Statements
(Unaudited)" in the Registrant's Form 10-Q for the quarterly period ended
September 30, 2002. During 2002, the Registrant made cash contributions totaling
$30 million to its defined benefit retirement plans. In addition, at December
31, 2002, the Registrant expects to record a minimum pension liability of
approximately $100 million after taxes which will result in a charge to other
comprehensive income in stockholders' equity. This charge will result in less
than a one percent change in the Registrant's debt to total capitalization
ratio. Based on the performance of the assets of the defined benefit retirement
plans through December 31, 2002, the Registrant expects to be required under the
Employee Retirement Income Security Act of 1974 to fund $150 million to $175
million annually in 2005, 2006 and 2007 in order to maintain minimum funding
levels. These amounts are estimates and may change based on actual stock market
performance, changes in interest rates, and any changes in government
regulations. The increasing costs and funding requirements associated with the
Registrant's defined benefit retirement plans and other employee benefits may
adversely affect its results of operations, liquidity and financial condition.
4. Reference is made to Item 2 - Properties in Part I of the Registrant's
Form 10-K for the fiscal year ended December 31, 2001. In December 2002, the
Registrant announced that it was temporarily suspending operations of certain
units at AmerenEnergy Generating Company's Meredosia, Illinois plant,
representing 126 megawatts of 1940s-era generating capacity, and permanently
retiring 343 megawatts of 1940s-era regulated generating capacity at Union
Electric Company's (operating as AmerenUE) Venice, Illinois plant. These
capacity reductions and related severance and contract termination charges
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resulted in an after-tax charge to earnings of approximately $10 million in the
fourth quarter of 2002.
5. Reference is made to Note 2 - Rate and Regulatory Matters - Federal -
Electric Transmission to the "Notes to Consolidated Financial Statements
(Unaudited)" in the Registrant's Form 10-Q for the quarterly period ended
September 30, 2002. The compliance filing to facilitate the formation and
operation of GridAmerica LLC (GridAmerica) as an independent transmission
company within the Midwest Independent System Operator (Midwest ISO), as
contemplated in the July 31, 2002 order of the Federal Energy Regulatory
Commission (FERC), was submitted to the FERC on November 1, 2002 and was
conditionally accepted in a FERC order issued December 19, 2002. The November 1,
2002 filing stated that GridAmerica is scheduled to become operational in April
2003.
Until the reliability and rate-barrier issues are resolved as ordered by
the FERC, and the tariffs and other material terms of the Registrant's
participation in GridAmerica, and GridAmerica's participation in the Midwest
ISO, are finalized and approved by the FERC, the Registrant cannot predict the
impact that on-going regional transmission organization (RTO) developments will
have on the Registrant's financial condition, results of operation or liquidity.
On November 15, 2002, the Registrant filed, with the FERC, its initial
comments on the standard market design notice of proposed rulemaking (NOPR)
issued by the FERC on July 31, 2002. The Registrant expressed its concern with
the potential impact of the proposed rules in their current form on the cost and
reliability of service to retail customers. The Registrant also proposed that
certain modifications be made to the proposed rules in order to protect
transmission owners from the possibility of trapped transmission costs that
might not be recoverable from ratepayers as a result of inconsistent regulatory
policies. Until the FERC issues a final rule, the Registrant cannot predict the
ultimate impact of the NOPR on the Registrant's future financial position,
results of operations or liquidity.
6. Reference is made to Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations - "Liquidity and Capital Resources
- Financing" in the Registrant's Form 10-Q for the quarterly period ended
September 30, 2002. The Registrant relies on access to short-term and long-term
capital markets as a significant source of liquidity for capital requirements
not satisfied by the Registrant's operating cash flows. The inability to raise
capital on favorable terms, particularly during times of uncertainty in the
capital markets, could negatively impact the Registrant's ability to maintain
and grow its businesses. Based on the Registrant's current credit ratings, it
believes that it will continue to have access to the capital markets. However,
events beyond the Registrant's control may create uncertainty in the capital
markets such that its cost of capital would increase or its ability to access
the capital markets would be adversely affected.
On January 14, 2003, the Registrant entered into an underwriting agreement
to sell 5,500,000 shares of its common stock at an initial price to the public
of $40.50 per share. In connection therewith, the Company granted the
underwriters an option to purchase up to an additional 825,000 shares of common
stock. The offering is expected to close on January 21, 2003. The Registrant
expects to use the net proceeds from the issuance of the common stock to provide
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a portion of the funds required to pay the cash portion of the purchase price
for the Registrant's acquisition of CILCORP and for general corporate purposes.
7. Reference is made to Note 11 - Commitment and Contingencies to the
"Notes to Consolidated Financial Statements" in the Registrant's Form 10-K for
the fiscal year ended December 31, 2001. Certain of the Registrant's employees
are represented by the International Brotherhood of Electrical Workers (IBEW)
and the International Union of Operating Engineers (IUOE). These employees
comprise approximately 63% of the Registrant's workforce. Labor agreements
covering 7% of the employees were renewed for terms expiring in 2005. Labor
agreements covering most of the remaining 93% of the employees represented by
the IBEW and IUOE will expire in the second quarter of 2003. Negotiations with
regard to the continuation of these contracts have not yet commenced. The
Registrant cannot predict what issues may be raised by the collective bargaining
units and, if raised, whether negotiations concerning such issues will be
successfully concluded.
SAFE HARBOR STATEMENT
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, we are providing this
cautionary statement to identify important factors that could cause actual
results to differ materially from those anticipated. The following factors, in
addition to those discussed elsewhere in this report and in the Registrant's
Annual Report on Form 10-K for the year ended December 31, 2001, and in
subsequent securities filings, could cause results to differ materially from
management expectations as suggested by such "forward-looking" statements:
o the effects of the stipulation and agreement relating to the AmerenUE
Missouri electric excess earnings complaint case and other regulatory
actions, including changes in regulatory policy;
o changes in laws and other governmental actions, including monetary and
fiscal policies;
o the impact on us of current regulations related to the opportunity for
customers to choose alternative energy suppliers in Illinois;
o the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of our business at both the
state and federal levels;
o the effects of participation in a FERC approved RTO, including
activities associated with the Midwest ISO;
o availability and future market prices for fuel and purchased power,
electricity and natural gas, including the use of financial and
derivative instruments and volatility of changes in market prices;
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o average rates for electricity in the Midwest;
o business and economic conditions;
o the impact of the adoption of new accounting standards on the
application of appropriate technical accounting rules and guidance;
o interest rates and the availability of capital;
o actions of rating agencies and the effects of such actions;
o weather conditions;
o generation plant construction, installation and performance;
o the effects of strategic initiatives, including acquisitions and
divestitures;
o operation of nuclear power facilities and decommissioning costs;
o the impact of current environmental regulations on utilities and
generating companies and the expectation that more stringent
requirements will be introduced over time, which could potentially
have a negative financial effect;
o future wages and employee benefits costs, including changes in returns
of benefit plan assets;
o disruptions of the capital markets or other events making our access
to necessary capital more difficult or costly;
o competition from other generating facilities including new facilities
that may be developed in the future;
o delays in receipt of regulatory approvals for the acquisition of
CILCORP or unexpected adverse conditions or terms of those approvals;
o difficulties in integrating CILCO with the Registrant's other
businesses;
o changes in the coal markets, environmental laws or regulations or
other factors adversely impacting synergy assumptions in connection
with the CILCORP acquisition;
o cost and availability of transmission capacity for the energy
generated by our generating facilities or required to satisfy energy
sales made by the Registrant; and
o legal and administrative proceedings.
Given these uncertainties, undue reliance should not be placed on these
forward-looking statements. Except to the extent required by the federal
securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMEREN CORPORATION
(Registrant)
By /s/ Martin J. Lyons
---------------------------------
Name: Martin J. Lyons
Title: Controller
(Principal Accounting Officer)
Dated: January 15, 2003
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