Attached files
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On October 1, 2010, Central Illinois Public Service Company (“CIPS”), Central Illinois Light Company (“CILCO”) and Illinois Power Company (“IP”) completed the previously announced merger whereby CILCO and IP merged with and into CIPS, with CIPS as the surviving entity (the “Merger”), pursuant to the terms of the agreement and plan of merger (the “Agreement”), dated as of April 13, 2010, among CIPS, CILCO and IP. Upon consummation of the Merger, CIPS’ name was changed to “Ameren Illinois Company” (“Ameren Illinois”) and the separate legal existence of CILCO and IP terminated. Prior to the Merger, each of CIPS, CILCO and IP was a registrant subsidiary of Ameren Corporation (“Ameren”). Immediately following the Merger, Ameren Illinois distributed all of its shares of AmerenEnergy Resources Generating Company (“AERG”) common stock to Ameren (sometimes referred to as the “AERG distribution”) with the subsequent contribution by Ameren of AERG stock to Ameren Energy Resources Company.
The following unaudited pro forma condensed combined balance sheet and statements of income presented below are based on the historical financial statements of CIPS, CILCO and IP after giving effect to the Merger of CILCO and IP with and into CIPS and the AERG distribution. The Merger and the AERG distribution represent transactions between entities under common control. In accordance with authoritative accounting guidance, assets and liabilities transferred between entities under common control are accounted for at the historical cost basis of the common parent. The unaudited pro forma condensed combined balance sheet as of June 30, 2010, gives effect to the Merger and the AERG distribution as if these events had occurred on June 30, 2010. The unaudited pro forma condensed combined statements of income for each of the years ended December 31, 2009, 2008, and 2007, and for the interim periods for the six months ended June 30, 2010, and 2009, give effect to the Merger and the AERG distribution as if these events had occurred on January 1, 2007. The unaudited pro forma condensed combined balance sheet and statements of income are for illustrative purposes only. They should not be considered indicative of actual results that would have been achieved had the Merger and the AERG distribution actually been consummated on the dates indicated and do not purport to be indicative of results of operations as of any future date or for any future period.
The unaudited pro forma condensed combined balance sheet and statements of income reflect the following actions that occurred prior to the effective time of the Merger: (i) Ameren contributed to the capital of IP, without the payment of any consideration, all of the IP preferred stock owned by Ameren; (ii) CILCO redeemed all of its outstanding preferred stock; and (iii) CIPS redeemed all of its 7.61% first mortgage bonds. Each series of outstanding debt of CIPS, CILCO and IP, except as described above, remains outstanding and governed by the indenture under which it was originally issued, except that Ameren Illinois has been substituted as the obligor under the indebtedness of CILCO and IP.
The unaudited pro forma condensed combined balance sheet and statements of income have been derived from and should be read in conjunction with:
| • | CIPS’, CILCO’s, and IP’s historical unaudited financial statements and related notes as of and for the six months ended June 30, 2010 and 2009; and |
| • | CIPS’, CILCO’s, and IP’s historical audited financial statements and related notes as of and for the years ended December 31, 2009, 2008, and 2007. |
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2010
(In millions)
| Pro Forma | ||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down Effects of Purchase Accounting |
Elimination
of Intercompany Balances |
Distribution of AERG (g) |
Ameren Illinois Company, Post-Distribution | ||||||||||||||||||||||||
| Historical | ||||||||||||||||||||||||||||
| CIPS | IP | CILCO | ||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||
| Current Assets: |
||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | 113 | $ | 142 | $ | 128 | $ | (62 | ) | $ | — | $ | — | $ | — | $ | 321 | |||||||||||
| Accounts receivable, net |
62 | 174 | 95 | — | — | (14 | ) (f) | (53 | ) | 264 | ||||||||||||||||||
| Other current assets |
195 | 330 | 183 | — | — | — | (51 | ) | 657 | |||||||||||||||||||
| Total current assets |
370 | 646 | 406 | (62 | ) | — | (14 | ) | (104 | ) | 1,242 | |||||||||||||||||
| Property and Plant, Net |
1,255 | 2,478 | 1,771 | — | (9 | ) (b) | — | (975 | ) | 4,520 | ||||||||||||||||||
| Investments and Other Assets: |
||||||||||||||||||||||||||||
| Goodwill |
— | 214 | — | — | 197 | (c) | — | — | 411 | |||||||||||||||||||
| Regulatory assets |
228 | 486 | 163 | — | — | — | — | 877 | ||||||||||||||||||||
| Other assets |
109 | 68 | 29 | — | — | — | (6 | ) | 200 | |||||||||||||||||||
| Total investments and other assets |
337 | 768 | 192 | — | 197 | — | (6 | ) | 1,488 | |||||||||||||||||||
| TOTAL ASSETS |
$ | 1,962 | $ | 3,892 | $ | 2,369 | $ | (62 | ) | $ | 188 | $ | (14 | ) | $ | (1,085 | ) | $ | 7,250 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
| Current Liabilities: |
||||||||||||||||||||||||||||
| Accounts and wages payable |
$ | 88 | $ | 168 | $ | 79 | $ | — | $ | — | $ | (14 | ) (f) | $ | (18 | ) | $ | 303 | ||||||||||
| Other current liabilities |
316 | 284 | 371 | — | — | — | (256 | ) | 715 | |||||||||||||||||||
| Total current liabilities |
404 | 452 | 450 | — | — | (14 | ) | (274 | ) | 1,018 | ||||||||||||||||||
| Long-term Debt, Net |
271 | 1,147 | 279 | (40 | ) | — | — | — | 1,657 | |||||||||||||||||||
| Other Deferred Credits and Other Liabilities |
707 | 837 | 763 | — | (3 | ) (d) | — | (237 | ) | 2,067 | ||||||||||||||||||
| Stockholders’ Equity: |
||||||||||||||||||||||||||||
| Common stock, no par value |
— | — | — | — | — | — | — | — | ||||||||||||||||||||
| Other paid-in capital |
257 | 1,349 | 480 | 33 | 173 | (b)(c)(d)(e) | — | (310 | ) | 1,982 | ||||||||||||||||||
| Preferred stock not subject to mandatory redemption |
50 | 46 | 19 | (53 | ) | — | — | — | 62 | |||||||||||||||||||
| Retained earnings |
273 | 58 | 376 | (2 | ) | — | — | (262 | ) | 443 | ||||||||||||||||||
| Accumulated other comprehensive income |
— | 3 | 2 | — | 18 | (e) | — | (2 | ) | 21 | ||||||||||||||||||
| Total stockholders’ equity |
580 | 1,456 | 877 | (22 | ) | 191 | — | (574 | ) | 2,508 | ||||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 1,962 | $ | 3,892 | $ | 2,369 | $ | (62 | ) | $ | 188 | $ | (14 | ) | $ | (1,085 | ) | $ | 7,250 | |||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2009
(In millions)
| Pro Forma | |||||||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down of Effects of Purchase Accounting |
Elimination
of Intercompany Transactions |
Distribution of AERG (e) |
Other Adjustments |
Ameren Illinois Company, Post-Distribution | ||||||||||||||||||||||||||||
|
Historical |
|||||||||||||||||||||||||||||||||
| CIPS | IP | CILCO | |||||||||||||||||||||||||||||||
| Operating Revenues: |
|||||||||||||||||||||||||||||||||
| Electric |
$ | 642 | $ | 992 | $ | 729 | $ | — | $ | — | $ | (3 | ) (d) | $ | (427 | ) | $ | 1 | (f) | $ | 1,934 | ||||||||||||
| Gas |
224 | 501 | 277 | — | — | (1 | ) (d) | — | — | 1,001 | |||||||||||||||||||||||
| Other |
3 | 11 | 76 | — | — | (86 | ) (d) | — | — | 4 | |||||||||||||||||||||||
| Total operating revenues |
869 | 1,504 | 1,082 | — | — | (90 | ) | (427 | ) | 1 | 2,939 | ||||||||||||||||||||||
| Operating Expenses: |
|||||||||||||||||||||||||||||||||
| Fuel and purchased power |
372 | 509 | 284 | — | — | (1 | ) (d) | (116 | ) | — | 1,048 | ||||||||||||||||||||||
| Gas purchased for resale |
143 | 310 | 189 | — | — | — | — | — | 642 | ||||||||||||||||||||||||
| Other operations and maintenance |
181 | 275 | 260 | — | (6 | ) (b) | (89 | ) (d) | (76 | ) | 1 | (f) | 546 | ||||||||||||||||||||
| Depreciation and amortization |
68 | 116 | 70 | — | — | — | (38 | ) | — | 216 | |||||||||||||||||||||||
| Taxes other than income taxes |
37 | 64 | 27 | — | — | — | (3 | ) | — | 125 | |||||||||||||||||||||||
| Total operating expenses |
801 | 1,274 | 830 | — | (6 | ) | (90 | ) | (233 | ) | 1 | 2,577 | |||||||||||||||||||||
| Operating Income |
68 | 230 | 252 | — | 6 | — | (194 | ) | — | 362 | |||||||||||||||||||||||
| Other Income (Expenses) |
6 | — | (4 | ) | — | — | — | — | — | 2 | |||||||||||||||||||||||
| Interest Charges |
29 | 98 | 41 | (3 | ) | — | — | (16 | ) | — | 149 | ||||||||||||||||||||||
| Income Before Income Taxes |
45 | 132 | 207 | 3 | 6 | — | (178 | ) | — | 215 | |||||||||||||||||||||||
| Income Taxes |
16 | 53 | 72 | 1 | 2 | (c) | — | (64 | ) | — | 80 | ||||||||||||||||||||||
| Income from Continuing Operations |
29 | 79 | 135 | 2 | 4 | — | (114 | ) | — | 135 | |||||||||||||||||||||||
| Preferred Stock Dividends |
3 | 2 | 1 | (3 | ) | — | — | — | — | 3 | |||||||||||||||||||||||
| Income from Continuing Operations Available to Common Stockholder |
$ | 26 | $ | 77 | $ | 134 | $ | 5 | $ | 4 | $ | — | $ | (114 | ) | $ | — | $ | 132 | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2008
(In millions)
| Pro Forma | |||||||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down of Effects of Purchase Accounting |
Elimination
of Intercompany Transactions |
Distribution of AERG (e) |
Other Adjustments |
Ameren Illinois Company, Post-Distribution | ||||||||||||||||||||||||||||
|
Historical |
|||||||||||||||||||||||||||||||||
| CIPS | IP | CILCO | |||||||||||||||||||||||||||||||
| Operating Revenues: |
|||||||||||||||||||||||||||||||||
| Electric |
$ | 720 | $ | 1,071 | $ | 771 | $ | — | $ | — | $ | (1 | ) (d) | $ | (342 | ) | $ | 3 | (f) | $ | 2,222 | ||||||||||||
| Gas |
259 | 620 | 375 | — | — | — | — | 1 | (f) | 1,255 | |||||||||||||||||||||||
| Other |
3 | 5 | 1 | — | — | (8 | ) (d) | — | — | 1 | |||||||||||||||||||||||
| Total operating revenues |
982 | 1,696 | 1,147 | — | — | (9 | ) | (342 | ) | 4 | 3,478 | ||||||||||||||||||||||
| Operating Expenses: |
|||||||||||||||||||||||||||||||||
| Fuel and purchased power |
461 | 654 | 412 | — | — | — | (123 | ) | 1 | (f) | 1,405 | ||||||||||||||||||||||
| Gas purchased for resale |
179 | 452 | 284 | — | — | (1 | ) (d) | — | — | 914 | |||||||||||||||||||||||
| Other operations and maintenance |
196 | 318 | 217 | — | (4 | ) (b) | (7 | ) (d) | (99 | ) | 2 | (f) | 623 | ||||||||||||||||||||
| Depreciation and amortization |
67 | 102 | 77 | — | — | — | (27 | ) | — | 219 | |||||||||||||||||||||||
| Taxes other than income taxes |
37 | 67 | 25 | — | — | — | (3 | ) | — | 126 | |||||||||||||||||||||||
| Total operating expenses |
940 | 1,593 | 1,015 | — | (4 | ) | (8 | ) | (252 | ) | 3 | 3,287 | |||||||||||||||||||||
| Operating Income |
42 | 103 | 132 | — | 4 | (1 | ) | (90 | ) | 1 | 191 | ||||||||||||||||||||||
| Other Income (Expenses) |
8 | 6 | (3 | ) | — | — | 1 | (d) | — | (1 | ) (f) | 11 | |||||||||||||||||||||
| Interest Charges |
30 | 99 | 21 | (3 | ) | — | — | (5 | ) | — | 142 | ||||||||||||||||||||||
| Income Before Income Taxes |
20 | 10 | 108 | 3 | 4 | — | (85 | ) | — | 60 | |||||||||||||||||||||||
| Income Taxes |
5 | 5 | 39 | 1 | 2 | (c) | — | (33 | ) | — | 19 | ||||||||||||||||||||||
| Income from Continuing Operations |
15 | 5 | 69 | 2 | 2 | — | (52 | ) | — | 41 | |||||||||||||||||||||||
| Preferred Stock Dividends |
3 | 2 | 1 | (3 | ) | — | — | — | — | 3 | |||||||||||||||||||||||
| Income from Continuing Operations Available to Common Stockholder |
$ | 12 | $ | 3 | $ | 68 | $ | 5 | $ | 2 | $ | — | $ | (52 | ) | $ | — | $ | 38 | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2007
(In millions)
| Pro Forma | |||||||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down of Effects of Purchase Accounting |
Elimination
of Intercompany Transactions |
Distribution of AERG (e) |
Other Adjustments |
Ameren Illinois Company, Post- Distribution | ||||||||||||||||||||||||||||
| Historical | |||||||||||||||||||||||||||||||||
| CIPS | IP | CILCO | |||||||||||||||||||||||||||||||
| Operating Revenues: |
|||||||||||||||||||||||||||||||||
| Electric |
$ | 772 | $ | 1,104 | $ | 681 | $ | — | $ | — | $ | (1 | ) (d) | $ | (283 | ) | $ | 3 | (f) | $ | 2,276 | ||||||||||||
| Gas |
230 | 540 | 329 | — | — | — | — | 2 | (f) | 1,101 | |||||||||||||||||||||||
| Other |
3 | 2 | 1 | — | — | (3 | ) (d) | — | — | 3 | |||||||||||||||||||||||
| Total operating revenues |
1,005 | 1,646 | 1,011 | — | — | (4 | ) | (283 | ) | 5 | 3,380 | ||||||||||||||||||||||
| Operating Expenses: |
|||||||||||||||||||||||||||||||||
| Fuel and purchased power |
527 | 714 | 351 | — | — | 1 | (d) | (78 | ) | 2 | (f) | 1,517 | |||||||||||||||||||||
| Gas purchased for resale |
157 | 390 | 237 | — | — | — | — | — | 784 | ||||||||||||||||||||||||
| Other operations and maintenance |
172 | 271 | 184 | — | (4 | ) (b) | (4 | ) (d) | (74 | ) | 2 | (f) | 547 | ||||||||||||||||||||
| Depreciation and amortization |
66 | 96 | 73 | — | — | — | (18 | ) | — | 217 | |||||||||||||||||||||||
| Taxes other than income taxes |
34 | 66 | 23 | — | — | — | (3 | ) | — | 120 | |||||||||||||||||||||||
| Total operating expenses |
956 | 1,537 | 868 | — | (4 | ) | (3 | ) | (173 | ) | 4 | 3,185 | |||||||||||||||||||||
| Operating Income |
49 | 109 | 143 | — | 4 | (1 | ) | (110 | ) | 1 | 195 | ||||||||||||||||||||||
| Other Income (Expenses) |
14 | 9 | (1 | ) | — | — | 1 | (d) | (2 | ) | (1 | ) (f) | 20 | ||||||||||||||||||||
| Interest Charges |
37 | 77 | 27 | (3 | ) | — | — | (8 | ) | — | 130 | ||||||||||||||||||||||
| Income Before Income Taxes |
26 | 41 | 115 | 3 | 4 | — | (104 | ) | — | 85 | |||||||||||||||||||||||
| Income Taxes |
9 | 15 | 39 | 1 | 2 | (c) | — | (39 | ) | — | 27 | ||||||||||||||||||||||
| Income from Continuing Operations |
17 | 26 | 76 | 2 | 2 | — | (65 | ) | — | 58 | |||||||||||||||||||||||
| Preferred Stock Dividends |
3 | 2 | 2 | (2 | ) | — | — | — | — | 5 | |||||||||||||||||||||||
| Income from Continuing Operations Available to Common Stockholder |
$ | 14 | $ | 24 | $ | 74 | $ | 4 | $ | 2 | $ | — | $ | (65 | ) | $ | — | $ | 53 | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(In millions)
| Pro Forma | |||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down of Effects of Purchase Accounting |
Elimination
of Intercompany Transactions |
Distribution of AERG (e) |
Ameren Illinois Company, Post-Distribution | |||||||||||||||||||||||||
|
Historical |
|||||||||||||||||||||||||||||
| CIPS | IP | CILCO | |||||||||||||||||||||||||||
| Operating Revenues: |
|||||||||||||||||||||||||||||
| Electric |
$ | 321 | $ | 501 | $ | 319 | $ | — | $ | — | $ | (2 | ) (d) | $ | (176 | ) | $ | 963 | |||||||||||
| Gas |
123 | 278 | 148 | — | — | (1 | ) (d) | — | 548 | ||||||||||||||||||||
| Other |
1 | 4 | 40 | — | — | (44 | ) (d) | — | 1 | ||||||||||||||||||||
| Total operating revenues |
445 | 783 | 507 | — | — | (47 | ) | (176 | ) | 1,512 | |||||||||||||||||||
| Operating Expenses: |
|||||||||||||||||||||||||||||
| Fuel and purchased power |
174 | 244 | 155 | — | — | — | (77 | ) | 496 | ||||||||||||||||||||
| Gas purchased for resale |
79 | 176 | 104 | — | — | — | — | 359 | |||||||||||||||||||||
| Other operations and maintenance |
87 | 146 | 126 | — | (3 | ) (b) | (47 | ) (d) | (35 | ) | 274 | ||||||||||||||||||
| Depreciation and amortization |
34 | 57 | 36 | — | — | — | (20 | ) | 107 | ||||||||||||||||||||
| Taxes other than income taxes |
19 | 34 | 15 | — | — | — | (2 | ) | 66 | ||||||||||||||||||||
| Total operating expenses |
393 | 657 | 436 | — | (3 | ) | (47 | ) | (134 | ) | 1,302 | ||||||||||||||||||
| Operating Income |
52 | 126 | 71 | — | 3 | — | (42 | ) | 210 | ||||||||||||||||||||
| Other Income (Expenses) |
1 | (1 | ) | 1 | — | — | — | (1 | ) | — | |||||||||||||||||||
| Interest Charges |
14 | 45 | 23 | (2 | ) | — | — | (10 | ) | 70 | |||||||||||||||||||
| Income Before Income Taxes |
39 | 80 | 49 | 2 | 3 | — | (33 | ) | 140 | ||||||||||||||||||||
| Income Taxes |
16 | 32 | 18 | 1 | 1 | (c) | — | (12 | ) | 56 | |||||||||||||||||||
| Income from Continuing Operations |
23 | 48 | 31 | 1 | 2 | — | (21 | ) | 84 | ||||||||||||||||||||
| Preferred Stock Dividends |
1 | 1 | — | (1 | ) | — | — | — | 1 | ||||||||||||||||||||
| Income from Continuing Operations Available to Common Stockholder |
$ | 22 | $ | 47 | $ | 31 | $ | 2 | $ | 2 | $ | — | $ | (21 | ) | $ | 83 | ||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(In millions)
| Pro Forma | |||||||||||||||||||||||||||||||||
| Capital Structure Adjustments (a) |
Push Down of Effects of Purchase Accounting |
Elimination
of Intercompany Transactions |
Distribution of AERG (e) |
Other Adjustments |
Ameren Illinois Company, Post-Distribution | ||||||||||||||||||||||||||||
|
Historical |
|||||||||||||||||||||||||||||||||
| CIPS | IP | CILCO | |||||||||||||||||||||||||||||||
| Operating Revenues: |
|||||||||||||||||||||||||||||||||
| Electric |
$ | 328 | $ | 499 | $ | 348 | $ | — | $ | — | $ | (2 | ) (d) | $ | (196 | ) | $ | 1 | (f) | $ | 978 | ||||||||||||
| Gas |
131 | 290 | 157 | — | — | — | — | — | 578 | ||||||||||||||||||||||||
| Other |
2 | 8 | 38 | — | — | (44 | ) (d) | — | — | 4 | |||||||||||||||||||||||
| Total operating revenues |
461 | 797 | 543 | — | — | (46 | ) | (196 | ) | 1 | 1,560 | ||||||||||||||||||||||
| Operating Expenses: |
|||||||||||||||||||||||||||||||||
| Fuel and purchased power |
200 | 275 | 133 | — | — | — | (46 | ) | — | 562 | |||||||||||||||||||||||
| Gas purchased for resale |
89 | 191 | 115 | — | — | — | — | — | 395 | ||||||||||||||||||||||||
| Other operations and maintenance |
98 | 144 | 129 | — | (2 | ) (b) | (46 | ) (d) | (36 | ) | 1 | (f) | 288 | ||||||||||||||||||||
| Depreciation and amortization |
34 | 57 | 34 | — | — | — | (18 | ) | — | 107 | |||||||||||||||||||||||
| Taxes other than income taxes |
18 | 34 | 14 | — | — | — | (2 | ) | — | 64 | |||||||||||||||||||||||
| Total operating expenses |
439 | 701 | 425 | — | (2 | ) | (46 | ) | (102 | ) | 1 | 1,416 | |||||||||||||||||||||
| Operating Income |
22 | 96 | 118 | — | 2 | — | (94 | ) | — | 144 | |||||||||||||||||||||||
| Other Income (Expenses) |
4 | 1 | (3 | ) | — | — | — | — | — | 2 | |||||||||||||||||||||||
| Interest Charges |
14 | 52 | 15 | (2 | ) | — | — | (3 | ) | — | 76 | ||||||||||||||||||||||
| Income Before Income Taxes |
12 | 45 | 100 | 2 | 2 | — | (91 | ) | — | 70 | |||||||||||||||||||||||
| Income Taxes |
4 | 18 | 36 | 1 | 1 | (c) | — | (35 | ) | — | 25 | ||||||||||||||||||||||
| Income from Continuing Operations |
8 | 27 | 64 | 1 | 1 | — | (56 | ) | — | 45 | |||||||||||||||||||||||
| Preferred Stock Dividends |
1 | 1 | — | (1 | ) | — | — | — | — | 1 | |||||||||||||||||||||||
| Income from Continuing Operations Available to Common Stockholder |
$ | 7 | $ | 26 | $ | 64 | $ | 2 | $ | 1 | $ | — | $ | (56 | ) | $ | — | $ | 44 | ||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
AMEREN ILLINOIS COMPANY
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1—Basis of Presentation
On October 1, 2010, CILCO and IP were merged with and into CIPS as part of a corporate reorganization of Ameren. Upon consummation of the Merger, CIPS’ name was changed to Ameren Illinois. Immediately following the Merger, Ameren Illinois distributed all of its shares of AERG common stock to Ameren with the subsequent contribution by Ameren of AERG stock to Ameren Energy Resources Company.
CIPS, CILCO and IP, all wholly owned (as to common stock) subsidiaries of Ameren, were entities under common control. Authoritative accounting guidance requires that transactions between entities under common control be valued and recorded at the historical cost basis of the parent. Accordingly, the financial statements of the receiving entity, CIPS, will reflect the transferred assets and liabilities of CILCO and IP at the historical cost basis of the common parent, Ameren.
Ameren’s historical cost basis in CILCO included purchase accounting-related adjustments in connection with Ameren’s acquisition of all of the outstanding common stock of CILCORP Inc. (“CILCORP”) in 2003. Such purchase accounting-related adjustments were components of Ameren’s basis in CILCO. As such, purchase accounting adjustments relating to CILCO’s rate-regulated electric and gas transmission and distribution businesses, recorded at Ameren, were pushed down to the financial statements of Ameren Illinois.
The AERG distribution was accounted for as a spin-off. Ameren Illinois transferred AERG to Ameren by distributing shares of AERG common stock to Ameren based on AERG’s carrying value. Subsequent to the AERG distribution, all AERG-related activity will be presented as discontinued operations in the Ameren Illinois financial statements.
Note 2—Pro Forma Adjustments
Balance Sheet
The following adjustments in the unaudited pro forma condensed combined balance sheet reflect the impact of events that are directly attributable to the Merger and the subsequent AERG distribution, assuming the Merger and the AERG distribution occurred on June 30, 2010:
| (a) | Reflects the impact of the redemption of all of CILCO’s outstanding preferred stock, the contribution of Ameren-owned IP preferred stock without consideration, and CIPS’ redemption of its 7.61% first mortgage bonds prior to the Merger. Also, includes the payout estimate and other costs related to CIPS and IP preferred shareholders who exercised their dissenters’ rights. |
| (b) | Capitalized credit relating to retirement benefit costs for CILCORP’s rate-regulated utility businesses incurred from 2004 through 2006. |
| (c) | Goodwill originating from Ameren’s acquisition of CILCORP’s rate-regulated utility businesses in 2003. |
| (d) | Deferred income tax balances relating to purchase accounting adjustments originating from Ameren’s acquisition of CILCORP’s rate-regulated utility businesses in 2003. |
| (e) | Accumulated other comprehensive income adjustment, net of income tax, relating to retirement benefits originating from Ameren’s acquisition of CILCORP’s rate-regulated utility businesses in 2003. |
| (f) | Reflects the elimination of accounts receivable and accounts payable between CIPS, CILCO and IP. |
| (g) | This column reflects the removal of AERG’s net assets as a result of the AERG distribution that occurred immediately after the Merger. |
Statements of Income
The following adjustments in the unaudited pro forma condensed combined statements of income for each of the years ended December 31, 2009, 2008, and 2007, and for the interim periods of the six months ended June 30, 2010, and 2009, reflect the impact of events that are directly attributable to the Merger and the AERG distribution assuming both occurred on January 1, 2007:
| (a) | Reflects the impact of the redemption of all of CILCO’s outstanding preferred stock, the contribution of Ameren-owned IP preferred stock without consideration, and CIPS’ redemption of its 7.61% first mortgage bonds prior to the Merger. |
| (b) | Retirement benefit expense credit that originated from Ameren’s acquisition of CILCORP’s rate-regulated utility businesses in 2003. |
| (c) | The income tax impact of the retirement benefit expense credit. |
| (d) | Reflects the elimination of transactions between CIPS, CILCO and IP related to electricity, natural gas, shared services and other agreements. |
| (e) | This column reflects the removal of AERG’s results of operations as a result of the AERG distribution that occurred immediately after the Merger. |
| (f) | Reflects the reversal of the elimination of transactions between AERG and Ameren Illinois after the AERG distribution was complete. These eliminations were necessary when AERG was a subsidiary of Ameren Illinois but are not necessary after the AERG distribution. |