Edgar Filing: AMEREN CORP

AEE-2014 Q3

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2014



¨	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	Exact name of registrant as specified in its charter; State of Incorporation; Address and Telephone Number	IRS Employer Identification No.
1-14756	Ameren Corporation	43-1723446
	(Missouri Corporation)
	1901 Chouteau Avenue
	St. Louis, Missouri 63103
	(314) 621-3222

1-2967	Union Electric Company	43-0559760
	(Missouri Corporation)
	1901 Chouteau Avenue
	St. Louis, Missouri 63103
	(314) 621-3222

1-3672	Ameren Illinois Company	37-0211380
	(Illinois Corporation)
	6 Executive Drive
	Collinsville, Illinois 62234
	(618) 343-8150

Indicate by check mark whether the registrants: (1) have 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) have been subject to such filing requirements for the past 90 days.



Ameren Corporation	Yes	ý	No	¨
Union Electric Company	Yes	ý	No	¨
Ameren Illinois Company	Yes	ý	No	¨

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Ameren Corporation	Yes	ý	No	¨
Union Electric Company	Yes	ý	No	¨
Ameren Illinois Company	Yes	ý	No	¨

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



	Large Accelerated Filer	Accelerated Filer	Non-Accelerated Filer	Smaller Reporting Company
Ameren Corporation	ý	¨	¨	¨
Union Electric Company	¨	¨	ý	¨
Ameren Illinois Company	¨	¨	ý	¨

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Ameren Corporation	Yes	¨	No	ý
Union Electric Company	Yes	¨	No	ý
Ameren Illinois Company	Yes	¨	No	ý

The number of shares outstanding of each registrant’s classes of common stock as of October 31, 2014, was as follows:



Ameren Corporation		Common stock, $0.01 par value per share - 242,634,798
Union Electric Company		Common stock, $5 par value per share, held by Ameren Corporation - 102,123,834
Ameren Illinois Company		Common stock, no par value, held by Ameren Corporation - 25,452,373

______________________________________________________________________________________________________

This combined Form 10-Q is separately filed by Ameren Corporation, Union Electric Company, and Ameren Illinois Company. Each registrant hereto is filing on its own behalf all of the information contained in this quarterly report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

TABLE OF CONTENTS



		Page
Glossary of Terms and Abbreviations		1

Forward-looking Statements		1

PART I Financial Information

Item 1.	Financial Statements (Unaudited)	3
	Ameren Corporation	3
	Consolidated Statement of Income	3
	Consolidated Statement of Comprehensive Income	4
	Consolidated Balance Sheet	5
	Consolidated Statement of Cash Flows	6
	Union Electric Company (d/b/a Ameren Missouri)	7
	Statement of Income and Comprehensive Income	7
	Balance Sheet	8
	Statement of Cash Flows	9
	Ameren Illinois Company (d/b/a Ameren Illinois)	10
	Statement of Income and Comprehensive Income	10
	Balance Sheet	11
	Statement of Cash Flows	12
	Combined Notes to Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	72

PART II Other Information

Item 1.	Legal Proceedings	73
Item 1A.	Risk Factors	73
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 6.	Exhibits	73

Signatures		75

This report contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements should be read with the cautionary statements and important factors under the heading “Forward-looking Statements.” Forward-looking statements are all statements other than statements of historical fact, including those statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” and similar expressions.

GLOSSARY OF TERMS AND ABBREVIATIONS

We use the words “our,” “we” or “us” with respect to certain information that relates to Ameren, Ameren Missouri and Ameren Illinois, collectively. When appropriate, subsidiaries of Ameren Corporation are named specifically as their various business activities are discussed. Refer to the Form 10-K for a complete listing of glossary terms and abbreviations. Only new or significantly changed terms and abbreviations are included below.

2006 Incentive Plan - The 2006 Omnibus Incentive Compensation Plan, which became effective in May 2006 and provided for compensatory stock-based awards to eligible employees and directors. The 2006 Omnibus Incentive Compensation Plan was replaced prospectively for new grants by the 2014 Incentive Plan.

2014 Incentive Plan - The 2014 Omnibus Incentive Compensation Plan, which became effective in April 2014 and provides for compensatory stock-based awards to eligible employees and directors.

Clean Power Plan - “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” a proposed rule issued by the EPA on June 18, 2014.

Form 10-K - The combined Annual Report on Form 10-K for the year ended December 31, 2013, filed by the Ameren Companies with the SEC.

NEIL - Nuclear Electric Insurance Limited, which includes all of its affiliated companies.

Net energy cost - Net energy cost, as defined in the FAC, includes fuel and purchased power costs, including transportation charges and revenues, net of off-system sales.

FORWARD-LOOKING STATEMENTS

Statements in this report not based on historical facts are considered “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 under Risk Factors in the Form 10-K and elsewhere in this report and in our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:


•	regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as Ameren Missouri’s July 2014 electric rate case filing; Ameren Illinois' appeals of the ICC's electric and natural gas

rate orders issued in December 2013; Ameren Illinois’ April 2014 annual electric delivery service formula update filing; FERC settlement procedures regarding a potential Ameren Illinois electric transmission rate refund; the complaint case filed with FERC seeking a reduction in the allowed return on common equity under the MISO tariff; and future regulatory, judicial, or legislative actions that seek to change regulatory recovery mechanisms;

•

the effect of Ameren Illinois participating in a performance-based formula ratemaking process under the IEIMA, including the direct relationship between Ameren Illinois' return on common equity and 30-year United States Treasury bond yields, the related financial commitments required by the IEIMA, and the resulting uncertain impact on the financial condition, results of operations, and liquidity of Ameren Illinois;


•	the potential extension of the IEIMA after its current sunset provision at the end of 2017, and any changes to the performance-based formula ratemaking process or required financial commitments;


•	the effects of Ameren Illinois' expected participation, beginning in 2015, in the regulatory framework provided by the state of Illinois' Natural Gas Consumer, Safety and Reliability Act, which allows for the use of a rider to recover costs of certain natural gas infrastructure investments made between rate cases;


•	the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at either the state or federal levels and the implementation of deregulation;


•	changes in laws and other governmental actions, including monetary, fiscal, and tax policies;


•	the effects on demand for our services resulting from technological advances, including advances in customer energy efficiency and distributed generation sources, which generate electricity at the site of consumption;


•	the effectiveness of Ameren Missouri’s energy efficiency programs and the ability to earn incentive awards under the MEEIA;


•	the timing of increasing capital expenditure and operating expense requirements and our ability to timely recover these costs;


•	the cost and availability of fuel, such as coal, natural gas, and enriched uranium, used to produce electricity; the cost and availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including our ability to recover the costs for such commodities;


•	the effectiveness of our risk management strategies and the use of financial and derivative instruments;


•	business and economic conditions, including their impact on interest rates, bad debt expense, and demand for our products;


•	disruptions of the capital markets, deterioration in credit metrics of the Ameren Companies, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity;


•	our assessment of our liquidity;


•	the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;


•	actions of credit rating agencies and the effects of such actions;


•	the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages;


•	generation, transmission, and distribution asset construction, installation, performance, and cost recovery;


•	the effects of our increasing investment in electric transmission projects and uncertainty as to whether we will achieve our expected returns in a timely fashion, if at all;


•	the extent to which Ameren Missouri prevails in its claim against an insurer in connection with its Taum Sauk pumped-storage hydroelectric energy center incident;


•	the extent to which Ameren Missouri is permitted by its regulators to recover in rates the investments it made in connection with additional nuclear generation at its Callaway energy center;


•	operation of Ameren Missouri's Callaway energy center, including planned and unplanned outages, and decommissioning costs;


•	the effects of strategic initiatives, including mergers, acquisitions and divestitures, and any related tax implications;

•

the impact of current environmental regulations and new, more stringent or changing requirements, including those related to greenhouse gases, other emissions and discharges, cooling water intake structures, CCR, and energy efficiency, that are enacted over time and that could limit or terminate the operation of certain of our energy centers, increase our costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect;


•	the impact of complying with renewable energy portfolio requirements in Missouri;


•	labor disputes, workforce reductions, future wage and employee benefits costs, including changes in discount rates, mortality tables, and returns on benefit plan assets;


•	the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;


•	the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri’s energy sales;


•	the inability of Dynegy and IPH to satisfy their indemnity and other obligations to Ameren in connection with the divestiture of New AER to IPH;


•	legal and administrative proceedings; and


•	acts of sabotage, war, terrorism, cyber attacks or intentionally disruptive acts.

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 update or revise publicly any forward-looking statements to reflect new information or future events.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AMEREN CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(Unaudited) (In millions, except per share amounts)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Operating Revenues:
Electric	$	1,523		$	1,507		$	3,864		$	3,823
Gas	147			131			819			693
Total operating revenues	1,670			1,638			4,683			4,516
Operating Expenses:
Fuel	236			222			638			648
Purchased power	112			128			335			400
Gas purchased for resale	49			42			432			344
Other operations and maintenance	404			383			1,236			1,229
Depreciation and amortization	187			175			551			528
Taxes other than income taxes	121			121			362			354
Total operating expenses	1,109			1,071			3,554			3,503
Operating Income	561			567			1,129			1,013
Other Income and Expense:
Miscellaneous income	21			20			60			51
Miscellaneous expense	7			5			20			18
Total other income	14			15			40			33
Interest Charges	85			88			266			289
Income Before Income Taxes	490			494			903			757
Income Taxes	194			187			357			288
Income from Continuing Operations	296			307			546			469
Loss from Discontinued Operations, Net of Taxes (Note 12)	(1		)	(3		)	(3		)	(212		)
Net Income	295			304			543			257
Less: Net Income from Continuing Operations Attributable to Noncontrolling Interests	2			2			5			5
Net Income (Loss) Attributable to Ameren Corporation:
Continuing Operations	294			305			541			464
Discontinued Operations	(1		)	(3		)	(3		)	(212		)
Net Income Attributable to Ameren Corporation	$	293		$	302		$	538		$	252

Earnings (Loss) per Common Share – Basic:
Continuing Operations	$	1.21		$	1.26		$	2.23		$	1.92
Discontinued Operations	—			(0.01		)	(0.01		)	(0.88		)
Earnings per Common Share – Basic	$	1.21		$	1.25		$	2.22		$	1.04

Earnings (Loss) per Common Share – Diluted:
Continuing Operations	$	1.20		$	1.25		$	2.21		$	1.91
Discontinued Operations	—			(0.01		)	(0.01		)	(0.88		)
Earnings per Common Share – Diluted	$	1.20		$	1.24		$	2.20		$	1.03

Dividends per Common Share	$	0.40		$	0.40		$	1.20		$	1.20
Average Common Shares Outstanding – Basic	242.6			242.6			242.6			242.6
Average Common Shares Outstanding – Diluted	244.3			245.1			244.3			244.4

The accompanying notes are an integral part of these consolidated financial statements.

AMEREN CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited) (In millions)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Income from Continuing Operations	$	296		$	307		$	546		$	469
Other Comprehensive Income (Loss), Net of Taxes
Pension and other postretirement benefit plan activity, net of income taxes (benefit) of $-, $(5), $3 and $3, respectively	—			(5		)	3			5
Comprehensive Income from Continuing Operations	296			302			549			474
Less: Comprehensive Income from Continuing Operations Attributable to Noncontrolling Interests	2			2			5			5
Comprehensive Income from Continuing Operations Attributable to Ameren Corporation	294			300			544			469

Loss from Discontinued Operations, Net of Taxes	(1		)	(3		)	(3		)	(212		)
Other Comprehensive Loss from Discontinued Operations, Net of Taxes	—			(5		)	—			(16		)
Comprehensive Loss from Discontinued Operations Attributable to Ameren Corporation	(1		)	(8		)	(3		)	(228		)
Comprehensive Income Attributable to Ameren Corporation	$	293		$	292		$	541		$	241

The accompanying notes are an integral part of these consolidated financial statements.

AMEREN CORPORATION

CONSOLIDATED BALANCE SHEET

(Unaudited) (In millions, except per share amounts)



	September 30, 2014		December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	13	$	30
Accounts receivable – trade (less allowance for doubtful accounts of $21 and $18, respectively)	467		404
Unbilled revenue	203		304
Miscellaneous accounts and notes receivable	117		196
Materials and supplies	561		526
Current regulatory assets	199		156
Current accumulated deferred income taxes, net	301		106
Other current assets	66		85
Assets of discontinued operations (Note 12)	15		165
Total current assets	1,942		1,972
Property and Plant, Net	16,991		16,205
Investments and Other Assets:
Nuclear decommissioning trust fund	529		494
Goodwill	411		411
Intangible assets	20		22
Regulatory assets	1,259		1,240
Other assets	724		698
Total investments and other assets	2,943		2,865
TOTAL ASSETS	$	21,876	$	21,042
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	119	$	534
Short-term debt	753		368
Accounts and wages payable	466		806
Taxes accrued	161		55
Interest accrued	105		86
Current regulatory liabilities	132		216
Other current liabilities	350		351
Liabilities of discontinued operations (Note 12)	33		45
Total current liabilities	2,119		2,461
Long-term Debt, Net	5,825		5,504
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net	3,845		3,250
Accumulated deferred investment tax credits	59		63
Regulatory liabilities	1,805		1,705
Asset retirement obligations	385		369
Pension and other postretirement benefits	400		466
Other deferred credits and liabilities	522		538
Total deferred credits and other liabilities	7,016		6,391
Commitments and Contingencies (Notes 2, 9, 10 and 12)
Ameren Corporation Stockholders’ Equity:
Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 242.6	2		2
Other paid-in capital, principally premium on common stock	5,612		5,632
Retained earnings	1,154		907
Accumulated other comprehensive income	6		3
Total Ameren Corporation stockholders’ equity	6,774		6,544
Noncontrolling Interests	142		142
Total equity	6,916		6,686
TOTAL LIABILITIES AND EQUITY	$	21,876	$	21,042

The accompanying notes are an integral part of these consolidated financial statements.



AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
	Nine Months Ended September 30,
	2014			2013
Cash Flows From Operating Activities:
Net income	$	543		$	257
Loss from discontinued operations, net of taxes	3			212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	526			500
Amortization of nuclear fuel	70			46
Amortization of debt issuance costs and premium/discounts	16			18
Deferred income taxes and investment tax credits, net	370			258
Allowance for equity funds used during construction	(26		)	(26		)
Stock-based compensation costs	20			19
Other	(9		)	14
Changes in assets and liabilities:
Receivables	16			(88		)
Materials and supplies	(34		)	7
Accounts and wages payable	(187		)	(102		)
Taxes accrued	100			104
Assets, other	(123		)	20
Liabilities, other	(70		)	(24		)
Pension and other postretirement benefits	(27		)	(34		)
Counterparty collateral, net	20			34
Net cash provided by operating activities – continuing operations	1,208			1,215
Net cash provided by (used in) operating activities – discontinued operations	(5		)	99
Net cash provided by operating activities	1,203			1,314
Cash Flows From Investing Activities:
Capital expenditures	(1,310		)	(943		)
Nuclear fuel expenditures	(28		)	(34		)
Purchases of securities – nuclear decommissioning trust fund	(365		)	(147		)
Sales and maturities of securities – nuclear decommissioning trust fund	354			134
Proceeds from note receivable – Marketing Company	79			—
Contributions to note receivable – Marketing Company	(84		)	—
Other	3			(1		)
Net cash used in investing activities – continuing operations	(1,351		)	(991		)
Net cash provided by (used in) investing activities – discontinued operations	139			(42		)
Net cash used in investing activities	(1,212		)	(1,033		)
Cash Flows From Financing Activities:
Dividends on common stock	(291		)	(291		)
Dividends paid to noncontrolling interest holders	(5		)	(5		)
Short-term debt, net	385			—
Redemptions and maturities of long-term debt	(692		)	—
Issuances of long-term debt	598			—
Capital issuance costs	(4		)	—
Other	1			—
Net cash used in financing activities – continuing operations	(8		)	(296		)
Net cash used in financing activities – discontinued operations	—			—
Net cash used in financing activities	(8		)	(296		)
Net change in cash and cash equivalents	(17		)	(15		)
Cash and cash equivalents at beginning of year	30			209
Cash and cash equivalents at end of period	13			194
Less cash and cash equivalents at end of period – discontinued operations	—			25
Cash and cash equivalents at end of period – continuing operations	$	13		$	169

The accompanying notes are an integral part of these consolidated financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

STATEMENT OF INCOME AND COMPREHENSIVE INCOME

(Unaudited) (In millions)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Operating Revenues:
Electric	$	1,076	$	1,075	$	2,696	$	2,667
Gas	21		17		117		110
Other	—		1		1		1
Total operating revenues	1,097		1,093		2,814		2,778
Operating Expenses:
Fuel	236		222		638		648
Purchased power	25		33		86		100
Gas purchased for resale	7		4		58		52
Other operations and maintenance	228		212		677		686
Depreciation and amortization	118		114		351		338
Taxes other than income taxes	89		91		248		247
Total operating expenses	703		676		2,058		2,071
Operating Income	394		417		756		707
Other Income and Expense:
Miscellaneous income	15		16		45		44
Miscellaneous expense	4		2		10		10
Total other income	11		14		35		34
Interest Charges	53		43		159		159
Income Before Income Taxes	352		388		632		582
Income Taxes	129		149		234		217
Net Income	223		239		398		365
Other Comprehensive Income	—		—		—		—
Comprehensive Income	$	223	$	239	$	398	$	365


Net Income	$	223	$	239	$	398	$	365
Preferred Stock Dividends	1		1		3		3
Net Income Available to Common Stockholder	$	222	$	238	$	395	$	362

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

BALANCE SHEET

(Unaudited) (In millions, except per share amounts)



	September 30, 2014		December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	1	$	1
Accounts receivable – trade (less allowance for doubtful accounts of $7 and $5, respectively)	261		191
Accounts receivable – affiliates	12		1
Unbilled revenue	134		168
Miscellaneous accounts and notes receivable	86		57
Materials and supplies	350		352
Current regulatory assets	137		118
Other current assets	40		71
Total current assets	1,021		959
Property and Plant, Net	10,660		10,452
Investments and Other Assets:
Nuclear decommissioning trust fund	529		494
Intangible assets	20		22
Regulatory assets	539		534
Other assets	410		443
Total investments and other assets	1,498		1,493
TOTAL ASSETS	$	13,179	$	12,904
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	119	$	109
Borrowings from money pool	—		105
Short-term debt	65		—
Accounts and wages payable	189		387
Accounts payable – affiliates	32		30
Taxes accrued	200		220
Interest accrued	66		57
Current regulatory liabilities	11		57
Other current liabilities	99		82
Total current liabilities	781		1,047
Long-term Debt, Net	3,885		3,648
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net	2,656		2,524
Accumulated deferred investment tax credits	55		59
Regulatory liabilities	1,107		1,041
Asset retirement obligations	383		366
Pension and other postretirement benefits	147		189
Other deferred credits and liabilities	44		37
Total deferred credits and other liabilities	4,392		4,216
Commitments and Contingencies (Notes 2, 8, 9 and 10)
Stockholders’ Equity:
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding	511		511
Other paid-in capital, principally premium on common stock	1,560		1,560
Preferred stock not subject to mandatory redemption	80		80
Retained earnings	1,970		1,842
Total stockholders’ equity	4,121		3,993
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,179	$	12,904

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)



	Nine Months Ended September 30,
	2014			2013
Cash Flows From Operating Activities:
Net income	$	398		$	365
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	329			313
Amortization of nuclear fuel	70			46
FAC prudence review charge	—			26
Amortization of debt issuance costs and premium/discounts	5			6
Deferred income taxes and investment tax credits, net	139			62
Allowance for equity funds used during construction	(24		)	(22		)
Other	1			1
Changes in assets and liabilities:
Receivables	(76		)	(148		)
Materials and supplies	3			27
Accounts and wages payable	(151		)	(124		)
Taxes accrued	(22		)	260
Assets, other	(10		)	59
Liabilities, other	6			(78		)
Pension and other postretirement benefits	(8		)	(12		)
Net cash provided by operating activities	660			781
Cash Flows From Investing Activities:
Capital expenditures	(548		)	(480		)
Nuclear fuel expenditures	(28		)	(34		)
Money pool advances, net	—			24
Purchases of securities – nuclear decommissioning trust fund	(365		)	(147		)
Sales and maturities of securities – nuclear decommissioning trust fund	354			134
Other	(6		)	(3		)
Net cash used in investing activities	(593		)	(506		)
Cash Flows From Financing Activities:
Dividends on common stock	(268		)	(320		)
Dividends on preferred stock	(3		)	(3		)
Short-term debt, net	65			—
Money pool borrowings, net	(105		)	—
Maturities of long-term debt	(104		)	—
Issuances of long-term debt	350			—
Capital issuance costs	(2		)	—
Net cash used in financing activities	(67		)	(323		)
Net change in cash and cash equivalents	—			(48		)
Cash and cash equivalents at beginning of year	1			148
Cash and cash equivalents at end of period	$	1		$	100

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)

STATEMENT OF INCOME AND COMPREHENSIVE INCOME

(Unaudited) (In millions)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014			2013
Operating Revenues:
Electric	$	445	$	432	$	1,162		$	1,160
Gas	127		115		703			585
Other	—		—		—			2
Total operating revenues	572		547		1,865			1,747
Operating Expenses:
Purchased power	89		96		256			303
Gas purchased for resale	43		38		374			292
Other operations and maintenance	185		166		580			538
Depreciation and amortization	66		59		193			182
Taxes other than income taxes	31		30		109			102
Total operating expenses	414		389		1,512			1,417
Operating Income	158		158		353			330
Other Income and Expense:
Miscellaneous income	4		4		12			7
Miscellaneous expense	2		3		7			7
Total other income	2		1		5			—
Interest Charges	31		31		90			96
Income Before Income Taxes	129		128		268			234
Income Taxes	54		51		110			93
Net Income	75		77		158			141
Other Comprehensive Loss, Net of Taxes:
Pension and other postretirement benefit plan activity, net of income taxes (benefit) of $(1), $(1), $(2) and $(2), respectively	—		—		(2		)	(2		)
Comprehensive Income	$	75	$	77	$	156		$	139


Net Income	$	75	$	77	$	158		$	141
Preferred Stock Dividends	—		—		2			2
Net Income Available to Common Stockholder	$	75	$	77	$	156		$	139

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)

BALANCE SHEET

(Unaudited) (In millions)



	September 30, 2014		December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	1	$	1
Accounts receivable – trade (less allowance for doubtful accounts of $14 and $13, respectively)	192		201
Accounts receivable – affiliates	2		—
Unbilled revenue	69		135
Miscellaneous accounts receivable	6		13
Materials and supplies	211		174
Current regulatory assets	62		38
Current accumulated deferred income taxes, net	125		45
Other current assets	17		26
Total current assets	685		633
Property and Plant, Net	6,030		5,589
Investments and Other Assets:
Goodwill	411		411
Regulatory assets	712		701
Other assets	145		120
Total investments and other assets	1,268		1,232
TOTAL ASSETS	$	7,983	$	7,454
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	189	$	—
Borrowings from money pool	16		56
Accounts and wages payable	212		243
Accounts payable – affiliates	28		18
Taxes accrued	16		23
Customer deposits	71		79
Current environmental remediation	53		43
Current regulatory liabilities	121		159
Other current liabilities	148		150
Total current liabilities	854		771
Long-term Debt, Net	1,940		1,856
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net	1,330		1,116
Accumulated deferred investment tax credits	3		4
Regulatory liabilities	698		664
Pension and other postretirement benefits	189		197
Environmental remediation	202		232
Other deferred credits and liabilities	165		166
Total deferred credits and other liabilities	2,587		2,379
Commitments and Contingencies (Notes 2, 8 and 9)
Stockholders’ Equity:
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding	—		—
Other paid-in capital	1,965		1,965
Preferred stock not subject to mandatory redemption	62		62
Retained earnings	566		410
Accumulated other comprehensive income	9		11
Total stockholders’ equity	2,602		2,448
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,983	$	7,454

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)



	Nine Months Ended September 30,
	2014			2013
Cash Flows From Operating Activities:
Net income	$	158		$	141
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	190			178
Amortization of debt issuance costs and premium/discounts	10			11
Deferred income taxes and investment tax credits, net	136			120
Other	(6		)	(7		)
Changes in assets and liabilities:
Receivables	80			66
Materials and supplies	(37		)	(20		)
Accounts and wages payable	1			31
Taxes accrued	(5		)	(2		)
Assets, other	(102		)	(33		)
Liabilities, other	(31		)	1
Pension and other postretirement benefits	(12		)	(13		)
Counterparty collateral, net	14			34
Net cash provided by operating activities	396			507
Cash Flows From Investing Activities:
Capital expenditures	(633		)	(462		)
Other	6			6
Net cash used in investing activities	(627		)	(456		)
Cash Flows From Financing Activities:
Dividends on common stock	—			(45		)
Dividends on preferred stock	(2		)	(2		)
Short-term debt, net	189			—
Money pool borrowings, net	(40		)	(3		)
Redemptions of long-term debt	(163		)	—
Issuances of long-term debt	248			—
Capital issuance costs	(2		)	—
Other	1			—
Net cash provided by (used in) financing activities	231			(50		)
Net change in cash and cash equivalents	—			1
Cash and cash equivalents at beginning of year	1			—
Cash and cash equivalents at end of period	$	1		$	1

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN CORPORATION (Consolidated)

UNION ELECTRIC COMPANY (d/b/a Ameren Missouri)

AMEREN ILLINOIS COMPANY (d/b/a Ameren Illinois)

COMBINED NOTES TO FINANCIAL STATEMENTS

(Unaudited)

September 30, 2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company under PUHCA 2005, administered by FERC. Ameren’s primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of parent company expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Also see the Glossary of Terms and Abbreviations at the front of this report and in the Form 10-K.


•	Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business, and a rate-regulated natural gas transmission and distribution business in Missouri. Ameren Missouri supplies electric service to 1.2 million customers and natural gas service to 127,000 customers.


•	Ameren Illinois Company, doing business as Ameren Illinois, operates a rate-regulated electric and natural gas transmission and distribution business in Illinois. Ameren Illinois supplies electric service to 1.2 million customers and natural gas service to 807,000 customers.

Ameren has various other subsidiaries responsible for activities such as the provision of shared services. Ameren also has a subsidiary, ATXI, that operates a FERC rate-regulated electric transmission business and is constructing the Illinois Rivers project.

The operating results, assets, and liabilities for New AER and the Elgin, Gibson City, Grand Tower, Meredosia, and Hutsonville energy centers have been presented separately as discontinued operations for all periods presented in this report. Unless otherwise stated, these notes to Ameren’s financial statements exclude discontinued operations for all periods presented. On January 31, 2014, Medina Valley completed its sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers to Rockland Capital. See Note 12 - Divestiture Transactions and Discontinued Operations in this report for additional information regarding the discontinued operations presentation and Note 16 - Divestiture Transactions and Discontinued Operations under Part II, Item 8, of the Form 10-K for additional information regarding Ameren’s divestiture of New AER in December 2013.

The financial statements of Ameren are prepared on a consolidated basis, and therefore include the accounts of its majority-owned subsidiaries. All significant intercompany transactions have been eliminated. Ameren Missouri and Ameren Illinois have no subsidiaries, and therefore their financial statements are not prepared on a consolidated basis. All tabular dollar amounts are in millions, unless otherwise indicated.

Our accounting policies conform to GAAP. Our financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in our opinion, for a fair presentation of our results. 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, the disclosure of contingent assets and liabilities at the dates of financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The results of operations of an interim period may not give a true indication of results that may be expected for a full year. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K.

Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to Ameren Corporation common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the diluted weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that would occur if certain stock-based performance share units were settled.

The following table presents Ameren’s basic and diluted earnings per share calculations and reconciles the weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the three and nine months ended September 30, 2014, and 2013:



	Three Months						Nine Months
	2014			2013			2014			2013
Net income (loss) attributable to Ameren Corporation:
Continuing operations	$	294		$	305		$	541		$	464
Discontinued operations	(1		)	(3		)	(3		)	(212		)
Net income attributable to Ameren Corporation	$	293		$	302		$	538		$	252

Average common shares outstanding - basic	242.6			242.6			242.6			242.6
Assumed settlement of performance share units	1.7			2.5			1.7			1.8
Average common shares outstanding - diluted	244.3			245.1			244.3			244.4

Earnings (loss) per common share – basic:
Continuing operations	$	1.21		$	1.26		$	2.23		$	1.92
Discontinued operations	—			(0.01		)	(0.01		)	(0.88		)
Earnings per common share – basic	$	1.21		$	1.25		$	2.22		$	1.04

Earnings (loss) per common share – diluted:
Continuing operations	$	1.20		$	1.25		$	2.21		$	1.91
Discontinued operations	—			(0.01		)	(0.01		)	(0.88		)
Earnings per common share – diluted	$	1.20		$	1.24		$	2.20		$	1.03

There were no potentially dilutive securities excluded from the diluted earnings per share calculations for the three and nine months ended September 30, 2014, and 2013.

Stock-based Compensation

Ameren’s long-term incentive plan available for eligible employees and directors, the 2006 Incentive Plan, was replaced prospectively for new grants by the 2014 Incentive Plan effective April 24, 2014. The 2014 Incentive Plan provides for a maximum of 8 million common shares to be available for grant to eligible employees and directors, and retains many of the features of the 2006 Incentive Plan. To the extent that the issuance of a share that is subject to an outstanding award under the 2006 Incentive Plan, as of April 24, 2014, would cause Ameren to exceed the maximum authorized shares under the 2006 Incentive Plan, the issuance of that share will take place under the 2014 Incentive Plan and will therefore reduce the maximum number of shares that may be granted under the 2014 Incentive Plan. The 2014 Incentive Plan awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards, and other stock-based awards.

A summary of nonvested performance share units at September 30, 2014, and changes during the nine months ended September 30, 2014, under the 2006 Incentive Plan and the 2014 Incentive Plan are presented below:



	Performance Share Units
	Share Units		Weighted-average Fair Value Per Share Unit at Grant Date
Nonvested at January 1, 2014	1,218,544		$	33.23
Granted^(a)	685,026		38.90
April Grants^(b)	38,559		50.34
Forfeitures	(65,847	)	33.82
Vested^(c)	(123,295	)	38.64
Nonvested at September 30, 2014	1,752,987		$	35.42


(a)	Includes performance share units (share units) granted to certain executive and nonexecutive officers and other eligible employees in 2014 under the 2006 Incentive Plan and the 2014 Incentive Plan.

(b)

In April 2014, certain executive officers were granted additional share units under the 2006 Incentive Plan and the 2014 Incentive Plan. The significant assumptions used to calculate fair value included a prorated three-year risk-free rate ranging from 0.76% to 0.79%, volatility of 12% to 18% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period.


(c)	Share units vested due to the attainment of retirement eligibility by certain employees. Actual shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.

The fair value of each share unit awarded in 2014, excluding the April Grants, under the 2006 Incentive Plan and the 2014 Incentive Plan was determined to be $38.90. That amount was based on Ameren’s closing common share price of $36.16 at December 31, 2013, and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren’s total stockholder return for a three-year performance period relative to the designated peer group beginning January 1, 2014. The simulations can produce a greater fair value for the share unit than the applicable closing common share price because they include the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 0.78%, volatility of 12% to 18% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period.

Intangible Assets

Ameren and Ameren Missouri classify renewable energy credits and emission allowances as intangible assets. Ameren Illinois consumes renewable energy credits as they are purchased through the IPA procurement process and expenses them immediately. Ameren Missouri’s emission allowances are allocated by the EPA and therefore are recorded at zero cost. We evaluate intangible assets for impairment if events or changes in circumstances indicate that their carrying amount might be impaired.

At September 30, 2014, Ameren’s and Ameren Missouri’s intangible assets consisted of renewable energy credits obtained through wind and solar power purchase agreements. The book values of both Ameren’s and Ameren Missouri’s renewable energy credits were $20 million and $22 million at September 30, 2014 and December 31, 2013, respectively.

Ameren Missouri’s and Ameren Illinois’ renewable energy credits and Ameren Missouri’s emission allowances are charged to “Purchased power” expense and “Fuel” expense, respectively, as they are used in operations. The following table presents amortization expense based on usage of renewable energy credits and emission allowances, net of gains from sales, for Ameren, Ameren Missouri and Ameren Illinois, during the three and nine months ended September 30, 2014, and 2013:



		Three Months			Nine Months
	2014		2013		2014		2013
Ameren Missouri	$	1	$	—	$	7	$	(a)
Ameren Illinois		1		2		7		9
Ameren	$	2	$	2	$	14	$	9


(a)	Less than $1 million.

Excise Taxes

Excise taxes levied on us are reflected on Ameren Missouri electric customer bills and on Ameren Missouri and Ameren Illinois natural gas customer bills. They are recorded gross in “Operating Revenues - Electric,” “Operating Revenues - Gas” and “Operating Expenses - Taxes other than income taxes” on

the statement of income or the statement of income and comprehensive income. Excise taxes reflected on Ameren Illinois electric customer bills are imposed on the customer and are therefore not included in revenues and expenses. They are included in “Taxes accrued” on the balance sheet. The following table presents excise taxes recorded in “Operating Revenues - Electric,” “Operating Revenues - Gas” and “Operating Expenses - Taxes other than income taxes” for the three and nine months ended September 30, 2014, and 2013:



	Three Months				Nine Months
	2014		2013		2014		2013
Ameren Missouri	$	47	$	49	$	120	$	120
Ameren Illinois	9		10		46		43
Ameren	$	56	$	59	$	166	$	163

Uncertain Tax Positions

With the adoption of new accounting guidance in the first quarter of 2014, unrecognized tax benefits are recorded as a reduction to the deferred tax assets for net operating losses and tax credit carryforwards within “Accumulated deferred income taxes, net” on our balance sheets. Unrecognized tax benefits that exceed these carryforwards are recorded in “Other deferred credits and liabilities” on our balance sheets. At September 30, 2014, unrecognized tax benefits of $89 million, $13 million, and $2 million were recorded in “Accumulated deferred income taxes, net” on Ameren's, Ameren Missouri's and Ameren Illinois' balance sheets, respectively. At December 31, 2013, unrecognized tax benefits of $84 million, $15 million, and $- million previously recorded in “Other deferred credits and liabilities” on Ameren’s, Ameren Missouri’s and Ameren Illinois’ respective balance sheets were reclassified to “Accumulated deferred income taxes, net” for comparative purposes. For additional information see the Accounting and Reporting Developments section below.

The following table presents the total amount of reserves for unrecognized tax benefits (detriments) related to uncertain tax positions as of September 30, 2014, and December 31, 2013:



	September 30, 2014		December 31, 2013
Ameren	$	97	$	90
Ameren Missouri	35		31
Ameren Illinois	1		(1		)

The following table presents the amount of reserves for unrecognized tax benefits, included in the table above, related to uncertain tax positions that would impact results of operations, if recognized, as of September 30, 2014, and December 31, 2013:



	September 30, 2014		December 31, 2013
Ameren	$	55	$	54
Ameren Missouri	3		3
Ameren Illinois	—		—

In October 2014, a settlement was reached with the Appeals Office of the IRS for the years 2007 through 2010. During the

fourth quarter of 2014, this settlement, which is primarily related to uncertain tax positions associated with the timing of research tax deductions, will result in a decrease in Ameren’s uncertain tax benefits of $16 million, of which $9 million is related to Ameren Missouri. This settlement will not have a material impact on Ameren’s or Ameren Missouri’s results of operations or liquidity.

Ameren’s federal income tax returns for the years 2011 and 2012 are before the Appeals Office of the IRS. It is reasonably possible that a settlement will be reached with the Appeals Office of the IRS in the next 12 months for the years 2011 and 2012. The potential settlement, which would primarily relate to uncertain tax positions associated with the timing of research tax deductions, is expected to result in a decrease in Ameren’s uncertain tax benefits of $6 million, all of which relates to Ameren Missouri and none of which will have a material impact on their respective results of operations or liquidity.

Ameren’s federal income tax return for the year 2013 is currently under examination by the IRS and it is reasonably possible that a settlement will be reached with the IRS examination team in the next 12 months for that year. The potential settlement, which would relate to the timing of research tax deductions and the tax basis of certain leases related to the divestiture of the merchant generation business, is expected to result in a decrease in Ameren’s uncertain tax benefits of $73 million, of which $17 million relates to Ameren Missouri and $1 million relates to Ameren Illinois. Although we are unable to estimate the impact of any potential settlement at this time, up to $55 million of the Ameren total could increase net income from

Ameren’s discontinued operations. Settlement of the remaining $18 million of uncertain tax positions at Ameren, as well as those positions at Ameren Missouri and Ameren Illinois, are associated with the timing of deductions and will not have a material impact on our results of operations.

In addition, it is reasonably possible that other events will occur during the next 12 months that would cause the total amount of our unrecognized tax benefits to fluctuate. However, other than as described above, we do not believe any such fluctuations would be material to our results of operations, financial position, or liquidity.

State income tax returns are generally subject to examination for a period of three years after filing of the return. We do not currently have material state income tax issues under examination, administrative appeals, or litigation. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

Asset Retirement Obligations

AROs at Ameren, Ameren Missouri and Ameren Illinois increased at September 30, 2014, compared to December 31, 2013, to reflect the accretion of obligations to their fair value and an additional ARO at Ameren and Ameren Missouri of $2 million related to the retirement costs for a CCR storage facility, partially offset by immaterial settlements.

Noncontrolling Interests

As of September 30, 2014, Ameren's noncontrolling interests were composed of the preferred stock not subject to mandatory redemption of Ameren Missouri and Ameren Illinois. All noncontrolling interests are classified as a component of equity separate from Ameren's equity on its consolidated balance sheet. A reconciliation of the equity changes attributable to the noncontrolling interests at Ameren for the three and nine months ended September 30, 2014, and 2013, are shown below:



	Three Months							Nine Months
	2014			2013				2014			2013
Noncontrolling interests, beginning of period	$	142		$	151		^(a)	$	142		$	151		^(a)
Net income from continuing operations attributable to noncontrolling interests	2			2				5			5
Dividends paid to noncontrolling interest holders	(2		)	(2		)		(5		)	(5		)
Noncontrolling interests, end of period	$	142		$	151		^(a)	$	142		$	151		^(a)

(a)

Included the 20% EEI ownership interest not owned by Ameren prior to the divestiture of New AER to IPH. Prior to the divestiture of New AER, the assets and liabilities of EEI were consolidated in Ameren’s balance sheet at a 100% ownership level and were included in “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively. The divestiture of New AER, which included EEI, was completed in the fourth quarter of 2013. See Note 12 - Divestiture Transactions and Discontinued Operations for additional information.

Accounting and Reporting Developments

The following is a summary of recently adopted or issued authoritative accounting guidance relevant to the Ameren Companies.

Presentation of an Unrecognized Tax Benefit

In July 2013, FASB issued additional authoritative accounting guidance to provide clarity for the financial statement presentation of an unrecognized tax benefit when a net operating

loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of this guidance is to eliminate diversity in practice related to the presentation of certain unrecognized tax benefits. It requires entities to present an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available under the tax law. This guidance was effective for the Ameren Companies beginning in

the first quarter of 2014. Previously, unrecognized tax benefits were recorded in “Other deferred credits and liabilities” on Ameren's, Ameren Missouri's and Ameren Illinois' respective balance sheets. Beginning in the first quarter 2014, unrecognized tax benefits are recorded as a reduction to the deferred tax assets for net operating losses and tax credit carryforwards within “Accumulated deferred income taxes, net” on our balance sheets. Unrecognized tax benefits that exceed these carryforwards are recorded in “Other deferred credits and liabilities,” on the respective balance sheets. For comparative purposes, the Ameren Companies reclassified the December 31, 2013 balances in accordance with the new guidance as discussed in the Uncertain Tax Positions section above. The implementation of the additional authoritative accounting guidance did not affect the Ameren Companies' results of operations or liquidity, as this guidance is presentation-related only.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

In April 2014, FASB issued authoritative accounting guidance that changes the criteria for reporting and qualifying for discontinued operations. Under the new guidance, a component of an entity, or a group of components of an entity, that either meets the criteria to be classified as held for sale or is disposed of by sale or otherwise, is required to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The guidance includes expanded disclosure requirements for discontinued operations and additional disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation. The guidance will be effective for the Ameren Companies in the first quarter of 2015 for components that are classified as held for sale or disposed of on or after January 1, 2015. Early adoption is permitted, but only for disposals or classifications as held for sale that have not been reported in financial statements previously issued. Therefore, Ameren’s existing discontinued operations would not be subject to the new disclosure requirements. The guidance will not affect the Ameren Companies’ results of operations, financial position, or liquidity, as this guidance is presentation-related only.

Revenue from Contracts with Customers

In May 2014, FASB issued authoritative accounting guidance to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The guidance requires an entity to recognize an amount of revenue for the transfer of promised goods or services to customers that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance will be effective for the Ameren Companies in the first quarter of 2017. The Ameren Companies are currently assessing the impacts of this guidance.

NOTE 2 - RATE AND REGULATORY MATTERS

Below is a summary of updates to significant regulatory proceedings and related lawsuits. See also Note 2 - Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K. We are unable to predict the ultimate outcome of these matters, the timing of the final decisions of the various agencies and courts, or the impact on our results of operations, financial position, or liquidity.

Missouri

Rate Shift Complaint and Earnings Complaint Cases

In February 2014, Noranda and 37 residential customers filed a rate shift complaint case and an earnings complaint case with the MoPSC.

On August 20, 2014, the MoPSC issued an order that rejected Noranda’s and the residential customers’ request in the rate shift complaint case. On September 12, 2014, Noranda, the MoOPC, the MIEC, and other parties filed a rehearing request, which was subsequently denied by the MoPSC.

In the earnings complaint case, Noranda and the residential customers asserted that Ameren Missouri’s electric service business is earning more than the 9.8% return on common equity authorized in the MoPSC's December 2012 electric rate order. The MoOPC, the MIEC, and other parties, participated in the earnings complaint case. On October 1, 2014, the MoPSC issued an order that rejected Noranda’s and the residential customers’ request in the earnings complaint case. On October 30, 2014, Noranda, the MoOPC, the MIEC, and other parties filed a rehearing request, which was subsequently denied by the MoPSC.

2014 Electric Rate Case

In July 2014, Ameren Missouri filed a request with the MoPSC seeking approval to increase its annual revenues for electric service by $264 million. The rate request seeks recovery of increased net energy costs and rebates provided for customer-installed solar generation, as well as recovery of, and a return on, additional electric infrastructure investments made for the benefit of Ameren Missouri’s customers. Plant additions to rate base since the last electric rate order are expected to total approximately $1.4 billion through the true-up date in this rate case and include electric infrastructure investments for upgrades to the electrostatic precipitators at the coal-fired Labadie energy center, the replacement of the nuclear reactor vessel head at the Callaway energy center, two new substations in St. Louis, and the O’Fallon solar energy center, among other additions. Approximately $127 million of the request relates to an increase in net energy costs above the current levels included in base rates previously authorized by the MoPSC in its December 2012 electric rate order, 95% of which, absent initiation of this general rate proceeding, would have been reflected in rate adjustments implemented under Ameren Missouri’s existing FAC. The electric rate increase request is based on a 10.4% return on common equity, a capital structure composed of 51.6% common equity, an

electric rate base for Ameren Missouri of $7.3 billion, and a test year ended March 31, 2014, with certain pro-forma adjustments expected through the true-up date of December 31, 2014.

As a part of its filing, Ameren Missouri also requested continued use of the FAC and the regulatory tracking mechanisms for storm costs, vegetation management/ infrastructure inspection costs, pension and postretirement benefits, and uncertain income tax positions that the MoPSC previously authorized in earlier electric rate orders.

The MoPSC proceeding relating to the proposed electric service rate increase will take place over a period of up to 11 months and a decision by the MoPSC in such proceeding is expected by May 2015, with rates effective by June 2015. Ameren Missouri cannot predict the level of any electric service rate change the MoPSC may approve, when any rate change may go into effect, or whether any rate increase that may eventually be approved will be sufficient for Ameren Missouri to recover its costs and earn a reasonable return on its investments when the increase goes into effect.

In October 2014, as part of this rate case proceeding, the MoOPC, the MIEC, and other parties, filed a rate shift request that seeks to reduce Noranda’s electric rates with an offsetting increase in electric rates for Ameren Missouri’s other customers. Ameren Missouri supplies electricity to Noranda’s aluminum smelter in southeast Missouri under a 15-year agreement, that is subject to termination as early as 2020 upon at least five years notice given by either party. Termination of the agreement by Ameren Missouri would require MoPSC approval.

Accounting Authority Order

In July 2011, Ameren Missouri filed a request with the MoPSC for an accounting authority order that would allow Ameren Missouri to defer fixed costs totaling $36 million that were not previously recovered from Noranda as a result of the loss of load caused by the severe 2009 ice storm for potential recovery in a future electric rate case. In November 2013, the MoPSC issued an accounting authority order that allowed Ameren Missouri to seek recovery of these fixed costs in an electric rate case. Ameren Missouri’s July 2014 electric rate case filing requested recovery of these fixed costs over five years. In February 2014, the MIEC and the MoOPC filed appeals of the MoPSC’s November 2013 accounting authority order with the Missouri Court of Appeals, Western District. Ameren Missouri has not recorded any potential revenue associated with this accounting authority order.

Illinois

IEIMA

Under the provisions of the IEIMA, Ameren Illinois’ electric delivery service rates are subject to an annual revenue requirement reconciliation to its actual costs. Throughout each year, Ameren Illinois records a regulatory asset or a regulatory liability and a corresponding increase or decrease to operating revenues for any differences between the revenue requirement in

effect for customer billings for that year and its estimate of the probable increase or decrease in the revenue requirement expected to ultimately be approved by the ICC based on that year's actual costs incurred. As of September 30, 2014, Ameren Illinois had recorded regulatory assets of $76 million and $64 million, respectively, to reflect its expected 2014 and 2013 revenue requirement reconciliation adjustments, with interest. As of September 30, 2014, Ameren Illinois had recorded a regulatory liability of $13 million to reflect its 2012 revenue requirement reconciliation adjustment, with interest, which is being refunded to customers during 2014.

In December 2013, the ICC issued an order in Ameren Illinois' annual formula rate update filing, which was based on 2012 recoverable costs and expected net plant additions for 2013. The ICC order established rates for 2014. In February 2014, Ameren Illinois filed an appeal to the Appellate Court of the Fourth District of Illinois regarding the rate treatment of accumulated deferred income taxes related to the transfer of former Ameren Missouri electric assets located in Illinois to Ameren Illinois.

In April 2014, Ameren Illinois filed with the ICC its annual electric delivery service formula rate update to establish the revenue requirement used to set rates for 2015. Pending ICC approval, Ameren Illinois’ update filing, as revised in July 2014, will result in a $205 million increase in Ameren Illinois’ electric delivery service revenue requirement beginning in January 2015. This update reflects an increase to the annual formula rate based on 2013 actual costs and expected net plant additions for 2014, an increase to include the annual reconciliation of the revenue requirement in effect for 2013 to the actual costs incurred in that year, and an increase resulting from the conclusion of a refund to customers in 2014 for the 2012 revenue requirement reconciliation. In August 2014, the ICC staff submitted its revised calculation of the revenue requirement. The ICC staff recommended a $205 million increase in Ameren Illinois’ electric delivery service revenue requirement. Other intervenors requested an electric delivery service revenue requirement up to $7 million lower than the revenue requirement recommended by the ICC staff. In October 2014, the administrative law judges issued a proposed order that reflected an increase to Ameren Illinois’ electric delivery service revenue requirement of $204 million. A final ICC decision on this April 2014 filing is expected by December 2014.

2013 Natural Gas Delivery Service Rate Case

In December 2013, the ICC issued a rate order that approved an increase in revenues for natural gas delivery service of $32 million. The revenue increase was based on a 9.1% return on common equity, a capital structure composed of 51.7% common equity, and a rate base of $1.1 billion. The rate order was based on a 2014 future test year. The rate changes became effective January 1, 2014. In March 2014, Ameren Illinois filed an appeal of the allowed return on common equity included in the ICC's order and also appealed the rate treatment of accumulated deferred income taxes related to the transfer of former Ameren Missouri natural gas assets located in Illinois to Ameren Illinois

with the Appellate Court of the Fourth District of Illinois. Ameren Illinois sought a 10.4% return on common equity in this rate case.

ATXI Transmission Project

The Spoon River project in northwest Illinois is a MISO-approved transmission line project. In August 2014, ATXI made a filing with the ICC requesting a certificate of public convenience and necessity and project approval for the Spoon River project. A decision is expected from the ICC in 2015. A certificate of public convenience and necessity is required before ATXI can proceed with right-of-way acquisition.

Federal

2011 Wholesale Distribution Rate Case

In January 2011, Ameren Illinois filed a request with FERC to increase its annual revenues for electric delivery service for its wholesale customers. These wholesale distribution revenues are treated as a deduction from Ameren Illinois’ revenue requirement in retail rate filings with the ICC with no material impact on net income. In March 2011, FERC issued an order authorizing the proposed rates to take effect, subject to refund when the final rates are determined. In November 2012, a FERC administrative law judge issued an initial decision finding that refunds were due to the wholesale customers. In September 2014, FERC issued an order affirming certain findings in the initial decision. Ameren and Ameren Illinois recognized in “Current regulatory liabilities” an estimate of $24 million and $13 million as of September 30, 2014, and December 31, 2013, respectively, for the refund due to the wholesale customers relating to billings since March 2011. In October 2014, Ameren Illinois refunded $24 million, including interest, to the wholesale customers and requested a rehearing on certain aspects of the order.

Ameren Illinois Electric Transmission Rate Refund

In July 2012, FERC issued an order concluding that Ameren Illinois improperly included acquisition premiums, including goodwill, in determining the common equity used in its electric transmission formula rate, and thereby inappropriately recovered a higher amount from its electric transmission customers. The order required Ameren Illinois to make refunds to customers for such improperly included amounts. In August 2012, Ameren Illinois filed a request for a rehearing of this order.

Ameren Illinois submitted a refund report in November 2012 and concluded that no refund was warranted. Several wholesale customers filed a protest with FERC regarding Ameren Illinois’ conclusion that no refund was warranted. In June 2013, FERC issued an order that rejected Ameren Illinois' November 2012 refund report and provided guidance as to the filing of a new refund report. In July 2013, Ameren Illinois filed a revised refund report based on the guidance provided in the June 2013 order, as well as a request for a rehearing of that order. Ameren Illinois' July 2013 refund report also concluded that no refund was warranted.

In June 2014, FERC issued an order that denied Ameren Illinois’ rehearing requests of the July 2012 order and the June 2013 order. Separately, in June 2014, FERC issued an order that established hearing and settlement procedures for Ameren Illinois’ July 2013 refund report. In July 2014, Ameren Illinois filed an appeal of FERC’s orders denying rehearing of the July 2012 and June 2013 orders with the United States Court of Appeals for the District of Columbia Circuit. Also in July 2014, Ameren Illinois separately filed a request for rehearing with FERC of its June 2014 order regarding the July 2013 refund report.

Ameren Illinois estimates the maximum pretax charge to earnings for this possible refund obligation through December 31, 2014, would be $19 million, before interest charges. For the nine months ended September 30, 2014, Ameren and Ameren Illinois recorded a $4 million reduction to “Operating Revenues - Electric” with a corresponding increase to “Current regulatory liabilities” for its estimate of the refund due to electric transmission customers based on the June 2014 order. If Ameren Illinois were to determine that a refund to its electric transmission customers in excess of the amount already recorded is probable, an additional charge to earnings would be recorded in the period in which that determination is made.

FERC Complaint Case

In November 2013, a customer group filed a complaint case with FERC seeking a reduction in the allowed base return on common equity for FERC-regulated MISO transmission rate base to 9.15%, as well as a limit on the common equity ratio, under the MISO tariff. Currently, the FERC-allowed base return on common equity for MISO transmission owners is 12.38%. In October 2014, FERC issued an order establishing settlement procedures and, if necessary, hearing procedures regarding the allowed base return on common equity and denied all other aspects of the MISO complaint case. This complaint case could result in a reduction to Ameren Illinois' and ATXI's allowed base return on common equity, which would result in a refund for transmission service revenues earned from the refund effective date of November 12, 2013.

In October 2014, FERC issued an order, which confirmed its June 2014 order, reducing the allowed base return on common equity for New England transmission owners from 11.14% to 10.57%, with rate incentives allowed up to 11.74%. The FERC orders in the New England transmission owners’ case applied observable market data from October 2012 to March 2013 to determine the allowed base return on common equity. FERC expects the evidence and the calculation used in the New England transmission owners’ case to guide its decision in the MISO complaint case. The calculation FERC will use to establish the allowed base return on common equity, which is based on a unique time period for each complaint case, will require multiple inputs based on observable market data specific to the utility industry and broader macroeconomic data. The unique time period of observable market data for the MISO complaint case has not been established by FERC. Due to the wide range of potential outcomes and significant uncertainty regarding the value of inputs required in FERC’s calculation, the Ameren

Companies cannot reasonably estimate the impact, if any, that a resolution in the MISO complaint case could have on their allowed base return on common equity.

On November 6, 2014, we filed a request with FERC to include an incentive adder of up to 50 basis points for participation in an RTO on the allowed base return on common equity. The filing requests a November 7, 2014 effective date and seeks authorization to defer collection of the incentive adder until after the issuance of the final order addressing the pending MISO complaint case discussed above. FERC is required to issue an order within 60 days of our filing.

If MISO’s allowed base return on common equity was lowered to 10.57%, as established in the New England transmission owners’ case, with no additional rate incentives, the required refund for Ameren and Ameren Illinois would be $14 million and $11 million, respectively, from the refund effective date of November 12, 2013 through September 30, 2014. The estimated annual reduction in revenues if the MISO return on common equity was 10.57% for Ameren and Ameren Illinois would be $16 million and $12 million, respectively. Ameren Missouri would not expect that a reduction in the FERC-allowed base return on common equity for MISO transmission owners would be material to its results of operations, financial position or liquidity. If Ameren and Ameren Illinois were to determine that a refund to their electric transmission customers could be reasonably estimated, a charge to earnings would be recorded for the refund in the period in which that determination is made.

Ameren Missouri Power Purchase Agreement with Entergy

Beginning in 2005, FERC issued a series of orders addressing a complaint filed in 2001 by the Louisiana Public Service Commission against Entergy and certain of its affiliates. The complaint alleged unjust and unreasonable cost allocations. As a result of the FERC orders, Entergy began billing Ameren Missouri in 2007 for additional charges under a 165-megawatt power purchase agreement, which expired August 31, 2009. In May 2012, FERC issued an order stating that Entergy should not have included additional charges to Ameren Missouri under the power purchase agreem