10-Q 1 aee-2013930x10q.htm 10-Q AEE- 2013.9.30-10Q

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, 2013
OR
 
¨
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from             to
 
Commission
File Number
  
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 Web site, 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, 2013, was as follows:
 
Ameren Corporation
 
Common stock, $0.01 par value per share - 242,634,671
Union Electric Company
 
Common stock, $5 par value per share, held by Ameren
Corporation (parent company of the registrant) - 102,123,834
Ameren Illinois Company
 
Common stock, no par value, held by Ameren
Corporation (parent company of the registrant) - 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
 
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
Union Electric Company (d/b/a Ameren Missouri)
 
 
 
 
Ameren Illinois Company (d/b/a Ameren Illinois)
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 6.
 
 
This Form 10-Q 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 included on pages 1 and 2 of this Form 10-Q 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.
AER - Ameren Energy Resources Company, LLC, an Ameren Corporation subsidiary that consists of non-rate-regulated operations, including Genco, AERG, Marketing Company and Medina Valley through March 13, 2013. Medina Valley was distributed from AER to Ameren on March 14, 2013.
Dynegy - Dynegy Inc.
FAC - Fuel adjustment clause, a fuel and purchased power cost recovery mechanism that allows Ameren Missouri to recover, through customer rates, 95% of changes in net energy costs greater or less than the amount set in base rates without a traditional rate proceeding, subject to MoPSC prudence reviews. Net energy cost includes fuel (coal, coal transportation, natural gas for generation, and nuclear), certain fuel additives, emission allowances, purchased power costs, transmission costs and revenues, and MISO costs and revenues, net of off-system sales revenues.
FCC - Federal Communications Commission, a United States government agency.
Form 10-K - The combined Annual Report on Form 10-K for the year ended December 31, 2012, filed by Ameren, Ameren Missouri and Ameren Illinois with the SEC.  With respect to Ameren only, references to Item 6,  Item 7, Item 7A, Item 8 or Schedules I or II to the consolidated financial statements of the Form 10-K shall be deemed to refer to such items and schedules as they appear in Exhibits 99.1 through 99.6 to the Current Report on Form 8-K filed by Ameren with the SEC on October 17, 2013.
IPH - Illinois Power Holdings, LLC, an indirect wholly owned subsidiary of Dynegy.
Medina Valley - AmerenEnergy Medina Valley Cogen, LLC, an AER subsidiary through March 13, 2013, which owned a 40-megawatt natural gas-fired electric energy center that was sold in February 2012. This company was distributed from AER to Ameren on March 14, 2013. On October 11, 2013, Medina Valley purchased the Elgin, Gibson City, and Grand Tower gas-fired energy centers from Genco.
MISO - Midcontinent Independent System Operator, Inc., an RTO. Formerly known as Midwest Independent Transmission System Operator, Inc.
New AER - A limited liability company to be formed as a direct wholly owned subsidiary of AER. New AER will be acquired by IPH and will include substantially all of the assets and liabilities of AER, except for certain assets and liabilities retained by Ameren.
Rockland Capital - Rockland Capital, LLC as well as the special purpose entity affiliated with and formed by Rockland Capital to acquire the Elgin, Gibson City, and Grand Tower gas-fired energy centers. Rockland Capital, LLC is not an affiliate of Ameren.
 
 
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 in the Form 10-Q for the quarterly period ended March 31, 2013, 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:
completion of our divestiture of New AER, which is subject to Illinois Pollution Control Board approval of an Illinois MPS variance in favor of IPH on the same material terms as AER’s existing Illinois MPS variance, and completion of the sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers, which is subject to FERC and other regulatory approvals;
Ameren's exit from the Merchant Generation business, which could result in additional impairments of long-lived assets, disposal-related losses, contingencies, reduction of existing deferred tax assets, or could have other adverse impacts on the financial condition, results of operations and liquidity of Ameren;
regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the outcome of Ameren Illinois' natural gas delivery service rate case filed in 2013; the court appeals of Ameren Illinois' electric rate order issued in 2012; Ameren Missouri's request with the MoPSC for an accounting authority order relating to the deferral of certain fixed costs; Ameren Illinois' request for rehearing of FERC’s July 2012 and June 2013 orders regarding the alleged inclusion of acquisition premiums in Ameren Illinois transmission rates; 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 the 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 effects of Ameren Illinois’ expected participation, beginning in 2014, in the regulatory framework provided by the state of Illinois’ recently enacted Natural Gas Consumer, Safety and Reliability Act, which allows for the use of a rider


1



to recover costs of certain infrastructure investments made between rate cases;
the effects of, or changes to, the Illinois power procurement process;
the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at both the state and federal levels, and the implementation of deregulation;
changes in laws and other governmental actions, including monetary, fiscal, and tax policies, such as changes that result in our being unable to claim all or a portion of the cash tax benefits that are expected to result from the divestiture of AER;
the effects on demand for our services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
increasing capital expenditure and operating expense requirements and our ability to 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 the ability to recover the costs for such commodities;
the effectiveness of our risk management strategies and the use of financial and derivative instruments;
the level and volatility of future prices for power in the Midwest, which may have a significant effect on the financial condition of Ameren's Merchant Generation segment;
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 make the Ameren Companies' access to necessary capital, including short-term credit and liquidity, impossible, more difficult, or more costly;
our assessment of our liquidity, including liquidity concerns for Ameren's Merchant Generation business, and specifically for Genco, whose ability to borrow additional funds from external, third-party sources is restricted;
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 impacts of droughts, which may cause lower river levels and could limit our energy centers' ability to generate power;
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 investment and returns in a timely fashion, if at all;
 
the extent to which Ameren Missouri prevails in its claims against insurers 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, unplanned and refueling outages, and future decommissioning costs;
the effects of strategic initiatives, including mergers, acquisitions and divestitures, including the divestiture of the Merchant Generation business, and any related tax implications;
the impact of current environmental regulations on utilities and power generating companies 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, result in an impairment of our assets, result in sales of 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 and returns on benefit plan assets;
the inability of our counterparties and affiliates 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's and Ameren Missouri's energy centers or required to satisfy energy sales made by Ameren or Ameren Missouri;
legal and administrative proceedings; and
acts of sabotage, war, terrorism, cybersecurity 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.



2



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,
 
2013
 
2012
 
2013
 
2012
Operating Revenues:
 
 
 
 
 
 
 
Electric
$
1,507

 
$
1,579

 
$
3,823

 
$
3,898

Gas
131

 
130

 
693

 
625

Total operating revenues
1,638

 
1,709

 
4,516

 
4,523

Operating Expenses:
 
 
 
 
 
 
 
Fuel
222

 
194

 
648

 
550

Purchased power
128

 
260

 
400

 
630

Gas purchased for resale
42

 
40

 
344

 
304

Other operations and maintenance
383

 
362

 
1,229

 
1,126

Depreciation and amortization
175

 
161

 
528

 
496

Taxes other than income taxes
121

 
114

 
354

 
337

Total operating expenses
1,071

 
1,131

 
3,503

 
3,443

Operating Income
567

 
578

 
1,013

 
1,080

Other Income and Expenses:
 
 
 
 
 
 
 
Miscellaneous income
20

 
17

 
51

 
53

Miscellaneous expense
5

 
6

 
18

 
28

Total other income
15

 
11

 
33

 
25

Interest Charges
88

 
99

 
289

 
295

Income Before Income Taxes
494

 
490

 
757

 
810

Income Taxes
187

 
179

 
288

 
298

Income from Continuing Operations
307

 
311

 
469

 
512

Income (Loss) from Discontinued Operations, Net of Taxes (Note 2)
(3
)
 
63

 
(212
)
 
(331
)
Net Income
304

 
374

 
257

 
181

Less: Net Income (Loss) Attributable to Noncontrolling Interests:
 
 
 
 
 
 
 
                  Continuing Operations
2

 
2

 
5

 
5

                  Discontinued Operations

 
(2
)
 

 
(6
)
Net Income (Loss) Attributable to Ameren Corporation:
 
 
 
 
 
 
 
      Continuing Operations
305

 
309

 
464

 
507

      Discontinued Operations
(3
)
 
65

 
(212
)
 
(325
)
Net Income Attributable to Ameren Corporation
$
302

 
$
374

 
$
252

 
$
182

 
 
 
 
 
 
 
 
Earnings (Loss) per Common Share – Basic:
 
 
 
 
 
 
 
          Continuing Operations
$
1.26

 
$
1.28

 
$
1.92

 
$
2.09

          Discontinued Operations
(0.01
)
 
0.26

 
(0.88
)
 
(1.34
)
Earnings per Common Share – Basic
$
1.25

 
$
1.54

 
$
1.04

 
$
0.75

 
 
 
 
 
 
 
 
Earnings (Loss) per Common Share – Diluted:
 
 
 
 
 
 
 
          Continuing Operations
$
1.25

 
$
1.28

 
$
1.91

 
$
2.09

          Discontinued Operations
(0.01
)
 
0.26

 
(0.88
)
 
(1.34
)
Earnings per Common Share – Diluted
$
1.24

 
$
1.54

 
$
1.03

 
$
0.75

 
 
 
 
 
 
 
 
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
245.1

 
242.9

 
244.4

 
242.9

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

3



AMEREN CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (In millions)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
Income from Continuing Operations
$
307

 
$
311

 
$
469

 
$
512

Other Comprehensive Income (Loss), Net of Taxes
 
 
 
 
 
 
 
Pension and other postretirement benefit plan activity, net of income taxes (benefit) of ($5), $-, $3, and $-, respectively
(5
)
 

 
5

 
1

Total other comprehensive income (loss), net of taxes
(5
)
 

 
5

 
1

Comprehensive Income from Continuing Operations
302

 
311

 
474

 
513

Less: Comprehensive Income from Continuing Operations Attributable to Noncontrolling Interests
2

 
2

 
5

 
5

Comprehensive Income from Continuing Operations Attributable to Ameren Corporation
300

 
309

 
469

 
508

 
 
 
 
 
 
 
 
Income (Loss) from Discontinued Operations, Net of Taxes
(3
)
 
63

 
(212
)
 
(331
)
Other Comprehensive Income (Loss) from Discontinued Operations, Net of Taxes
(5
)
 
41

 
(16
)
 
60

Comprehensive Income (Loss) from Discontinued Operations
(8
)
 
104

 
(228
)
 
(271
)
Less: Comprehensive Income from Discontinued Operations Attributable to Noncontrolling Interest

 
7

 

 
3

Comprehensive Income (Loss) from Discontinued Operations Attributable to Ameren Corporation
(8
)
 
97

 
(228
)
 
(274
)
Comprehensive Income Attributable to Ameren Corporation
$
292

 
$
406

 
$
241

 
$
234

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

4



AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
 
September 30, 2013
 
December 31, 2012
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
169

 
$
184

Accounts receivable – trade (less allowance for doubtful accounts of $20 and $17, respectively)
469

 
354

Unbilled revenue
226

 
291

Miscellaneous accounts and notes receivable
109

 
71

Materials and supplies
581

 
570

Current regulatory assets
173

 
247

Current accumulated deferred income taxes, net
43

 
170

Other current assets
108

 
98

Assets of discontinued operations (Note 2)
1,395

 
1,600

Total current assets
3,273

 
3,585

Property and Plant, Net
15,834

 
15,348

Investments and Other Assets:
 
 
 
Nuclear decommissioning trust fund
459

 
408

Goodwill
411

 
411

Intangible assets
19

 
14

Regulatory assets
1,729

 
1,786

Other assets
660

 
667

Total investments and other assets
3,278

 
3,286

TOTAL ASSETS
$
22,385

 
$
22,219

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Current maturities of long-term debt
$
884

 
$
355

Accounts and wages payable
414

 
533

Taxes accrued
159

 
50

Interest accrued
120

 
89

Customer deposits
106

 
107

Mark-to-market derivative liabilities
65

 
92

Current regulatory liabilities
149

 
100

Other current liabilities
190

 
168

Liabilities of discontinued operations (Note 2)
1,141

 
1,166

Total current liabilities
3,228

 
2,660

Long-term Debt, Net
5,274

 
5,802

Deferred Credits and Other Liabilities:
 
 
 
Accumulated deferred income taxes, net
3,422

 
3,176

Accumulated deferred investment tax credits
65

 
70

Regulatory liabilities
1,703

 
1,589

Asset retirement obligations
392

 
375

Pension and other postretirement benefits
1,042

 
1,138

Other deferred credits and liabilities
534

 
642

Total deferred credits and other liabilities
7,158

 
6,990

Commitments and Contingencies (Notes 2, 3, 9, 10 and 11)


 


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
5,624

 
5,616

Retained earnings
967

 
1,006

Accumulated other comprehensive loss
(19
)
 
(8
)
Total Ameren Corporation stockholders’ equity
6,574

 
6,616

Noncontrolling Interests
151

 
151

Total equity
6,725

 
6,767

TOTAL LIABILITIES AND EQUITY
$
22,385

 
$
22,219

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

5



AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
 
Nine Months Ended September 30,
 
2013
 
2012
Cash Flows From Operating Activities:
 
 
 
Net income
$
257

 
$
181

Loss from discontinued operations, net of taxes
212

 
331

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
500

 
466

Amortization of nuclear fuel
46

 
63

Amortization of debt issuance costs and premium/discounts
18

 
13

Deferred income taxes and investment tax credits, net
258

 
249

Allowance for equity funds used during construction
(26
)
 
(26
)
Stock-based compensation costs
19

 
23

Other
14

 
(6
)
Changes in assets and liabilities:
 
 
 
Receivables
(88
)
 
(21
)
Materials and supplies
7

 
(57
)
Accounts and wages payable
(102
)
 
(157
)
Taxes accrued
104

 
95

Assets, other
20

 
(24
)
Liabilities, other
(24
)
 
61

Pension and other postretirement benefits
(34
)
 
16

Counterparty collateral, net
34

 
21

Premiums paid on long-term debt repurchases

 
(138
)
Net cash provided by operating activities - continuing operations
1,215

 
1,090

Net cash provided by operating activities - discontinued operations
99

 
222

Net cash provided by operating activities
1,314

 
1,312

Cash Flows From Investing Activities:
 
 
 
Capital expenditures
(943
)
 
(762
)
Nuclear fuel expenditures
(34
)
 
(56
)
Purchases of securities – nuclear decommissioning trust fund
(147
)
 
(341
)
Sales and maturities of securities – nuclear decommissioning trust fund
134

 
326

Other
(1
)
 
(6
)
Net cash used in investing activities - continuing operations
(991
)
 
(839
)
Net cash used in investing activities - discontinued operations
(42
)
 
(123
)
Net cash used in investing activities
(1,033
)
 
(962
)
Cash Flows From Financing Activities:
 
 
 
Dividends on common stock
(291
)
 
(284
)
Dividends paid to noncontrolling interest holders
(5
)
 
(5
)
Short-term debt, net

 
(143
)
Redemptions, repurchases, and maturities of long-term debt

 
(754
)
Issuances of long-term debt

 
882

Capital issuance costs

 
(7
)
Other

 
4

Net cash used in financing activities - continuing operations
(296
)
 
(307
)
Net cash used in financing activities - discontinued operations

 

Net cash used in financing activities
(296
)
 
(307
)
Net change in cash and cash equivalents
(15
)
 
43

Cash and cash equivalents at beginning of year
209

 
255

Cash and cash equivalents at end of period
194

 
298

Less cash and cash equivalents at end of period, discontinued operations
25

 
25

Cash and cash equivalents at end of period, continuing operations
$
169

 
$
273

 
 
 
 
Noncash financing activity – dividends on common stock
$

 
$
(7
)
The accompanying notes are an integral part of these consolidated financial statements.

6



 
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,
 
2013
 
2012
 
2013
 
2012
Operating Revenues:
 
 
 
 
 
 
 
Electric
$
1,075

 
$
1,046

 
$
2,667

 
$
2,504

Gas
17

 
18

 
110

 
94

Other
1

 

 
1

 
1

Total operating revenues
1,093

 
1,064

 
2,778

 
2,599

Operating Expenses:
 
 
 
 
 
 
 
Fuel
222

 
192

 
648

 
549

Purchased power
33

 
37

 
100

 
57

Gas purchased for resale
4

 
5

 
52

 
42

Other operations and maintenance
212

 
203

 
686

 
611

Depreciation and amortization
114

 
111

 
338

 
328

Taxes other than income taxes
91

 
87

 
247

 
236

Total operating expenses
676

 
635

 
2,071

 
1,823

Operating Income
417

 
429

 
707

 
776

Other Income and Expenses:
 
 
 
 
 
 
 
Miscellaneous income
16

 
15

 
44

 
48

Miscellaneous expense
2

 
4

 
10

 
11

Total other income
14

 
11

 
34

 
37

Interest Charges
43

 
55

 
159

 
167

Income Before Income Taxes
388

 
385

 
582

 
646

Income Taxes
149

 
148

 
217

 
243

Net Income
239

 
237

 
365

 
403

Other Comprehensive Income

 

 

 

Comprehensive Income
$
239

 
$
237

 
$
365

 
$
403

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
$
239

 
$
237

 
$
365

 
$
403

Preferred Stock Dividends
1

 
1

 
3

 
3

Net Income Available to Common Stockholder
$
238

 
$
236

 
$
362

 
$
400

The accompanying notes as they relate to Union Electric Company are an integral part of these financial statements.

7



UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
 
September 30, 2013
 
December 31, 2012
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
100

 
$
148

Advances to money pool

 
24

Accounts receivable – trade (less allowance for doubtful accounts of $7 and $5, respectively)
270

 
161

Accounts receivable – affiliates
9

 
4

Unbilled revenue
151

 
145

Miscellaneous accounts and notes receivable
76

 
48

Materials and supplies
370

 
397

Current regulatory assets
124

 
163

Other current assets
65

 
69

Total current assets
1,165

 
1,159

Property and Plant, Net
10,337

 
10,161

Investments and Other Assets:
 
 
 
Nuclear decommissioning trust fund
459

 
408

Intangible assets
19

 
14

Regulatory assets
808

 
852

Other assets
443

 
449

Total investments and other assets
1,729

 
1,723

TOTAL ASSETS
$
13,231

 
$
13,043

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current Liabilities:
 
 
 
Current maturities of long-term debt
$
309

 
$
205

Accounts and wages payable
186

 
345

Accounts payable – affiliates
61

 
66

Taxes accrued
288

 
28

Interest accrued
67

 
60

Current regulatory liabilities
61

 
18

Other current liabilities
97

 
77

Total current liabilities
1,069

 
799

Long-term Debt, Net
3,697

 
3,801

Deferred Credits and Other Liabilities:
 
 
 
Accumulated deferred income taxes, net
2,472

 
2,443

Accumulated deferred investment tax credits
61

 
64

Regulatory liabilities
1,002

 
917

Asset retirement obligations
362

 
346

Pension and other postretirement benefits
423

 
461

Other deferred credits and liabilities
49

 
158

Total deferred credits and other liabilities
4,369

 
4,389

Commitments and Contingencies (Notes 3, 9, 10 and 11)


 


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
1,556

 
1,556

Preferred stock not subject to mandatory redemption
80

 
80

Retained earnings
1,949

 
1,907

Total stockholders’ equity
4,096

 
4,054

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
13,231

 
$
13,043

The accompanying notes as they relate to Union Electric Company are an integral part of these financial statements.

8



UNION ELECTRIC COMPANY(d/b/a AMEREN MISSOURI)
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
 
Nine Months Ended September 30,
 
2013
 
2012
Cash Flows From Operating Activities:
 
 
 
Net income
$
365

 
$
403

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
313

 
303

Amortization of nuclear fuel
46

 
63

FAC prudence review charge
26

 

Amortization of debt issuance costs and premium/discounts
6

 
5

Deferred income taxes and investment tax credits, net
62

 
217

Allowance for equity funds used during construction
(22
)
 
(23
)
Other
1

 
7

Changes in assets and liabilities:
 
 
 
Receivables
(148
)
 
(62
)
Materials and supplies
27

 
(53
)
Accounts and wages payable
(124
)
 
(168
)
Taxes accrued
260

 
59

Assets, other
59

 
(29
)
Liabilities, other
(78
)
 
22

Pension and other postretirement benefits
(12
)
 
17

Premiums paid on long-term debt repurchases

 
(62
)
Net cash provided by operating activities
781

 
699

Cash Flows From Investing Activities:
 
 
 
Capital expenditures
(480
)
 
(445
)
Nuclear fuel expenditures
(34
)
 
(56
)
Money pool advances, net
24

 

Purchases of securities – nuclear decommissioning trust fund
(147
)
 
(341
)
Sales and maturities of securities – nuclear decommissioning trust fund
134

 
326

Other
(3
)
 
(5
)
Net cash used in investing activities
(506
)
 
(521
)
Cash Flows From Financing Activities:
 
 
 
Dividends on common stock
(320
)
 
(300
)
Dividends on preferred stock
(3
)
 
(3
)
Redemptions, repurchases, and maturities of long-term debt

 
(422
)
Issuances of long-term debt

 
482

Capital issuance costs

 
(4
)
Net cash used in financing activities
(323
)
 
(247
)
Net change in cash and cash equivalents
(48
)
 
(69
)
Cash and cash equivalents at beginning of year
148

 
201

Cash and cash equivalents at end of period
$
100

 
$
132

The accompanying notes as they relate to Union Electric Company are an integral part of these financial statements.


9



 
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,
 
2013
 
2012
 
2013
 
2012
Operating Revenues:
 
 
 
 
 
 
 
Electric
$
432

 
$
536

 
$
1,160

 
$
1,404

Gas
115

 
112

 
585

 
532

Other

 

 
2

 

Total operating revenues
547

 
648

 
1,747

 
1,936

Operating Expenses:
 
 
 
 
 
 
 
Purchased power
96

 
224

 
303

 
576

Gas purchased for resale
38

 
35

 
292

 
262

Other operations and maintenance
166

 
159

 
538

 
513

Depreciation and amortization
59

 
55

 
182

 
165

Taxes other than income taxes
30

 
24

 
102

 
94

Total operating expenses
389

 
497

 
1,417

 
1,610

Operating Income
158

 
151

 
330

 
326

Other Income and Expenses:
 
 
 
 
 
 
 
Miscellaneous income
4

 
2

 
7

 
5

Miscellaneous expense
3

 
2

 
7

 
15

Total other income (expense)
1

 

 

 
(10
)
Interest Charges
31

 
34

 
96

 
98

Income Before Income Taxes
128

 
117

 
234

 
218

Income Taxes
51

 
46

 
93

 
86

Net Income
77

 
71

 
141

 
132

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

 
(1
)
 
(2
)
 
(3
)
Comprehensive Income
$
77

 
$
70

 
$
139

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
$
77

 
$
71

 
$
141

 
$
132

Preferred Stock Dividends

 

 
2

 
2

Net Income Available to Common Stockholder
$
77

 
$
71

 
$
139

 
$
130

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


10



AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
BALANCE SHEET
(Unaudited) (In millions)
 
September 30, 2013
 
December 31, 2012
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
1

 
$

Accounts receivable – trade (less allowance for doubtful accounts of $13 and $12, respectively)
185

 
182

Accounts receivable – affiliates
28

 
10

Unbilled revenue
75

 
146

Miscellaneous accounts receivable
8

 
22

Materials and supplies
211

 
173

Current regulatory assets
49

 
84

Current accumulated deferred income taxes, net
35

 
85

Other current assets
33

 
47

Total current assets
625

 
749

Property and Plant, Net
5,369

 
5,052

Investments and Other Assets:
 
 
 
Tax receivable – Genco
37

 
39

Goodwill
411

 
411

Regulatory assets
916

 
934

Other assets
81

 
97

Total investments and other assets
1,445

 
1,481

TOTAL ASSETS
$
7,439

 
$
7,282

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current Liabilities:
 
 
 
Current maturities of long-term debt
$
150

 
$
150

Borrowings from money pool
21

 
24

Accounts and wages payable
189

 
146

Accounts payable – affiliates
86

 
86

Taxes accrued
17

 
18

Customer deposits
81

 
85

Mark-to-market derivative liabilities
48

 
77

Current environmental remediation
53

 
37

Current regulatory liabilities
88

 
82

Other current liabilities
114

 
92

Total current liabilities
847

 
797

Long-term Debt, Net
1,577

 
1,577

Deferred Credits and Other Liabilities:
 
 
 
Accumulated deferred income taxes, net
1,095

 
1,025

Accumulated deferred investment tax credits
4

 
5

Regulatory liabilities
701

 
672

Pension and other postretirement benefits
376

 
406

Environmental remediation
194

 
216

Other deferred credits and liabilities
152

 
183

Total deferred credits and other liabilities
2,522

 
2,507

Commitments and Contingencies (Notes 3, 9 and 10)


 


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
454

 
360

Accumulated other comprehensive income
12

 
14

Total stockholders’ equity
2,493

 
2,401

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
7,439

 
$
7,282


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

11



AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
 
Nine Months Ended September 30,
 
2013
 
2012
Cash Flows From Operating Activities:
 
 
 
Net income
$
141

 
$
132

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
178

 
159

Amortization of debt issuance costs and premium/discounts
11

 
7

Deferred income taxes and investment tax credits, net
120

 
127

Other
(7
)
 
(8
)
Changes in assets and liabilities:
 
 
 
Receivables
66

 
58

Materials and supplies
(20
)
 
(6
)
Accounts and wages payable
31

 
(4
)
Taxes accrued
(2
)
 
(3
)
Assets, other
(33
)
 
(2
)
Liabilities, other
1

 
42

Pension and other postretirement benefits
(13
)
 
(8
)
Counterparty collateral, net
34

 
23

Premiums paid on long-term debt repurchases

 
(76
)
Net cash provided by operating activities
507

 
441

Cash Flows From Investing Activities:
 
 
 
Capital expenditures
(462
)
 
(309
)
Other
6

 
5

Net cash used in investing activities
(456
)
 
(304
)
Cash Flows From Financing Activities:
 
 
 
Dividends on common stock
(45
)
 
(132
)
Dividends on preferred stock
(2
)
 
(2
)
Money pool borrowings, net
(3
)
 

Redemptions, repurchases, and maturities on long-term debt

 
(332
)
Issuances of long-term debt

 
400

Capital issuance costs

 
(3
)
Other

 
4

Net cash used in financing activities
(50
)
 
(65
)
Net change in cash and cash equivalents
1

 
72

Cash and cash equivalents at beginning of year

 
21

Cash and cash equivalents at end of period
$
1

 
$
93

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


12



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, 2013
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. These subsidiaries operate, as the case may be, rate-regulated electric generation, transmission and distribution businesses, rate-regulated natural gas transmission and distribution businesses, and merchant electric generation businesses. Dividends on Ameren’s common stock and the payment of 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 Illinois Company, doing business as Ameren Illinois, operates a rate-regulated electric and natural gas transmission and distribution business in Illinois.
AER consists of non-rate-regulated operations, including Genco, AERG, and Marketing Company, and, through Genco, an 80% ownership interest in EEI, which Ameren consolidates for financial reporting purposes.
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.
On March 14, 2013, Ameren entered into a transaction agreement to divest New AER to IPH, which Ameren expects will close during the fourth quarter of 2013. Immediately prior to Ameren’s entry into the transaction agreement with IPH, on March 14, 2013, Genco exercised its option under the amended put option agreement with Medina Valley and received an initial payment of $100 million with respect to the sale of its Elgin, Gibson City, and Grand Tower gas-fired energy centers to Medina Valley. On October 11, 2013, Ameren received FERC approval for the divestiture of New AER to IPH and Genco’s sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers to Medina Valley. Immediately after receipt of FERC approval, Genco completed its sale of these gas-fired energy
 
centers to Medina Valley and received additional cash proceeds of $37.5 million. Medina Valley has entered into an agreement to sell the Elgin, Gibson City, and Grand Tower gas-fired energy centers to Rockland Capital. Ameren expects this third-party sale of these gas-fired energy centers to close by the end of 2013, subject to FERC and other regulatory approvals. See Note 2 - Divestiture Transactions and Discontinued Operations for additional information regarding these divestitures.
As a result of the transaction agreement with IPH and Ameren’s plan to sell its Elgin, Gibson City, and Grand Tower gas-fired energy centers, Ameren determined that New AER and the Elgin, Gibson City, and Grand Tower gas-fired energy centers qualified for discontinued operations presentation beginning March 14, 2013. Therefore, Ameren has segregated New AER’s and the Elgin, Gibson City, and Grand Tower gas-fired energy centers’ operating results, assets, and liabilities and presented them 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. See Note 2 - Divestiture Transactions and Discontinued Operations for additional information regarding that presentation.
The financial statements of Ameren are prepared on a consolidated basis. Ameren Missouri and Ameren Illinois have no subsidiaries, and therefore their financial statements are not prepared on a consolidated basis. All significant intercompany transactions have been eliminated. 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.
During preparation of the 2012 annual statements of cash flows, it was identified that Ameren’s and Ameren Missouri’s 2012 interim statements of cash flows incorrectly classified certain activity from the nuclear decommissioning trust fund. Although not material, operating cash flows were overstated by $49 million for the nine months ended September 30, 2012. The overstated operating cash flows resulted in the investing cash flows being understated by the same amounts. The cash flows for the nine months ended September 30, 2012, for Ameren and Ameren Missouri have been revised in this report to correct for this error.


13



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, 2013, and 2012:
 
Three Months
 
Nine Months
 
2013
 
2012
 
2013
 
2012
Net income (loss) attributable to Ameren Corporation:
 
 
 
 
 
 
 
Continuing operations
$
305

 
$
309

 
$
464

 
$
507

Discontinued operations
(3
)
 
65

 
(212
)
 
(325
)
Net income (loss) attributable to Ameren Corporation
$
302

 
$
374

 
$
252

 
$
182

 
 
 
 
 
 
 
 
Average common shares outstanding - basic
242.6

 
242.6

 
242.6

 
242.6

Assumed settlement of performance share units
2.5

 
0.3

 
1.8

 
0.3

Average common shares outstanding - diluted
245.1

 
242.9

 
244.4

 
242.9

 
 
 
 
 
 
 
 
Earnings (loss) per common share – basic:
 
 
 
 
 
 
 
Continuing operations
$
1.26

 
$
1.28

 
$
1.92

 
$
2.09

Discontinued operations
(0.01
)
 
0.26

 
(0.88
)
 
(1.34
)
Earnings (loss) per common share – basic
$
1.25

 
$
1.54

 
$
1.04

 
$
0.75

 
 
 
 
 
 
 
 
Earnings (loss) per common share – diluted:
 
 
 
 
 
 
 
Continuing operations
$
1.25

 
$
1.28

 
$
1.91

 
$
2.09

Discontinued operations
(0.01
)
 
0.26

 
(0.88
)
 
(1.34
)
Earnings (loss) per common share – diluted
$
1.24

 
$
1.54

 
$
1.03

 
$
0.75

 
 
 
 
 
 
 
 
Average performance share units excluded from calculation(a)

 
1.0

 
0.1

 
1.0

(a) 
Weighted-average number of performance share units that were excluded from the “Assumed settlement of performance share units” provided above because the performance or market conditions related to the awards had not yet been met.
Stock-based Compensation
A summary of nonvested performance share units at September 30, 2013, and changes during the nine months ended September 30, 2013, under the 2006 Omnibus Incentive Compensation Plan (2006 Plan) are presented below:
 
Performance Share Units
 
Share Units
Weighted-average Fair Value Per Unit at Grant Date
Nonvested as of January 1, 2013
1,192,487

$
33.56

Granted(a)
837,199

31.19

Forfeitures
(7,757
)
32.66

Vested(b)
(131,960
)
31.30

Nonvested as of September 30, 2013
1,889,969

$
32.67

(a)
Includes performance share units (share units) granted to certain executive and nonexecutive officers and other eligible employees in 2013 under the 2006 Plan.
(b)
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 2013 under the 2006 Plan was determined to be $31.19. That amount was based on Ameren’s closing common share price of $30.72 at December 31, 2012, 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, 2013. 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


14



in the share price has occurred. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 0.36%, volatility of 12% to 21% 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 emission allowances and renewable energy credits as intangible assets. Ameren Illinois consumes renewable energy credits as they are purchased through the IPA procurement process and expenses them immediately. We evaluate intangible assets for impairment if events or changes in circumstances indicate that their carrying amount might be impaired.
At September 30, 2013, Ameren’s and Ameren Missouri’s intangible assets consisted of renewable energy credits obtained through wind and solar power purchase agreements. The book value of Ameren’s and Ameren Missouri’s renewable energy credits was $19 million and $19 million, respectively, at September 30, 2013. The book value of Ameren’s and Ameren Missouri’s renewable energy credits was $14 million and $14 million, respectively, at December 31, 2012.
Renewable energy credits and emission allowances are charged to purchased power expense and fuel expense, respectively, as they are used in operations. In accordance with the MoPSC's 2012 electric rate order, the majority of Ameren Missouri's amortization of intangible assets is deferred as a regulatory asset pending future recovery from customers through rates. 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, 2013, and 2012.
 
 
Three Months
 
Nine Months
 
2013
 
2012
 
2013
 
2012
Ameren Missouri
$

 
$
1

 
$
(a)

 
$
1

Ameren Illinois
 
2

 
 
1

 
 
9

 
 
1

Ameren
$
2

 
$
2

 
$
9

 
$
2

(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 consumer and are therefore not included in revenues and expenses. They are recorded as tax collections payable and 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, 2013, and 2012:
 
Three Months
 
Nine Months
 
2013
 
2012
 
2013
 
2012
Ameren Missouri
$
49

 
$
46

 
$
120

 
$
111

Ameren Illinois
10

 
9

 
43

 
37

Ameren
$
59

 
$
55

 
$
163

 
$
148

Uncertain Tax Positions
The amount of unrecognized tax benefits (detriments) as of September 30, 2013, was $86 million, $27 million, and $(2) million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively. Unrecognized tax benefits are included in “Other deferred credits and liabilities” on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ September 30, 2013 balance sheets. The amount of unrecognized tax benefits (detriments) as of September 30, 2013, that would impact the effective tax rate, if recognized, was $51 million, $2 million, and $(1) million for Ameren, Ameren Missouri, and Ameren Illinois, respectively. The Ameren amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, increased by $50 million primarily during the first quarter of 2013. This increase was primarily due to uncertainty related to the historical computation of Ameren’s tax basis in its stock investment in AER.
During the three months ended September 30, 2013, unrecognized tax benefits related to the deductibility of expenditures to maintain, replace, or improve steam or electric power generation property, along with casualty loss deductions for storm damage, were reduced by $113 million, $103 million, and $5 million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively, with an offset to “Accumulated deferred income taxes, net.” This was the result of recent Internal Revenue Service guidance establishing new rules for the amount and timing of these deductions.
Ameren’s federal income tax returns for the years 2007 through 2011 are before the Appeals Office of the Internal Revenue Service. Ameren’s federal income tax return for the year 2012 is currently under examination.
It is reasonably possible that a settlement will be reached with the Appeals Office of the Internal Revenue Service in the next 12 months for the years 2007 through 2011. This settlement, which is primarily related to uncertain tax positions for research tax deductions, is expected to result in a decrease in uncertain tax benefits of $23 million, $15 million, and $- million for Ameren, Ameren Missouri, and Ameren Illinois, respectively. In addition, it is reasonably possible that other events will occur during the next 12 months that would cause the total amount of unrecognized tax benefits for the Ameren Companies to increase or decrease. However, the Ameren Companies do not believe any such increases or decreases, including the decrease from the reasonably possible Internal Revenue Service Appeals Office settlement discussed above, would be material to their results of operations, financial position, or liquidity.


15



State income tax returns are generally subject to examination for a period of three years after filing of the return. The Ameren Companies 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.
Ameren Missouri has an uncertain tax position tracker. Under Missouri’s regulatory framework, uncertain income tax
 
positions do not reduce Ameren Missouri’s electric rate base. When an uncertain income tax position liability is resolved, the MoPSC requires, through the uncertain tax position tracker, the creation of a regulatory asset or regulatory liability to reflect the time value (using the weighted-average cost of capital included in each of the electric rate orders in effect before the tax position was resolved) of the difference between the uncertain income tax position liability that was excluded from rate base and the final tax liability. The resulting regulatory asset or liability will be amortized over three years beginning on the effective date of new rates established in the next electric rate case.

Asset Retirement Obligations
The following table provides a reconciliation of the beginning balance and ending carrying amount of AROs for the nine months ended September 30, 2013:
 
Ameren
Missouri(a)
 
Ameren
Illinois(b)
 
Other(c)
 
Ameren(a)
 
Balance at December 31, 2012
$
346

 
$
3

 
$
26

 
$
375

 
Liabilities incurred

 

 

  

 
Liabilities settled
(d)

 
(d)

 
(d)

 
(d)

 
Accretion in 2013(e)
14

 
(d)

 
1

  
15

 
Change in estimates(f)
2

 
(d)

 
(d)

 
2

 
Balance at September 30, 2013
$
362

 
$
3

 
$
27

  
$
392

 
(a)
The nuclear decommissioning trust fund assets of $459 million and $408 million as of September 30, 2013, and December 31, 2012, respectively, were restricted for decommissioning of the Callaway energy center.
(b)
Balance included in “Other deferred credits and liabilities” on the balance sheet.
(c)
Represents amounts for the Meredosia and Hutsonville energy centers. Pursuant to the transaction agreement to divest New AER to IPH, Ameren will retain the AROs associated with the Meredosia and Hutsonville energy centers. See Note 2 - Divestiture Transactions and Discontinued Operations for additional information.
(d)
Less than $1 million.
(e)
Accretion was recorded as an increase to regulatory assets at Ameren Missouri and Ameren Illinois.
(f)
Ameren Missouri changed its fair value estimates for asbestos removal and certain CCR storage facilities.
Noncontrolling Interest
Ameren's noncontrolling interests comprised the 20% of EEI not owned by Ameren and the preferred stock not subject to mandatory redemption of Ameren's subsidiaries. These noncontrolling interests were 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, 2013, and 2012, is shown below:
  
Three Months
 
Nine Months
  
2013
 
2012
 
2013
 
2012
Noncontrolling interests, beginning of period (a)
$
151

 
$
145

 
$
151

 
$
149

Net income from continuing operations attributable to noncontrolling interests
2

 
2

 
5

 
5

Net loss from discontinued operations attributable to noncontrolling interests

 
(2
)
 

 
(6
)
Dividends paid to noncontrolling interest holders
(2
)
 
(2
)
 
(5
)
 
(5
)
Other comprehensive income attributable to noncontrolling interests(b)

 
9

 

 
9

Noncontrolling interests, end of period (a)
$
151

 
$
152

 
$
151