Summary Of Significant Accounting Policies

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 the common stock of 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 in Missouri and Illinois. Dividends on Ameren's common stock and the payment of other 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.

Ÿ

Union Electric Company, or 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 was incorporated in Missouri in 1922 and is successor to a number of companies, the oldest of which was organized in 1881. It is the largest electric utility in the state of Missouri. It supplies electric and natural gas service to a 24,000-square-mile area in central and eastern Missouri. This area has an estimated population of 2.9 million and includes the Greater St. Louis area. Ameren Missouri supplies electric service to 1.2 million customers and natural gas service to 127,000 customers.

Ÿ

Ameren Illinois Company, or Ameren Illinois, operates a rate-regulated electric and natural gas transmission and distribution business in Illinois. Ameren Illinois was created by the merger of CILCO and IP with and into CIPS. CIPS was incorporated in Illinois in 1923 and is successor to a number of companies, the oldest of which was organized in 1902. Ameren Illinois supplies electric and natural gas utility service to portions of central and southern Illinois having an estimated population of 3.1 million in an area of 40,000 square miles. Ameren Illinois supplies electric service to 1.2 million customers and natural gas service to 809,000 customers.

Ÿ

AER consists of non-rate-regulated operations, including Genco, AERG, Marketing Company and Medina Valley. The Medina Valley energy center was sold in February 2012. Genco operates a merchant electric generation business in Illinois and holds an 80% ownership interest in EEI, which it consolidates for financial reporting purposes. Genco was incorporated in Illinois in March 2000. Genco's coal and natural gas electric generating facilities are expected to have capacity of 3,095 and 1,348 megawatts, respectively, at the time of the 2012 peak summer electrical demand.

Ameren has various other subsidiaries responsible for activities such as the provision of shared services.

On October 1, 2010, Ameren, CIPS, CILCO, IP, AERG and AER completed a two-step corporate internal reorganization. The first step of the reorganization was the Ameren Illinois Merger. Upon consummation of the Ameren Illinois Merger, the separate legal existence of CILCO and IP ended. The second step of the reorganization involved the distribution of AERG stock from Ameren Illinois to Ameren and the subsequent contribution by Ameren of the AERG stock to AER. The Ameren Illinois Merger and the distribution of AERG stock were accounted for as transactions between entities under common control. In accordance with authoritative accounting guidance, assets and liabilities transferred between entities under common control were accounted for at the historical cost basis of the common parent, Ameren, as if the transfer had occurred at the beginning of the earliest reporting period presented. Ameren's historical cost basis in Ameren Illinois included purchase accounting adjustments related to Ameren's acquisition of CILCORP in 2003. Ameren Illinois accounted for the AERG distribution as a spinoff. Ameren Illinois transferred AERG to Ameren based on AERG's carrying value. Ameren Illinois has segregated AERG's operating results and cash flows and presented them separately as discontinued operations in its consolidated statement of income and consolidated statement of cash flows, respectively, for all periods presented prior to October 1, 2010, in this report. For Ameren's financial statements, AERG's results of operations remain classified as continuing operations. See Note 16 – Corporate Reorganization and Discontinued Operations for additional information.

Effective January 1, 2010, as part of an internal reorganization, AER transferred its 80% stock ownership interest in EEI to Genco through a capital contribution. The

transfer of EEI to Genco was accounted for as a transaction between entities under common control, whereby Genco accounted for the transfer at the historical carrying value of the parent (Ameren) as if the transfer had occurred at the beginning of the earliest reporting period presented. Ameren's historical cost basis in EEI included purchase accounting adjustments relating to Ameren's acquisition of an additional 20% ownership interest in EEI in 2004. This transfer required Genco's prior-period financial statements to be retrospectively combined for all periods presented. Consequently, Genco's prior-period consolidated financial statements reflect EEI as if it had been a subsidiary of Genco. Ameren and Genco consolidate EEI for financial reporting purposes.

The financial statements of Ameren, Ameren Illinois and Genco are prepared on a consolidated basis. Ameren Missouri has no subsidiaries, and therefore its financial statements were 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 that Ameren management 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.

During the second quarter of 2011, Genco identified an error in the cash flow statement classification of a capital contribution from Ameren that affected Genco's year ended December 31, 2010. For the year ended December 31, 2010, Genco's previously reported cash flows provided by operating activities were $280 million, and cash flows used in financing activities were $251 million. As corrected herein, Genco's cash flows provided by operating activities were $304 million and cash flows used in financing activities were $275 million. This correction had no impact on Ameren's previously reported consolidated statement of cash flows.

Regulation

Certain Ameren subsidiaries are regulated by the MoPSC, the ICC, and FERC. In accordance with authoritative accounting guidance regarding accounting for the effects of certain types of regulation, Ameren Missouri and Ameren Illinois defer certain costs as assets pursuant to actions of rate regulators or based on the expectation they will be able to recover such costs in rates charged to customers. Ameren Missouri and Ameren Illinois also defer certain amounts as liabilities pursuant to actions of rate regulators or based on the expectation that such amounts will be returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. See Note 2 – Rate and Regulatory Matters for additional information on regulatory assets and liabilities. In addition, other costs that Ameren Missouri and Ameren Illinois expect to recover from customers are recorded as construction work in progress and property and plant, net. See Note 3 – Property and Plant, Net.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and temporary investments purchased with an original maturity of three months or less.

Allowance for Doubtful Accounts Receivable

The allowance for doubtful accounts represents our best estimate of existing accounts receivable that will ultimately be uncollectible. The allowance is calculated by applying estimated loss factors to various classes of outstanding receivables, including unbilled revenue. The loss factors used to estimate uncollectible accounts are based upon both historical collections experience and management's best estimate of future collections success given the existing and anticipated future collections environment. Ameren Illinois has a rate mechanism that adjusts rates for bad debt expense above or below those being collected in rates.

Materials and Supplies

Materials and supplies are recorded at the lower of cost or market. Cost is determined using the average-cost method. Materials and supplies are capitalized as inventory when purchased and then expensed or capitalized as plant assets when installed, as appropriate. The following table presents a breakdown of materials and supplies for each of the Ameren Companies at December 31, 2011, and 2010:


	Ameren^(a)		Ameren Missouri		Ameren Illinois		Genco
2011:
Fuel^(b)	$	251	$	150	$	-	$	76
Gas stored underground		171		22		149		-
Other materials and supplies		290		176		50		46
	$	712	$	348	$	199	$	122
2010:
Fuel^(b)	$	255	$	152	$	-	$	81
Gas stored underground		175		22		152		-
Other materials and supplies		277		167		46		49
	$	707	$	341	$	198	$	130

(a)	Includes amounts for Ameren registrant and nonregistrant subsidiaries.

(b)	Consists of coal, oil, paint, propane, and tire chips.

Property and Plant

We capitalize the cost of additions to and betterments of units of property and plant. The cost includes labor, material, applicable taxes, and overhead. An allowance for funds used during construction, as discussed specifically below, is also capitalized as a cost of our rate-regulated assets. Interest incurred during construction is capitalized as a cost of merchant generation assets. Maintenance expenditures, including nuclear refueling and maintenance outages, are expensed as incurred. When units of depreciable property are retired, the original costs, less salvage values, are charged to accumulated depreciation. Asset removal costs incurred by our merchant generation operations that do not constitute legal obligations are expensed as incurred. Asset removal costs accrued by our rate-regulated operations that do not constitute legal obligations are classified as a regulatory liability. See Asset Retirement Obligations below and Note 3 – Property and Plant, Net, for additional information.

Depreciation

Depreciation is provided over the estimated lives of the various classes of depreciable property by applying composite rates on a straight-line basis to the cost basis of such property. The provision for depreciation for the Ameren Companies in 2011, 2010 and 2009 ranged from 3% to 4% of the average depreciable cost.

Allowance for Funds Used During Construction

In our rate-regulated operations, we capitalize the allowance for funds used during construction, or the cost of borrowed funds and the cost of equity funds (preferred and common stockholders' equity) applicable to rate-regulated construction expenditures, as is the utility industry accounting practice. Allowance for funds used during construction does not represent a current source of cash funds. This accounting practice offsets the effect on earnings of the cost of financing current construction, and it treats such financing costs in the same manner as construction charges for labor and materials.

Under accepted ratemaking practice, cash recovery of allowance for funds used during construction and other construction costs occurs when completed projects are placed in service and reflected in customer rates. The following table presents the annual allowance for funds used during construction rates that were utilized during 2011, 2010 and 2009:


	2011		2010		2009
Ameren		8% - 9%		8% - 9%		6% - 9%
Ameren Missouri		8		8		6
Ameren Illinois		9		9		9

Goodwill and Intangible Assets

Goodwill. Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired. As of December 31, 2011, Ameren's and Ameren Illinois' goodwill related to Ameren's acquisition of IP in 2004 and Ameren's acquisition of CILCORP in 2003.

We evaluate goodwill for impairment as of October 31 of each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. During the fourth quarter of 2011, Ameren and Ameren Illinois used a qualitative evaluation to assess the likelihood of a goodwill impairment based on authoritative accounting guidance issued by the FASB in 2011. That evaluation led Ameren and Ameren Illinois to believe it was more likely than not that the fair value of each of their reporting units exceeded their carrying values, resulting in no impairment in 2011. See Note 17 – Goodwill, Impairment and Other Charges for additional information including the goodwill impairment recorded in 2010.

Intangible Assets. Ameren, Ameren Missouri and Genco classify emission allowances and renewable energy credits as intangible assets. We evaluate intangible assets for impairment if events or changes in circumstances indicate that their carrying amount might be impaired. See Note 17 – Goodwill, Impairment and Other Charges for additional information including the intangible asset impairments recorded in 2011 and 2010.

At December 31, 2011, Ameren's and Ameren Missouri's intangible assets included renewable energy credits obtained through wind and solar power purchase agreements. The book value of each of Ameren's and Ameren Missouri's renewable energy credits was $7 million and less than $1 million at December 31, 2011, and 2010, respectively.

In July 2011, the EPA issued the CSAPR, which created new allowances for SO₂ and NO_x emissions, and restricted the use of preexisting SO₂and NO_x allowances to the acid rain program and NO_x budget trading program, respectively. In anticipation of the CSAPR announcement, observable market prices for existing emission allowances declined materially. Consequently, during 2011, Ameren and Genco recorded a noncash, pretax impairment charge of $2 million and $1 million, respectively, which was reflected in "Goodwill, impairment and other charges" on their statements of income. Ameren Missouri recorded a $1 million impairment of its SO₂ emission allowances by reducing a previously established regulatory liability relating to the SO₂emission allowances, which had no impact to earnings. On December 30, 2011, the United States Court of Appeals for the District of Columbia issued a stay of the CSAPR. Until that court proceeding is finalized, the EPA is expected to continue to administer the CAIR and to use CAIR's allowance program for compliance. During 2010, Ameren and Genco each recognized an impairment charge of intangible assets to reduce the carrying value of SO₂ emission allowances. The charge was reflected in "Goodwill, impairment and other charges" in their statements of income. See Note 15 – Commitments and Contingencies for additional information on emission allowances and the CSAPR. The book value of each of Ameren's, Ameren Missouri's, and Genco's CAIR emission allowances was less than $1 million at December 31, 2011. The book value of Ameren's, Ameren Missouri's, and Genco's CAIR emission allowances was $7 million, $2 million, and $3 million, at December 31, 2010, respectively.

Renewable energy credits and 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, Ameren Illinois, and Genco during the years ended December 31, 2011, 2010, and 2009. The table below does not include the intangible asset impairment charges referenced above.


	2011			2010		2009
Ameren Missouri	$	(a	)	$	6	$	2
Ameren Illinois		3			7		9
Genco^(b)		2			18		24
Other^(b)(c)		1			4		5
Ameren^(b)	$	6		$	35	$	40

(a)	Less than $1 million.

(b)	Includes allowances consumed that were recorded through purchase accounting.

(c)	Consists of renewable energy credit expense for Marketing Company and emission allowances expense for AERG.

Impairment of Long-lived Assets

We evaluate long-lived assets classified as held and used for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whether impairment has occurred is determined by comparing the estimated undiscounted cash flows attributable to the assets with the carrying value of the assets. If the carrying value exceeds the undiscounted cash flows, we recognize an impairment charge equal to the carrying value of the assets in excess of estimated fair value. In the period in which we determine an asset meets the held for sale criteria, we record an impairment charge to the extent the book value exceeds its fair value less cost to sell. See Note 17 – Goodwill, Impairment and Other Charges for information about Ameren's, Ameren Missouri's and Genco's impairments.

Investments

Ameren and Ameren Missouri evaluate for impairment the investments held in Ameren Missouri's nuclear decommissioning trust fund. Losses on assets in the trust fund could result in higher funding requirements for decommissioning costs, which Ameren Missouri believes would be recovered in electric rates paid by its customers. Accordingly, Ameren and Ameren Missouri recognize a regulatory asset on their balance sheets for losses on investments held in the nuclear decommissioning trust fund. See Note 9 – Nuclear Decommissioning Trust Fund Investments for additional information.

Environmental Costs

Liabilities for environmental costs are recorded on an undiscounted basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Costs are expensed or deferred as a regulatory asset when it is expected that the costs will be recovered from customers in future rates. If environmental expenditures are related to facilities currently in use, such as pollution control equipment, the cost is capitalized and depreciated over the expected life of the asset.

Unamortized Debt Discount, Premium, and Expense

Discount, premium, and expense associated with long-term debt are amortized over the lives of the related issues.

Revenue

Operating Revenues

Ameren Missouri, Ameren Illinois and Genco record operating revenue for electric or natural gas service when it is delivered to customers. We accrue an estimate of electric and natural gas revenues for service rendered but unbilled at the end of each accounting period.

Trading Activities

We present the revenues and costs associated with certain energy derivative contracts designated as trading on a net basis in "Operating Revenues – Electric" and "Operating Revenues – Other."

Nuclear Fuel

Ameren Missouri's cost of nuclear fuel is capitalized and then amortized to fuel expense on a unit-of-production basis. Spent fuel disposal cost is based on net kilowatthours generated and sold, and that cost is charged to expense.

Purchased Gas, Power and Fuel Rate-adjustment Mechanisms

Ameren's utility subsidiaries have various rate-adjustment mechanisms in place that provide for the recovery of purchased natural gas and electric fuel and purchased power costs. See Note 2 – Rate and Regulatory Matters for the regulatory assets and liabilities recorded at December 31, 2011, and 2010, related to the rate-adjustment mechanisms discussed below.

In Ameren Missouri's and Ameren Illinois' retail natural gas utility jurisdictions, changes in natural gas costs are generally reflected in billings to their natural gas utility customers through PGA clauses. The difference between actual natural gas costs and costs billed to customers in a given period are deferred as regulatory assets or liabilities. The deferred amounts are either billed or refunded to natural gas utility customers in a subsequent period.

In Ameren Illinois' retail electric utility jurisdictions, changes in purchased power costs are generally reflected in billings to their electric utility customers through pass-through rate-adjustment clauses. The difference between actual purchased power costs and costs billed to customers in a given period are deferred as regulatory assets or liabilities. The deferred amounts are either billed or refunded to electric utility customers in a subsequent period.

Ameren Missouri has a FAC that allows an adjustment of electric rates three times per year for a pass-through to customers of 95% of changes in fuel, emission allowances and purchased power costs, net of off-system revenues, including MISO costs and revenues, greater or less than the amount set in base rates, subject to MoPSC prudency review. The differences between the cost of fuel incurred and the cost of fuel recovered from Ameren Missouri's customers are deferred as regulatory assets or liabilities. The deferred amounts are either billed or refunded to Ameren Missouri's electric utility customers in a subsequent period.

Accounting for MISO Transactions

MISO-related purchase and sale transactions are recorded by Ameren, Ameren Missouri and Ameren Illinois using settlement information provided by MISO. These purchase and sale transactions are accounted for on a net hourly position. We record net purchases in a single hour in "Operating Expenses – Purchased power" and net sales in a single hour in "Operating Revenues – Electric" in our statements of income. On occasion, prior-period transactions will be resettled outside the routine settlement process because of a change in MISO's tariff or a material interpretation thereof. In these cases, Ameren, Ameren Missouri and Ameren Illinois recognize expenses associated with resettlements once the resettlement is probable and the resettlement amount can be estimated.

Stock-based Compensation

Stock-based compensation cost is measured at the grant date based on the fair value of the award. Ameren recognizes as compensation expense the estimated fair value of stock-based compensation on a straight-line basis over the requisite service period. See Note 12 – Stock-based Compensation for additional information.

Excise Taxes

Excise taxes imposed on us are reflected on Ameren Missouri customer electric bills and on Ameren Missouri and Ameren Illinois customer natural gas 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. 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 years ended 2011, 2010 and 2009:


	2011		2010		2009
Ameren Missouri	$	137	$	130	$	112
Ameren Illinois		57		59		56
Ameren	$	194	$	189	$	168

Income Taxes

Ameren uses an asset and liability approach for its financial accounting and reporting of income taxes, in

accordance with authoritative accounting guidance. Deferred tax assets and liabilities are recognized for transactions that are treated differently for financial reporting and income tax return purposes. These deferred tax assets and liabilities are based on statutory tax rates.

We recognize that regulators will probably reduce future revenues for deferred tax liabilities that were initially recorded at rates in excess of the current statutory rate. Therefore, reductions in the deferred tax liability, which were recorded because of decreases in the statutory rate, have been credited to a regulatory liability. A regulatory asset has been established to recognize the probable recovery in rates of future income taxes, resulting principally from the reversal of allowance for funds used during construction. This refers to equity and temporary differences related to property and plant acquired before 1976 that were unrecognized temporary differences prior to the adoption of the authoritative accounting guidance for income taxes.

Investment tax credits used on tax returns for prior years have been deferred for book purposes; the credits are being amortized over the useful lives of the related investment. Deferred income taxes were recorded on the temporary difference represented by the deferred investment tax credits and a corresponding regulatory liability. This recognizes the expected reduction in rate revenue for future lower income taxes associated with the amortization of the investment tax credits. See Note 13 – Income Taxes.

Ameren Missouri, Ameren Illinois and Genco are parties to a tax sharing agreement with Ameren that provides for the allocation of consolidated tax liabilities. The tax sharing agreement specifies that each party be allocated an amount of tax similar to that which would be owed had the party been separately subject to tax. Any net benefit attributable to the parent is reallocated to other members. That allocation is treated as a contribution of capital to the party receiving the benefit.

Noncontrolling Interests

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 are classified as a component of equity separate from Ameren's equity in its consolidated balance sheet. Genco's noncontrolling interest comprised the 20% of EEI not owned by Genco. This noncontrolling interest is classified as a component of equity separate from Genco's equity in its consolidated balance sheet.

Earnings per Share

There were no material differences between Ameren's basic and diluted earnings per share amounts in 2011, 2010, and 2009. The number of stock options, restricted stock shares, and performance share units outstanding was immaterial. There were no assumed stock option conversions in 2009 and 2010, as the remaining stock options were not dilutive. All of Ameren's stock options expired in February 2010.

Accounting Changes and Other Matters

The following is a summary of recently adopted authoritative accounting guidance as well as guidance issued but not yet adopted that could impact the Ameren Companies.

Disclosures about an Employer's Participation in a Multiemployer Plan

In September 2011, FASB amended its guidance to require employers to provide additional disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. This guidance was applicable to Ameren Missouri, Ameren Illinois, and Genco because they participate in their parent's (Ameren's) benefit plans. Ameren Missouri, Ameren Illinois, and Genco adopted this guidance as of December 31, 2011. See Note 11 – Retirement Benefits for the required additional disclosures made by Ameren Missouri, Ameren Illinois and Genco, including the amount of their contributions to Ameren's benefit plans.

Testing of Goodwill for Impairment

In September 2011, FASB amended its guidance on testing of goodwill impairment. The amended guidance provided companies the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a two-step goodwill impairment test. As permitted, Ameren and Ameren Illinois early adopted the amended guidance for the annual goodwill impairment test performed as of October 31, 2011. See Note 17 – Goodwill, Impairment and Other Charges for additional information.

Disclosures about Fair Value Measurements

See Note 8 – Fair Value Measurements for adopted guidance on fair value measurements issued in January 2010, which became effective in its entirety for the Ameren Companies as of January 1, 2011.

In May 2011, FASB issued additional authoritative guidance regarding fair value measurements. The guidance amends the disclosure requirements for fair value measurements in order to align the principles for fair value measurements and the related disclosure requirements under GAAP and International Financial Reporting Standards. The amendments will not affect the Ameren Companies' results of operations, financial positions, or liquidity, as this guidance only requires additional disclosures. This guidance will be effective for the Ameren Companies beginning in the first quarter of 2012 with retrospective application required.

Presentation of Comprehensive Income

In June 2011, FASB amended its guidance on the presentation of comprehensive income in financial statements. The amended guidance will not affect the Ameren Companies' results of operations, financial positions, or liquidity. The amended guidance changes the presentation of comprehensive income in the financial statements. It requires entities to report components of comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. This guidance will be effective for the Ameren Companies beginning in the first quarter of 2012. In December 2011, the FASB amended the guidance to postpone a requirement to present reclassification adjustments by income component until further guidance is issued.

Asset Retirement Obligations

Authoritative accounting guidance requires us to record the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the liabilities are incurred and to capitalize a corresponding amount as part of the book value of the related long-lived asset. In subsequent periods, we are required to make adjustments to AROs based on changes in the estimated fair values of the obligations. Corresponding increases in asset book values are depreciated over the remaining useful life of the related asset. Uncertainties as to the probability, timing, or amount of cash flows associated with AROs affect our estimates of fair value. Ameren, Ameren Missouri and Genco have recorded AROs for retirement costs associated with Ameren Missouri's Callaway energy center decommissioning costs, asbestos removal, ash ponds, and river structures. In addition, Ameren, Ameren Missouri and Ameren Illinois have recorded AROs for the disposal of certain transformers.

Asset removal costs accrued by our rate-regulated operations that do not constitute legal obligations are classified as a regulatory liability. See Note 2 – Rate and Regulatory Matters.

The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the years 2011 and 2010:


	Ameren Missouri^(a)			Ameren Illinois^(b)			Genco			AERG			Ameren^(a)
Balance at December 31, 2009	$	331		$	5		$	65		$	33		$	434
Liabilities incurred		5			(c	)		3			-			8
Liabilities settled		(4	)		(c	)		(c	)		(c	)		(4	)
Accretion in 2010^(d)		19			1			4			2			26
Change in estimates^(e)		12			(3	)		2			(c	)		11
Balance at December 31, 2010	$	363		$	3		$	74		$	35		$	475
Liabilities incurred		-			-			(c	)		-			(c	)
Liabilities settled		(1	)		(c	)		(2	)		(c	)		(3	)
Accretion in 2011^(d)		20			(c	)		5			2			27
Change in estimates^(f)		(54	)		(c	)		(6	)		(6	)		(66	)
Balance at December 31, 2011	$	328		$	3		$	71	^(g)	$	31		$	433	^(g)

(a)	The nuclear decommissioning trust fund assets of $357 million and $337 million as of December 31, 2011, and 2010, respectively, were restricted for decommissioning of the Callaway energy center.

(b)	Balance included in "Other deferred credits and liabilities" on the balance sheet.

(c)	Less than $1 million.

(d)	Accretion expense was recorded as an increase to regulatory assets at Ameren Missouri and Ameren Illinois.

(e)	Ameren Missouri and Genco changed their estimates for asbestos removal. Additionally, Genco changed the estimates related to retirement costs for its coal combustion byproduct storage areas.

(f)

Ameren Missouri changed estimates related to its Callaway energy center decommissioning costs because of a cost study performed in 2011 and a decline in the cost escalation factor assumptions. Additionally, Ameren Missouri, Genco and AERG changed estimates related to retirement costs for asbestos removal, river structures and their coal combustion byproduct storage areas.

(g)	Balance included $5 million in "Other current liabilities" on the balance sheet as of December 31, 2011.

Genco Asset Sale

In June 2010, Genco completed a sale of 25% of its Columbia CT energy center to the city of Columbia, Missouri. Genco received cash proceeds of $18 million and recognized a $5 million pretax gain from the sale.

In June 2011, Genco completed the sale of its remaining interest in the Columbia CT energy center to the city of Columbia, Missouri. Genco received cash proceeds of $45 million and recognized an $8 million pretax gain from the sale. Effective with the sale, the power purchase agreements between Marketing Company and the city of Columbia were terminated. Also in 2011, Genco sold additional property and assets for cash proceeds of $4 million, which resulted in pretax gains of $4 million.

Medina Valley Sale in 2012

In February 2012, Ameren completed the asset sale of its Medina Valley energy center's net property and plant for cash proceeds of $16 million and an additional $1 million payment at the two-year anniversary date of the sale if there are no violations of representations and warranties contained in the sale agreement.

Employee Separation and Other Charges

During the fourth quarter of 2011, as part of efforts to reduce operations and maintenance expenses, Ameren Missouri and Ameren Services extended voluntary separation offers consistent with Ameren's standard management separation program to eligible management and labor union-represented employees. Approximately 340 employees of Ameren Missouri and Ameren Services accepted the offers and left their employment by December 31, 2011. Ameren and Ameren Missouri recorded a pretax charge to earnings of $28 million and $27 million, respectively, for the severance costs related to these offers. These charges were recorded in "Other operations and maintenance expense" in each company's statement of income for the year ended December 31, 2011. Substantially all of the severance costs will be paid in the first quarter of 2012 and were recorded in "Accounts and wages payable" on each company's balance sheet at December 31, 2011. The severance costs related to participating Ameren Services employees were allocated to affiliates consistent with the terms of its support services agreement, which is described in Note 14 – Related Party Transactions.

Also during 2011, Genco ceased operations of its Meredosia and Hutsonville energy centers. The closure of these energy centers at the end of 2011 resulted in the elimination of 90 positions. Ameren and Genco each recorded a $4 million pretax charge for related severance and relocation costs to "Goodwill, impairment and other charges" in their statements of income for the year ended December 31, 2011. The severance costs will be substantially paid during the first quarter of 2012 and were accrued in "Accounts and wages payable" on each company's balance sheet at December 31, 2011. See Note 17 – Goodwill, Impairment and Other Charges for additional information.

In 2010, Ameren's Merchant Generation segment initiated an involuntary separation program to reduce positions under the terms and benefits consistent with Ameren's standard management separation program. Ameren and Genco recorded a pretax charge to earnings of $4 million in 2010 for the severance costs related to this program. These charges were recorded in "Other operations and maintenance expense" on Ameren's and Genco's consolidated statement of income.

In 2009, Ameren initiated voluntary and involuntary separation programs under terms and benefits consistent with Ameren's standard management severance program. Ameren recorded a pretax charge to earnings of $17 million (Ameren Missouri – $8 million, Ameren Illinois – $3 million, Genco – $5 million) for the severance costs related to both the voluntary and involuntary separation programs. These charges were recorded in "Other operations and maintenance expense" in each company's statement of income. The number of positions eliminated as a result of these separation programs was approximately 300. In its May 2010 electric rate order, the MoPSC allowed Ameren Missouri to recover the costs of this severance program from its customers. Therefore, in 2010 Ameren Missouri reclassified the 2009 "Other operations and maintenance expense" to "Regulatory assets." In addition to these programs, Genco recorded a $4 million pretax charge to 2009 earnings in connection with the retirement of two generating units at its Meredosia energy center and for related obsolete inventory.