DIVESTITURE TRANSACTIONS AND DISCONTINUED OPERATIONS

On December 2, 2013, Ameren completed the divestiture of New AER to IPH in accordance with the transaction agreement between Ameren and IPH dated March 14, 2013, as amended by a letter agreement dated December 2, 2013. The transaction agreement with IPH, as amended, provided that if the Elgin, Gibson City, and Grand Tower gas-fired energy centers were subsequently sold by Medina Valley and if Medina Valley received additional proceeds from such sale, Medina Valley would pay Genco any proceeds from such sale, net of taxes and other expenses, in excess of the $137.5 million previously paid to Genco.

On January 31, 2014, Medina Valley completed the sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers to Rockland Capital for a total purchase price of $168 million. The agreement with Rockland Capital requires a portion of the purchase price to be held in escrow until January 31, 2016, to fund certain indemnity obligations, if any, of Medina Valley. The Rockland Capital escrow receivable balance and the corresponding payable due to Genco, both totaling $14 million, are reflected on Ameren's September 30, 2015 consolidated balance sheet in "Other current assets" and in "Other current liabilities," respectively. Medina Valley expects to pay Genco any amount it receives from the escrow on January 31, 2016. Ameren did not record a gain from its sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers.

Discontinued Operations Presentation

See Note 16 - Divestiture Transactions and Discontinued Operations under Part II, Item 8, of the Form 10-K for additional information related to disposal groups. All matters related to the final tax basis of New AER and the related tax benefit resulting from the divested merchant generation business have been resolved with the completion of the IRS’ audit for 2013. During the second quarter of 2015, based on the completion of the IRS audit, Ameren removed a reserve for unrecognized tax benefits recorded in 2013 and recognized a tax benefit from discontinued operations. See Note 1 - Summary of Significant Accounting Policies for additional information regarding the Ameren Companies’ uncertain tax positions.

The following table presents the components of discontinued operations in Ameren's consolidated statement of income for the three and nine months ended September 30, 2015 and 2014:



	Three Months						Nine Months
	2015			2014			2015		2014
Operating revenues	$	—		$	—		$	—	$	1
Operating benefits (expenses)	(1		)	(1		)	2		(4		)
Operating income (loss) before income tax	(1		)	(1		)	2		(3		)
Income tax benefit	1			—			50		—
Income (loss) from discontinued operations, net of taxes	$	—		$	(1	)	$	52	$	(3	)

The following table presents the carrying amounts of the components of assets and liabilities of Ameren’s discontinued operations, which consist primarily of AROs and related deferred income tax assets associated with the abandoned Meredosia and Hutsonville energy centers, at September 30, 2015, and December 31, 2014:



	September 30, 2015		December 31, 2014
Assets of discontinued operations
Accumulated deferred income taxes, net	$	17	$	15
Total assets of discontinued operations	$	17	$	15
Liabilities of discontinued operations
Accounts payable and other current obligations	$	1	$	1
Asset retirement obligations	29		32
Total liabilities of discontinued operations	$	30	$	33

Pursuant to the IPH transaction agreement, as amended, Ameren is obligated to pay up to $25 million for certain liabilities, which were included in "Other current liabilities" on Ameren's September 30, 2015 consolidated balance sheet as the payment is expected to be made by the end of 2015.

Included in “Miscellaneous accounts and notes receivable” on Ameren’s consolidated balance sheet is a note receivable from Marketing Company related to the cash collateral support provided to New AER. The note receivable balance was $8 million and $12 million at September 30, 2015, and December 31, 2014, respectively. This note receivable is due to Ameren, with interest, on December 2, 2015, or sooner as cash collateral requirements are reduced. In addition, as of September 30, 2015, if Ameren’s credit ratings had been below investment grade, Ameren could have been required to post additional cash collateral in support of New AER in the amount of $21 million, which includes $6 million currently covered by Ameren guarantees discussed below. This cash collateral support is part of Ameren’s obligation to provide certain limited credit support to New AER until December 2, 2015, as discussed below.

Ameren Guarantees and Letters of Credit

The IPH transaction agreement, as amended, requires Ameren to maintain its financial obligations with respect to all credit support provided to New AER as of the December 2, 2013 closing date of the divestiture. Ameren must also provide such additional credit support as required by contracts entered into prior to the closing date, in each case until December 2, 2015. IPH shall indemnify Ameren for any payments Ameren makes pursuant to these credit support obligations if the counterparty does not return the posted collateral to Ameren. IPH's indemnification obligation is secured by certain AERG and Genco assets. In addition, Dynegy has provided a limited guarantee of $25 million to Ameren pursuant to which Dynegy will, among other things, guarantee IPH's indemnification obligations until December 2, 2015.

In addition to the $25 million of liabilities recorded on Ameren’s September 30, 2015 consolidated balance sheet, Ameren had a total of $74 million in guarantees outstanding for New AER that were not recorded on Ameren’s September 30, 2015 consolidated balance sheet. Almost all of these guarantees support Marketing Company for physically and financially settled power transactions with its counterparties that were in place at the December 2, 2013 closing of the divestiture, as well as for Marketing Company's clearing broker and other service agreements. If Marketing Company did not fulfill its obligations to these counterparties who had active open positions as of September 30, 2015, Ameren would have been required under its guarantees to provide $6 million to the counterparties. Also, at September 30, 2015, Ameren had issued letters of credit totaling $9 million as credit support on behalf of New AER. Ameren has not recorded a liability for these contingent obligations because it does not believe a payment with respect to any of these guarantees or letters of credit was probable as of September 30, 2015.