NOTE 7 - FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various methods to determine fair value, including market, income, and cost approaches. With these approaches, we adopt certain assumptions that market participants would use in pricing the asset or liability, including assumptions about market risk or the risks inherent in the inputs to the valuation. Inputs to valuation can be readily observable, market-corroborated, or unobservable. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Authoritative accounting guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. All financial assets and liabilities carried at fair value are classified and disclosed in one of the following three hierarchy levels:

Level 1: Inputs based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities are primarily exchange-traded derivatives and assets, including cash and cash equivalents and listed equity securities, such as those held in Ameren Missouri’s Nuclear Decommissioning Trust Fund.

The market approach is used to measure the fair value of equity securities held in Ameren Missouri’s Nuclear Decommissioning Trust Fund. Equity securities in this fund are representative of the S&P 500 index, excluding securities of Ameren Corporation, owners and/or operators of nuclear power plants and the trustee and investment managers. The S&P 500 index is comprised of stocks of large capitalization companies.

Level 2: Market-based inputs corroborated by third-party brokers or exchanges based on transacted market data. Level 2 assets and liabilities include certain assets held in Ameren Missouri’s Nuclear Decommissioning Trust Fund, including corporate bonds and other fixed-income securities, U.S. treasury and agency securities, and certain over-the-counter derivative instruments, including natural gas and financial power transactions.

Fixed income securities are valued using prices from independent, industry recognized data vendors who provide values that are either exchange based or matrix based. The fair value measurements of fixed income securities classified as Level 2 are based on inputs other than quoted prices that are observable for the asset or liability. Examples are matrix pricing, market corroborated pricing, and inputs such as yield curves and indices. Level 2 fixed income securities in the Nuclear Decommissioning Trust Fund are comprised primarily of corporate bonds, asset-backed securities and U.S. agency bonds.

Derivative instruments classified as Level 2 are valued by corroborated observable inputs, such as pricing services or prices from similar instruments that trade in liquid markets. Our development and corroboration process entails obtaining multiple quotes or prices from outside sources. To derive our forward view to price our derivative instruments at fair value, we average the midpoints of the bid/ask spreads. To validate forward prices obtained from outside parties, we compare the pricing to recently settled market transactions. Additionally, a review of all sources is performed to identify any anomalies or potential errors. Further, we consider the volume of transactions on certain trading platforms in our reasonableness assessment of the averaged midpoint. Natural gas derivative contracts are valued based upon exchange closing prices without significant unobservable adjustments. Power derivative contracts are valued based upon the use of multiple forward prices provided by third parties. The prices are averaged and shaped to a monthly profile when needed without significant unobservable adjustments.

Level 3: Unobservable inputs that are not corroborated by market data. Level 3 assets and liabilities are valued by internally developed models and assumptions or methodologies that use significant unobservable inputs. Level 3 assets and liabilities include derivative instruments that trade in less liquid markets, where pricing is largely unobservable, including the financial contracts entered into between Ameren Illinois and Marketing Company as part of the 2007 Illinois Electric Supply Agreement. We value Level 3 instruments by using pricing models with inputs that are often unobservable in the market, as well as certain internal assumptions. Our development and corroboration process entails obtaining multiple quotes or prices from outside sources. As a part of our fair value estimation process, an evaluation of all sources is performed to identify any anomalies or potential errors.

We perform an analysis each quarter to determine the appropriate hierarchy level of the assets and liabilities subject to fair value measurements. Financial assets and liabilities are classified in their entirety according to the lowest level of input that is significant to the fair value measurement. All assets and liabilities whose fair value measurement is based on significant unobservable inputs are classified as Level 3.

The following table describes the valuation techniques and unobservable inputs for the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the period ended September 30, 2012:

Fair Value

Valuation Technique(s)

Unobservable Input

Range [Weighted

Average]

Assets
Liabilities

Level 3 Derivative asset and liability - commodity contracts^(a):

Ameren^(b)

Fuel oils

$

8

$

(2

)

Discounted cash flow

Escalation rate(%)^(c)

.25 - .70 [.56]

Counterparty credit risk(%)^(d),(e)

.12 - 9 [2]

Option model

Volatilities(%)^(c)

22 - 30 [27]

Power^(f)

146

(174

)

Option model

Volatilities(%)^(d)

14 - 61 [18]

Average bid/ask consensus peak and offpeak pricing - forwards/swaps ($/MWh)^(d)

22 - 47 [33]

Discounted cash flow

Average bid/ask consensus peak and offpeak pricing - forwards/swaps ($/MWh)^(d)

16 - 55 [32]

Estimated auction price for FTRs
($/MW)^(c)

(19,671) -133,769 [166]

Nodal basis
($/MWh)^(d)

(12) - 2 [(1)]

Counterparty credit risk(%)^(d),(e)

.06 - 12 [3]

Ameren credit risk(%)^(d),(e)

2 - 4 [4]

Fundamental energy production model

Estimated future gas prices ($/mmbtu)^(c)

4 - 7 [6]

Contract price allocation

Estimated renewable energy credit costs ($/credit)^(c)

5 - 7 [6]

Uranium

-

(2

)

Discounted cash flow

Average bid/ask consensus pricing ($/pound)^(c)

45 - 55 [47]

Ameren

Missouri

Fuel oils

$

7

$

(2

)

Discounted cash flow

Escalation rate(%)^(c)

.25 - .70 [.59]

Counterparty credit risk(%)^(d),(e)

.12 - 4 [2]

Fair Value

Valuation Technique(s)

Unobservable Input

Range
[Weighted

Average]

Assets
Liabilities

Option model

Volatilities(%)^(c)

22 - 30 [27]

Power^(f)

20

(5

)

Option model

Volatilities(%)^(d)

49 - 61 [56]

Average bid/ask consensus peak and offpeak pricing - ($/MWh)^(d)

21 - 26 [22]

Discounted cash flow

Average bid/ask consensus peak and offpeak pricing - forwards/swaps ($/MWh)^(d)

19 - 58 [35]

Estimated auction price for FTRs ($/MW)^(c)

23 - 2,120 [139]

Nodal basis ($/MWh)^(d)

(7) - (.40) [(4)]

Counterparty credit risk(%)^(d),(e)

.22 - 9 [3]

Ameren Missouri credit risk(%)^(d),(e)

2

Uranium

-

(2

)

Discounted cash flow

Average bid/ask consensus pricing ($/pound)^(c)

45 - 55 [47]

Ameren Illinois

Power^(f)

$

-

$

(165

)

Discounted cash flow

Average bid/ask consensus peak and offpeak pricing - forwards/swaps ($/MWh)^(c)

17 - 47 [27]

Nodal basis ($/MWh)^(c)

(5) - (.91) [(3)]

Ameren Illinois credit risk (%)^(d),(e)

4

Fundamental energy production model

Estimated future gas prices ($/mmbtu)^(c)

4 - 7 [5]

Contract price allocation

Estimated renewable energy credit costs ($/credit)^(c)

5 - 7 [6]

Genco

Fuel oils

$

1

$

-

Discounted cash flow

Escalation rate^(c)

.25 - .70 [.64]

Counterparty credit risk (%)^(d),(e)

.12 - 9 [3]

Option model

Volatilities (%)^(c)

22 - 30 [24]

(a)	The derivative asset and liability balances are presented net of counterparty credit considerations.

(b)	Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

(c)	Generally, significant increases (decreases) in this input in isolation would result in a significantly higher (lower) fair value measurement.

(d)	Generally, significant increases (decreases) in this input in isolation would result in a significantly lower (higher) fair value measurement.

(e)	Counterparty credit risk is only applied to counterparties with derivative asset balances. Ameren, Ameren Missouri, Ameren Illinois, and Genco credit risk is only applied to counterparties with derivative liability balances.

(f)	Power valuations utilize visible third party pricing evaluated by month for peak and off-peak through 2016. Valuations beyond 2016 utilize fundamentally modeled pricing by month for peak and off-peak.

In accordance with applicable authoritative accounting guidance, we consider nonperformance risk in our valuation of derivative instruments by analyzing the credit standing of our counterparties and considering any counterparty credit enhancements (e.g., collateral). The guidance also requires that the fair value measurement of liabilities reflect the nonperformance risk of the reporting entity, as applicable. Therefore, we have factored the impact of our credit standing as well as any potential credit enhancements into the fair value measurement of both derivative assets and derivative liabilities. Included in our valuation, and based on current market conditions, is a valuation adjustment for counterparty default derived from market data such as the price of credit default swaps, bond yields, and credit ratings. Ameren recorded losses totaling $1 million and $1 million in the first nine months of 2012 and 2011, respectively, related to valuation adjustments for counterparty default risk. Genco recorded losses of less than $1 million and less than $1 million in the first nine months of 2012 and 2011, respectively, related to valuation adjustments for counterparty default risk. At September 30, 2012, the counterparty default risk (asset)/liability valuation adjustment related to derivative contracts totaled $5 million, less than $(1) million, $9 million, and less than $(1) million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively. At December 31, 2011, the counterparty default risk (asset)/liability valuation adjustment related to derivative contracts totaled $1 million, less than $1 million, $19 million, and less than $(1) million for Ameren, Ameren Missouri, Ameren Illinois and Genco, respectively.

The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of September 30, 2012:


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Ameren^(a)	Derivative assets - commodity contracts^(b):
	Fuel oils	$	15	$	-	$	8	$	23
	Natural gas		7		4		-		11
	Power		-		17		146		163
	Total derivative assets - commodity contracts	$	22	$	21	$	154	$	197
	Nuclear Decommissioning Trust Fund^(c):
	Cash and cash equivalents	$	2	$	-	$	-	$	2
	Equity securities:
	U.S. large capitalization		270		-		-		270
	Debt securities:
	Corporate bonds		-		46		-		46
	Municipal bonds		-		1		-		1
	U.S. treasury and agency securities		-		78		-		78
	Asset-backed securities		-		11		-		11
	Other		-		1		-		1
	Total Nuclear Decommissioning Trust Fund	$	272	$	137	$	-	$	409
	Total Ameren	$	294	$	158	$	154	$	606
Ameren	Derivative assets - commodity contracts^(b):
Missouri	Fuel oils	$	8	$	-	$	7	$	15
	Natural gas		1		1		-		2
	Power		-		8		20		28
	Total derivative assets - commodity contracts	$	9	$	9	$	27	$	45
	Nuclear Decommissioning Trust Fund^(c):
	Cash and cash equivalents	$	2	$	-	$	-	$	2
	Equity securities:
	U.S. large capitalization		270		-		-		270
	Debt securities:
	Corporate bonds		-		46		-		46
	Municipal bonds		-		1		-		1
	U.S. treasury and agency securities		-		78		-		78
	Asset-backed securities		-		11		-		11
	Other		-		1		-		1
	Total Nuclear Decommissioning Trust Fund	$	272	$	137	$	-	$	409
	Total Ameren Missouri	$	281	$	146	$	27	$	454
Ameren	Derivative assets - commodity contracts^(b):
Illinois	Natural gas	$	-	$	2	$	-	$	2
Genco	Derivative assets - commodity contracts^(b):
	Fuel oils	$	6	$	-	$	1	$	7
	Natural gas		6		1		-		7
	Total Genco	$	12	$	1	$	1	$	14
Liabilities:
Ameren^(a)	Derivative liabilities - commodity contracts^(b):
	Coal	$	10	$	-	$	-	$	10
	Fuel oils		2		-		2		4
	Natural gas		12		113		-		125
	Power		-		13		174		187
	Uranium		-		-		2		2
	Total Ameren	$	24	$	126	$	178	$	328
Ameren	Derivative liabilities - commodity contracts^(b):
Missouri	Fuel oils	$	-	$	-	$	2	$	2
	Natural gas		9		8		-		17
	Power		-		6		5		11
	Uranium		-		-		2		2
	Total Ameren Missouri	$	9	$	14	$	9	$	32
Ameren	Derivative liabilities - commodity contracts^(b):
Illinois	Natural gas	$	-	$	104	$	-	$	104
	Power		-		-		165		165
	Total Ameren Illinois	$	-	$	104	$	165	$	269


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Genco	Derivative liabilities - commodity contracts^(b):
	Coal	$	8	$	-	$	-	$	8
	Fuel oils		2		-		-		2
	Natural gas		3		1		-		4
	Total Genco	$	13	$	1	$	-	$	14

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

(b)	The derivative asset and liability balances are presented net of counterparty credit considerations.

(c)	Balance excludes $(2) million of receivables, payables, and accrued income, net.

The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of December 31, 2011:


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Ameren^(a)	Derivative assets - commodity contracts^(b):
	Fuel oils	$	33	$	-	$	4	$	37
	Natural gas		4		-		2		6
	Power		-		2		193		195
	Total derivative assets - commodity contracts	$	37	$	2	$	199	$	238
	Nuclear Decommissioning Trust Fund^(c):
	Cash and cash equivalents	$	3	$	-	$	-	$	3
	Equity securities:
	U.S. large capitalization		234		-		-		234
	Debt securities:
	Corporate bonds		-		44		-		44
	Municipal bonds		-		1		-		1
	U.S. treasury and agency securities		-		65		-		65
	Asset-backed securities		-		10		-		10
	Other		-		1		-		1
	Total Nuclear Decommissioning Trust Fund	$	237	$	121	$	-	$	358
	Total Ameren	$	274	$	123	$	199	$	596
Ameren	Derivative assets - commodity contracts^(b):
Missouri	Fuel oils	$	20	$	-	$	3	$	23
	Natural gas		2		-		-		2
	Power		-		1		29		30
	Total derivative assets - commodity contracts	$	22	$	1	$	32	$	55
	Nuclear Decommissioning Trust Fund^(c):
	Cash and cash equivalents	$	3	$	-	$	-	$	3
	Equity securities:
	U.S. large capitalization		234		-		-		234
	Debt securities:
	Corporate bonds		-		44		-		44
	Municipal bonds		-		1		-		1
	U.S. treasury and agency securities		-		65		-		65
	Asset-backed securities		-		10		-		10
	Other		-		1		-		1
	Total Nuclear Decommissioning Trust Fund	$	237	$	121	$	-	$	358
	Total Ameren Missouri	$	259	$	122	$	32	$	413
Ameren	Derivative assets - commodity contracts^(b):
Illinois	Natural gas	$	-	$	-	$	2	$	2
	Power		-		-		77		77
	Total Ameren Illinois	$	-	$	-	$	79	$	79
Genco	Derivative assets - commodity contracts^(b):
	Fuel oils	$	10	$	-	$	1	$	11
	Natural gas		2		-		-		2
	Total Genco	$	12	$	-	$	1	$	13


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Liabilities:
Ameren^(a)	Derivative liabilities - commodity contracts^(b):
	Fuel oils	$	2	$	-	$	-	$	2
	Natural gas		22		-		176		198
	Power		-		2		78		80
	Uranium		-		-		1		1
	Total Ameren	$	24	$	2	$	255	$	281
Ameren	Derivative liabilities - commodity contracts^(b):
Missouri	Fuel oils	$	1	$	-	$	-	$	1
	Natural gas		12		-		14		26
	Power		-		1		8		9
	Uranium		-		-		1		1
	Total Ameren Missouri	$	13	$	1	$	23	$	37
Ameren	Derivative liabilities - commodity contracts^(b):
Illinois	Natural gas		7		-		162		169
	Power		-		-		217		217
	Total Ameren Illinois	$	7	$	-	$	379	$	386
Genco	Derivative liabilities - commodity contracts^(b):
	Fuel oils	$	1	$	-	$	-	$	1
	Natural gas		2		-		-		2
	Total Genco	$	3	$	-	$	-	$	3

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

(b)	The derivative asset and liability balances are presented net of counterparty credit considerations.

(c)	Balance excludes $(1) million of receivables, payables, and accrued income, net.

The following table summarizes the changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the three months ended September 30, 2012:


	Net derivative commodity contracts
Three Months	Ameren Missouri			Ameren Illinois			Genco			Other^(c)			Ameren
Fuel oils:
Beginning balance at July 1, 2012	$	3		$	(a	)	$	1		$	-		$	4
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		1			(a	)		(a	)		(a	)		1
Total realized and unrealized gains (losses)		1			(a	)		-			-			1
Purchases		2			(a	)		(1	)		-			1
Sales		(1	)		(a	)		-			-			(1	)
Transfers out of Level 3		-			(a	)		1			-			1
Ending balance at September 30, 2012	$	5		$	(a	)	$	1		$	-		$	6
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	2		$	(a	)	$	-		$	-		$	2
Power:
Beginning balance at July 1, 2012	$	26		$	(221	)	$	-		$	185		$	(10	)
Realized and unrealized gains (losses):
Included in earnings^(b)		-			-			-			4			4
Included in OCI		-			-			-			(4	)		(4	)
Included in regulatory assets/liabilities		(4	)		2			(a	)		(4	)		(6	)
Total realized and unrealized gains (losses)		(4	)		2			-			(4	)		(6	)
Purchases		-			-			-			3			3
Sales		(1	)		-			-			(4	)		(5	)
Settlements		(4	)		54			-			(56	)		(6	)
Transfers out of Level 3		(2	)		-			-			(2	)		(4	)
Ending balance at September 30, 2012	$	15		$	(165	)	$	-		$	122		$	(28	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	(5	)	$	(2	)	$	-		$	(10	)	$	(17	)

Uranium:
Beginning balance at July 1, 2012	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(1	)		(a	)		(a	)		(a	)		(1	)
Total realized and unrealized gains (losses)		(1	)		(a	)		(a	)		(a	)		(1	)
Ending balance at September 30, 2012	$	(2	)	$	(a	)	$	(a	)	$	(a	)	$	(2	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)

(a)	Not applicable.

(b)	Net gains and losses on fuel oils and natural gas derivative commodity contracts are recorded in “Operating Expenses - Fuel”, while net gains and losses on power derivative commodity contracts are recorded in “Operating Revenues - Electric”.

(c)	Includes amounts for Merchant Generation nonregistrant subsidiaries and intercompany eliminations, including the elimination of financial power contracts between Ameren Illinois and Marketing Company.

The following table summarizes the changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the three months ended September 30, 2011:


	Net derivative commodity contracts
Three Months	Ameren Missouri			Ameren Illinois			Genco			Other^(c)			Ameren
Fuel oils:
Beginning balance at July 1, 2011	$	41		$	(a	)	$	21		$	6		$	68
Realized and unrealized gains (losses):
Included in earnings^(b)		-			(a	)		(5	)		(2	)		(7	)
Included in regulatory assets/liabilities		(12	)		(a	)		(a	)		(a	)		(12	)
Total realized and unrealized gains (losses)		(12	)		(a	)		(5	)		(2	)		(19	)
Purchases		2			(a	)		(1	)		-			1
Sales		(1	)		(a	)		-			-			(1	)
Settlements		(10	)		(a	)		(7	)		(2	)		(19	)
Ending balance at September 30, 2011	$	20		$	(a	)	$	8		$	2		$	30
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	(14	)	$	(a	)	$	(6	)	$	(2	)	$	(22	)

Natural gas:
Beginning balance at July 1, 2011	$	(11	)	$	(106	)	$	-		$	-		$	(117	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(2	)		(31	)		(a	)		(a	)		(33	)
Total realized and unrealized gains (losses)		(2	)		(31	)		-			-			(33	)
Purchases		-			(1	)		-			-			(1	)
Settlements		2			22			-			(1	)		23
Ending balance at September 30, 2011	$	(11	)	$	(116	)	$	-		$	(1	)	$	(128	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	(2	)	$	(27	)	$	-		$	-		$	(29	)

Power:
Beginning balance at July 1, 2011	$	25		$	(204	)	$	1		$	295		$	117
Realized and unrealized gains (losses):
Included in OCI		-			-			-			(7	)		(7	)
Included in regulatory assets/liabilities		-			35			(a	)		(10	)		25
Total realized and unrealized gains (losses)		-			35			-			(17	)		18
Purchases		-			-			-			2			2
Sales		-			-			-			(1	)		(1	)
Settlements		(7	)		35			(1	)		(45	)		(18	)
Transfers into Level 3		-			-			-			(2	)		(2	)
Transfers out of Level 3		-			-			-			(2	)		(2	)
Ending balance at September 30, 2011	$	18		$	(134	)	$	-		$	230		$	114
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	-		$	26		$	-		$	(4	)	$	22
Uranium:
Beginning balance at July 1, 2011	$	(2	)	$	(a	)	$	(a	)	$	(a	)	$	(2	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		-			(a	)		(a	)		(a	)		-
Total realized and unrealized gains (losses)		-			(a	)		(a	)		(a	)		-
Settlements		1			(a	)		(a	)		(a	)		1
Ending balance at September 30, 2011	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	-		$	(a	)	$	(a	)	$	(a	)	$	-

(a)	Not applicable.

(b)	Net gains and losses on fuel oils and natural gas derivative commodity contracts are recorded in Operating Expenses - Fuel, while net gains and losses on power derivative commodity contracts are recorded in Operating Revenues - Electric.

(c)	Includes amounts for Merchant Generation nonregistrant subsidiaries and intercompany eliminations, including the elimination of financial power contracts between Ameren Illinois and Marketing Company.

The following table summarizes the changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the nine months ended September 30, 2012:


	Net derivative commodity contracts
Nine Months	Ameren Missouri			Ameren Illinois			Genco			Other^(c)			Ameren
Fuel oils:
Beginning balance at January 1, 2012	$	3		$	(a	)	$	1		$	-		$	4
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(1	)		(a	)		(a	)		(a	)		(1	)
Total realized and unrealized gains (losses)		(1	)		(a	)		-			-			(1	)
Purchases		4			(a	)		-			-			4
Sales		(2	)		(a	)		-			-			(2	)
Settlements		(1	)		(a	)		-			-			(1	)
Transfers into Level 3		2			(a	)		-			-			2
Ending balance at September 30, 2012	$	5		$	(a	)	$	1		$	-		$	6
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	(1	)	$	(a	)	$	-		$	-		$	(1	)

Natural gas:
Beginning balance at January 1, 2012	$	(14	)	$	(160	)	$	-		$	-		$	(174	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(2	)		(26	)		(a	)		(a	)		(28	)
Total realized and unrealized gains (losses)		(2	)		(26	)		-			-			(28	)
Settlements		1			16			-			-			17
Transfer out of Level 3		15			170			-			-			185
Ending balance at September 30, 2012	$	-		$	-		$	-		$	-		$	-
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	7		$	-		$	-		$	-		$	7

Power:
Beginning balance at January 1, 2012	$	21		$	(140	)	$	-		$	234		$	115
Realized and unrealized gains (losses):
Included in earnings^(b)		-			-			-			11			11
Included in OCI		-			-			-			30			30
Included in regulatory assets/liabilities		5			(219	)		(a	)		40			(174	)
Total realized and unrealized gains (losses)		5			(219	)		-			81			(133	)
Purchases		22			-			-			8			30
Sales		(1	)		-			-			3			2
Settlements		(28	)		194			-			(206	)		(40	)
Transfers into Level 3		-			-			-			1			1
Transfers out of Level 3		(4	)		-			-			1			(3	)
Ending balance at September 30, 2012	$	15		$	(165	)	$	-		$	122		$	(28	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	(1	)	$	(187	)^(d)	$	-		$	44		$	(144	)
Uranium:
Beginning balance at January 1, 2012	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(1	)		(a	)		(a	)		(a	)		(1	)
Total realized and unrealized gains (losses)		(1	)		(a	)		(a	)		(a	)		(1	)
Ending balance at September 30, 2012	$	(2	)	$	(a	)	$	(a	)	$	(a	)	$	(2	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2012	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)

(a)	Not applicable.

(b)	Net gains and losses on fuel oils and natural gas derivative commodity contracts are recorded in “Operating Expenses - Fuel”, while net gains and losses on power derivative commodity contracts are recorded in “Operating Revenues - Electric”.

(c)	Includes amounts for Merchant Generation nonregistrant subsidiaries and intercompany eliminations, including the elimination of financial power contracts between Ameren Illinois and Marketing Company.

(d)	The change in unrealized losses was due to decreases in long-term power prices applied to 20-year Ameren Illinois’ swap contracts, which expire in May 2032.

The following table summarizes the changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy for the nine months ended September 30, 2011:


	Net derivative commodity contracts
Nine Months	Ameren Missouri			Ameren Illinois			Genco			Other^(c)			Ameren
Fuel oils:
Beginning balance at January 1, 2011	$	30		$	(a	)	$	17		$	4		$	51
Realized and unrealized gains (losses):
Included in earnings^(b)		-			(a	)		7			3			10
Included in regulatory assets/liabilities		10			(a	)		(a	)		(a	)		10
Total realized and unrealized gains (losses)		10			(a	)		7			3			20
Purchases		4			(a	)		(1	)		-			3
Sales		(1	)		(a	)		-			-			(1	)
Settlements		(23	)		(a	)		(15	)		(5	)		(43	)
Ending balance at September 30, 2011	$	20		$	(a	)	$	8		$	2		$	30
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	2		$	(a	)	$	1		$	1		$	4

Natural gas:
Beginning balance at January 1, 2011	$	(14	)	$	(134	)	$	-		$	-		$	(148	)
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(3	)		(43	)		(a	)		(a	)		(46	)
Total realized and unrealized gains (losses)		(3	)		(43	)		-			-			(46	)
Purchases		-			1			-			(1	)		-
Settlements		6			60			-			-			66
Ending balance at September 30, 2011	$	(11	)	$	(116	)	$	-		$	(1	)	$	(128	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	(3	)	$	(31	)	$	-		$	-		$	(34	)

Power:
Beginning balance at January 1, 2011	$	2		$	(352	)	$	3		$	383		$	36
Realized and unrealized gains (losses):
Included in earnings^(b)		-			-			(1	)		(17	)		(18	)
Included in OCI		-			-			-			(2	)		(2	)
Included in regulatory assets/liabilities		6			82			(a	)		1			89
Total realized and unrealized gains (losses)		6			82			(1	)		(18	)		69
Purchases		29			-			-			32			61
Sales		-			-			-			(17	)		(17	)
Settlements		(19	)		136			(2	)		(149	)		(34	)
Transfers into Level 3		(1	)		-			-			-			(1	)
Transfers out of Level 3		1			-			-			(1	)		-
Ending balance at September 30, 2011	$	18		$	(134	)	$	-		$	230		$	114
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	1		$	70		$	(1	)	$	7		$	77

Uranium:
Beginning balance at January 1, 2011	$	2		$	(a	)	$	(a	)	$	(a	)	$	2
Realized and unrealized gains (losses):
Included in regulatory assets/liabilities		(4	)		(a	)		(a	)		(a	)		(4	)
Total realized and unrealized gains (losses)		(4	)		(a	)		(a	)		(a	)		(4	)
Settlements		1			(a	)		(a	)		(a	)		1
Ending balance at September 30, 2011	$	(1	)	$	(a	)	$	(a	)	$	(a	)	$	(1	)
Change in unrealized gains (losses) related to assets/liabilities held at September 30, 2011	$	(2	)	$	(a	)	$	(a	)	$	(a	)	$	(2	)

(a)	Not applicable.

(b)	Net gains and losses on fuel oils and natural gas derivative commodity contracts are recorded in Operating Expenses - Fuel, while net gains and losses on power derivative commodity contracts are recorded in Operating Revenues - Electric.

(c)	Includes amounts for Merchant Generation nonregistrant subsidiaries and intercompany eliminations, including the elimination of financial power contracts between Ameren Illinois and Marketing Company.

Transfers in or out of Level 3 represent either (1) existing assets and liabilities that were previously categorized as a higher level but were recategorized to Level 3 because the inputs to the model became unobservable during the period, or (2) existing assets and liabilities that were previously classified as Level 3 but were recategorized to a higher level because the lowest significant input became observable during the period. Transfers out of Level 3 into Level 2 for natural gas derivatives were due to management previously using broker quotations to estimate the fair value of natural gas contracts and changing to estimates based upon exchange closing prices without significant unobservable adjustments in the first quarter of 2012. Estimates of fair value based on exchange closing prices are deemed to be a more accurate approximation of natural gas prices. Transfers between Level 2 and Level 3 for power derivatives and between Level 1 and Level 3 for fuel oils were primarily caused by changes in availability of financial trades observable on electronic exchanges between the period ended September 30, 2012, and the previous reporting periods ended June 30, 2012 and December 31, 2011. Any reclassifications are reported as transfers out of Level 3 at the fair value measurement reported at the beginning of the period in which the changes occur. For the three and nine months ended September 30, 2012, and 2011, there were no transfers between Level 1 and Level 2 related to derivative commodity contracts. The following table summarizes all transfers between fair value hierarchy levels related to derivative commodity contracts for the three and nine months ended September 30, 2012, and 2011:


	Three Months						Nine Months
	2012			2011			2012			2011
Ameren - derivative commodity contracts:^(a)
Transfers into Level 3 / Transfers out of Level 1 - Fuel oils	$	-		$	-		$	2		$	-
Transfers out of Level 3 / Transfers into Level 1 - Fuel oils		1			-			-			-
Transfers out of Level 3 / Transfers into Level 2 - Natural gas		-			-			185			-
Transfers into Level 3 / Transfers out of Level 2 - Power		-			(2	)		1			(1	)
Transfers out of Level 3 / Transfers into Level 2 - Power		(4	)		(2	)		(3	)		-
Net fair value of Level 3 transfers	$	(3	)	$	(4	)	$	185		$	(1	)
Ameren Missouri - derivative commodity contracts:
Transfers into Level 3 / Transfers out of Level 1 - Fuel oils	$	-		$	-		$	2		$	-
Transfers out of Level 3 / Transfers into Level 2 - Natural gas		-			-			15			-
Transfers into Level 3 / Transfers out of Level 2 - Power		-			-			-			(1	)
Transfers out of Level 3 / Transfers into Level 2 - Power		(2	)		-			(4	)		1
Net fair value of Level 3 transfers	$	(2	)	$	-		$	13		$	-
Ameren Illinois - derivative commodity contracts:
Transfers out of Level 3 / Transfers into Level 2 - Natural gas	$	-		$	-		$	170		$	-
Genco - derivative commodity contracts:
Transfers out of Level 3 / Transfers into Level 1 - Fuel oils	$	1		$	-		$	-		$	-

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

The Ameren Companies’ carrying amounts of cash and cash equivalents approximate fair value because of the short-term nature of these instruments and are considered to be Level 1 in the fair value hierarchy. Short-term borrowings, which are composed of Ameren issued commercial paper, also approximate fair value because of their short-term nature. Short-term borrowings are considered to be Level 2 in the fair value hierarchy as they are valued based on market rates for similar market transactions. The estimated fair value of long-term debt and preferred stock is based on the quoted market prices for same or similar issuances for companies with similar credit profiles or on the current rates offered to the Ameren Companies for similar financial instruments, which fair value measurement is considered Level 2 in the fair value hierarchy.

The following table presents the carrying amounts and estimated fair values of our long-term debt and capital lease obligations and preferred stock at September 30, 2012, and December 31, 2011:


	September 30, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Ameren:^(a)(b)
Long-term debt and capital lease obligations (including current portion)	$	6,987	$	8,024	$	6,856	$	7,800
Preferred stock		142		122		142		92
Ameren Missouri:
Long-term debt and capital lease obligations (including current portion)	$	4,011	$	4,711	$	3,950	$	4,541
Preferred stock		80		73		80		55
Ameren Illinois:
Long-term debt (including current portion)	$	1,728	$	2,052	$	1,658	$	1,943
Preferred stock		62		49		62		37
Genco:
Long-term debt (including current portion)	$	824	$	790	$	824	$	839

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

(b)	Preferred stock not subject to mandatory redemption of the Ameren subsidiaries along with the 20% noncontrolling interest of EEI is recorded in Noncontrolling Interests on the balance sheet.

FAIR VALUE MEASUREMENTS