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 provided that if the Elgin, Gibson City, and Grand Tower gas-fired energy centers were subsequently sold to a third party and Medina Valley receives proceeds within two years of the closing of the New AER divestiture, Medina Valley will pay Genco any proceeds from such sale, net of taxes and other expenses, in excess of the amounts previously paid to Genco, which totaled $137.5 million.

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, before consideration of a net working capital adjustment. The agreement with Rockland Capital required $17 million of the purchase price to be held in escrow until the two-year anniversary of the closing of the sale to fund certain indemnity obligations, if any, of Medina Valley. The Rockland Capital escrow receivable balance is reflected on Ameren's June 30, 2014, consolidated balance sheet in "Other assets." The corresponding payable due to Genco is reflected on Ameren's June 30, 2014, consolidated balance sheet in "Other deferred credits and liabilities." An immaterial net working capital adjustment with Rockland Capital is expected to be finalized during the third quarter of 2014. Medina Valley expects to pay Genco any remaining portion of the escrow balance 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

New AER and the Elgin, Gibson City, Grand Tower, Meredosia, and Hutsonville energy centers have been classified collectively in Ameren’s consolidated financial statements as discontinued operations for all periods presented in this report. The disposal groups have been aggregated in the disclosures below. 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. The following table presents the components of discontinued operations in Ameren's consolidated statement of income (loss) for the three and six months ended June 30, 2014, and 2013:



	Three Months						Six Months
	2014			2013			2014			2013
Operating revenues	$	—		$	303		$	1		$	567
Operating expenses	(1		)	(310		)	(3		)	(725		)	^(a)
Operating loss	(1		)	(7		)	(2		)	(158		)
Other income (loss)	—			1			—			(1		)
Interest charges	—			(11		)	—			(22		)
Loss before income taxes	(1		)	(17		)	(2		)	(181		)
Income tax (expense) benefit	—			7			—			(28		)
Loss from discontinued operations, net of taxes	$	(1	)	$	(10	)	$	(2	)	$	(209	)


(a)	Included a noncash pretax asset impairment charge of $168 million for the six months ended June 30, 2013, to reduce the carrying value of the New AER disposal group to its estimated fair value less cost to sell.

Ameren recorded a cumulative pretax charge to earnings of $168 million for the six months ended June 30, 2013, to reduce the carrying value of the New AER disposal group to its estimated fair value less cost to sell. During the three months ended March 31, 2013, Ameren adjusted the accumulated deferred income taxes on its consolidated balance sheet to reflect the excess of tax basis over financial reporting basis of its stock investment in AER, when it became apparent that the temporary difference would reverse. For the six months ended June 30, 2013, this change in basis resulted in a cumulative discontinued operations deferred tax expense of $97 million. The deferred tax expense was partially offset by the then-expected tax benefits of $69 million related to the pretax loss from discontinued operations including the impairment charge recorded during the six months ended June 30, 2013.

During the three and six months ended June 30, 2014, Ameren recorded adjustments for its estimate of the New AER net working capital adjustment and for certain contingent liabilities associated with the New AER divestiture to IPH. Additionally, Ameren recognized the operating revenues and operating expenses associated with the Elgin, Gibson City, and Grand Tower energy centers prior to the completion of their sale to Rockland Capital on January 31, 2014. The operating expenses associated with the abandoned Meredosia and Hutsonville energy centers were also included in discontinued operations.

Ameren’s results of operations for the six months ended June 30, 2014, and financial position as of June 30, 2014, reflect the final amount owed to IPH. The final tax basis of the AER disposal group and the related tax benefit resulting from the transaction with IPH are dependent upon the resolution of tax matters under audit, including the adoption of recently issued guidance from the IRS related to tangible property repairs and other matters. As a result, tax expense and benefits ultimately realized in discontinued operations may differ materially from those recorded as of June 30, 2014.

The following table presents the carrying amounts of the components of assets and liabilities segregated on Ameren's consolidated balance sheets as discontinued operations at June 30, 2014, and December 31, 2013:



	June 30, 2014		December 31, 2013
Assets of discontinued operations
Cash and cash equivalents	$	—	$	—
Accounts receivable and unbilled revenue	—		5
Materials and supplies	—		5
Property and plant, net	—		142
Accumulated deferred income taxes, net^(a)	15		13
Total assets of discontinued operations	$	15	$	165
Liabilities of discontinued operations
Accounts payable and other current obligations	$	1	$	5
Asset retirement obligations^(b)	32		40
Total liabilities of discontinued operations	$	33	$	45


(a)	Includes income tax assets related to the abandoned Meredosia and Hutsonville energy centers.


(b)	Includes AROs associated with the abandoned Meredosia and Hutsonville energy centers of $32 million and $31 million, respectively, at June 30, 2014, and December 31, 2013.

Pursuant to the IPH transaction agreement, as amended, Ameren is obligated to pay up to $34 million for certain contingent liabilities. Of these liabilities, $29 million were included in "Other deferred credits and liabilities" and $5 million were included in "Accounts and wages payable" on Ameren's June 30, 2014 consolidated balance sheet.

The note receivable from Marketing Company related to the cash collateral support provided to New AER was $26 million and $18 million at June 30, 2014, and December 31, 2013, respectively, and was reflected on Ameren's consolidated balance sheet in "Other assets." This receivable is due to Ameren, with interest, on December 2, 2015, or sooner as cash collateral requirements are reduced. 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 (parent) 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 (parent) pursuant to which Dynegy will, among other things, guarantee IPH's indemnification obligations until December 2, 2015.

In addition to the $34 million of contingent liabilities recorded on Ameren’s June 30, 2014 consolidated balance sheet, Ameren had a total of $147 million in guarantees outstanding for New AER that were not recorded on Ameren’s June 30, 2014 consolidated balance sheet, which included:

•

$138 million related to guarantees supporting 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 June 30, 2014, Ameren would have been required under its guarantees to provide approximately $10 million to the counterparties.


•	$9 million related to requirements for lease agreements and potential environmental obligations. If New AER had not fulfilled its lease obligation as of June 30, 2014, Ameren would have been required to provide approximately $8 million to the leasing counterparty.

Additionally, at June 30, 2014, Ameren had issued letters of credit totaling $9 million as credit support on behalf of New AER.

Ameren has not recorded a reserve 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 June 30, 2014.