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 three hierarchy levels. See Note 8 - Fair Value Measurements under Part II, Item 8, of the Form 10-K for information related to hierarchy levels. 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 as of March 31, 2015:



		Fair Value								Weighted Average
		Assets		Liabilities			Valuation Technique(s)	Unobservable Input	Range	Weighted Average
Level 3 Derivative asset and liability - commodity contracts^(a):
Ameren	Fuel oils	$	1	$	(7	)	Option model	Volatilities(%)^(b)	33 - 80	42
							Discounted cash flow	Ameren Missouri credit risk(%)^(b)(c)	0.40	(d)
	Natural gas	1		(1		)	Option model	Volatilities(%)^(e)	6 - 39	33
								Nodal basis($/mmbtu)^(e)	(0.40) - (0.20)	(0.30)
							Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.40) - (0.10)	(0.30)
								Counterparty credit risk(%)^(b)(c)	0.31 - 12.07	2.47
								Ameren Missouri and Ameren Illinois credit risk(%)^(b)(c)	0.40	(d)
	Power^(f)	5		(165		)	Discounted cash flow	Average forward peak and off-peak pricing - forwards/swaps($/MWh)^(g)	22 - 46	32
								Estimated auction price for FTRs($/MW)^(e)	(597) - 1,922	153
								Nodal basis($/MWh)^(e)	(11) - 0	(3)
								Counterparty credit risk(%)^(b)(c)	0.29 - 10.98	5.84
								Ameren Missouri and Ameren Illinois credit risk(%)^(b)(c)	0.40	(d)
							Fundamental energy production model	Estimated future gas prices($/mmbtu)^(e)	3 - 5	4
								Escalation rate(%)^(e)(h)	1	(d)
							Contract price allocation	Estimated renewable energy credit costs($/credit)^(e)	5 - 7	6
	Uranium	—		(1		)	Discounted cash flow	Average forward uranium pricing($/pound)^(e)	40 - 43	40
Ameren Missouri	Fuel oils	$	1	$	(7	)	Option model	Volatilities(%)^(b)	33 - 80	42
							Discounted cash flow	Ameren Missouri credit risk(%)^(b)(c)	0.40	(d)
	Natural gas	—		(1		)	Option model	Volatilities(%)^(e)	6 - 39	33
								Nodal basis($/mmbtu)^(e)	(0.40) - (0.20)	(0.30)
							Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.10)	(d)
								Counterparty credit risk(%)^(b)(c)	0.54 - 12.07	5
								Ameren Missouri credit risk(%)^(b)(c)	0.40	(d)
	Power^(f)	5		(1		)	Discounted cash flow	Average forward peak and off-peak pricing - forwards/swaps($/MWh)^(b)	24 - 46	36
								Estimated auction price for FTRs($/MW)^(e)	(597) - 1,922	153
								Nodal basis($/MWh)^(b)	(11) - (4)	(8)
								Counterparty credit risk(%)^(b)(c)	0.29 - 10.98	5.84
	Uranium	—		(1		)	Discounted cash flow	Average forward uranium pricing($/pound)^(e)	40 - 43	40
Ameren Illinois	Natural gas	$	1	$	—		Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.40) - (0.10)	(0.30)
								Counterparty credit risk(%)^(b)(c)	0.31 - 2.28	1.28
								Ameren Illinois credit risk(%)^(b)(c)	0.40	(d)
	Power^(f)	—		(164		)	Discounted cash flow	Average forward peak and off-peak pricing - forwards/swaps($/MWh)^(e)	22 - 38	31
								Nodal basis($/MWh)^(e)	(6) - 0	(3)
								Ameren Illinois credit risk(%)^(b)(c)	0.40	(d)
							Fundamental energy production model	Estimated future gas prices($/mmbtu)^(e)	3 - 5	4
								Escalation rate(%)^(e)(h)	1	(d)
							Contract price allocation	Estimated renewable energy credit costs($/credit)^(e)	5 - 7	6


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


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


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


(d)	Not applicable.


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


(f)	Power valuations use visible third-party pricing evaluated by month for peak and off-peak demand through 2018. Valuations beyond 2018 use fundamentally modeled pricing by month for peak and off-peak demand.


(g)	The balance at Ameren is comprised of Ameren Missouri and Ameren Illinois power contracts, which respond differently to unobservable input changes due to their opposing positions. As such, refer to the power sensitivity analysis for each company above.


(h)	Escalation rate applies to power prices 2026 and beyond.



		Fair Value								Weighted
		Assets		Liabilities			Valuation Technique(s)	Unobservable Input	Range	Average
Level 3 Derivative asset and liability – commodity contracts^(a):
Ameren	Fuel oils	$	2	$	(8	)	Option model	Volatilities(%)^(b)	3 - 39	32
							Discounted cash flow	Ameren Missouri credit risk(%)^(b)(c)	0.43	(d)
								Escalation rate(%)^(e)(f)	5	(d)
	Natural Gas	1		(2		)	Option model	Volatilities(%)^(b)	31 - 144	63
								Nodal basis($/mmbtu)^(e)	(0.40) - 0	(0.20)
							Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.40) - 0.10	(0.20)
								Counterparty credit risk(%)^(b)(c)	0.43 - 13	3
								Ameren Missouri and Ameren Illinois credit risk(%)^(b)(c)	0.43	(d)
	Power^(g)	11		(144		)	Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps($/MWh)^(h)	27 - 50	32
								Estimated auction price for FTRs($/MW)^(e)	(1,833) - 2,743	171
								Nodal basis($/MWh)^(e)	(6) - 0	(2)
								Counterparty credit risk(%)^(b)(c)	0.26	(d)
								Ameren Missouri and Ameren Illinois credit risk(%)^(b)(c)	0.43	(d)
							Fundamental energy production model	Estimated future gas prices($/mmbtu)^(e)	4 - 5	4
								Escalation rate(%)^(e)(i)	0 - 1	1
							Contract price allocation	Estimated renewable energy credit costs($/credit)^(e)	5 - 7	6
	Uranium	—		(2		)	Discounted cash flow	Average forward uranium pricing($/pound)^(e)	35 - 40	36
Ameren Missouri	Fuel oils	$	2	$	(8	)	Option model	Volatilities(%)^(b)	3 - 39	32
							Discounted cash flow	Ameren Missouri credit risk(%)^(b)(c)	0.43	(d)
								Escalation rate(%)^(e)(f)	5	(d)
	Natural Gas	—		(1		)	Option model	Volatilities(%)^(b)	31 - 144	53
								Nodal basis($/mmbtu)^(e)	(0.40) - 0	(0.30)
							Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.10)	(d)
								Counterparty credit risk(%)^(b)(c)	0.57 - 13	5
								Ameren Missouri credit risk(%)^(b)(c)	0.43	(d)
	Power^(g)	11		(2		)	Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps($/MWh)^(b)	27 - 50	32
								Estimated auction price for FTRs($/MW)^(e)	(1,833) - 2,743	171
								Counterparty credit risk(%)^(b)(c)	0.26	(d)
								Ameren Missouri credit risk(%)^(b)(c)	0.43	(d)
	Uranium	—		(2		)	Discounted cash flow	Average forward uranium pricing($/pound)^(e)	35 - 40	36
Ameren Illinois	Natural Gas	$	1	$	(1	)	Option model	Volatilities(%)^(b)	50 - 144	94
								Nodal basis($/mmbtu)^(e)	(0.10) - 0	(0.10)
							Discounted cash flow	Nodal basis($/mmbtu)^(e)	(0.40) - 0.10	(0.20)
								Counterparty credit risk(%)^(b)(c)	0.43 - 2	0.83
								Ameren Illinois credit risk(%)^(b)(c)	0.43	(d)
	Power^(g)	—		(142		)	Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps($/MWh)^(e)	27 - 38	32
								Nodal basis($/MWh)^(e)	(6) - 0	(2)
								Ameren Illinois credit risk(%)^(b)(c)	0.43	(d)
							Fundamental energy production model	Estimated future gas prices($/mmbtu)^(e)	4 - 5	4
								Escalation rate(%)^(e)(i)	0 - 1	1
							Contract price allocation	Estimated renewable energy credit costs($/credit)^(e)	5 - 7	6


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


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


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


(d)	Not applicable.


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


(f)	Escalation rate applies to fuel oil prices 2017 and beyond.


(g)	Power valuations use visible third-party pricing evaluated by month for peak and off-peak demand through 2018. Valuations beyond 2018 use fundamentally modeled pricing by month for peak and off-peak demand.


(h)	The balance at Ameren is comprised of Ameren Missouri and Ameren Illinois power contracts, which respond differently to unobservable input changes due to their opposing positions. As such, refer to the power sensitivity analysis for each company above.


(i)	Escalation rate applies to power prices 2026 and beyond.

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. No gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in the first quarter of 2015 or 2014. At March 31, 2015, the counterparty default risk liability valuation adjustment related to derivative contracts totaled $1 million, less than $1 million, and $1 million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively. At December 31, 2014, the counterparty default risk liability valuation adjustment related to derivative contracts totaled $1 million, less than $1 million, and $1 million, for Ameren, Ameren Missouri, and Ameren Illinois, 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 March 31, 2015:



		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	Derivative assets - commodity contracts^(a):
	Fuel oils	$	—	$	—	$	1	$	1
	Natural gas	—		—		1		1
	Power	—		2		5		7
	Total derivative assets - commodity contracts	$	—	$	2	$	7	$	9
	Nuclear decommissioning trust fund:
	Cash and cash equivalents	$	2	$	—	$	—	$	2
	Equity securities:
	U.S. large capitalization	368		—		—		368
	Debt securities:
	Corporate bonds	—		65		—		65
	U.S. treasury and agency securities	—		101		—		101
	Other	—		20		—		20
	Total nuclear decommissioning trust fund	$	370	$	186	$	—	$	556	^(b)
	Total Ameren	$	370	$	188	$	7	$	565
Ameren	Derivative assets - commodity contracts^(a):
Missouri	Fuel oils	$	—	$	—	$	1	$	1
	Power	—		2		5		7
	Total derivative assets - commodity contracts	$	—	$	2	$	6	$	8
	Nuclear decommissioning trust fund:
	Cash and cash equivalents	$	2	$	—	$	—	$	2
	Equity securities:
	U.S. large capitalization	368		—		—		368
	Debt securities:
	Corporate bonds	—		65		—		65
	U.S. treasury and agency securities	—		101		—		101
	Other	—		20		—		20
	Total nuclear decommissioning trust fund	$	370	$	186	$	—	$	556	^(b)
	Total Ameren Missouri	$	370	$	188	$	6	$	564
Ameren	Derivative assets - commodity contracts^(a):
Illinois	Natural gas	$	—	$	—	$	1	$	1
Liabilities:
Ameren	Derivative liabilities - commodity contracts^(a):
	Fuel oils	$	21	$	—	$	7	$	28
	Natural gas	—		63		1		64
	Power	—		—		165		165
	Uranium	—		—		1		1
	Total Ameren	$	21	$	63	$	174	$	258
Ameren	Derivative liabilities - commodity contracts^(a):
Missouri	Fuel oils	$	21	$	—	$	7	$	28
	Natural gas	—		13		1		14
	Power	—		—		1		1
	Uranium	—		—		1		1
	Total Ameren Missouri	$	21	$	13	$	10	$	44
Ameren	Derivative liabilities - commodity contracts^(a):
Illinois	Natural gas	$	—	$	50	$	—	$	50
	Power	—		—		164		164
	Total Ameren Illinois	$	—	$	50	$	164	$	214


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


(b)	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, 2014:



		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	Derivative assets - commodity contracts^(a):
	Fuel oils	$	—	$	—	$	2	$	2
	Natural gas	—		1		1		2
	Power	—		4		11		15
	Total derivative assets - commodity contracts	$	—	$	5	$	14	$	19
	Nuclear decommissioning trust fund:
	Cash and cash equivalents	$	1	$	—	$	—	$	1
	Equity securities:
	U.S. large capitalization	364		—		—		364
	Debt securities:
	Corporate bonds	—		63		—		63
	U.S. treasury and agency securities	—		102		—		102
	Other	—		17		—		17
	Total nuclear decommissioning trust fund	$	365	$	182	$	—	$	547	^(b)
	Total Ameren	$	365	$	187	$	14	$	566
Ameren	Derivative assets - commodity contracts^(a):
Missouri	Fuel oils	$	—	$	—	$	2	$	2
	Natural gas	—		1		—		1
	Power	—		4		11		15
	Total derivative assets - commodity contracts	$	—	$	5	$	13	$	18
	Nuclear decommissioning trust fund:
	Cash and cash equivalents	$	1	$	—	$	—	$	1
	Equity securities:
	U.S. large capitalization	364		—		—		364
	Debt securities:
	Corporate bonds	—		63		—		63
	U.S. treasury and agency securities	—		102		—		102
	Other	—		17		—		17
	Total nuclear decommissioning trust fund	$	365	$	182	$	—	$	547	^(b)
	Total Ameren Missouri	$	365	$	187	$	13	$	565
Ameren	Derivative assets - commodity contracts^(a):
Illinois	Natural gas	$	—	$	—	$	1	$	1
Liabilities:
Ameren	Derivative liabilities - commodity contracts^(a):
	Fuel oils	$	21	$	—	$	8	$	29
	Natural gas	1		53		2		56
	Power	—		1		144		145
	Uranium	—		—		2		2
	Total Ameren	$	22	$	54	$	156	$	232
Ameren	Derivative liabilities - commodity contracts^(a):
Missouri	Fuel oils	$	21	$	—	$	8	$	29
	Natural gas	1		10		1		12
	Power	—		1		2		3
	Uranium	—		—		2		2
	Total Ameren Missouri	$	22	$	11	$	13	$	46
Ameren	Derivative liabilities - commodity contracts^(a):
Illinois	Natural gas	$	—	$	43	$	1	$	44
	Power	—		—		142		142
	Total Ameren Illinois	$	—	$	43	$	143	$	186


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


(b)	Balance excludes $2 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 March 31, 2015:



		Net derivative commodity contracts
		Ameren Missouri			Ameren Illinois			Ameren
Fuel oils:
Beginning balance at January 1, 2015	$	(6	)	$	(a)		$	(6	)
Realized and unrealized gains (losses) included in regulatory assets/liabilities		(1	)		(a)			(1	)
Settlements		1			(a)			1
Ending balance at March 31, 2015	$	(6	)	$	(a)		$	(6	)
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2015	$	(3	)	$	(a)		$	(3	)
Natural gas:
Beginning balance at January 1, 2015	$	(1	)	$	—		$	(1	)
Purchases		—			1			1
Ending balance at March 31, 2015	$	(1	)	$	1		$	—
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2015	$	—		$	—		$	—
Power:
Beginning balance at January 1, 2015	$	9		$	(142	)	$	(133	)
Realized and unrealized gains (losses) included in regulatory assets/liabilities		(2	)		(25	)		(27	)
Settlements		(3	)		3			—
Ending balance at March 31, 2015	$	4		$	(164	)	$	(160	)
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2015	$	—		$	(24	)	$	(24	)
Uranium:
Beginning balance at January 1, 2015	$	(2	)	$	(a)		$	(2	)
Realized and unrealized gains (losses) included in regulatory assets/liabilities		1			(a)			1
Ending balance at March 31, 2015	$	(1	)	$	(a)		$	(1	)
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2015	$	1		$	(a)		$	1


(a)	Not applicable.

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 March 31, 2014:



		Net derivative commodity contracts
		Ameren Missouri			Ameren Illinois			Ameren
Fuel oils:
Beginning balance at January 1, 2014	$	5		$	(a)		$	5
Realized and unrealized gains (losses) included in regulatory assets/liabilities		(2	)		(a)			(2	)
Settlements		(2	)		(a)			(2	)
Ending balance at March 31, 2014	$	1		$	(a)		$	1
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2014	$	(1	)	$	(a)		$	(1	)
Natural gas:
Beginning balance at January 1, 2014	$	—		$	—		$	—
Purchases		—			(2	)		(2	)
Settlements		—			2			2
Ending balance at March 31, 2014	$	—		$	—		$	—
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2014	$	—		$	—		$	—
Power:
Beginning balance at January 1, 2014	$	19		$	(108	)	$	(89	)
Realized and unrealized gains (losses) included in regulatory assets/liabilities		(5	)		(12	)		(17	)
Settlements		(5	)		—			(5	)
Transfers out of Level 3		1			—			1
Ending balance at March 31, 2014	$	10		$	(120	)	$	(110	)
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2014	$	(1	)	$	(14	)	$	(15	)
Uranium:
Beginning balance at January 1, 2014	$	(6	)	$	(a)		$	(6	)
Settlements		1			(a)			1
Ending balance at March 31, 2014	$	(5	)	$	(a)		$	(5	)
Change in unrealized gains (losses) related to assets/liabilities held at March 31, 2014	$	—		$	(a)		$	—


(a)	Not applicable.

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 between Level 2 and Level 3 for power derivatives were primarily caused by changes in availability of similar financial trades observable on electronic exchanges between the periods. 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 months ended March 31, 2015 and 2014, there were no transfers between Level 1 and Level 2 or between Level 2 and Level 3 related to derivative commodity contracts, with the exception of $1 million of transfers out of Level 3 into Level 2 related to power contracts at Ameren and Ameren Missouri for the three months ended March 31, 2014.

The Ameren Companies’ carrying amounts of cash and cash equivalents approximate fair value because of the short-term nature of these instruments. They are considered to be Level 1 in the fair value hierarchy. The Ameren Companies' short-term borrowings 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, capital lease obligations and preferred stock at March 31, 2015, and December 31, 2014:



	March 31, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Ameren:^(a)
Long-term debt and capital lease obligations (including current portion)	$	6,240	$	7,127	$	6,240	$	7,135
Preferred stock	142		123		142		122
Ameren Missouri:
Long-term debt and capital lease obligations (including current portion)	$	3,999	$	4,574	$	3,999	$	4,518
Preferred stock	80		74		80		73
Ameren Illinois:
Long-term debt	$	2,241	$	2,553	$	2,241	$	2,517
Preferred stock	62		49		62		49


(a)	Preferred stock is recorded in “Noncontrolling Interests” on the consolidated balance sheet.