Divestiture Transactions and Discontinued Operations (Notes)

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

DIVESTITURE TRANSACTIONS AND DISCONTINUED OPERATIONS

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, provides that if the Elgin, Gibson City, and Grand Tower gas-fired energy centers are subsequently sold by Medina Valley and if Medina Valley receives additional proceeds from such sale, Medina Valley will 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, 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 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 is reflected on Ameren's March 31, 2015 consolidated balance sheet in "Other current assets" and in "Other current liabilities," respectively. 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

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 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. It is reasonably possible that in the next 12 months these tax audits will be completed. As a result, tax expense and benefits ultimately realized from the divestitures, including the final resolution of Ameren’s uncertain tax positions, may differ materially from those recorded as of and for the three months ended March 31, 2015. The assets and liabilities of Ameren’s discontinued operations at March 31, 2015, and December 31, 2014, consist primarily of AROs and related deferred income tax assets associated with the abandoned Meredosia and Hutsonville energy centers.

Pursuant to the IPH transaction agreement, as amended, Ameren is obligated to pay up to $25 million for certain contingent liabilities as of March 31, 2015, which were included in "Other current liabilities" on Ameren's March 31, 2015 consolidated balance sheet.

The note receivable from Marketing Company related to the cash collateral support provided to New AER was $12 million at March 31, 2015, and December 31, 2014, and was reflected on Ameren's consolidated balance sheet in "Miscellaneous accounts and notes receivable.” This receivable is due to Ameren, with interest, on December 2, 2015, or sooner as cash collateral requirements are reduced. In addition, as of March 31, 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 $20 million, which includes $10 million currently covered by Ameren guarantees. 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 contingent liabilities recorded on Ameren’s March 31, 2015 consolidated balance sheet, Ameren had a total of $105 million in guarantees outstanding for New AER that were not recorded on Ameren’s March 31, 2015 consolidated balance sheet, which included:

• $103 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 March 31, 2015, Ameren would have been required under its guarantees to provide $10 million to the counterparties.

• $2 million related to requirements for lease agreements and potential environmental obligations. If New AER had not fulfilled its lease obligation as of March 31, 2015, Ameren would have been required to provide $1 million to the lease counterparty.

Additionally, at March 31, 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 March 31, 2015.