SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company under PUHCA 2005, administered by the FERC. Ameren’s primary assets are its equity interests in its subsidiaries, including Ameren Missouri and Ameren Illinois. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Also see the Glossary of Terms and Abbreviations at the front of this report and in the Form 10-K.


•	Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas transmission and distribution business in Missouri.


•	Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric and natural gas transmission and distribution businesses in Illinois.

Ameren has various other subsidiaries that conduct activities such as the provision of shared services. Ameren also has a subsidiary, ATXI, that operates a FERC rate-regulated electric transmission business. ATXI is developing MISO-approved electric transmission projects, including the Illinois Rivers, Spoon River, and Mark Twain projects. Ameren is also pursuing reliability projects within Ameren Missouri's and Ameren Illinois' service territories as well as competitive electric transmission investment opportunities outside of these territories, including investments outside of MISO.

The operating results, assets, and liabilities of the Elgin, Gibson City, Grand Tower, Meredosia, and Hutsonville energy centers have been presented separately as discontinued operations for all periods presented in this report. Unless otherwise stated, these notes to Ameren’s financial statements exclude discontinued operations for all periods presented. See Note 12 - Divestiture Transactions and Discontinued Operations in this report for additional information regarding the discontinued operations presentation and Note 16 - Divestiture Transactions and Discontinued Operations under Part II, Item 8, of the Form 10-K for additional information regarding Ameren’s divestiture of New AER in December 2013.

The financial statements of Ameren are prepared on a consolidated basis, and therefore include the accounts of its majority-owned subsidiaries. All intercompany transactions have been eliminated. Ameren Missouri and Ameren Illinois have no subsidiaries, and therefore their financial statements are not prepared on a consolidated basis. All tabular dollar amounts are in millions, unless otherwise indicated.

Our accounting policies conform to GAAP. Our financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in our opinion, for a fair presentation of our results. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The results of operations of an interim period may not give a true indication of results that may be expected for a full year. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K.

Asset Retirement Obligations

The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the three months ended March 31, 2015:



	Ameren Missouri		Ameren Illinois^(a)		Ameren
Balance at December 31, 2014	$	389	$	7	$	396
Accretion in 2015^(b)	5		(c)		5
Change in estimates^(d)	99		(c)		99
Balance at March 31, 2015	$	493	$	7	$	500


(a)	Included in “Other deferred credits and liabilities” on the balance sheet.


(b)	Accretion expense was recorded as an increase to regulatory assets at Ameren Missouri and Ameren Illinois.


(c)	Less than $1 million.

(d)

The ARO increase also resulted in a corresponding increase recorded to “Property and Plant, Net.” Ameren Missouri’s estimates related to its Callaway energy center decommissioning costs changed to reflect increased costs from the 2015 cost study and funding analysis, extension of the estimated operating life until 2044, and a reduction in the discount rate assumption. See Note 10 - Callaway Energy Center for additional information.

In addition, during the second quarter of 2015, Ameren and Ameren Missouri each expect to record an increase to their ARO related to retirement costs for CCR storage facilities of between $90 million and $120 million, with a corresponding increase to “Property and Plant, Net.” This increase is a result of the EPA’s new regulations for the management and disposal of CCR, which were published in April 2015. See Note 9 - Commitments and Contingencies in this report for additional information.

Stock-based Compensation

A summary of nonvested performance share units at March 31, 2015, and changes during the three months ended March 31, 2015, under the 2006 Incentive Plan and the 2014 Incentive Plan are presented below:



	Number of Performance Share Units		Weighted-average Fair Value Per Performance Share Unit
Nonvested at January 1, 2015	1,162,377		$	35.35
Granted^(a)	566,332		52.88
Forfeitures	(1,944	)	34.75
Vested^(b)	(68,411	)	47.88
Nonvested at March 31, 2015	1,658,354		$	40.82


(a)	Performance share units granted to certain executive and nonexecutive officers and other eligible employees in 2015 under the 2014 Incentive Plan.


(b)	Performance share units vested due to the attainment of retirement eligibility by certain employees. Actual shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.

The fair value of each performance share unit awarded in 2015 under the 2014 Incentive Plan was determined to be $52.88, which was based on Ameren’s closing common share price of $46.13 at December 31, 2014, and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren’s total stockholder return for a three-year performance period relative to the designated peer group beginning January 1, 2015. The simulations can produce a greater fair value for the performance share unit than the applicable closing common share price because they include the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 1.10%, volatility of 12% to 18% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period.

Excise Taxes

Ameren Missouri and Ameren Illinois collect certain excise taxes from customers that are levied on the sale or distribution of natural gas and electricity. Excise taxes are levied on Ameren Missouri’s electric and natural gas businesses and on Ameren Illinois’ natural gas business and are recorded gross in “Operating Revenues - Electric,” “Operating Revenues - Gas” and “Operating Expenses - Taxes other than income taxes” on the statement of income or the statement of income and comprehensive income. Excise taxes for electric service in Illinois are levied on the customer and are therefore not included in Ameren Illinois’ revenues and expenses. The following table presents excise taxes recorded in “Operating Revenues - Electric,” “Operating Revenues - Gas” and “Operating Expenses - Taxes other than income taxes” for the three months ended March 31, 2015 and 2014:



	Three Months
	2015		2014
Ameren Missouri	$	34	$	34
Ameren Illinois	23		26
Ameren	$	57	$	60

Uncertain Tax Positions

The following table presents the total amount of reserves for unrecognized tax benefits (detriments) related to uncertain tax positions as of March 31, 2015, and December 31, 2014:



	March 31, 2015			December 31, 2014
Ameren	$	53		$	54
Ameren Missouri	(1		)	—
Ameren Illinois	(1		)	(1		)

The following table presents the amount of reserves for unrecognized tax benefits, included in the table above, related to uncertain tax positions that, if recognized, would impact results of operations as of March 31, 2015, and December 31, 2014:



	March 31, 2015			December 31, 2014
Ameren	$	52		$	52
Ameren Missouri	(1		)	—
Ameren Illinois	(1		)	(1		)

In March 2015, a settlement was reached with the IRS for tax year 2012. Since there were no uncertain tax positions related to the 2012 tax year as of December 31, 2014, this settlement did not impact the amount of recorded unrecognized tax benefits.

Ameren’s federal income tax return for the tax year 2013 is currently under examination by the IRS. It is reasonably possible that a settlement will be reached with the IRS in the next 12 months, which will result in a reduction of Ameren’s unrecognized tax benefits of $53 million related to discontinued operations.

In addition, it is reasonably possible that other events will occur during the next 12 months that would cause the total amount of our unrecognized tax benefits to fluctuate. However, other than as described above, we do not believe any such fluctuations would be material to our results of operations, financial position, or liquidity.

State income tax returns are generally subject to examination for a period of three years after filing. We do not currently have material state income tax issues under examination, administrative appeal, or litigation. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

Earnings Per Share

There were no material differences between Ameren’s basic and diluted earnings per share amounts for the three months ended March 31, 2015 and 2014. The assumed settlement of dilutive performance share units had an immaterial impact on earnings per share.

Accounting and Reporting Developments

Below is a summary of recently adopted or issued authoritative accounting guidance relevant to the Ameren Companies.

Presentation of Debt Issuance Costs

In April 2015, FASB issued authoritative accounting guidance to simplify the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented in the balance sheet as a reduction to the associated debt liability. Currently, debt issuance costs are presented as a component of “Other assets” on the Ameren Companies’ balance sheets. The guidance will be effective for the Ameren Companies in the first quarter of 2016 and applied retrospectively. The guidance will not affect the Ameren Companies' results of operations, financial position, or liquidity, as this guidance is presentation-related only.