SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. 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. Ameren also has other subsidiaries that conduct other activities, such as providing shared services. Ameren evaluates competitive electric transmission investment opportunities as they arise.


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


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


•	ATXI operates a FERC rate-regulated electric transmission business. ATXI is developing MISO-approved electric transmission projects, including the Illinois Rivers and Mark Twain projects, and placed the Spoon River project in service in February 2018.

Ameren’s financial statements 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. All tabular dollar amounts are in millions, unless otherwise indicated.

As of March 31, 2018, and December 31, 2017, Ameren had unconsolidated variable interests as a limited partner in various equity method investments, totaling $19 million and $17 million, respectively, included in “Other assets” on Ameren’s consolidated balance sheet. Ameren is not the primary beneficiary of these investments because it does not have the power to direct matters that most significantly affect the activities of these variable interest entities. As of March 31, 2018, the maximum exposure to loss related to these variable interests is limited to the investment in these partnerships of $19 million plus associated outstanding funding commitments of $18 million.

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 accompanying notes included in the Form 10-K.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents include short-term, highly liquid investments purchased with an original maturity of three months or less. Cash and cash equivalents subject to legal or contractual restrictions and not readily available for use for general corporate purposes are classified as restricted cash.

In November 2016, the FASB issued authoritative guidance that requires, including on a retrospective basis, restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Our adoption of this guidance in the first quarter of 2018 did not result in material changes to previously reported cash flows from operating, investing, or financing activities.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows as of March 31, 2018 and 2017, and December 31, 2017 and 2016:



	March 31, 2018						December 31, 2017						March 31, 2017						December 31, 2016
	Ameren		Ameren Missouri		Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois
Cash and cash equivalents^(a)	$	30	$	3	$	3	$	10	$	—	$	—	$	8	$	—	$	—	$	9	$	—	$	—
Restricted cash included in “Other current assets”	12		4		5		21		5		6		19		4		5		20		4		6
Restricted cash included in “Other assets”	44		—		44		35		—		35		23		—		23		22		—		22
Restricted cash included in “Nuclear decommissioning trust fund”	3		3		(b)		2		2		(b)		1		1		(b)		1		1		(b)
Total cash, cash equivalents, and restricted cash^(c)	$	89	$	10	$	52	$	68	$	7	$	41	$	51	$	5	$	28	$	52	$	5	$	28


(a)	As presented on the balance sheet.


(b)	Not applicable.


(c)	As presented on the statement of cash flows.

Restricted cash included in Ameren’s other current assets primarily represents participant funds from Ameren (parent)’s DRPlus and funds held by an irrevocable Voluntary Employee Beneficiary Association trust which provides health care benefits for active employees. Restricted cash included in Ameren Missouri’s and Ameren Illinois’ other current assets primarily represents funds held by the trust.

Restricted cash included in Ameren’s and Ameren Illinois’ other assets primarily represents amounts in a trust fund restricted for the use of funding certain asbestos-related claims and amounts collected under a cost recovery rider which are restricted for use in the procurement of renewable energy credits.

Supplemental Cash Flow Information

The following table provides noncash investing activity excluded from the statements of cash flows for the three months ended March 31, 2018 and 2017:



	March 31, 2018								March 31, 2017
	Ameren^(a)			Ameren Missouri			Ameren Illinois		Ameren^(a)		Ameren Missouri		Ameren Illinois
Accrued capital expenditures	$	202		$	73		$	114	$	164	$	50	$	74
Accrued nuclear fuel expenditures	(b)			(b)			(c)		13		13		(c)
Net realized gain – nuclear decommissioning trust fund	(b)			(b)			(c)		4		4		(c)
Net unrealized gain (loss) – nuclear decommissioning trust fund	(11		)	(11		)	(c)		19		19		(c)


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


(b)	Less than $1 million.


(c)	Not applicable.

Accounts Receivable

"Accounts receivable – trade" on Ameren's and Ameren Illinois' balance sheet includes certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At March 31, 2018, and December 31, 2017, "Other current liabilities" on Ameren's and Ameren Illinois' balance sheet included payables for purchased receivables of $33 million and $31 million, respectively.

For the three months ended March 31, 2018 and 2017, the Ameren Companies recorded immaterial expense related to doubtful accounts.

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, 2018:



	Ameren Missouri				Ameren Illinois^(a)		Ameren
Balance at December 31, 2017	$	640		^(b)	$	4	$	644		^(b)
Liabilities settled	(c)				(c)		(c)
Accretion^(d)	7				(c)		7
Change in estimates^(e)	(9		)		—		(9		)
Balance at March 31, 2018	$	638		^(b)	$	4	$	642		^(b)


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


(b)	Balance included $6 million in “Other current liabilities” on the balance sheet as of both December 31, 2017, and March 31, 2018, respectively.


(c)	Less than $1 million.


(d)	Accretion expense attributable to Ameren Missouri was recorded as a decrease to regulatory liabilities.


(e)	Ameren Missouri changed its fair value estimate primarily due to a reduction in the cost estimate for closure of certain CCR storage facilities.

Company-owned Life Insurance

Company-owned life insurance is recorded at the net cash surrender value, which is the amount that can be realized under the insurance policies at the balance sheet date. As of March 31, 2018, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $251 million and $120 million, respectively, while total borrowings against the policies were $111 million at both Ameren and Ameren Illinois. As of December 31, 2017, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $265 million and $129 million, respectively, while total borrowings against the policies were $120 million at both Ameren and Ameren Illinois. Ameren and Ameren Illinois have the right to offset the borrowings against the cash surrender value of the policies, and consequently present the net asset in “Other assets” on their respective balance sheets.

Stock-based Compensation

A summary of nonvested performance share units and restricted stock units at March 31, 2018, and changes during the three months ended March 31, 2018, under the 2014 Incentive Plan are presented below:



	Performance Share Units				Restricted Stock Units
	Share Units		Weighted-average Fair Value per Share Unit		Stock Units		Weighted-average Fair Value per Stock Unit
Nonvested at January 1, 2018^(a)	895,489		$	52.28	—		$	—
Granted	298,774		62.88		181,145		57.62
Forfeitures	(37,337	)	46.08		(643	)	58.99
Undistributed vested units^(b)	(72,392	)	53.50		(6,458	)	58.99
Earned and vested	(176,043	)	52.88		—		—
Nonvested at March 31, 2018^(c)	908,491		$	55.81	174,044		$	57.56


(a)	Excludes 712,572 of undistributed vested performance share units.


(b)	Undistributed vested units are awards that vested due to attainment of retirement eligibility by certain employees, but have not yet been distributed. For undistributed vested performance share units, the number of shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.


(c)	Excludes 403,584 undistributed vested performance share units and 6,458 undistributed vested restricted stock units.

Performance Share Units

A performance share unit vests and entitles an employee to receive shares of Ameren common stock (plus accumulated dividends) if, at the end of the three-year performance period, certain specified market conditions have been met and if the individual remains employed by Ameren through the required vesting period. The vesting period for share units awarded extends beyond the three-year performance period to the payout date. In the event of a participant’s death or retirement, awards vest on a pro rata basis. The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals. The payout date of the awards is approximately 38 months after the grant date.

The fair value of each performance share unit granted in 2018 was determined to be $62.88, which was based on Ameren’s closing common share price of $58.99 at December 31, 2017, and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren’s total shareholder return for a three-year performance period beginning January 1, 2018, relative to the designated peer group. The simulations can produce a greater fair value for the performance share unit than the December 31 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 1.98% and volatility of 15% to 23% for the peer group.

Restricted Stock Units

Restricted stock units vest and entitle an employee to receive shares of Ameren common stock (plus accumulated dividends) if the individual remains employed with Ameren through the payment date of the awards. Generally, in the event of a participant’s death or retirement, awards vest on a pro rata basis. The payout date of the awards is approximately 38 months after the grant date. The fair value of each restricted stock unit is determined by Ameren’s closing common share price on the date the restricted stock unit is granted.

Deferred Compensation

As of March 31, 2018, and December 31, 2017, “Other deferred credits and liabilities” on Ameren’s balance sheet included deferred compensation obligations of $84 million and $86 million, respectively, recorded at the present value of future benefits to be paid.

Operating Revenues

In the first quarter of 2018, we adopted authoritative accounting guidance related to revenue from contracts with customers using the full retrospective method, with no material changes to the amount or timing of revenue recognition. We record revenues from contracts with customers for various electric and natural gas services, which primarily consist of retail distribution, electric transmission, and off-system arrangements. When more than one performance obligation exists in a contract, the consideration under the contract is allocated to the performance obligations based on the relative standalone selling price.

Electric and natural gas retail distribution revenues are earned when the commodity is delivered to our customers. We accrue an estimate of electric and natural gas retail distribution revenues for service provided but unbilled at the end of each accounting period.

Electric transmission revenues are earned as electric transmission services are provided.

Off-system revenues are primarily comprised of MISO revenues and wholesale bilateral revenues. MISO revenues include the sale of electricity, capacity, and ancillary services. MISO-related electricity revenues are earned as electricity is delivered. MISO-related capacity and ancillary service revenues are earned as services are provided. Wholesale bilateral revenues include the sale of electricity and capacity. Wholesale bilateral electricity revenues are earned as electricity is delivered. Wholesale bilateral capacity revenues are earned as services are provided.

Retail distribution, electric transmission, and off-system revenues, including each respective underlying component described above, represent a series of goods or services that are substantially the same and have the same pattern of transfer over time to our customers. Revenues from contracts with customers is equal to the amounts billed and our estimate of electric and natural gas retail distribution services provided but unbilled at the end of each accounting period. Revenues are billed at least monthly, and payments are due less than one month after services are provided.

The Ameren Companies have elected the optional exemption to exclude disclosure related to the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of the end of the reporting period for contracts with an initial expected term of one year or less. As of March 31, 2018 and 2017, our remaining performance obligations were immaterial. See Note 12 – Segment Information for disaggregated revenue information.

For certain regulatory recovery mechanisms that are alternative revenue programs, rather than revenues from contracts with customers, we recognize revenues that have been authorized for rate recovery, are objectively determinable and probable of recovery, and are expected to be collected from customers within two years from the end of the year. Our alternative revenue programs include revenue requirement reconciliations, MEEIA, and VBA. These revenues are subsequently recognized as revenues from contracts with customers when billed, with an offset to alternative revenue program revenues.

Excise Taxes

Ameren Missouri and Ameren Illinois collect from their customers certain excise taxes 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. They are recorded gross in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” on the statements of income. Excise taxes for electric service in Illinois are levied on customers and are therefore not included in Ameren Illinois’ revenues and expenses. The following table presents the excise taxes recorded in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” for the three months ended March 31, 2018 and 2017:



	Three Months
	2018		2017
Ameren Missouri	$	34	$	31
Ameren Illinois	22		19
Ameren	$	56	$	50

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, 2018 and 2017. The assumed settlement of dilutive performance share units had an immaterial impact on earnings per share. There were no potentially dilutive securities excluded from the earnings per diluted share calculations for the three months ended March 31, 2018 and 2017.

Accounting and Reporting Developments

In the first quarter of 2018, the Ameren Companies adopted authoritative accounting guidance on various topics. See the Operating Revenues section above for more information on our adoption of the guidance on revenue from contracts with customers. See Note 11 – Retirement Benefits for more information on our adoption of the guidance on the presentation of net periodic pension and postretirement benefit cost. See the Cash, Cash Equivalents, and Restricted Cash section above for more information on our adoption of the guidance on restricted cash. Our adoption of the guidance on the recognition and measurement of financial assets and financial liabilities did not have a material impact on our results of operations or financial position.

See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of the Form 10-K for additional information about recently issued authoritative accounting standards relating to leases, the measurement of credit losses on financial instruments, and the reclassification of certain tax effects from accumulated OCI.