Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Ameren Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Ameren Corporation and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income and comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of Regulation

As described in Notes 1 and 2 to the consolidated financial statements, the Company has operations that are subject to the decisions and requirements of its regulators. The Company’s use of accounting guidance for rate-regulated businesses results in recording regulatory assets and liabilities for certain transactions that management expects will be recovered from, or returned to, customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. As of December 31, 2019, the Company’s consolidated balance sheet reflected $1.1 billion of regulatory assets and $5.1 billion of regulatory liabilities. As disclosed by management, in some cases, management must apply judgment related to the probability of recovery if regulatory balances are recorded before approval has been received from the regulator or probability of refund of amounts collected in rates that may be returned to customers. Additionally, management recognizes revenue for alternative revenue programs that allow for an automatic rate adjustment, are probable of recovery, and are collected within 24 months of the end of the annual period in which they are recognized. Management’s conclusions are based on certain factors including, but not limited to, regulatory commission orders, legislation, or historical experience, as well as management’s discussions with legal counsel.

The principal considerations for our determination that performing procedures relating to accounting for the effects of regulation is a critical audit matter are there was significant judgment by management when accounting for (i) new or existing regulatory assets or liabilities that were impacted by updates in regulatory commission orders, legislation, historical experience, or management’s discussions with legal counsel, (ii) the probability of recovery of regulatory assets and refund of regulatory liabilities recorded before approval has been received from the regulator and (iii) regulatory assets meeting the alternative revenue program criteria. This resulted in significant auditor judgment and effort when performing audit procedures and evaluating audit evidence relating to management’s application of regulatory accounting, assessment of probability of recovery, and expected timing of collection within 24 months of the end of the annual period in which they are recognized.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s implementation and application of new or existing regulatory assets or liabilities, including controls related to evaluating the probability of recovery of regulatory assets and refund of regulatory liabilities, and alternative revenue programs. These procedures also included, among others, (i) testing calculations of new and existing regulatory assets or liabilities by comparison to provisions and formulas outlined in regulatory commission orders, legislation, or external legal counsel correspondence, (ii) evaluating management’s assessment of the probability of recovery of regulatory assets and refund of regulatory liabilities, and (iii) evaluating management’s assessment of regulatory mechanisms meeting the alternative revenue program criteria and testing the expected timing of collection within 24 months of the end of the annual period in which they are recognized.

/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri

February 28, 2020

We have served as the Company’s auditor since at least 1932. We have not been able to determine the specific year we began serving as auditor of the Company.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Union Electric Company

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Union Electric Company (the “Company”) as of December 31, 2019 and 2018, and the related statements of income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri

February 28, 2020

We have served as the Company’s auditor since at least 1932. We have not been able to determine the specific year we began serving as auditor of the Company.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Ameren Illinois Company

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Ameren Illinois Company (the “Company”) as of December 31, 2019 and 2018, and the related statements of income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri

February 28, 2020

We have served as the Company’s auditor since 1998.

AMEREN CORPORATION CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (In millions, except per share amounts)
	Year Ended December 31,
	2019				2018				2017
Operating Revenues:
Electric	$	4,981			$	5,339			$	5,307
Natural gas	929				952				867
Total operating revenues	5,910				6,291				6,174
Operating Expenses:
Fuel	535				769				737
Purchased power	556				581				638
Natural gas purchased for resale	331				374				311
Other operations and maintenance	1,745				1,772				1,705
Depreciation and amortization	995				955				896
Taxes other than income taxes	481				483				477
Total operating expenses	4,643				4,934				4,764
Operating Income	1,267				1,357				1,410
Other Income, Net	130				102				86
Interest Charges	381				401				391
Income Before Income Taxes	1,016				1,058				1,105
Income Taxes	182				237				576
Net Income	834				821				529
Less: Net Income Attributable to Noncontrolling Interests	6				6				6
Net Income Attributable to Ameren Common Shareholders	$	828			$	815			$	523
Net Income	$	834			$	821			$	529
Other Comprehensive Income (Loss), Net of Taxes
Pension and other postretirement benefit plan activity, net of income taxes (benefit) of $1, $(1), and $3, respectively	5				(4		)		5
Comprehensive Income	839				817				534
Less: Comprehensive Income Attributable to Noncontrolling Interests	6				6				6
Comprehensive Income Attributable to Ameren Common Shareholders	$	833			$	811			$	528
Earnings per Common Share – Basic	$	3.37			$	3.34			$	2.16
Earnings per Common Share – Diluted	$	3.35			$	3.32			$	2.14
Weighted-average Common Shares Outstanding – Basic	245.6				243.8				242.6
Weighted-average Common Shares Outstanding – Diluted	247.1				245.8				244.2

The accompanying notes are an integral part of these consolidated financial statements.

AMEREN CORPORATION CONSOLIDATED BALANCE SHEET (In millions, except per share amounts)
	December 31,
	2019				2018
ASSETS
Current Assets:
Cash and cash equivalents	$	16			$	16
Accounts receivable – trade (less allowance for doubtful accounts of $17 and $18, respectively)	393				463
Unbilled revenue	278				295
Miscellaneous accounts receivable	63				79
Inventories	494				483
Current regulatory assets	69				134
Other current assets	118				63
Total current assets	1,431				1,533
Property, Plant, and Equipment, Net	24,376				22,810
Investments and Other Assets:
Nuclear decommissioning trust fund	847				684
Goodwill	411				411
Regulatory assets	992				1,127
Other assets	876				650
Total investments and other assets	3,126				2,872
TOTAL ASSETS	$	28,933			$	27,215
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	442			$	580
Short-term debt	440				597
Accounts and wages payable	874				817
Current regulatory liabilities	164				149
Other current liabilities	585				544
Total current liabilities	2,505				2,687
Long-term Debt, Net	8,915				7,859
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	2,919				2,666
Regulatory liabilities	4,887				4,637
Asset retirement obligations	638				627
Pension and other postretirement benefits	401				558
Other deferred credits and liabilities	467				408
Total deferred credits and other liabilities	9,312				8,896
Commitments and Contingencies (Notes 2, 9, and 14)
Ameren Corporation Shareholders’ Equity:
Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 246.2 and 244.5, respectively	2				2
Other paid-in capital, principally premium on common stock	5,694				5,627
Retained earnings	2,380				2,024
Accumulated other comprehensive loss	(17		)		(22		)
Total Ameren Corporation shareholders’ equity	8,059				7,631
Noncontrolling Interests	142				142
Total equity	8,201				7,773
TOTAL LIABILITIES AND EQUITY	$	28,933			$	27,215

The accompanying notes are an integral part of these consolidated financial statements.

AMEREN CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (In millions)
	Year Ended December 31,
	2019				2018				2017
Cash Flows From Operating Activities:
Net income	$	834			$	821			$	529
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,002				938				876
Amortization of nuclear fuel	79				95				76
Amortization of debt issuance costs and premium/discounts	19				20				22
Deferred income taxes and investment tax credits, net	167				224				539
Allowance for equity funds used during construction	(28		)		(36		)		(24		)
Stock-based compensation costs	20				20				17
Other	(14		)		44				(10		)
Changes in assets and liabilities:
Receivables	79				(24		)		(53		)
Inventories	(10		)		39				17
Accounts and wages payable	(3		)		(22		)		32
Taxes accrued	(8		)		(10		)		55
Regulatory assets and liabilities	164				201				36
Assets, other	(59		)		2				34
Liabilities, other	(33		)		(117		)		(7		)
Pension and other postretirement benefits	(39		)		(25		)		(21		)
Net cash provided by operating activities	2,170				2,170				2,118
Cash Flows From Investing Activities:
Capital expenditures	(2,411		)		(2,286		)		(2,132		)
Nuclear fuel expenditures	(31		)		(52		)		(63		)
Purchases of securities – nuclear decommissioning trust fund	(256		)		(315		)		(321		)
Sales and maturities of securities – nuclear decommissioning trust fund	260				299				305
Purchase of bonds	(207		)		—				—
Proceeds from sale of remarketed bonds	207				—				—
Other	3				18				7
Net cash used in investing activities	(2,435		)		(2,336		)		(2,204		)
Cash Flows From Financing Activities:
Dividends on common stock	(472		)		(451		)		(431		)
Dividends paid to noncontrolling interest holders	(6		)		(6		)		(6		)
Short-term debt, net	(157		)		112				(74		)
Maturities of long-term debt	(580		)		(841		)		(681		)
Issuances of long-term debt	1,527				1,352				1,345
Issuances of common stock	68				74				—
Repurchases of common stock for stock-based compensation	—				—				(24		)
Employee payroll taxes related to stock-based compensation	(29		)		(19		)		(15		)
Debt issuance costs	(17		)		(14		)		(11		)
Other	—				(2		)		(1		)
Net cash provided by financing activities	334				205				102
Net change in cash, cash equivalents, and restricted cash	69				39				16
Cash, cash equivalents, and restricted cash at beginning of year	107				68				52
Cash, cash equivalents, and restricted cash at end of year	$	176			$	107			$	68
Cash Paid (Refunded) During the Year:
Interest (net of $20, $21, and $14 capitalized, respectively)	$	367			$	387			$	370
Income taxes, net	13				21				(19		)

The accompanying notes are an integral part of these consolidated financial statements.

AMEREN CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (In millions)
	December 31,
	2019				2018				2017
Common Stock	$	2			$	2			$	2
Other Paid-in Capital:
Beginning of year	5,627				5,540				5,556
Shares issued under the DRPlus and 401(k) plan	68				74				—
Stock-based compensation activity	(1		)		13				(16		)
Other paid-in capital, end of year	5,694				5,627				5,540
Retained Earnings:
Beginning of year	2,024				1,660				1,568
Net income attributable to Ameren common shareholders	828				815				523
Dividends	(472		)		(451		)		(431		)
Retained earnings, end of year	2,380				2,024				1,660
Accumulated Other Comprehensive Income (Loss):
Deferred retirement benefit costs, beginning of year	(22		)		(18		)		(23		)
Change in deferred retirement benefit costs	5				(4		)		5
Deferred retirement benefit costs, end of year	(17		)		(22		)		(18		)
Total accumulated other comprehensive loss, end of year	(17		)		(22		)		(18		)
Total Ameren Corporation Shareholders’ Equity	$	8,059			$	7,631			$	7,184
Noncontrolling Interests:
Beginning of year	142				142				142
Net income attributable to noncontrolling interest holders	6				6				6
Dividends paid to noncontrolling interest holders	(6		)		(6		)		(6		)
Noncontrolling interests, end of year	142				142				142
Total Equity	$	8,201			$	7,773			$	7,326
Common stock shares outstanding at beginning of year	244.5				242.6				242.6
Shares issued under the DRPlus and 401(k) plan	0.9				1.2				—
Shares issued for stock-based compensation	0.8				0.7				—
Common stock shares outstanding at end of year	246.2				244.5				242.6
Dividends per common share	$	1.9200			$	1.8475			$	1.7775

The accompanying notes are an integral part of these consolidated financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI) STATEMENT OF INCOME (In millions)
	Year Ended December 31,
	2019				2018				2017
Operating Revenues:
Electric	$	3,109			$	3,451			$	3,411
Natural gas	134				138				126
Total operating revenues	3,243				3,589				3,537
Operating Expenses:
Fuel	535				769				737
Purchased power	193				164				245
Natural gas purchased for resale	53				56				47
Other operations and maintenance	960				972				925
Depreciation and amortization	556				550				533
Taxes other than income taxes	329				329				328
Total operating expenses	2,626				2,840				2,815
Operating Income	617				749				722
Other Income, Net	58				56				65
Interest Charges	178				200				207
Income Before Income Taxes	497				605				580
Income Taxes	68				124				254
Net Income	$	429			$	481			$	326
Preferred Stock Dividends	3				3				3
Net Income Available to Common Shareholder	$	426			$	478			$	323

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI) BALANCE SHEET (In millions, except per share amounts)
	December 31,
	2019				2018
ASSETS
Current Assets:
Cash and cash equivalents	$	9			$	—
Accounts receivable – trade (less allowance for doubtful accounts of $7 and $7, respectively)	164				223
Accounts receivable – affiliates	30				14
Unbilled revenue	139				155
Miscellaneous accounts receivable	33				42
Inventories	373				358
Other current assets	66				40
Total current assets	814				832
Property, Plant, and Equipment, Net	12,635				12,103
Investments and Other Assets:
Nuclear decommissioning trust fund	847				684
Regulatory assets	285				366
Other assets	356				306
Total investments and other assets	1,488				1,356
TOTAL ASSETS	$	14,937			$	14,291
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	92			$	580
Short-term debt	234				55
Accounts and wages payable	465				428
Accounts payable – affiliates	52				69
Current regulatory liabilities	62				68
Other current liabilities	221				202
Total current liabilities	1,126				1,402
Long-term Debt, Net	4,098				3,418
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	1,612				1,576
Regulatory liabilities	2,937				2,799
Asset retirement obligations	634				623
Pension and other postretirement benefits	141				228
Other deferred credits and liabilities	40				16
Total deferred credits and other liabilities	5,364				5,242
Commitments and Contingencies (Notes 2, 9, 13, and 14)
Shareholders’ Equity:
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding	511				511
Other paid-in capital, principally premium on common stock	2,027				1,903
Preferred stock	80				80
Retained earnings	1,731				1,735
Total shareholders’ equity	4,349				4,229
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	14,937			$	14,291

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI) STATEMENT OF CASH FLOWS (In millions)
	Year Ended December 31,
	2019				2018				2017
Cash Flows From Operating Activities:
Net income	$	429			$	481			$	326
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	564				533				514
Amortization of nuclear fuel	79				95				76
Amortization of debt issuance costs and premium/discounts	5				6				6
Deferred income taxes and investment tax credits, net	(19		)		(9		)		82
Allowance for equity funds used during construction	(19		)		(27		)		(21		)
Other	13				17				4
Changes in assets and liabilities:
Receivables	75				(32		)		(46		)
Inventories	(13		)		30				18
Accounts and wages payable	16				(21		)		27
Taxes accrued	(15		)		(1		)		(1		)
Regulatory assets and liabilities	17				201				26
Assets, other	(28		)		2				31
Liabilities, other	(32		)		(13		)		(23		)
Pension and other postretirement benefits	(5		)		(2		)		(2		)
Net cash provided by operating activities	1,067				1,260				1,017
Cash Flows From Investing Activities:
Capital expenditures	(1,076		)		(914		)		(773		)
Nuclear fuel expenditures	(31		)		(52		)		(63		)
Purchases of securities – nuclear decommissioning trust fund	(256		)		(315		)		(321		)
Sales and maturities of securities – nuclear decommissioning trust fund	260				299				305
Purchase of bonds	(207		)		—				—
Proceeds from sale of remarketed bonds	207				—				—
Money pool advances, net	—				—				161
Other	8				6				7
Net cash used in investing activities	(1,095		)		(976		)		(684		)
Cash Flows From Financing Activities:
Dividends on common stock	(430		)		(375		)		(362		)
Dividends on preferred stock	(3		)		(3		)		(3		)
Short-term debt, net	179				16				39
Maturities of long-term debt	(580		)		(384		)		(431		)
Issuances of long-term debt	778				423				399
Debt issuance costs	(9		)		(5		)		(3		)
Capital contribution from parent	124				45				30
Net cash provided by (used in) financing activities	59				(283		)		(331		)
Net change in cash, cash equivalents, and restricted cash	31				1				2
Cash, cash equivalents, and restricted cash at beginning of year	8				7				5
Cash, cash equivalents, and restricted cash at end of year	$	39			$	8			$	7
Cash Paid During the Year:
Interest (net of $12, $14, and $10 capitalized, respectively)	$	190			$	196			$	202
Income taxes, net	101				128				178

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI) STATEMENT OF SHAREHOLDERS’ EQUITY (In millions)
	December 31,
	2019				2018				2017
Common Stock	$	511			$	511			$	511
Other Paid-in Capital:
Beginning of year	1,903				1,858				1,828
Capital contribution from parent	124				45				30
Other paid-in capital, end of year	2,027				1,903				1,858
Preferred Stock	80				80				80
Retained Earnings:
Beginning of year	1,735				1,632				1,671
Net income	429				481				326
Common stock dividends	(430		)		(375		)		(362		)
Preferred stock dividends	(3		)		(3		)		(3		)
Retained earnings, end of year	1,731				1,735				1,632
Total Shareholders’ Equity	$	4,349			$	4,229			$	4,081

The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)

STATEMENT OF INCOME

(In millions)

	Year Ended December 31,
	2019				2018				2017
Operating Revenues:
Electric	$	1,730			$	1,761			$	1,784
Natural gas	797				815				743
Total operating revenues	2,527				2,576				2,527
Operating Expenses:
Purchased power	368				429				417
Natural gas purchased for resale	278				318				264
Other operations and maintenance	782				799				799
Depreciation and amortization	406				374				341
Taxes other than income taxes	143				144				137
Total operating expenses	1,977				2,064				1,958
Operating Income	550				512				569
Other Income, Net	53				42				12
Interest Charges	147				149				144
Income Before Income Taxes	456				405				437
Income Taxes	110				98				166
Net Income	$	346			$	307			$	271
Preferred Stock Dividends	3				3				3
Net Income Available to Common Shareholder	$	343			$	304			$	268

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS) BALANCE SHEET (In millions)
	December 31,
	2019				2018
ASSETS
Current Assets:
Cash and cash equivalents	$	—			$	—
Accounts receivable – trade (less allowance for doubtful accounts of $10 and $11, respectively)	215				224
Accounts receivable – affiliates	28				21
Unbilled revenue	139				140
Miscellaneous accounts receivable	25				40
Inventories	121				125
Current regulatory assets	57				110
Other current assets	29				16
Total current assets	614				676
Property, Plant, and Equipment, Net	10,083				9,198
Investments and Other Assets:
Goodwill	411				411
Regulatory assets	694				759
Other assets	383				275
Total investments and other assets	1,488				1,445
TOTAL ASSETS	$	12,185			$	11,319
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	53			$	72
Accounts and wages payable	299				302
Accounts payable – affiliates	82				58
Customer deposits	77				76
Current environmental remediation	42				42
Current regulatory liabilities	84				62
Other current liabilities	207				184
Total current liabilities	844				796
Long-term Debt, Net	3,575				3,296
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	1,224				1,119
Regulatory liabilities	1,849				1,741
Pension and other postretirement benefits	214				280
Environmental remediation	87				109
Other deferred credits and liabilities	260				204
Total deferred credits and other liabilities	3,634				3,453
Commitments and Contingencies (Notes 2, 13, and 14)
Shareholders’ Equity:
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding	—				—
Other paid-in capital	2,188				2,173
Preferred stock	62				62
Retained earnings	1,882				1,539
Total shareholders’ equity	4,132				3,774
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,185			$	11,319

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS) STATEMENT OF CASH FLOWS (In millions)
	Year Ended December 31,
	2019				2018				2017
Cash Flows From Operating Activities:
Net income	$	346			$	307			$	271
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	405				375				341
Amortization of debt issuance costs and premium/discounts	12				13				13
Deferred income taxes and investment tax credits, net	80				88				171
Other	7				11				—
Changes in assets and liabilities:
Receivables	11				—				(7		)
Inventories	2				8				(1		)
Accounts and wages payable	(19		)		(13		)		19
Taxes accrued	21				(13		)		18
Regulatory assets and liabilities	155				1				16
Assets, other	(23		)		(1		)		(2		)
Liabilities, other	(5		)		(92		)		3
Pension and other postretirement benefits	(30		)		(25		)		(14		)
Net cash provided by operating activities	962				659				828
Cash Flows From Investing Activities:
Capital expenditures	(1,208		)		(1,258		)		(1,076		)
Other	3				10				6
Net cash used in investing activities	(1,205		)		(1,248		)		(1,070		)
Cash Flows From Financing Activities:
Dividends on preferred stock	(3		)		(3		)		(3		)
Short-term debt, net	(19		)		10				11
Maturities of long-term debt	—				(457		)		(250		)
Issuances of long-term debt	299				929				496
Debt issuance costs	(4		)		(9		)		(6		)
Capital contribution from parent	15				160				8
Other	—				(2		)		(1		)
Net cash provided by financing activities	288				628				255
Net change in cash, cash equivalents, and restricted cash	45				39				13
Cash, cash equivalents, and restricted cash at beginning of year	80				41				28
Cash, cash equivalents, and restricted cash at end of year	$	125			$	80			$	41
Cash Paid (Refunded) During the Year:
Interest (net of $8, $7, and $4 capitalized, respectively)	$	127			$	144			$	139
Income taxes, net	4				28				(22		)

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS) STATEMENT OF SHAREHOLDERS’ EQUITY (In millions)
	December 31,
	2019				2018				2017
Common Stock	$	—			$	—			$	—
Other Paid-in Capital
Beginning of year	2,173				2,013				2,005
Capital contribution from parent	15				160				8
Other paid-in capital, end of year	2,188				2,173				2,013
Preferred Stock	62				62				62
Retained Earnings:
Beginning of year	1,539				1,235				967
Net income	346				307				271
Preferred stock dividends	(3		)		(3		)		(3		)
Retained earnings, end of year	1,882				1,539				1,235
Total Shareholders’ Equity	$	4,132			$	3,774			$	3,310

The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.

AMEREN CORPORATION (Consolidated)

UNION ELECTRIC COMPANY (d/b/a Ameren Missouri)

AMEREN ILLINOIS COMPANY (d/b/a Ameren Illinois)

COMBINED NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2019

NOTE 1 – 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.

•

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 Missouri was incorporated in Missouri in 1922 and is successor to a number of companies, the oldest of which was organized in 1881. It is the largest electric utility in the state of Missouri. It supplies electric and natural gas service to a 24,000-square-mile area in central and eastern Missouri, which includes the Greater St. Louis area. Ameren Missouri supplies electric service to 1.2 million customers and natural gas service to 0.1 million customers.

•

Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois. Ameren Illinois was incorporated in Illinois in 1923 and is the successor to a number of companies, the oldest of which was organized in 1902. Ameren Illinois supplies electric and natural gas utility service to a 43,700 square mile area in central and southern Illinois. Ameren Illinois supplies electric service to 1.2 million customers and natural gas service to 0.8 million customers.

•

Ameren Transmission Company of Illinois, doing business as ATXI, operates a FERC rate-regulated electric transmission business in the MISO. ATXI was incorporated in Illinois in 2006. ATXI is constructing the Illinois Rivers project, a MISO-approved electric transmission project, and eight of its nine line segments have been completed and placed in service as of December 31, 2018. ATXI operates the Spoon River project and the Mark Twain project, which were placed in service in February 2018 and December 2019, respectively.

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, except as disclosed in Note 13 – Related-party Transactions. Ameren Missouri and Ameren Illinois have no subsidiaries. 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.

Regulation

Our customer rates are regulated by the MoPSC, the ICC, and the FERC. We defer certain costs as assets pursuant to actions of rate regulators or because of expectations that we will be able to recover such costs in future rates charged to customers. We also defer certain amounts as liabilities pursuant to actions of rate regulators or based on the expectation that such amounts will be returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. See Note 2 – Rate and Regulatory Matters for additional information on our regulatory frameworks, regulatory recovery mechanisms, and regulatory assets and liabilities recorded at December 31, 2019 and 2018.

We continually assess the recoverability of our respective regulatory assets. Regulatory assets are charged to earnings when it is no longer probable that such amounts will be recovered through future revenues. To the extent that reductions in customers’ rates or refunds to customers related to regulatory liabilities are no longer probable, the amounts are credited to earnings.

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. See Note 15 – Supplemental Information for a reconciliation of cash, cash equivalents, and restricted cash

reported within the balance sheets and the statements of cash flows.

Allowance for Doubtful Accounts Receivable

The allowance for doubtful accounts represents our estimate of existing accounts receivable that will ultimately be uncollectible. The allowance is calculated by applying estimated loss factors to various classes of outstanding receivables, including unbilled revenue. The loss factors used to estimate uncollectible accounts are based upon both historical collections experience and management’s estimate of future collections success given the existing and anticipated future collections environment. Ameren Illinois has a bad debt rider that adjusts rates for net write-offs of customer accounts receivable above or below those being collected in rates.

Inventories

Inventories are recorded at the lower of weighted-average cost or net realizable value. Inventories are capitalized when purchased and then expensed as consumed or capitalized as property, plant, and equipment when installed, as appropriate. See Note 15 – Supplemental Information for the components of inventories.

Property, Plant, and Equipment, Net

We capitalize the cost of additions to, and betterments of, units of property, plant, and equipment. The cost includes labor, material, applicable taxes, and overhead. An allowance for funds used during construction, as discussed below, is also capitalized as a cost of our rate-regulated assets. Maintenance expenditures are expensed as incurred. Beginning in 2020, maintenance expenses related to scheduled Callaway nuclear refueling and maintenance outages, which were previously expensed as incurred, are deferred and amortized over approximately 18 months. See Note 2 – Rate and Regulatory Matters for additional information. When units of depreciable property are retired, the original costs, and the associated removal cost, net of salvage, are charged to accumulated depreciation. If environmental expenditures are related to assets currently in use, as in the case of the installation of pollution control equipment, the cost is capitalized and depreciated over the expected life of the asset. See Asset Retirement Obligations section below and Note 3 – Property, Plant, and Equipment, Net for additional information.

Ameren Missouri’s cost of nuclear fuel is capitalized as a part of “Property, Plant, and Equipment, Net” on the balance sheet and then amortized to “Operating Expenses – Fuel” in the statement of income on a unit-of-production basis.

Depreciation

Depreciation is provided over the estimated lives of the various classes of depreciable property by applying composite rates on a straight-line basis to the cost basis of such property. The composite rates include a provision for the estimated removal cost of property, plant, and equipment retired from service, net of salvage. The provision for depreciation for the Ameren Companies in 2019, 2018, and 2017 ranged from 3% to 4% of the average depreciable cost. See Note 3 – Property, Plant, and Equipment, Net for additional information on estimated depreciable lives.

Allowance for Funds Used During Construction

As a part of "Property, Plant, and Equipment, Net" on the balance sheet, we capitalize allowance for funds used during construction, which is the cost of borrowed funds and the cost of equity funds (preferred and common shareholders' equity) applicable to eligible rate-regulated construction work in progress, in accordance with the utility industry’s accounting practice and GAAP. The amount of allowance for funds used during construction is calculated using a FERC-prescribed formula based on a rate, which includes the average cost of short-term debt, the average cost of long-term debt, and the cost of equity funds. The portion attributable to borrowed funds is recorded as a reduction of "Interest Charges" on the statements of income. The portion attributable to equity funds is recorded within "Other Income, Net" on the statements of income. This accounting practice offsets the effect on earnings of the cost of financing during construction. See Note 15 – Supplemental Information for the amount of allowance for funds used during construction capitalized and the average rate applied to eligible construction work in progress.

Allowance for funds used during construction does not represent a current source of cash funds. Under accepted ratemaking practice, cash recovery of allowance for funds used during construction and other construction costs occurs when completed projects are placed in service and reflected in customer rates.

Goodwill

Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired. Ameren and Ameren Illinois had goodwill of $411 million at December 31, 2019 and 2018. Ameren has four reporting units: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. Ameren Illinois has three reporting units: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission. Ameren Illinois Electric Distribution, Ameren Illinois

Natural Gas, and Ameren Illinois Transmission had goodwill of $238 million, $80 million, and $93 million, respectively, at December 31, 2019 and 2018. The Ameren Transmission reporting unit had the same $93 million of goodwill as the Ameren Illinois Transmission reporting unit at December 31, 2019 and 2018.

Ameren and Ameren Illinois evaluate goodwill for impairment in each of their reporting units as of October 31 each year, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of their reporting units below their carrying amounts. To determine whether the fair value of a reporting unit is more likely than not greater than its carrying amount, Ameren and Ameren Illinois elect to perform either a qualitative assessment or to bypass the qualitative assessment and perform a quantitative test.

Ameren and Ameren Illinois elected to perform a qualitative assessment for their annual goodwill impairment test conducted as of October 31, 2019. As part of this qualitative assessment, Ameren and Ameren Illinois evaluated, among other things, macroeconomic conditions, industry and market considerations such as observable industry market multiples, regulatory frameworks, cost factors, overall financial performance, and entity-specific events. The results of Ameren’s and Ameren Illinois’ qualitative assessment indicated that it was more likely than not that the fair value of each reporting unit exceeded its carrying value as of October 31, 2019, resulting in no impairment of Ameren’s or Ameren Illinois’ goodwill.

Impairment of Long-lived Assets

We evaluate long-lived assets classified as held and used for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whether an impairment has occurred is determined by comparing the estimated undiscounted cash flows attributable to the assets to the carrying value of the assets. If the carrying value exceeds the undiscounted cash flows, we recognize an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value of the assets. In the period in which we determine that an asset meets held for sale criteria, we record an impairment charge to the extent the book value exceeds its estimated fair value less cost to sell. We did not identify any events or changes in circumstances that indicated that the carrying value of long-lived assets may not be recoverable in 2019 or 2018.

Variable Interest Entities

As of December 31, 2019, Ameren and Ameren Missouri had interests in unconsolidated variable interest entities that were established to construct wind generation facilities and, ultimately, sell those constructed facilities to Ameren Missouri. Neither Ameren nor Ameren Missouri are the primary beneficiary of these variable interest entities because neither has the power to direct matters that most significantly affect the entities’ activities, which include designing, financing, and constructing the wind generation facilities. As a result, these variable interest entities are not required to be consolidated. As of December 31, 2019, the maximum exposure to loss related to these variable interest entities was approximately $13 million, which primarily represents legal costs incurred. The risk of a loss was assessed to be remote and, accordingly, Ameren and Ameren Missouri have not recognized a liability associated with any portion of the maximum exposure to loss. See Note 2 – Rate and Regulatory Matters for additional information on the agreements to acquire these wind generation facilities.

As of December 31, 2019 and 2018, Ameren had unconsolidated variable interests as a limited partner in various equity method investments, totaling $28 million and $22 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 December 31, 2019, the maximum exposure to loss related to these variable interest entities is limited to the investment in these partnerships of $28 million plus associated outstanding funding commitments of $35 million.

Environmental Costs

Liabilities for environmental costs are recorded on an undiscounted basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Costs are expensed or deferred as a regulatory asset when it is expected that the costs will be recovered from customers in future rates. See Note 14 – Commitments and Contingencies for additional information on liabilities for environmental costs.

Asset Retirement Obligations

We record the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the liabilities are incurred and capitalize a corresponding amount as part of the book value of the related long-lived asset. In subsequent periods, we adjust AROs for accretion and based on changes in the estimated fair values of the obligations with a corresponding increase or decrease in the asset book value. Asset book values, reflected within “Property, Plant, and Equipment, Net” on the balance sheet, are depreciated over the remaining useful life of the related asset. Due to regulatory recovery, that depreciation is deferred as a regulatory balance. The depreciation of the asset book values at Ameren Missouri was $18 million, $14 million, and $26 million for the years ended December 31, 2019, 2018, and 2017, respectively, which was deferred as a reduction to the net regulatory liability. The net regulatory liability also reflects deferrals of net realized and unrealized gains and losses within the nuclear decommissioning trust fund for the Callaway Energy

Center. The depreciation deferred to the regulatory asset at Ameren Illinois was immaterial in each respective period. Uncertainties as to the probability, timing, or amount of cash expenditures associated with AROs affect our estimates of fair value. Ameren and Ameren Missouri have recorded AROs for retirement costs associated with Ameren Missouri’s Callaway Energy Center decommissioning, CCR facilities, and river structures. Also, Ameren, Ameren Missouri, and Ameren Illinois have recorded AROs for retirement costs associated with asbestos removal and the disposal of certain transformers. See Note 15 – Supplemental Information for a reconciliation of the beginning and ending carrying amount of AROs.

Estimated funds collected from customers to pay for the future removal cost of property, plant, and equipment retired from service, net of salvage, represent a cost of removal regulatory liability. See the cost of removal regulatory liability balance in Note 2 – Rate and Regulatory Matters.

Company-owned Life Insurance

Ameren and Ameren Illinois have company-owned life insurance, which is recorded at the net cash surrender value. The net cash surrender value is the amount that can be realized under the insurance policies at the balance sheet date. As of December 31, 2019, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $264 million (December 31, 2018 – $244 million) and $123 million (December 31, 2018 – $122 million), respectively, while total borrowings against the policies were $114 million (December 31, 2018 – $113 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. The net cash surrender value of Ameren’s company-owned life insurance is affected by the investment performance of a separate account in which Ameren holds a beneficial interest.

Operating Revenues

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

Retail distribution, electric transmission, and off-system revenues, including the underlying components 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 are 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. Customers are billed at least monthly, and payments are due less than one month after goods and/or services are provided. See Note 16 – 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, the MEEIA, and the VBA. These revenues are subsequently recognized as revenues from contracts with customers when billed, with an offset to alternative revenue program revenues.

As of December 31, 2019 and 2018, our remaining performance obligations were immaterial. The Ameren Companies elected not to disclose 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.

Accounting for MISO Transactions

MISO-related purchase and sale transactions are recorded by Ameren, Ameren Missouri, and Ameren Illinois using settlement information provided by the MISO. Ameren Missouri records these purchase and sale transactions on a net hourly position. Ameren Missouri records net purchases in a single hour in “Operating Expenses – Purchased power” and net sales in a single hour in “Operating Revenues – Electric” in its statement of income. Ameren Illinois records net purchases in “Operating Expenses – Purchased power” in its statement of

income to reflect all of its MISO transactions relating to the procurement of power for its customers. On occasion, Ameren Missouri’s and Ameren Illinois’ prior-period transactions will be resettled outside the routine settlement process because of a change in the MISO’s tariff or a material interpretation thereof. In these cases, Ameren Missouri and Ameren Illinois recognize revenues and expenses associated with resettlements once the resettlement is probable and the resettlement amount can be estimated. There were no material MISO resettlements in 2019, 2018, or 2017.

Stock-based Compensation

Stock-based compensation cost is measured at the grant date based on the fair value of the award, net of an assumed forfeiture rate. Ameren recognizes as compensation expense the estimated fair value of stock-based compensation on a straight-line basis over the requisite vesting period. See Note 11 – Stock-based Compensation for additional information.

Unamortized Debt Discounts, Premiums, and Issuance Costs

Long-term debt discounts, premiums, and issuance costs are amortized over the lives of the related issuances. Credit agreement fees are amortized over the term of the agreement.

Income Taxes

Ameren uses an asset and liability approach for its financial accounting and reporting of income taxes. Deferred tax assets and liabilities are recognized for transactions that are treated differently for financial reporting and income tax return purposes. These deferred tax assets and liabilities are based on statutory tax rates.

We expect that regulators will reduce future revenues for deferred tax liabilities that were initially recorded at rates in excess of the current statutory rate. Therefore, reductions in certain deferred tax liabilities that were recorded because of decreases in the statutory rate have been credited to a regulatory liability. A regulatory asset has been established to recognize the probable recovery through future customer rates of tax benefits related to the equity component of allowance for funds used during construction, as well as the effects of tax rate increases. To the extent deferred tax balances are included in rate base, the revaluation of deferred taxes is recorded as a regulatory asset or liability on the balance sheet and will be collected from, or refunded to, customers. For deferred tax balances not included in rate base, the revaluation of deferred taxes is recorded as an adjustment to income tax expense on the income statement. See Note 12 – Income Taxes for further information regarding the revaluation of deferred taxes related to the TCJA and Missouri and Illinois state corporate income tax rate changes.

Ameren Missouri, Ameren Illinois, and all the other Ameren subsidiary companies are parties to a tax allocation agreement with Ameren (parent) that provides for the allocation of consolidated tax liabilities. The tax allocation agreement specifies that each party be allocated an amount of tax using a stand-alone calculation, which is similar to what would be owed or refunded had the party been separately subject to tax without considering the impact of consolidation. Any net benefit attributable to Ameren (parent) is reallocated to the other parties. This reallocation is treated as a capital contribution to the party receiving the benefit. See Note 13 – Related-party Transactions for information regarding capital contributions under the tax allocation agreement.

Accounting Changes and Other Matters

The following is a summary of recently adopted authoritative accounting guidance, as well as guidance issued but not yet adopted, that could affect the Ameren Companies.

In the first quarter of 2019, the Ameren Companies adopted authoritative accounting guidance on leases. See Note 15 – Supplemental Information for additional information.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued authoritative guidance that requires an entity to recognize an allowance for financial instruments that reflects its current estimate of credit losses expected to be incurred over the life of the financial instruments. The guidance requires an entity to measure expected credit losses using relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. This guidance will be effective for the Ameren Companies in the first quarter of 2020, and will require changes to be applied retrospectively with a cumulative effect adjustment to retained earnings as of the adoption date. The adoption of this guidance will not have a significant impact on the Ameren Companies’ financial statements.

Fair Value Measurement Disclosures

In August 2018, the FASB issued authoritative guidance that affects disclosure requirements for fair value measurements. This guidance will be effective for the Ameren Companies in the first quarter of 2020.

Defined Benefit Plan Disclosures

In August 2018, the FASB issued authoritative guidance that affects disclosure requirements for defined benefit plans. This guidance will be effective for the Ameren Companies in the fourth quarter of 2020, and will require changes to be applied retrospectively to each period presented.

NOTE 2 – RATE AND REGULATORY MATTERS

Below is a summary of our regulatory frameworks and significant regulatory proceedings and related lawsuits. We are unable to predict the ultimate outcome of these matters, the timing of final decisions of the various agencies and courts, or the effect on our results of operations, financial position, or liquidity.

Regulatory Frameworks

Missouri

The MoPSC regulates rates and other matters for Ameren Missouri's electric service and natural gas distribution businesses. The rates Ameren Missouri charges customers for these services are established in a traditional regulatory rate review, which takes up to 11 months to complete, based on a historical test year and the allowed ROE established in the review.

Ameren Missouri has recovery mechanisms, including the RESRAM, FAC, MEEIA, PGA, DCA, and ISRS, that allow customer rates to be adjusted without a traditional regulatory rate review. These rate-adjustment mechanisms, along with the PISA, each described in more detail below, mitigate the effects of regulatory lag. Ameren Missouri also employs other recovery mechanisms, including a pension and postretirement benefit cost tracker, an uncertain income tax position tracker, a tracker on certain excess deferred income taxes, a renewable energy standard cost tracker, and a solar rebate program cost tracker. Each of these trackers allows Ameren Missouri to defer the difference between actual costs incurred and costs included in customer rates as a regulatory asset or regulatory liability. The difference will be reflected in base rates in a subsequent MoPSC rate order. Ameren Missouri’s cost recovery under any of its recovery mechanisms is subject to MoPSC prudence reviews.

The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense and a return at the applicable WACC on investments in certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC, with all approved PISA deferrals added to rate base prospectively and recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the 15% of depreciation expense and a return at the applicable WACC for investments in renewable generation plant placed in service and not recovered under the PISA. The deferrals are a regulatory asset until they are included in customer rates and collected in a subsequent period. Those investments not eligible for recovery under the PISA and the remaining 15% of certain property, plant, and equipment placed in service, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. Ameren Missouri recognizes the cost of debt on PISA deferrals in revenue, instead of using the applicable WACC, with the difference recognized in revenues when recovery of such deferrals is reflected in customer rates. Under Missouri law, as a result of the PISA election, additional provisions apply to Ameren Missouri, including limitations on electric customer rate increases. If rate changes from the FAC or the RESRAM riders would cause rates to temporarily exceed the 2.85% rate cap, the overage would be deferred for future recovery in the next regulatory rate review; however, rates established in such regulatory rate review would be subject to the rate cap. Any deferred overages approved for recovery would be recovered in a manner consistent with costs recovered under the PISA. Excluding customer rates under the MEEIA rider, which are not subject to the rate cap, Ameren Missouri would incur a penalty equal to the amount of deferred overage that would cause customer rates to exceed the 2.85% rate cap. Customer rates for Ameren Missouri’s electric service did not exceed the cap in 2019. Both the rate increase limitation and the PISA are effective through December 2023. Missouri law provides for the ability to use the PISA, if Ameren Missouri requests and receives MoPSC approval for extension, through December 2028.

The RESRAM permits Ameren Missouri to recover or refund, through customer rates, the difference between the cost of compliance with Missouri’s renewable energy standard and the amount set in base rates. Customer rates are adjusted for the RESRAM on an annual basis without a traditional regulatory rate review, subject to MoPSC prudence reviews. The difference between actual compliance costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. RESRAM regulatory assets earn carrying costs at short-term interest rates. The RESRAM permits Ameren Missouri to recover investments in wind generation and other renewables, and earn a return at the applicable WACC on those investments not already provided for in customer rates or any other recovery mechanism.

The FAC permits Ameren Missouri to recover or refund, through customer rates, 95% of the variance in net energy costs from the amount set in base rates without a traditional regulatory rate review, subject to MoPSC prudence reviews, with the remaining 5% of changes retained by Ameren Missouri. Net recovery of these costs through customer rates does not affect Ameren Missouri’s electric margins, as any change in revenue is offset by a corresponding change in fuel expense. The difference between actual net energy costs and costs billed to

customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. FAC regulatory assets earn carrying costs at short-term interest rates. Ameren Missouri’s base rates for electric service are required to be reset at least every four years to allow for continued use of the FAC.

The MEEIA permits Ameren Missouri to recover customer energy-efficiency program costs, the related lost electric margins, and any performance incentive through the MEEIA without a traditional regulatory rate review. MEEIA assets earn carrying costs at short-term interest rates.

Ameren Missouri is a member of the MISO, and its transmission rate is calculated in accordance with the MISO Open Access Transmission, Energy, and Operating Reserve Markets Tariff. The FERC regulates the rates charged and the terms and conditions for wholesale electric transmission service. The transmission rate update each June is based on Ameren Missouri’s actual historical cost from the prior calendar year. This rate is not directly charged to Missouri retail customers because, in Missouri, bundled retail rates include an amount for transmission-related costs and revenues.

The PGA allows Ameren Missouri to recover prudently incurred costs of natural gas purchased on behalf of its customers without a traditional regulatory rate review. These pass-through purchased gas costs do not affect Ameren Missouri’s natural gas margins, as any change in costs is offset by a corresponding change in revenues. The difference between actual natural gas costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. PGA regulatory assets earn carrying costs at short-term interest rates. The DCA ensures recoverability of the natural gas delivery service revenue requirement that is dependent on sales volume for nearly all customers. The DCA allows Ameren Missouri to adjust natural gas delivery service rates without a traditional regulatory rate review when changes occur in sales volumes from those volumes approved by the MoPSC in the previous regulatory rate review. The difference between actual gas delivery service revenues billed to customers and revenues approved by the MoPSC in a given period is deferred as a regulatory asset or liability. DCA regulatory assets earn carrying costs at short-term interest rates. The deferred amount is either billed or refunded to customers in a subsequent period. In addition, the ISRS permits certain prudently incurred natural gas infrastructure replacement costs to be recovered from customers on a more timely basis between regulatory rate reviews. The ROE currently used by Ameren Missouri for purposes of the ISRS tariff is 9.725%.

Illinois

The ICC regulates rates and other matters for Ameren Illinois' electric distribution service and natural gas distribution businesses. The rates Ameren Illinois charges customers for electric distribution service are calculated under a performance-based formula ratemaking framework. The rates Ameren Illinois charges customers for natural gas distribution service are established in a traditional regulatory rate review, which takes up to 11 months to complete, based on a future test year and an allowed ROE established in the review.

Ameren Illinois’ election to use the electric distribution service performance-based formula ratemaking framework allowed by state law, described below, permits Ameren Illinois to adjust customer rates to recover the cost of electric distribution service on an annual basis. Ameren Illinois electric distribution service also has other cost recovery mechanisms in place that allow customer rates to be adjusted without a traditional regulatory rate review. Ameren Illinois’ electric distribution service business has cost recovery mechanisms for power procurement and transmission services incurred on behalf of its customers, renewable energy credit compliance, zero emission credits, and certain environmental costs, as well as bad debt expense and the costs of certain asbestos-related claims not recovered in base rates. These pass-through costs do not affect Ameren Illinois’ net income, as any change in costs is offset by a corresponding change in revenues. Ameren Illinois’ cost recovery under any of its recovery mechanisms is subject to ICC prudence reviews.

Ameren Illinois’ electric distribution service performance-based formula ratemaking framework allows Ameren Illinois to reconcile electric distribution service rates to its actual revenue requirement on an annual basis. If a given year’s revenue requirement varies from the amount collected from customers, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to reflect that year’s actual revenue requirement, independent of actual sales volumes. The regulatory balance is then collected from, or refunded to, customers within two years from the end of the year. In addition, Ameren Illinois’ electric customer energy-efficiency rider provides Ameren Illinois’ electric distribution service business with recovery of, and return on, energy-efficiency investments. Under formula ratemaking for both its electric distribution service and its electric energy-efficiency investments, the revenue requirements are based on recoverable costs, year-end rate base, a capital structure of up to and including 50% common equity, and earn a return at the applicable WACC. The ROE component of the applicable WACC is based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points and any performance-related basis point adjustments, described in more detail below. Therefore, Ameren Illinois’ annual ROE for its electric distribution business is directly correlated to the yields on such bonds. In addition, regulatory assets applicable to formula ratemaking for both electric distribution service and electric energy-efficiency investments earn a return at the applicable WACC. However, Ameren Illinois recognizes the cost of debt on these regulatory assets in revenue, instead of the applicable WACC, with the difference recognized in revenues when recovery of such regulatory assets is reflected in customer rates.

Ameren Illinois electric distribution service business is also subject to performance standards. Failure to achieve the standards would result in a reduction in the company’s allowed ROE calculated under the formulas. The performance standards applicable to electric

distribution service include improvements in service reliability to reduce both the frequency and duration of outages, a reduction in the number of estimated bills, a reduction of consumption from inactive meters, and a reduction in bad debt expense. The electric distribution service regulatory framework provides for ROE penalties up to 38 basis points in each year from 2020 through 2022, if these performance standards are not met. The allowed ROE on energy-efficiency investments can be increased or decreased up to 200 basis points, depending on the achievement of annual energy savings goals. Any adjustments to the allowed ROE for energy-efficiency investments will depend on annual performance of a historical period relative to energy savings goals. In 2019, 2018, and 2017, there were no material performance-related basis point adjustments.

Ameren Illinois’ natural gas distribution business has recovery mechanisms, including the QIP, PGA, and VBA, that allow customer rates to be adjusted without a traditional regulatory rate review. These rate-adjustment mechanisms, described in more detail below, mitigate the effects of regulatory lag. Ameren Illinois employs other cost recovery mechanisms for natural gas customer energy-efficiency program costs and certain environmental costs, as well as bad debt expenses and invested capital taxes not recovered in base rates. Pass-through costs under the cost recovery mechanisms do not affect Ameren Illinois’ net income, as any change in costs is offset by a corresponding change in revenues. Ameren Illinois’ cost recovery under any of its recovery mechanisms is subject to ICC prudence reviews.

The QIP rider provides Ameren Illinois with recovery of, and a return on, qualifying natural gas infrastructure investments that are placed in service between regulatory rate reviews. Infrastructure investments under the QIP rider earn a return at the applicable WACC. Eligible natural gas investments include projects to improve safety and reliability and modernization investments, such as smart meters. The deferrals are a regulatory asset until they are included in customer rates in a subsequent period. Recovery of the regulatory asset begins two months after the qualifying natural gas plant is placed in service and continues until such plant is included in base rates in a natural gas delivery service rate order. Ameren Illinois’ QIP rider is subject to a rate impact limitation of a cumulative 4% per year since the most recent delivery service rate order, with no single year exceeding 5.5%. Upon issuance of a natural gas delivery service rate order, QIP rate base is transferred to base rates and the QIP rider is reset to zero, which mitigates the risk that the QIP rider will exceed its statutory limitations in future years and ensures timely recovery of capital investments. Without legislative action, the QIP rider will expire in December 2023.

The PGA allows Ameren Illinois to recover prudently incurred costs of natural gas purchased on behalf of its customers without a traditional regulatory rate review. These pass-through purchased gas costs do not affect Ameren Illinois natural gas margins, as any change in costs is offset by a corresponding change in revenues. The difference between actual natural gas costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. PGA regulatory assets earn carrying costs at short-term interest rates. The VBA ensures recoverability of the natural gas distribution service revenue requirement that is dependent on sales volumes for residential and small nonresidential customers. For these rate classes, the VBA allows Ameren Illinois to adjust natural gas distribution service rates without a traditional regulatory rate review when changes occur in sales volumes from those volumes approved by the ICC in a previous regulatory rate review. The difference between allowed sales revenues and amounts billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is collected from, or refunded to, customers in a subsequent period. VBA regulatory assets earn carrying costs at short-term interest rates.

Federal

The FERC regulates rates and other matters for Ameren Illinois' transmission business and ATXI. Both Ameren Illinois and ATXI are members of the MISO, and their transmission rates are calculated in accordance with the MISO Open Access Transmission, Energy, and Operating Reserve Markets Tariff. Ameren Illinois and ATXI have received FERC approval to use a company-specific, forward-looking formula ratemaking framework in setting their transmission rates. These forward-looking rates are updated annually and become effective each January with forecasted information. The formula rate framework provides for an annual reconciliation of the electric transmission service revenue requirement, which reflects the actual recoverable costs incurred and the 13-month average rate base for a given year, with the revenue requirement in customer rates, including an allowed ROE. If a given year’s revenue requirement varies from the amount collected from customers, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to reflect that year’s actual revenue requirement, independent of actual sales volumes. The regulatory balance is collected from, or refunded to, customers within two years from the end of the year. FERC revenue reconciliation adjustment regulatory assets earn carrying costs at each company’s short-term interest rates, while each company incurs interest at a FERC-prescribed rate on related regulatory liabilities. In addition, the FERC has approved transmission rate incentives, including a 50 basis point incentive adder to the allowed base ROE for Ameren Illinois and ATXI for participation in an RTO, and an additional 50 basis point ROE incentive adder the Mark Twain project earns based on the unique nature of risks involved in the project.

Proceedings and Updates

Missouri

2019 Electric Service Regulatory Rate Review

In July 2019, Ameren Missouri filed a request with the MoPSC seeking approval to decrease its annual revenues for electric service by $1 million. In February 2020, Ameren Missouri, the MoPSC staff, the MoOPC, and certain intervenors filed a nonunanimous stipulation and agreement with the MoPSC to decrease Ameren Missouri’s annual revenues for electric service by $32 million. The remaining intervenor did not object to the agreement. The stipulation and agreement, which is subject to MoPSC approval, specified an allowed ROE range of 9.4% to 9.8%, but did not specify the common equity percentage or rate base. The stipulation and agreement includes the continued use of the FAC and trackers for pension and postretirement benefits, uncertain income tax positions, certain excess deferred income taxes, and renewable energy standard compliance costs that the MoPSC previously authorized in earlier electric rate orders. Ameren Missouri cannot predict whether the MoPSC will approve the stipulation and agreement or, if approved, whether any application for rehearing or appeal will be filed, or the outcome if so filed.

A decision by the MoPSC on the nonunanimous stipulation and agreement is expected by March 2020, with new rates effective as early as April 1, 2020. Ameren Missouri cannot predict the level of any electric service rate change the MoPSC may approve, when any rate change may go into effect, whether the requested regulatory recovery mechanisms will be approved, or whether any rate change that may eventually be approved will be sufficient for Ameren Missouri to recover its costs and earn a reasonable return on its investments when the rate change goes into effect.

The percentage of net energy cost variances from the amount set in base rates allowed to be recovered or refunded under the FAC and costs from services provided by affiliates are still being challenged by the MoOPC, and are expected to be addressed in a proceeding that would begin in March 2020. A MoPSC decision would be expected in the proceeding by the end of May 2020. If a change to the percentage of net energy cost variances from the amount set in base rates allowed to be recovered or refunded under the FAC is ordered by the MoPSC, the ordered percentage will be reflected in the FAC. If any investments or expenses are disallowed by the MoPSC, the effect on customer rates of such disallowances will be deferred as a regulatory liability and refunded to customers over a period of time determined in the next regulatory rate review.

Wind Generation Facilities and RESRAM

In May 2019, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 300-megawatt wind generation facility. In 2018, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 400-megawatt wind generation facility. These two agreements are subject to customary contract terms and conditions. The two build-transfer acquisitions collectively represent $1.2 billion of capital expenditures, are expected to be completed by the end of 2020, and would support Ameren Missouri’s compliance with the Missouri renewable energy standard. Both acquisitions have received all regulatory approvals, and both projects have received all applicable zoning approvals, have entered into RTO interconnection agreements, and have begun construction activities. The following table provides information with respect to each build-transfer agreement:

		Up-to 400-Megawatt Facility		Up-to 300-Megawatt Facility
Build-transfer agreement date		April 2018		May 2019
Wind facility developer		Terra-Gen, LLC		Invenergy Renewables, LLC
Location		Northeastern Missouri		Northwestern Missouri
Status of certificate of convenience and necessity from the MoPSC		Approved October 2018		Approved August 2019
Status of final interconnection costs		Received July 2019		Received July 2019
Status of RTO transmission interconnection agreement		Executed August 2019		Executed October 2019
Status of FERC approval		Received December 2018		Received October 2019
Expected completion date		By the end of 2020		By the end of 2020

In February 2020, the developers of the wind generation facilities received notice from the wind turbine supplier of potential disruptions in its manufacturing, transport, and/or import/export activities resulting from the international public health emergency associated with the novel coronavirus (COVID-19). The developers notified Ameren Missouri that their performance might be delayed as a result. At this time, Ameren Missouri and the developers are unable to estimate the impact to each project, including the project schedule and contracted megawatts.

In 2018, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, a 157-megawatt wind generation facility. In July 2019, Ameren Missouri and the developer mutually agreed to terminate the project due to unacceptable interconnection costs, which made the project uneconomic and not in the best interest of Ameren Missouri’s customers. Abandonment costs incurred as a result of terminating the project were immaterial to Ameren Missouri.

In January 2019, the MoOPC filed an appeal with the Missouri Court of Appeals, Western District, challenging the MoPSC’s December 2018 order allowing Ameren Missouri to recover, through the RESRAM, the 15% of depreciation expense and return at the applicable WACC not recovered under the PISA. In October 2019, the Missouri Court of Appeals, Western District, upheld the MoPSC’s order. In November 2019, the MoOPC filed a request for appeal of the MoPSC’s order to the Missouri Supreme Court, which was denied in February 2020.

MEEIA

As a result of MoPSC orders issued in September 2017, October 2018, January 2019, and September 2019 related to performance incentives for the MEEIA 2013 and MEEIA 2016 programs, Ameren Missouri recognized revenues of $37 million and $11 million during 2019 and 2018, respectively.

Deferral of Maintenance Expenses Related to Scheduled Callaway Refueling and Maintenance Outages

In February 2020, the MoPSC issued an order approving a stipulation and agreement allowing Ameren Missouri to defer and amortize maintenance expenses related to scheduled refueling and maintenance outages at its Callaway Energy Center. Beginning with the fall 2020 refueling and maintenance outage, Ameren Missouri will defer the maintenance expenses incurred related to a refueling and maintenance outage as a regulatory asset and amortize those expenses after completion of the outage. Maintenance expenses will be amortized over the period between refueling and maintenance outages, which is approximately 18 months.

2018 Natural Gas Delivery Service Regulatory Rate Review

In December 2018, Ameren Missouri filed a request with the MoPSC to increase its annual revenues for natural gas delivery service. In August 2019, the MoPSC issued an order approving a stipulation and agreement to decrease Ameren Missouri’s annual revenues for natural gas delivery service by $1 million from rates approved by the MoPSC in January 2011. The decrease in annual rates is based on an allowed ROE range of 9.4% to 9.95% and a capital structure composed of 52.0% common equity, which was Ameren Missouri’s capital structure as of May 31, 2019. This order permits the use of the DCA, as well as ISRS, which will be calculated using an allowed ROE of 9.725%. The order represents a $1 million increase to Ameren Missouri’s annual revenues for natural gas delivery service from interim rates, which were approved by the MoPSC in December 2018. The new rates became effective September 1, 2019.

Illinois

Electric Distribution Service Rates

In December 2019, the ICC issued an order in Ameren Illinois’ annual update filing that approved a $7 million decrease in Ameren Illinois’ electric distribution service rates beginning in January 2020. This order reflected a decrease for the conclusion of the 2017 revenue requirement reconciliation adjustment, which was fully collected from customers in 2019, consistent with the ICC’s November 2018 annual update filing order. It also reflected an increase to the annual formula rate based on 2018 actual costs and expected net plant additions for 2019, and an increase to include the 2018 revenue requirement reconciliation adjustment.

Electric Customer Energy-Efficiency Investments

In May 2019, Ameren Illinois filed its annual electric customer energy-efficiency formula rate update to establish the revenue requirement to be used for 2020 rates with the ICC. In November 2019, the ICC issued an order that approved 2020 electric customer energy-efficiency rates of $44 million, which represents an increase of $10 million from 2019 rates.

2020 Natural Gas Delivery Service Regulatory Rate Review

In February 2020, Ameren Illinois filed a request with the ICC seeking approval to increase its annual revenues for natural gas delivery service by $102 million, which included an estimated $46 million of annual revenues that would otherwise be recovered under the QIP and other riders. The request is based on a 10.5% allowed ROE, a capital structure composed of 54.1% common equity, and a rate base of $2.1 billion. In an attempt to reduce regulatory lag, Ameren Illinois used a 2021 future test year in this proceeding. A decision by the ICC in this proceeding is required by January 2021, with new rates expected to be effective in February 2021. Ameren Illinois cannot predict the level of any delivery service rate change the ICC may approve, nor whether any rate change that may eventually be approved will be sufficient to enable Ameren Illinois to recover its costs and to earn a reasonable return on investments when the rate changes go into effect.

QIP Prudence Review

In March 2019, Ameren Illinois filed a request for an ICC prudence review of natural gas infrastructure investments recovered under the QIP rider during 2018. In November 2019, the Illinois Attorney General's office challenged the recovery of capital investments, among other things, that were made during 2018, alleging that the amount of investments is excessive based on a comparison to historical investment levels. The Illinois Attorney General's office is not alleging imprudence or that the investments do not qualify for recovery. In November 2019,

the ICC staff filed testimony that supports recovery of capital investments made during 2018. Ameren Illinois’ 2018 QIP rate recovery under review by the ICC is within the rate increase limitations allowed by law. An ICC decision in this proceeding is expected by mid-2020.

Federal

FERC Complaint Cases

In November 2013, a customer group filed a complaint case with the FERC seeking a reduction in the allowed base ROE for FERC-regulated transmission rate base under the MISO tariff from 12.38% to 9.15%. In September 2016, the FERC issued an order in the November 2013 complaint case, which lowered the allowed base ROE to 10.32%, or a 10.82% total allowed ROE with the inclusion of a 50 basis point incentive adder for participation in an RTO, that was effective from late September 2016 forward. The September 2016 order also required refunds for the period November 2013 to February 2015, which were paid in 2017. With the maximum FERC-allowed refund period for the November 2013 complaint case ended in February 2015, another customer complaint case was filed in February 2015, seeking a further reduction in the allowed base ROE for the period of February 2015 to May 2016. In November 2019, the FERC issued an order addressing the November 2013 complaint case, which set the allowed base ROE at 9.88% and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The order also dismissed the February 2015 complaint case.

As a result of the November 2019 order, Ameren and Ameren Illinois fully reduced their regulatory liabilities of $46 million and $27 million, respectively, associated with the February 2015 complaint case. As of December 31, 2019, Ameren and Ameren Illinois had recorded current regulatory liabilities of $40 million and $23 million, respectively, to reflect the expected refunds, including interest, associated with the reduced ROEs in the November 2019 decision in the November 2013 complaint case. The reduction in the FERC-allowed base ROE is not material to Ameren Missouri’s results of operations, financial position, or liquidity.

In December 2019, Ameren and the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI, filed requests for rehearing with the FERC. Additionally, in December 2019, various parties filed requests for rehearing with the FERC, challenging the dismissal of the February 2015 complaint case. The FERC has not ruled on the merits of the rehearing requests and is under no deadline to do so. The allowed base ROE for the 15-month period related to the February 2015 complaint case was 12.38%. Each 50 basis point reduction in the allowed base ROE for this period would reduce Ameren’s and Ameren Illinois’ net income by an estimated $10 million and $6 million, respectively.

In March 2019, the FERC issued separate Notices of Inquiry regarding its allowed base ROE policy and its transmission incentives policy. Initial comments were due by June 2019, and reply comments were due by late August 2019. The Notice of Inquiry addressing the FERC’s base ROE policy, among other things, broadened the ability to comment on the new methodology beyond electric utilities that are participants in the complaint cases. The transmission incentives Notice of Inquiry was open for comment on the FERC’s transmission incentive policy, including incentive adders to the base ROE. Ameren is unable to predict the ultimate impact of the Notices of Inquiry at this time.

Regulatory Assets and Liabilities

The following table presents our regulatory assets and regulatory liabilities at December 31, 2019 and 2018:

		2019													2018
		Ameren Missouri				Ameren Illinois				Ameren					Ameren Missouri				Ameren Illinois				Ameren
Regulatory assets:
Under-recovered Illinois electric power costs(a)		$	—			$	4			$	4				$	—			$	—			$	—
Under-recovered PGA(a)		—				—				—					—				7				7
MTM derivative losses(b)		12				242				254					19				197				216
IEIMA revenue requirement reconciliation adjustment(c)(d)		—				17				17					—				70				70
FERC revenue requirement reconciliation adjustment(e)		—				1				16					—				16				30
Pension and postretirement benefit costs(f)		7				26				33					103				149				252
Income taxes(g)		114				61				177					119				68				185
Callaway costs(d)(h)		18				—				18					22				—				22
Unamortized loss on reacquired debt(i)		55				31				86					58				40				98
Environmental cost riders(j)		—				127				127					—				148				148
Storm costs(d)(k)		—				7				7					—				13				13
Workers’ compensation claims(l)		4				7				11					4				7				11
Construction accounting for pollution control equipment(d)(m)		15				—				15					16				—				16
Solar rebate program(n)		5				—				5					14				—				14
PISA(o)(d)		41				—				41					1				—				1
RESRAM(p)		9				—				9					—				—				—
FEJA energy-efficiency rider(d)(q)		—				211				211					—				136				136
Other		13				17				30					24				18				42
Total regulatory assets		$	293			$	751			$	1,061				$	380			$	869			$	1,261
Less: current regulatory assets		(8		)		(57		)		(69		)			(14		)		(110		)		(134		)
Noncurrent regulatory assets		$	285			$	694			$	992				$	366			$	759			$	1,127
Regulatory liabilities:
Over-recovered FAC(r)		$	39			$	—			$	39				$	34			$	—			$	34
Over-recovered Illinois electric power costs(a)		—				11				11					—				12				12
Over-recovered PGA(a)		8				14				22					7				3				10
Over-recovered VBA rider(s)		—				8				8					—				8				8
MTM derivative gains(b)		18				3				21					5				3				8
IEIMA revenue requirement reconciliation adjustment(c)		—				18				18					—				—				—
FERC revenue requirement reconciliation adjustment(e)		—				37				38					—				17				19
MEEIA energy-efficiency rider(t)		3				—				3					19				—				19
Estimated refund for FERC complaint cases(u)		—				23				40					—				26				44
Income taxes(g)		1,428				813				2,326					1,484				843				2,413
Cost of removal(v)		1,041				827				1,884					1,027				774				1,811
AROs(w)		303				—				303					175				—				175
Pension and postretirement benefit costs tracker(x)		72				—				72					43				—				43
Renewable energy credits and zero emission credits(y)		—				155				155					—				102				102
Excess income taxes collected in 2018(z)		60				—				60					60				—				60
Other		27				24				51					13				15				28
Total regulatory liabilities		$	2,999			$	1,933			$	5,051				$	2,867			$	1,803			$	4,786
Less: current regulatory liabilities		(62		)		(84		)		(164		)			(68		)		(62		)		$	(149	)
Noncurrent regulatory liabilities		$	2,937			$	1,849			$	4,887				$	2,799			$	1,741			$	4,637

(a)	Under-recovered or over-recovered costs from utility customers. Amounts will be recovered from, or refunded to, customers within one year of the deferral.

(b)	Deferral of commodity-related derivative MTM losses or gains. See Note 7 – Derivative Financial Instruments for additional information.

(c)	The difference between Ameren Illinois’ electric distribution service annual revenue requirement calculated under the performance-based formula ratemaking framework and the revenue requirement included in customer rates for that year. Any under-recovery or over-recovery will be recovered from, or refunded to, customers with interest within two years.

(d)	These assets earn a return at the applicable WACC.

(e)	Ameren Illinois’ and ATXI’s annual revenue requirement reconciliation calculated pursuant to the FERC’s electric transmission formula ratemaking framework. Any under-recovery or over-recovery will be recovered from, or refunded to, customers within two years.

(f)	These costs are being amortized in proportion to the recognition of prior service costs (credits) and actuarial losses (gains) attributable to Ameren’s pension plan and postretirement benefit plans. See Note 10 – Retirement Benefits for additional information.

(g)

The regulatory assets represent amounts that will be recovered from customers for deferred income taxes related to the equity component of allowance for funds used during construction and the effects of tax rate changes. The regulatory liabilities represent amounts that will be refunded to customers for deferred income taxes related to depreciation differences, other tax liabilities, and the unamortized portion of investment tax credits recorded at rates in excess of current statutory rates. Amounts associated with the equity component of allowance for funds used during construction, and the unamortized portion of investment tax credits will be amortized over the expected life of the related assets. For net regulatory liabilities related to deferred income taxes recorded at rates other than the current statutory rate, the weighted-average remaining amortization periods at Ameren, Ameren Missouri, and Ameren Illinois are 34, 26, and 43 years.

(h)	Ameren Missouri’s Callaway Energy Center operations and maintenance expenses, property taxes, and carrying costs incurred between the plant in-service date and the date the plant was reflected in rates. These costs are being amortized over the original remaining life of the energy center.

(i)	Losses related to reacquired debt. These amounts are being amortized over the lives of the related new debt issuances or the original lives of the old debt issuances if no new debt was issued.

(j)	The recoverable portion of accrued environmental site liabilities that will be collected from electric and natural gas customers through ICC-approved cost recovery riders. The period of recovery will depend on the timing of remediation expenditures. See Note 14 – Commitments and Contingencies for additional information.

(k)	Storm costs from 2016 and 2018 deferred in accordance with the IEIMA. These costs are being amortized over five-year periods beginning in the year the storm occurred.

(l)	The period of recovery will depend on the timing of actual expenditures.

(m)	The MoPSC’s May 2010 electric rate order allowed Ameren Missouri to record an allowance for funds used during construction for pollution control equipment at its Sioux Energy Center until the cost of that equipment was included in customer rates beginning in 2011. These costs are being amortized over the expected life of the Sioux Energy Center, currently through 2033.

(n)	Costs associated with Ameren Missouri’s solar rebate program. The amortization period for these assets will be determined in a future electric service regulatory rate review.

(o)	Under the PISA, Ameren Missouri is permitted to defer and recover 85% of the depreciation expense on certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates. Accumulated PISA deferrals are added to rate base prospectively and amortized over a period of 20 years following a regulatory rate review.

(p)	Costs associated with Ameren Missouri’s compliance with the state of Missouri’s renewable energy standard. Costs incurred over a twelve-month period beginning each August are amortized over a twelve-month period beginning February the following year.

(q)	The electric energy-efficiency investments are being amortized over their weighted-average useful lives beginning in the period in which they were made, with current remaining amortization periods ranging from 7 to 12 years.

(r)	Under-recovered or over-recovered fuel costs to be recovered or refunded through the FAC. Specific accumulation periods aggregate the under-recovered or over-recovered costs over four months, any related adjustments that occur over the following four months, and the recovery from, or refund to, customers that occurs over the next eight months.

(s)	Under-recovered or over-recovered natural gas revenue caused by sales volume deviations from weather normalized sales approved by the ICC in rate regulatory reviews. Each year’s amount will be recovered from or refunded to customers from April through December of the following year.

(t)

The MEEIA rider allows Ameren Missouri to collect from, or refund to, customers any annual difference in the actual amounts incurred and the amounts collected from customers for the MEEIA program costs, lost electric margins, and the performance incentive. Under the MEEIA rider, collections from or refunds to customers occur one year after the program costs, and lost electric margins are incurred or any performance incentive are earned.

(u)	The 2019 balances represent the estimated refunds to transmission customers related to the November 2019 FERC order in the November 2013 FERC complaint case. The 2018 balances represent the estimated refunds to transmission customers related to the February 2015 FERC complaint case, which was dismissed in the November 2019 order. See further discussion of the FERC ROE complaint cases above.

(v)	Estimated funds collected from customers to pay for the future removal cost of property, plant, and equipment retired from service, net of salvage.

(w)	Recoverable or refundable removal costs for AROs, including net realized and unrealized gains and losses related to the nuclear decommissioning trust fund investments. See Note 1 – Summary of Significant Accounting Policies – Asset Retirement Obligations.

(x)

A regulatory recovery mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri and the level of such costs included in customer rates. The period of refund varies based on MoPSC approval in a regulatory rate review. For costs incurred prior to December 2016, the weighted-average remaining amortization period is three years. For costs incurred after December 2016, the amortization period will be determined in the current electric service regulatory rate review.

(y)	Funds collected for the purchase of renewable energy credits and zero emission credits through IPA procurements. The balance will be amortized as the credits are purchased.

(z)	The excess amount collected in rates related to the TCJA from January 1, 2018, through July 31, 2018. The regulatory liability will be reflected in customer rates over a period of time to be determined by the MoPSC in the current electric service regulatory rate review.

NOTE 3 – PROPERTY, PLANT, AND EQUIPMENT, NET

The following table presents property, plant, and equipment, net, at December 31, 2019 and 2018:

		Ameren Missouri**(a)**				Ameren Illinois				Other				Ameren**(a)**
2019
Property, plant, and equipment at original cost:(b)
Electric generation		$	11,880			$	—			$	—			$	11,880
Electric distribution		6,371				6,299				—				12,670
Electric transmission		1,405				3,101				1,642				6,148
Natural gas		528				3,024				—				3,552
Other(c)		1,173				993				236				2,402
		21,357				13,417				1,878				36,652
Less: Accumulated depreciation and amortization		9,195				3,536				275				13,006
		12,162				9,881				1,603				23,646
Construction work in progress:
Nuclear fuel in process		135				—				—				135
Other		338				202				55				595
Property, plant, and equipment, net		$	12,635			$	10,083			$	1,658			$	24,376
2018
Property, plant, and equipment at original cost:(b)
Electric generation		$	11,432			$	—			$	—			$	11,432
Electric distribution		5,989				5,970				—				11,959
Electric transmission		1,277				2,647				1,385				5,309
Natural gas		500				2,701				—				3,201
Other(c)		1,008				863				230				2,101
		20,206				12,181				1,615				34,002
Less: Accumulated depreciation and amortization		8,726				3,294				253				12,273
		11,480				8,887				1,362				21,729
Construction work in progress:
Nuclear fuel in process		217				—				—				217
Other		406				311				147				864
Property, plant, and equipment, net		$	12,103			$	9,198			$	1,509			$	22,810

(a)

Amounts include two CTs that have related financing obligations. The gross cumulative asset value of those agreements was $236 million and $235 million at December 31, 2019 and 2018, respectively. The total accumulated depreciation associated with the two CTs was $95 million and $89 million at December 31, 2019 and 2018, respectively. See Note 5 – Long-term Debt and Equity Financings for additional information on these agreements.

(b)	The estimated lives for each asset group are as follows: 5 to 72 years for electric generation, excluding Ameren Missouri’s hydro generating assets which have useful lives of up to 150 years, 20 to 80 years for electric distribution, 50 to 75 years for electric transmission, 20 to 80 years for natural gas, and 5 to 55 years for other.

(c)	Other property, plant, and equipment includes assets used to support electric and natural gas services.

Capitalized software costs are classified within “Property, Plant, and Equipment, Net” on the balance sheet and are amortized on a straight-line basis over the expected period of benefit, ranging from 5 to 10 years. The following table presents the amortization, gross carrying value, and related accumulated amortization of capitalized software by year:

		Amortization Expense										Gross Carrying Value							Accumulated Amortization
		2019			2018			2017				2019			2018				2019			2018
Ameren		$	78		$	71		$	58			$	901		$	734			$	(584	)	$	(514	)
Ameren Missouri		30			24			20				303			223				(153		)	(125		)
Ameren Illinois		45			44			36				377			297				(221		)	(183		)

Annual amortization expense for capitalized costs for software placed in service as of December 31, 2019, is estimated to be as follows:

		2020				2021				2022				2023				2024
Ameren		$	80			$	74			$	63			$	50			$	24
Ameren Missouri		36				34				29				24				12
Ameren Illinois		41				36				32				24				12

NOTE 4 – SHORT-TERM DEBT AND LIQUIDITY

The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings.

Credit Agreements

In December 2019, the Credit Agreements were amended and restated. The amended and restated agreements, among other things, extended the maturity dates of the Credit Agreements and provide $2.3 billion of credit through the extended maturity date. The total facility size of the Missouri Credit Agreement was increased from $1.0 billion to $1.2 billion. The total facility size of the Illinois Credit Agreement remained unchanged at $1.1 billion. The Credit Agreements, which were previously scheduled to mature in December 2022, are now scheduled to mature in December 2024. The maturity date may be extended for two additional one-year periods upon mutual consent of the borrowers and lenders. Credit available under the agreements is provided by 22 international, national, and regional lenders, with no single lender providing more than $130 million of credit in aggregate.

The obligations of each borrower under the respective Credit Agreements to which it is a party are several and not joint. Except under limited circumstances relating to expenses and indemnities, the obligations of Ameren Missouri and Ameren Illinois under the respective Credit Agreements are not guaranteed by Ameren (parent) or any other subsidiary of Ameren. The following table presents the maximum aggregate amount available to each borrower under each facility:

		Missouri Credit Agreement			Illinois Credit Agreement
Ameren (parent)		$	900		$	500
Ameren Missouri		850			(a)
Ameren Illinois		(a)			800

(a)	Not applicable.

The borrowers have the option to seek additional commitments from existing or new lenders to increase the total facility size of the Credit Agreements to a maximum of $1.4 billion for the Missouri Credit Agreement and $1.3 billion for the Illinois Credit Agreement. Ameren (parent) borrowings are due and payable no later than the maturity date of the Credit Agreements. Ameren Missouri and Ameren Illinois borrowings under the applicable Credit Agreement are due and payable no later than the earlier of the maturity date or 364 days after the date of the borrowing.

The obligations of the borrowers under the Credit Agreements are unsecured. Loans are available on a revolving basis under each of the Credit Agreements. Funds borrowed may be repaid and, subject to satisfaction of the conditions to borrowing, reborrowed from time to time. At the election of each borrower, the interest rates on such loans will be the alternate base rate plus the margin applicable to the particular borrower and/or the eurodollar rate plus the margin applicable to the particular borrower. The applicable margins will be determined by the borrower’s long-term unsecured credit ratings or, if no such ratings are in effect, the borrower’s corporate/issuer ratings then in effect. The borrowers have received commitments from the lenders to issue letters of credit up to $100 million under each of the Credit Agreements. In addition, the issuance of letters of credit is subject to the $2.3 billion overall combined facility borrowing limitations of the Credit Agreements.

The borrowers will use the proceeds from any borrowings under the Credit Agreements for general corporate purposes, including working capital, commercial paper liquidity support, issuance of letters of credit, loan funding under the Ameren money pool arrangements, and other short-term affiliate loan arrangements. The Missouri Credit Agreement and the Illinois Credit Agreement are available to support issuances under Ameren (parent)’s, Ameren Missouri’s and Ameren Illinois’ commercial paper programs, respectively, subject to borrowing sublimits. As of December 31, 2019, based on commercial paper outstanding and letters of credit issued under the Credit Agreements, along with cash and cash equivalents, the net liquidity available to Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, was $1.9 billion.

Ameren, Ameren Missouri, and Ameren Illinois did not borrow under the Credit Agreements for the years ended December 31, 2019 and 2018.

Commercial Paper

The following table summarizes the borrowing activity and relevant interest rates under Ameren (parent)’s, Ameren Missouri’s, and Ameren Illinois’ commercial paper programs for the years ended December 31, 2019 and 2018:

		Ameren (parent)				Ameren Missouri				Ameren Illinois				Ameren Consolidated
2019
Average daily commercial paper outstanding		$	421			$	122			$	157			$	700
Outstanding borrowings at period-end		153				234				53				440
Weighted-average interest rate		2.66		%		2.62		%		2.43		%		2.60		%
Peak outstanding commercial paper during period(a)		$	651			$	549			$	356			$	1,113
Peak interest rate		3.80		%	(b)	2.97		%		5.00		%	(b)	5.00		%	(b)
2018
Average daily commercial paper outstanding		$	410			$	61			$	108			$	579
Outstanding borrowings at period-end		470				55				72				597
Weighted-average interest rate		2.31		%		1.94		%		2.26		%		2.26		%
Peak outstanding commercial paper during period(a)		$	543			$	481			$	442			$	1,295
Peak interest rate		3.10		%		2.80		%		2.85		%		3.10		%

(a)	The timing of peak outstanding commercial paper issuances varies by company. Therefore, the sum of the peak amounts presented by the companies may not equal the Ameren consolidated peak amount for the period.

(b)	In 2019, the peak interest rate was affected by temporary disruptions in the commercial paper market.

Indebtedness Provisions and Other Covenants

The information below is a summary of the Ameren Companies’ compliance with indebtedness provisions and other covenants.

The Credit Agreements contain conditions for borrowings and issuances of letters of credit. These conditions include the absence of default or unmatured default, material accuracy of representations and warranties (excluding any representation after the closing date as to the absence of material adverse change and material litigation, and the absence of any notice of violation, liability, or requirement under any environmental laws that could have a material adverse effect), and obtaining required regulatory authorizations. In addition, it is a condition for any Ameren Illinois borrowing that, at the time of and after giving effect to such borrowing, Ameren Illinois not be in violation of any limitation on its ability to incur unsecured indebtedness contained in its articles of incorporation.

The Credit Agreements also contain nonfinancial covenants, including restrictions on the ability to incur certain liens, to transact with affiliates, to dispose of assets, to make investments in or transfer assets to its affiliates, and to merge with other entities. The Credit Agreements require each of Ameren, Ameren Missouri, and Ameren Illinois to maintain consolidated indebtedness of not more than 65% of its consolidated total capitalization pursuant to a defined calculation set forth in the agreements. As of December 31, 2019, the ratios of consolidated indebtedness to total consolidated capitalization, calculated in accordance with the provisions of the Credit Agreements, were 54%, 49%, and 47%, for Ameren, Ameren Missouri, and Ameren Illinois, respectively.

The Credit Agreements contain default provisions that apply separately to each borrower. However, a default of Ameren Missouri or Ameren Illinois under the applicable credit agreement is also deemed to constitute a default of Ameren (parent) under such agreement. Defaults include a cross-default resulting from a default of such borrower under any other agreement covering outstanding indebtedness of such borrower and certain subsidiaries (other than project finance subsidiaries and nonmaterial subsidiaries) in excess of $100 million in the aggregate (including under the other credit agreement). However, under the default provisions of the Credit Agreements, any default of Ameren (parent) under either credit agreement that results solely from a default of Ameren Missouri or Ameren Illinois does not result in a cross-default of Ameren (parent) under the other credit agreement. Further, the Credit Agreements default provisions provide that an Ameren (parent) default under either of the Credit Agreements does not constitute a default by Ameren Missouri or Ameren Illinois.

None of the Credit Agreements or financing agreements contain credit rating triggers that would cause a default or acceleration of repayment of outstanding balances. The Ameren Companies were in compliance with the provisions and covenants of the Credit Agreements at December 31, 2019*.*

Money Pools

Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements.

Ameren Missouri, Ameren Illinois, and ATXI may participate in the utility money pool as both lenders and borrowers. Ameren (parent) and Ameren Services may participate in the utility money pool only as lenders. Surplus internal funds are contributed to the money pool from participants. The primary sources of external funds for the utility money pool are the Credit Agreements and the commercial paper programs. The total amount available to the pool participants from the utility money pool at any given time is reduced by the amount of borrowings made by participants, but it is increased to the extent that the pool participants advance surplus funds to the utility money pool or remit funds from other external sources. The availability of funds is also determined by funding requirement limits established by regulatory authorizations.

Participants receiving a loan under the utility money pool agreement must repay the principal amount of such loan, together with accrued interest. The rate of interest depends on the composition of internal and external funds in the utility money pool. The average interest rate for borrowing under the utility money pool for the year ended December 31, 2019, was 2.48% (2018 – 2.10%).

See Note 13 – Related-party Transactions for the amount of interest income and expense from the utility money pool agreement recorded by Ameren Missouri and Ameren Illinois for the years ended December 31, 2019, 2018, and 2017.

NOTE 5 – LONG-TERM DEBT AND EQUITY FINANCINGS

The following table presents long-term debt outstanding, including maturities due within one year, as of December 31, 2019 and 2018:

	2019				2018
Ameren (Parent):
2.70% Senior unsecured notes due 2020	$	350			$	350
2.50% Senior unsecured notes due 2024	450				—
3.65% Senior unsecured notes due 2026	350				350
Total long-term debt, gross	1,150				700
Less: Unamortized debt issuance costs	(6		)		(3		)
Less: Maturities due within one year	(350		)		—
Long-term debt, net	$	794			$	697
Ameren Missouri:
Bonds and notes:
6.70% Senior secured notes due 2019	$	—			$	329
5.10% Senior secured notes due 2019	—				244
5.00% Senior secured notes due 2020(a)	85				85
1.60% 1992 Series bonds due 2022(b)(c)	47				47
3.50% Senior secured notes due 2024(a)	350				350
2.95% Senior secured notes due 2027(a)	400				400
5.45% First mortgage bonds due 2028	—				(d)
3.50% First mortgage bonds due 2029(f)	450				—
2.90% 1998 Series A bonds due 2033(b)(c)	60				60
2.90% 1998 Series B bonds due 2033(b)(c)	50				50
2.75% 1998 Series C bonds due 2033(b)(c)	50				50
5.50% Senior secured notes due 2034(a)	184				184
5.30% Senior secured notes due 2037(a)	300				300
8.45% Senior secured notes due 2039(a)(e)	350				350
3.90% Senior secured notes due 2042(a)(e)	485				485
3.65% Senior secured notes due 2045(a)	400				400
4.00% First mortgage bonds due 2048(f)	425				425
3.25% First mortgage bonds due 2049(f)	330				—
Finance obligations:
City of Bowling Green agreement (Peno Creek CT) due 2022(g)	23				30
Audrain County agreement (Audrain County CT) due 2023(g)	240				240
Total long-term debt, gross	4,229				4,029
Less: Unamortized discount and premium	(9		)		(9		)
Less: Unamortized debt issuance costs	(30		)		(22		)
Less: Maturities due within one year	(92		)		(580		)
Long-term debt, net	$	4,098			$	3,418

	2019				2018
Ameren Illinois:
Bonds and notes:
2.70% Senior secured notes due 2022(h)(i)	$	400			$	400
5.90% First mortgage bonds due 2023	—				(d)
5.70% First mortgage bonds due 2024	—				(d)
3.25% Senior secured notes due 2025(h)	300				300
6.125% Senior secured notes due 2028(h)	60				60
1993 Series B-1 Senior unsecured notes due 2028(c)	—				17
3.80% First mortgage bonds due 2028(j)	430				430
6.70% Senior secured notes due 2036(h)	61				61
6.70% Senior secured notes due 2036(h)	42				42
4.80% Senior secured notes due 2043(h)	280				280
4.30% Senior secured notes due 2044(h)	250				250
4.15% Senior secured notes due 2046(h)	490				490
3.70% First mortgage bonds due 2047(j)	500				500
4.50% First mortgage bonds due 2049(j)	500				500
3.25% First mortgage bonds due 2050(j)	300				—
Total long-term debt, gross	3,613				3,330
Less: Unamortized discount and premium	(4		)		(3		)
Less: Unamortized debt issuance costs	(34		)		(31		)
Long-term debt, net	$	3,575			$	3,296
ATXI:
3.43% Senior notes due 2050(k)	$	450			$	450
Total long-term debt, gross	450				450
Less: Unamortized debt issuance costs	(2		)		(2		)
Long-term debt, net	$	448			$	448
Ameren consolidated long-term debt, net	$	8,915			$	7,859

(a)

These notes are collaterally secured by first mortgage bonds issued by Ameren Missouri under the Ameren Missouri mortgage indenture. The notes have a fall-away lien provision and will remain secured only as long as any first mortgage bonds issued under the Ameren Missouri mortgage indenture remain outstanding. Redemption, purchase, or maturity of all first mortgage bonds, including first mortgage bonds currently outstanding and any that may be issued in the future, would result in a release of the first mortgage bonds currently securing these notes, at which time these notes would become unsecured obligations. Considering the 2049 maturity of the 3.25% first mortgage bonds and the restrictions preventing a release date to occur that are attached to certain senior secured notes described in footnote (e) below, Ameren Missouri does not expect the first mortgage lien protection associated with these notes to fall away.

(b)	These bonds are collaterally secured by first mortgage bonds issued by Ameren Missouri under the Ameren Missouri mortgage indenture and have a fall-away lien provision similar to that of Ameren Missouri’s senior secured notes.

(c)

Prior to the change in the method of determining the interest rates applicable to the Ameren Missouri bonds and the extinguishment of Ameren Illinois’ senior unsecured notes, the interest rates and the periods during which such rates apply varied depending on our selection of defined rate modes. The average interest rates for the respective applicable period in 2019 and the year ended December 31, 2018 were as follows:

	2019		2018
Ameren Missouri 1992 Series due 2022	2.58%		2.37%
Ameren Missouri 1998 Series A due 2033	3.43%		2.76%
Ameren Missouri 1998 Series B due 2033	3.57%		2.79%
Ameren Missouri 1998 Series C due 2033	3.43%		2.83%
Ameren Illinois 1993 Series B-1 due 2028	1.68%		1.58%

(d)	Amount less than $1 million.

(e)	Ameren Missouri has agreed that so long as any of the 3.90% senior secured notes due 2042 are outstanding, Ameren Missouri will not permit a release date to occur, and so long as any of the 8.45% senior secured notes due 2039 are outstanding, Ameren Missouri will not optionally redeem, purchase, or otherwise retire in full the outstanding first mortgage bonds not subject to release provisions.

(f)	These bonds are first mortgage bonds issued by Ameren Missouri under the Ameren Missouri bond indenture. They are secured by substantially all Ameren Missouri property and franchises.

(g)

Payments due related to these financing obligations are paid to a trustee, which is authorized to utilize the cash only to pay equal amounts due to Ameren Missouri under related bonds issued by the city/county and held by Ameren Missouri. The timing and amounts of payments due from Ameren Missouri under the agreements are equal to the timing and amount of bond service payments due to Ameren Missouri, resulting in no net cash flow. The balance of both the financing obligations and the related investments in debt securities, recorded in “Other Assets,” was $263 million and $270 million, respectively, as of December 31, 2019 and 2018.

(h)

These notes are collaterally secured by first mortgage bonds issued by Ameren Illinois under its mortgage indenture. They are secured by substantially all Ameren Illinois property and franchises. The notes have a fall-away lien provision and will remain secured only as long as any series of first mortgage bonds issued under its mortgage indenture remain outstanding. Redemption, purchase, or maturity of all first mortgage bonds, including first mortgage bonds currently outstanding and any that may be issued in the future, would result in a release of the first mortgage bonds currently securing these notes, at which time these notes would become unsecured obligations. Considering the 2050 maturity date of the 3.25% first mortgage bonds, Ameren Illinois does not expect the first mortgage lien protection associated with these notes to fall away.

(i)	Ameren Illinois has agreed that so long as any of the 2.70% senior secured notes due 2022 are outstanding, Ameren Illinois will not permit a release date to occur.

(j)	These bonds are first mortgage bonds issued by Ameren Illinois under its mortgage indenture. They are secured by substantially all Ameren Illinois property and franchises.

(k)	The following table presents the principal maturities schedule for the 3.43% senior notes due 2050:

Payment Date		Principal Payment
August 2022	$	49.5
August 2024		49.5
August 2027		49.5
August 2030		49.5
August 2032		49.5
August 2038		49.5
August 2043		76.5
August 2050		76.5
Total	$	450.0

The following table presents the aggregate maturities of long-term debt, including current maturities, at December 31, 2019:

	Ameren (parent)****(a)				Ameren Missouri**(a)**				Ameren Illinois**(a)**				ATXI**(a)**				Ameren Consolidated**(a)**
2020	$	350			$	92			$	—			$	—			$	442
2021	—				8				—				—				8
2022	—				55				400				50				505
2023	—				240				—				—				240
2024	450				350				—				50				850
Thereafter	350				3,484				3,213				350				7,397
Total	$	1,150			$	4,229			$	3,613			$	450			$	9,442

(a)	Excludes unamortized discount, unamortized premium, and debt issuance costs of $6 million, $39 million, $38 million and $2 million at Ameren (parent), Ameren Missouri, Ameren Illinois and ATXI, respectively.

All classes of Ameren Missouri’s and Ameren Illinois’ preferred stock are entitled to cumulative dividends, have voting rights, and are not subject to mandatory redemption. The preferred stock of Ameren’s subsidiaries is included in “Noncontrolling Interests” on Ameren’s consolidated balance sheet. The following table presents the outstanding preferred stock of Ameren Missouri and Ameren Illinois, which is redeemable at the option of the issuer, at the prices shown below as of December 31, 2019 and 2018:

	Shares Outstanding		Redemption Price (per share)				2019				2018
Ameren Missouri:
Without par value and stated value of $100 per share, 25 million shares authorized
$3.50 Series	130,000 shares		$	110.00			$	13			$	13
$3.70 Series	40,000 shares		104.75				4				4
$4.00 Series	150,000 shares		105.625				15				15
$4.30 Series	40,000 shares		105.00				4				4
$4.50 Series	213,595 shares		110.00			(a)	21				21
$4.56 Series	200,000 shares		102.47				20				20
$4.75 Series	20,000 shares		102.176				2				2
$5.50 Series A	14,000 shares		110.00				1				1
Total							$	80			$	80
Ameren Illinois:
With par value of $100 per share, 2 million shares authorized
4.00% Series	144,275 shares		$	101.00			$	14			$	14
4.08% Series	45,224 shares		103.00				5				5
4.20% Series	23,655 shares		104.00				2				2
4.25% Series	50,000 shares		102.00				5				5
4.26% Series	16,621 shares		103.00				2				2
4.42% Series	16,190 shares		103.00				2				2
4.70% Series	18,429 shares		103.00				2				2
4.90% Series	73,825 shares		102.00				7				7
4.92% Series	49,289 shares		103.50				5				5
5.16% Series	50,000 shares		102.00				5				5
6.625% Series	124,274 shares		100.00				12				12
7.75% Series	4,542 shares		100.00				1				1
Total							$	62			$	62
Total Ameren							$	142			$	142

(a)	In the event of voluntary liquidation, $105.50.

Ameren has 100 million shares of $0.01 par value preferred stock authorized, with no such shares outstanding. Ameren Missouri has 7.5 million shares of $1 par value preference stock authorized, with no such shares outstanding. Ameren Illinois has 2.6 million shares of no par value preferred stock authorized, with no such shares outstanding.

Ameren

Under the DRPlus and its 401(k) plan, Ameren issued 0.9 million and 1.2 million shares of common stock in 2019 and 2018, respectively, and received proceeds of $68 million and $74 million for the respective years. In addition, Ameren issued 0.8 million and 0.7 million shares of common stock valued at $54 million and $35 million in 2019 and 2018, respectively, for no cash consideration in connection with stock-based compensation. Ameren did not issue any common stock in 2017.

In October 2018, Ameren filed a Form S-8 registration statement with the SEC, authorizing the offering of 4 million additional shares of its common stock under its 401(k) plan. Shares of common stock issuable under the 401(k) plan are, at Ameren’s option, newly issued shares, treasury shares, or shares purchased in the open market or in privately negotiated transactions.

In May 2017, Ameren filed a Form S-3 registration statement with the SEC, authorizing the offering of 6 million additional shares of its common stock under the DRPlus, which expires in May 2020. Shares of common stock sold under the DRPlus are, at Ameren’s option, newly issued shares, treasury shares, or shares purchased in the open market or in privately negotiated transactions..

In December 2017, Ameren, Ameren Missouri, and Ameren Illinois filed a Form S-3 shelf registration statement with the SEC, registering the issuance of an indeterminate amount of certain types of securities. The registration statement became effective immediately upon filing and expires in December 2020.

In August 2019, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million shares of common stock. The forward sale agreement can be settled at Ameren’s discretion on or prior to March 31, 2021. On a settlement date or dates, if Ameren elects to physically settle the forward sale agreement, Ameren will issue shares of common stock to the counterparty at the then-applicable forward sale price. The forward sale price was initially $74.18 per share. The initial forward price is subject to adjustment based on a floating interest rate factor equal to the overnight bank funding rate less a spread of 75 basis points, and will be subject to decrease on certain dates specified in the forward sale agreement by specified amounts related to expected dividends on shares of the common stock during the term of the forward sale agreement. If the overnight bank funding rate is less than the spread on any day, the interest rate factor will result in a reduction of the forward sale price.

The forward sale agreement will be physically settled unless Ameren elects to settle in cash or to net share settle. At December 31, 2019, Ameren could have settled the forward sale agreement with physical delivery of 7.5 million shares of common stock to the counterparty in exchange for cash of $555 million. The forward sale could have also been settled at December 31, 2019, with delivery of approximately $25 million of cash or approximately 0.3 million shares of common stock to the counterparty, if Ameren had elected to net cash or net share, respectively.

The forward sale agreement has been classified as an equity transaction because it is indexed to Ameren’s common stock, physical settlement is within Ameren’s control, and the other requirements necessary for equity classification were met. As a result of the equity classification, no gain or loss will be recognized within earnings due to subsequent changes in the fair value of the forward sale agreement. If the average price of Ameren’s common stock exceeds the adjusted forward sale price during a quarterly period, the forward sale agreement could have a dilutive effect on earnings per share.

In September 2019, Ameren issued $450 million of 2.50% senior unsecured notes due September 2024, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2020. Ameren received net proceeds of $447 million, which were used to repay outstanding short-term debt.

Ameren Missouri

In February 2020, $85 million principal amount of Ameren Missouri’s 5.00% senior secured notes matured and were repaid with commercial paper borrowings.

In March 2019, Ameren Missouri issued $450 million of 3.50% first mortgage bonds due March 2029, with interest payable semiannually on March 15 and September 15 of each year, beginning September 15, 2019. Ameren Missouri received net proceeds of $447 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Missouri incurred in connection with the repayment of $329 million of its 6.70% senior secured notes that matured February 1, 2019.

In June and July 2019, all of the 1992 Series bonds, 1998 Series A bonds, 1998 Series B bonds, and 1998 Series C bonds issued by the Missouri Environmental Authority on behalf of Ameren Missouri were subject to purchase in lieu of redemption or a mandatory tender as a result of a change in the method of determining the interest rates on the bonds. The interest rate method of each of the series of bonds, as well as Ameren Missouri’s first mortgage bonds that collaterally secure each of the series of bonds, was changed from a variable rate to a fixed rate. Upon the change in the method of determining the interest rate, the bonds, totaling $207 million, were remarketed to new investors. The following table provides additional information on the bonds:

	1992 Series	1998 Series A	1998 Series B	1998 Series C
Transaction month	June 2019	July 2019	July 2019	June 2019
Principal amount	$47	$60	$50	$50
Fixed interest rate	1.60%	2.90%	2.90%	2.75%
Variable interest rate(a)	2.58%	3.43%	3.57%	3.43%
Maturity	December 2022	September 2033	September 2033	September 2033
Interest payment dates	June 1 and December 1	March 1 and September 1	March 1 and September 1	March 1 and September 1
Initial interest payment date	December 2019	September 2019	September 2019	September 2019

(a)	Represents the variable interest rate of the bonds effective prior to the change in method of determining the interest rate.

In October 2019, Ameren Missouri issued $330 million of 3.25% first mortgage bonds due October 2049, with interest payable semiannually on April 1 and October 1 of each year, beginning April 1, 2020. Ameren Missouri received net proceeds of $326 million, which were used to repay $244 million of its 5.10% senior unsecured notes due October 1, 2019, with the remaining proceeds used to repay a portion of its short-term debt.

In October 2019, Ameren Missouri redeemed the remaining amount outstanding of its 5.45% first mortgage bonds due 2028 for less than $1 million.

In April 2018, Ameren Missouri issued $425 million of 4.00% first mortgage bonds due April 2048, with interest payable semiannually on April 1 and October 1 of each year, beginning October 1, 2018. Ameren Missouri received net proceeds of $419 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Missouri incurred in connection with the repayment of $179 million of its 6.00% senior secured notes that matured April 1, 2018.

In August 2018, $199 million principal amount of Ameren Missouri’s 5.10% senior secured notes matured and were repaid with cash on hand.

For information on Ameren Missouri’s capital contributions, refer to Capital Contributions in Note 13 – Related-party Transactions.

Ameren Illinois

In 2006, Ameren Illinois purchased all $17 million of the 1993 Series B-1 bonds due 2028 issued by the Illinois Finance Authority on behalf of Ameren Illinois pursuant to a mandatory tender. Ameren Illinois’ 1993 Series B-1 senior unsecured notes due 2028 were not extinguished and remained as “Long-term debt, net” on Ameren’s and Ameren Illinois’ balance sheets. In September 2019, Ameren Illinois exchanged its bond investments for the extinguishment of its senior unsecured notes.

In September 2019, Ameren Illinois redeemed the remaining amount outstanding of its 5.70% first mortgage bonds due 2024 for less than $1 million. Additionally, in October 2019, Ameren Illinois redeemed the remaining amount outstanding of its 5.90% first mortgage bonds due 2023 for less than $1 million. Following the redemption of the 5.90% first mortgage bonds, Ameren Illinois collaterally secured its 6.70% senior secured notes due 2036 with first mortgage bonds issued under its mortgage indenture.

In November 2019, Ameren Illinois issued $300 million of 3.25% first mortgage bonds due March 2050, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2020. Ameren Illinois received net proceeds of $296 million, which were used to repay outstanding short-term debt.

In May 2018, Ameren Illinois issued $430 million of 3.80% first mortgage bonds due May 2028, with interest payable semiannually on May 15 and November 15 of each year, beginning November 15, 2018. Ameren Illinois received net proceeds of $427 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Illinois incurred in connection with the repayment of $144 million of its 6.25% senior secured notes that matured April 1, 2018.

In November 2018, Ameren Illinois issued $500 million of 4.50% first mortgage bonds due March 2049, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2019. Ameren Illinois received net proceeds of $495 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Illinois incurred in connection with the repayment of $313 million of its 9.75% senior secured notes that matured November 15, 2018.

For information on Ameren Illinois’ capital contributions, refer to Capital Contributions in Note 13 – Related-party Transactions.

Indenture Provisions and Other Covenants

Ameren Missouri’s and Ameren Illinois’ indentures and articles of incorporation include covenants and provisions related to issuances of first mortgage bonds and preferred stock. Ameren Missouri and Ameren Illinois are required to meet certain ratios to issue additional first mortgage bonds and preferred stock. A failure to achieve these ratios would not result in a default under these covenants and provisions but would restrict the companies’ ability to issue bonds or preferred stock. The following table summarizes the required and actual interest coverage ratios for interest charges, dividend coverage ratios, and bonds and preferred stock issuable as of December 31, 2019, at an assumed interest rate of 5% and dividend rate of 6%.

	Required Interest Coverage Ratio**(a)**	Actual Interest Coverage Ratio		Bonds Issuable**(b)**				Required Dividend Coverage Ratio**(c)**	Actual Dividend Coverage Ratio		Preferred Stock Issuable
Ameren Missouri	>2.0	4.0		$	5,251			>2.5	125.7		$	2,808
Ameren Illinois	>2.0	6.8		6,668				>1.5	3.2		203			(d)

(a)	Coverage required on the annual interest charges on first mortgage bonds outstanding and to be issued. Coverage is not required in certain cases when additional first mortgage bonds are issued on the basis of retired bonds.

(b)	Amount of bonds issuable based either on required coverage ratios or unfunded property additions, whichever is more restrictive. The amounts shown also include bonds issuable based on retired bond capacity of $2,358 million and $643 million at Ameren Missouri and Ameren Illinois, respectively.

(c)	Coverage required on the annual dividend on preferred stock outstanding and to be issued, as required in the respective company’s articles of incorporation.

(d)	Preferred stock issuable is restricted by the amount of preferred stock that is currently authorized by Ameren Illinois’ articles of incorporation.

Ameren’s indenture does not require Ameren to comply with any quantitative financial covenants. The indenture does, however, include certain cross-default provisions. Specifically, either (1) the failure by Ameren to pay when due and upon expiration of any applicable grace period any portion of any Ameren indebtedness in excess of $25 million, or (2) the acceleration upon default of the maturity of any Ameren

indebtedness in excess of $25 million under any indebtedness agreement, including borrowings under the Credit Agreements or the Ameren commercial paper program, constitutes a default under the indenture, unless such past due or accelerated debt is discharged or the acceleration is rescinded or annulled within a specified period.

Ameren Missouri and Ameren Illinois and certain other nonregistrant Ameren subsidiaries are subject to Section 305(a) of the Federal Power Act, which makes it unlawful for any officer or director of a public utility, as defined in the Federal Power Act, to participate in the making or paying of any dividend from any funds “properly included in capital account.” The FERC has consistently interpreted the provision to allow dividends to be paid as long as (1) the source of the dividends is clearly disclosed, (2) the dividends are not excessive, and (3) there is no self-dealing on the part of corporate officials. At a minimum, Ameren believes that dividends can be paid by its subsidiaries that are public utilities from net income and retained earnings. In addition, under Illinois law, Ameren Illinois and ATXI may not pay any dividend on their respective stock unless, among other things, their respective earnings and earned surplus are sufficient to declare and pay a dividend after provisions are made for reasonable and proper reserves, or unless Ameren Illinois or ATXI has specific authorization from the ICC.

Ameren Illinois’ articles of incorporation require dividend payments on its common stock to be based on ratios of common stock to total capitalization and other provisions related to certain operating expenses and accumulations of earned surplus. Ameren Illinois has made a commitment to the FERC to maintain a minimum 30% ratio of common stock equity to total capitalization. As of December 31, 2019, using the FERC-agreed upon calculation method, Ameren Illinois’ ratio of common stock equity to total capitalization was 51%.

ATXI’s note purchase agreement includes financial covenants that require ATXI not to permit at any time (1) debt to exceed 70% of total capitalization or (2) secured debt to exceed 10% of total assets.

At December 31, 2019, the Ameren Companies were in compliance with the provisions and covenants contained in their indentures and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement. In order for the Ameren Companies to issue securities in the future, they will have to comply with all applicable requirements in effect at the time of any such issuances.

Off-Balance-Sheet Arrangements

At December 31, 2019, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than the forward sale agreement relating to common stock, variable interest entities, letters of credit, and Ameren (parent) guarantee arrangements on behalf of its subsidiaries. See Note 1 – Summary of Significant Accounting Policies for further detail concerning variable interest entities.

NOTE 6 – OTHER INCOME, NET

The following table presents the components of “Other Income, Net” in the Ameren Companies’ statements of income for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Ameren:
Other Income, Net
Allowance for equity funds used during construction	$	28			$	36			$	24
Interest income on industrial development revenue bonds	25				26				26
Other interest income	8				7				8
Non-service cost components of net periodic benefit income	90			(a)	70			(a)	44
Other income	6				8				5
Charitable donations	(12		)		(33		)		(8		)
Other expense	(15		)		(12		)		(13		)
Total Other Income, Net	$	130			$	102			$	86
Ameren Missouri:
Other Income, Net
Allowance for equity funds used during construction	$	19			$	27			$	21
Interest income on industrial development revenue bonds	25				26				26
Other interest income	1				2				1
Non-service cost components of net periodic benefit income	18			(a)	17			(a)	22
Other income	5				4				3
Charitable donations	(3		)		(14		)		(2		)
Other expense	(7		)		(6		)		(6		)
Total Other Income, Net	$	58			$	56			$	65

	2019				2018				2017
Ameren Illinois:
Other Income, Net
Allowance for equity funds used during construction	$	9			$	9			$	3
Interest income	6				6				7
Non-service cost components of net periodic benefit income	47				34				10
Other income	3				3				2
Charitable donations	(5		)		(6		)		(5		)
Other expense	(7		)		(4		)		(5		)
Total Other Income, Net	$	53			$	42			$	12

(a)	For the years ended December 31, 2019, and 2018, the non-service cost components of net periodic benefit income were partially offset by a deferral of $29 million and $17 million, respectively, due to a regulatory tracking mechanism for the difference between the level of such costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.

NOTE 7 – DERIVATIVE FINANCIAL INSTRUMENTS

We use derivatives to manage the risk of changes in market prices for natural gas, power and uranium, as well as the risk of changes in rail transportation surcharges through fuel oil hedges. Such price fluctuations may cause the following:

•	an unrealized appreciation or depreciation of our contracted commitments to purchase or sell when purchase or sale prices under the commitments are compared with current commodity prices;

•	market values of natural gas and uranium inventories that differ from the cost of those commodities in inventory;

•	actual cash outlays for the purchase of these commodities that differ from anticipated cash outlays; and

•	actual off-system sales revenues that differ from anticipated revenues.

The derivatives that we use to hedge these risks are governed by our risk management policies for forward contracts, futures, options, and swaps. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The goal of the hedging program is generally to mitigate financial risks while ensuring that sufficient volumes are available to meet our requirements. Contracts we enter into as part of our risk management program may be settled financially, settled by physical delivery, or net settled with the counterparty.

All contracts considered to be derivative instruments are required to be recorded on the balance sheet at their fair values, unless the NPNS exception applies. See Note 8 – Fair Value Measurements for discussion of our methods of assessing the fair value of derivative instruments. Many of our physical contracts, such as our purchased power contracts, qualify for the NPNS exception to derivative accounting rules. The revenue or expense on NPNS contracts is recognized at the contract price upon physical delivery. The following disclosures exclude NPNS contracts and other non-derivative commodity contracts that are accounted for under the accrual method of accounting.

If we determine that a contract meets the definition of a derivative and is not eligible for the NPNS exception, we review the contract to determine whether the resulting gains or losses qualify for regulatory deferral. Derivative contracts that qualify for regulatory deferral are recorded at fair value, with changes in fair value recorded as regulatory assets or liabilities in the period in which the change occurs. We believe derivative losses and gains deferred as regulatory assets and liabilities are probable of recovery, or refund, through future rates charged to customers. Regulatory assets and liabilities are amortized to operating income as related losses and gains are reflected in rates charged to customers. Therefore, gains and losses on these derivatives have no effect on operating income. As of December 31, 2019 and 2018, all contracts that met the definition of a derivative and were not eligible for the NPNS exception received regulatory deferral. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.

The following table presents open gross commodity contract volumes by commodity type for derivative assets and liabilities as of December 31, 2019 and 2018. As of December 31, 2019, these contracts extended through October 2022, March 2024, May 2032, and March 2023 for fuel oils, natural gas, power, and uranium, respectively.

	Quantity (in millions, except as indicated)
	2019						2018
Commodity	Ameren Missouri		Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois		Ameren
Fuel oils (in gallons)	58		—		58		66		—		66
Natural gas (in mmbtu)	20		136		156		19		154		173
Power (in megawatthours)	5		7		12		1		8		9
Uranium (pounds in thousands)	565		—		565		380		—		380

The following table presents the carrying value and balance sheet location of all derivative commodity contracts, none of which were designated as hedging instruments, as of December 31, 2019 and 2018:

			2019												2018
Commodity	Balance Sheet Location		Ameren Missouri				Ameren Illinois				Ameren					Ameren Missouri				Ameren Illinois				Ameren
Fuel oils	Other current assets	$	4			$	—			$	4				$	3			$	—			$	3
	Other assets		2				—				2					5				—				5
Natural gas	Other current assets		—				3				3					—				1				1
	Other assets		—				1				1					—				2				2
Power	Other current assets		14				—				14					4				—				4
	Other assets		2				—				2					—				—				—
	Total assets	$	22			$	4			$	26				$	12			$	3			$	15
Fuel oils	Other current liabilities	$	4			$	—			$	4				$	4			$	—			$	4
	Other deferred credits and liabilities		3				—				3					9				—				9
Natural gas	Other current liabilities		1				12				13					4				8				12
	Other deferred credits and liabilities		1				6				7					1				6				7
Power	Other current liabilities		2				17				19					4				14				18
	Other deferred credits and liabilities		1				207				208					—				169				169
Uranium	Other deferred credits and liabilities		1				—				1					—				—				—
	Total liabilities	$	13			$	242			$	255				$	22			$	197			$	219

The Ameren Companies elect to present the fair value amounts of derivative assets and derivative liabilities subject to an enforceable master netting arrangement or similar agreement at the gross amounts on the balance sheet. However, if the gross amounts recognized on the balance sheet were netted with derivative instruments and cash collateral received or posted, the net amounts would not be materially different from the gross amounts at December 31, 2019 and 2018.

Credit Risk

In determining our concentrations of credit risk related to derivative instruments, we review our individual counterparties and categorize each counterparty into groupings according to the primary business in which each engages. As of December 31, 2019, if counterparty groups were to fail completely to perform on contracts, the Ameren Companies’ maximum exposure related to derivative assets would have been immaterial with or without consideration of the application of master netting arrangements or similar agreements and collateral held.

Certain of our derivative instruments contain collateral provisions tied to the Ameren Companies’ credit ratings. If our credit ratings were downgraded below investment grade, or if a counterparty with reasonable grounds for uncertainty regarding our ability to satisfy an obligation requested adequate assurance of performance, additional collateral postings might be required. The additional collateral required is the net liability position allowed under the master netting arrangements or similar agreements, assuming (1) the credit risk-related contingent features underlying these arrangements were triggered and (2) those counterparties with rights to do so requested collateral. As of December 31, 2019, the aggregate fair value of derivative instruments with credit risk-related contingent features in a gross liability position, the cash collateral posted, and the aggregate amount of additional collateral that counterparties could require were each immaterial to Ameren, Ameren Missouri, and Ameren Illinois.

NOTE 8 – FAIR VALUE MEASUREMENTS

Fair value is defined as the 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 the following three hierarchy levels:

Level 1 (quoted prices in active markets for identical assets or liabilities): Inputs based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities are primarily exchange-traded derivatives, cash and cash equivalents, and listed equity securities.

The market approach is used to measure the fair value of equity securities held in Ameren Missouri’s nuclear decommissioning trust fund. Equity securities in this fund are representative of the S&P 500 index, excluding securities of Ameren Corporation, owners and/or operators of nuclear power plants, and the trustee and investment managers. The S&P 500 index comprises stocks of large-capitalization companies.

Level 2 (significant other observable inputs): Market-based inputs corroborated by third-party brokers or exchanges based on transacted market data. Level 2 assets and liabilities include certain assets held in Ameren Missouri’s nuclear decommissioning trust fund, including United States Treasury and agency securities, corporate bonds and other fixed-income securities, and certain over-the-counter derivative instruments, including natural gas and financial power transactions.

Fixed income securities are valued by using prices from independent industry-recognized data vendors who provide values that are either exchange-based or matrix-based. The fair value measurements of fixed-income securities classified as Level 2 are based on inputs other than quoted prices that are observable for the asset or liability. Examples are matrix pricing, market corroborated pricing, and inputs such as yield curves and indices.

Derivative instruments classified as Level 2 are valued by corroborated observable inputs, such as pricing services or prices from similar instruments that trade in liquid markets. Our development and corroboration process entails obtaining multiple quotes or prices from outside sources. To derive our forward view to price our derivative instruments at fair value, we average the bid/ask spreads to the midpoints. To validate forward prices obtained from outside parties, we compare the pricing to recently settled market transactions. Additionally, a review of all sources is performed to identify any anomalies or potential errors. Further, we consider the volume of transactions on certain trading platforms in our reasonableness assessment of the averaged midpoints. The value of natural gas derivative contracts is based upon exchange closing prices without significant unobservable adjustments. The value of power derivative contracts is based upon exchange closing prices or the use of multiple forward prices provided by third parties. The prices are averaged and shaped to a monthly profile when needed without significant unobservable adjustments.

Level 3 (significant other unobservable inputs): Unobservable inputs that are not corroborated by market data. Level 3 assets and liabilities are valued by internally developed models and assumptions or methodologies that use significant unobservable inputs. Level 3 assets and liabilities include derivative instruments that trade in less liquid markets, where pricing is largely unobservable. We value Level 3 instruments by using pricing models with inputs that are often unobservable in the market, such as certain internal assumptions, quotes or prices from outside sources not supported by a liquid market, or trend rates. Our development and corroboration process entails reasonableness reviews and an evaluation of all sources to identify any anomalies or potential errors.

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.

We consider nonperformance risk in our valuation of derivative instruments by analyzing our own credit standing and the credit standing of our counterparties, and by considering any credit enhancements (e.g., collateral). 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 material gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in 2019, 2018, or 2017. At December 31, 2019 and 2018, the counterparty default risk valuation adjustment related to derivative contracts was immaterial for Ameren, Ameren Missouri, and Ameren Illinois.

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, 2019 and 2018:

		December 31, 2019														December 31, 2018
		Level 1			Level 2			Level 3			Total					Level 1			Level 2			Level 3			Total
Assets:
Ameren	Derivative assets – commodity contracts:
	Fuel oils	$	—		$	—		$	6		$	6				$	1		$	—		$	7		$	8
	Natural gas	—			1			3			4					—			2			1			3
	Power	—			2			14			16					—			1			3			4
	Total derivative assets – commodity contracts	$	—		$	3		$	23		$	26				$	1		$	3		$	11		$	15
	Nuclear decommissioning trust fund:
	Equity securities:
	U.S. large capitalization	$	569		$	—		$	—		$	569				$	427		$	—		$	—		$	427
	Debt securities:
	U.S. Treasury and agency securities	—			107			—			107					—			148			—			148
	Corporate bonds	—			93			—			93					—			72			—			72
	Other	—			73			—			73					—			32			—			32
	Total nuclear decommissioning trust fund	$	569		$	273		$	—		$	842		(a)		$	427		$	252		$	—		$	679		(a)
	Total Ameren	$	569		$	276		$	23		$	868				$	428		$	255		$	11		$	694
Ameren Missouri	Derivative assets – commodity contracts:
	Fuel oils	$	—		$	—		$	6		$	6				$	1		$	—		$	7		$	8
	Power	—			2			14			16					—			1			3			4
	Total derivative assets – commodity contracts	$	—		$	2		$	20		$	22				$	1		$	1		$	10		$	12
	Nuclear decommissioning trust fund:
	Equity securities:
	U.S. large capitalization	$	569		$	—		$	—		$	569				$	427		$	—		$	—		$	427
	Debt securities:
	U.S. Treasury and agency securities	—			107			—			107					—			148			—			148
	Corporate bonds	—			93			—			93					—			72			—			72
	Other	—			73			—			73					—			32			—			32
	Total nuclear decommissioning trust fund	$	569		$	273		$	—		$	842		(a)		$	427		$	252		$	—		$	679		(a)
	Total Ameren Missouri	$	569		$	275		$	20		$	864				$	428		$	253		$	10		$	691
Ameren Illinois	Derivative assets – commodity contracts:
	Natural gas	$	—		$	1		$	3		$	4				$	—		$	2		$	1		$	3
Liabilities:
Ameren	Derivative liabilities – commodity contracts:
	Fuel oils	$	1		$	—		$	6		$	7				$	2		$	—		$	11		$	13
	Natural gas	3			14			3			20					—			15			4			19
	Power	—			2			225			227					—			1			186			187
	Uranium	—			—			1			1					—			—			—			—
	Total Ameren	$	4		$	16		$	235		$	255				$	2		$	16		$	201		$	219
Ameren Missouri	Derivative liabilities – commodity contracts:
	Fuel oils	$	1		$	—		$	6		$	7				$	2		$	—		$	11		$	13
	Natural gas	—			2			—			2					—			5			—			5
	Power	—			2			1			3					—			1			3			4
	Uranium	—			—			1			1					—			—			—			—
	Total Ameren Missouri	$	1		$	4		$	8		$	13				$	2		$	6		$	14		$	22
Ameren Illinois	Derivative liabilities – commodity contracts:
	Natural gas	$	3		$	12		$	3		$	18				$	—		$	10		$	4		$	14
	Power	—			—			224			224					—			—			183			183
	Total Ameren Illinois	$	3		$	12		$	227		$	242				$	—		$	10		$	187		$	197

(a)	Balance excludes $5 million and $5 million of cash and cash equivalents, receivables, payables, and accrued income, net for December 31, 2019 and 2018, respectively.

See Note 10 – Retirement Benefits for tables that set forth, by level within the fair value hierarchy, Ameren’s pension and postretirement plan assets as of December 31, 2019 and 2018.

Level 3 fuel oils, natural gas and uranium derivative contract assets and liabilities measured at fair value on a recurring basis were immaterial for all periods presented. The following table presents the fair value reconciliation of Level 3 power derivative contract assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2019 and 2018:

	2019											2018
	Ameren Missouri			Ameren Illinois			Ameren					Ameren Missouri			Ameren Illinois			Ameren
Beginning balance at January 1	$	—		$	(183	)	$	(183	)			$	7		$	(195	)	$	(188	)
Realized and unrealized gains (losses) included in regulatory assets/liabilities	23			(56		)	(33		)			(6		)	—			(6		)
Purchases	—			—			—					5			—			5
Settlements	(7		)	15			8					(5		)	12			7
Transfers out of Level 3	(3		)	—			(3		)			(1		)	—			(1		)
Ending balance at December 31	$	13		$	(224	)	$	(211	)			$	—		$	(183	)	$	(183	)
Change in unrealized gains (losses) related to assets/liabilities held at December 31	$	12		$	(54	)	$	(42	)			$	(1	)	$	(2	)	$	(3	)

For the years ended December 31, 2019 and 2018, there were no material transfers between fair value hierarchy levels.

All gains or losses related to our Level 3 derivative commodity contracts are expected to be recovered or returned through customer rates; therefore, there is no impact to net income resulting from changes in the fair value of these instruments.

The following table describes the valuation techniques and significant unobservable inputs utilized for the fair value of our Level 3 power derivative contract assets and liabilities as of December 31, 2019 and 2018:

		Fair Value										Weighted Average**(b)**
	Commodity	Assets			Liabilities				Valuation Technique(s)	Unobservable Input**(a)**	Range
2019	Power(c)	$	14		$	(225	)		Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps($/MWh)	22 – 34	25
										Nodal basis($/MWh)	(6) – 0	(2)
										Trend rate(%)	(1) – 0	0
2018	Power(d)	$	3		$	(186	)		Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps($/MWh)	23 – 39	28
										Nodal basis($/MWh)	(9) – 0	(2)
									Fundamental energy production model	Estimated future natural gas prices($/mmbtu)	3 – 4	3

(a)	Generally, significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement.

(b)	Unobservable inputs were weighted by relative fair value.

(c)	Valuations through 2028 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2028 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.

(d)	Valuations through 2022 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2022 use a fundamental energy production model incorporating estimated future natural gas prices.

The following table sets forth, by level within the fair value hierarchy, the carrying amount and fair value of financial assets and liabilities disclosed, but not carried, at fair value as of December 31, 2019 and 2018:

	Carrying Amount				Fair Value
		Level 1				Level 2				Level 3				Total
Ameren:	December 31, 2019
Cash, cash equivalents, and restricted cash	$	176			$	176			$	—			$	—			$	176
Investments in industrial development revenue bonds(a)	263				—				263				—				263
Short-term debt	440				—				440				—				440
Long-term debt (including current portion)(a)	9,357			(b)	—				9,957				484			(c)	10,441
Ameren Missouri:
Cash, cash equivalents, and restricted cash	$	39			$	39			$	—			$	—			$	39
Investments in industrial development revenue bonds(a)	263				—				263				—				263
Short-term debt	234				—				234				—				234
Long-term debt (including current portion)(a)	4,190			(b)	—				4,772				—				4,772
Ameren Illinois:
Cash, cash equivalents, and restricted cash	$	125			$	125			$	—			$	—			$	125
Short-term debt	53				—				53				—				53
Long-term debt (including current portion)	3,575			(b)	—				4,019				—				4,019
	December 31, 2018
Ameren:
Cash, cash equivalents, and restricted cash	$	107			$	107			$	—			$	—			$	107
Investments in industrial development revenue bonds(a)	270				—				270				—				270
Short-term debt	597				—				597				—				597
Long-term debt (including current portion)(a)	8,439			(b)	—				8,240				429			(c)	8,669
Ameren Missouri:
Cash, cash equivalents, and restricted cash	$	8			$	8			$	—			$	—			$	8
Investments in industrial development revenue bonds(a)	270				—				270				—				270
Short-term debt	55				—				55				—				55
Long-term debt (including current portion)(a)	3,998			(b)	—				4,156				—				4,156
Ameren Illinois:
Cash, cash equivalents, and restricted cash	$	80			$	80			$	—			$	—			$	80
Short-term debt	72				—				72				—				72
Long-term debt (including current portion)	3,296			(b)	—				3,391				—				3,391

(a)

Ameren and Ameren Missouri have investments in industrial development revenue bonds, classified as held-to-maturity and recorded in “Other Assets,” that are equal to the finance obligations for the Peno Creek and Audrain CT energy centers. As of December 31, 2019 and 2018, the carrying amount of both the investments in industrial development revenue bonds and the finance obligations approximated fair value.

(b)

Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $72 million, $30 million, and $34 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2019. Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $58 million, $22 million, and $31 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2018.

(c)	The Level 3 fair value amount consists of ATXI’s senior unsecured notes.

NOTE 9 – CALLAWAY ENERGY CENTER

Spent Nuclear Fuel

Under the Nuclear Waste Policy Act of 1982, as amended, the DOE is responsible for disposing of spent nuclear fuel from the Callaway Energy Center and other commercial nuclear energy centers. As required by the act, Ameren Missouri and other utilities have entered into standard contracts with the DOE, which stated that the DOE would begin to dispose of spent nuclear fuel by 1998. However, the DOE failed to fulfill its disposal obligations, and Ameren Missouri and other nuclear energy center owners sued the DOE to recover costs incurred for ongoing storage of their spent fuel. Ameren Missouri’s lawsuit against the DOE resulted in a settlement agreement that provides for annual reimbursement of additional spent fuel storage and related costs. Ameren Missouri received reimbursements from the DOE of $21 million, $11 million, and $3 million in 2019, 2018, and 2017, respectively. Ameren Missouri will continue to apply for reimbursement from the DOE for allowable costs associated with the ongoing storage of spent fuel. The DOE’s delay in carrying out its obligation to dispose of spent nuclear fuel from the Callaway Energy Center is not expected to adversely affect the continued operations of the energy center.

Decommissioning

Electric rates charged to customers provide for the recovery of the Callaway Energy Center’s decommissioning costs, which include decontamination, dismantling, and site restoration costs, over the expected life of the nuclear energy center. Amounts collected from

customers are deposited into the external nuclear decommissioning trust fund to provide for the Callaway Energy Center’s decommissioning. It is assumed that the Callaway Energy Center site will be decommissioned after its retirement through the immediate dismantlement method and removed from service. The Callaway Energy Center’s operating license expires in 2044. Ameren and Ameren Missouri have recorded an ARO for the Callaway Energy Center decommissioning costs at fair value, which represents the present value of estimated future cash outflows. Annual decommissioning costs of $7 million are included in the costs used to establish electric rates for Ameren Missouri’s customers. Every three years, the MoPSC requires Ameren Missouri to file an updated cost study and funding analysis for decommissioning its Callaway Energy Center. An updated cost study and funding analysis was filed with the MoPSC in September 2017 and reflected within the ARO. In January 2018, the MoPSC approved no change in electric rates for decommissioning costs consistent with Ameren Missouri’s updated cost study and funding analysis.

The fair value of the trust fund for Ameren Missouri’s Callaway Energy Center is reported as “Nuclear decommissioning trust fund” in Ameren’s and Ameren Missouri’s balance sheets. This amount is legally restricted and may be used only to fund the costs of nuclear decommissioning. Changes in the fair value of the trust fund are recorded as an increase or decrease to the nuclear decommissioning trust fund, with an offsetting adjustment to the related regulatory liability. If the assumed return on trust assets is not earned, Ameren Missouri believes that it is probable that any additional funding requirements resulting from such earnings deficiency will be recovered in customer rates.

Ameren Missouri has investments in debt and equity securities that are held in a trust fund for the purpose of funding the decommissioning of its Callaway Energy Center. We have classified these investments as available for sale, and we have recorded all such investments at their fair market value at December 31, 2019 and 2018. Investments in the nuclear decommissioning trust fund have a target allocation of 60% to 70% in equity securities, with the balance invested in debt securities.

The following table presents proceeds from the sale and maturities of investments in Ameren Missouri’s nuclear decommissioning trust fund and the gross realized gains and losses resulting from those sales for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Proceeds from sales and maturities	$	260			$	299			$	305
Gross realized gains	10				18				13
Gross realized losses	2				5				5

Net realized and unrealized gains and losses are deferred and are currently reflected in the regulatory liability related to AROs on Ameren’s and Ameren Missouri’s balance sheets. This reporting is consistent with the method used to account for the decommissioning costs recovered in rates. See Note 2 – Rate and Regulatory Matters for the regulatory liability recorded at December 31, 2019.

The following table presents the cost and fair value of investments in debt and equity securities in Ameren’s and Ameren Missouri’s nuclear decommissioning trust fund at December 31, 2019 and 2018:

Security Type	Cost				Gross Unrealized Gain				Gross Unrealized Loss				Fair Value
2019
Debt securities	$	262			$	11			$	—			$	273
Equity securities	183				393				7				569
Cash and cash equivalents	26				—				—				26
Other(a)	(21		)		—				—				(21		)
Total	$	450			$	404			$	7			$	847
2018
Debt securities	$	253			$	3			$	4			$	252
Equity securities	162				277				12				427
Cash and cash equivalents	3				—				—				3
Other(a)	2				—				—				2
Total	$	420			$	280			$	16			$	684

(a)	Represents net receivables and payables relating to pending securities sales, interest, and securities purchases.

The following table presents the costs and fair values of investments in debt securities in Ameren’s and Ameren Missouri’s nuclear decommissioning trust fund according to their contractual maturities at December 31, 2019:

	Cost				Fair Value
Less than 5 years	$	112			$	114
5 years to 10 years	56				58
Due after 10 years	94				101
Total	$	262			$	273

There are unrealized losses relating to certain available-for-sale investments included in the nuclear decommissioning trust fund, deferred within the regulatory liability as discussed above. Decommissioning will not occur until the Callaway Energy Center is retired.

Insurance

The following table presents insurance coverage at Ameren Missouri’s Callaway Energy Center at December 31, 2019:

Type and Source of Coverage	Most Recent Renewal Date	Maximum Coverages				Maximum Assessments for Single Incidents
Public liability and nuclear worker liability:
American Nuclear Insurers	January 1, 2020	$	450			$	—
Pool participation	(a)	13,486			(a)	138			(b)
		$	13,936		(c)	$	138
Property damage:
NEIL and EMANI	April 1, 2019	$	3,200		(d)	$	27		(e)
Replacement power:
NEIL	April 1, 2019	$	490		(f)	$	7		(e)

(a)	Provided through mandatory participation in an industrywide retrospective premium assessment program. The maximum coverage available is dependent on the number of United States commercial reactors participating in the program.

(b)	Retrospective premium under the Price-Anderson Act. This is subject to retrospective assessment with respect to a covered loss in excess of $450 million in the event of an incident at any licensed United States commercial reactor, payable at $21 million per year.

(c)	Limit of liability for each incident under the Price-Anderson liability provisions of the Atomic Energy Act of 1954, as amended. This limit is subject to change to account for the effects of inflation and changes in the number of licensed power reactors.

(d)	NEIL provides $2.7 billion in property damage, stabilization, decontamination, and premature decommissioning insurance for radiation events and $2.3 billion in property damage insurance for nonradiation events. EMANI provides $490 million in property damage insurance for both radiation and nonradiation events.

(e)	All NEIL-insured plants could be subject to assessments should losses exceed the accumulated funds from NEIL.

(f)	Provides replacement power cost insurance in the event of a prolonged accidental outage. Weekly indemnity up to $4.5 million for 52 weeks, which commences after the first 12 weeks of an outage, plus up to $3.6 million per week for a minimum of 71 weeks thereafter for a total not exceeding the policy limit of $490 million. Nonradiation events are limited to $328 million.

The Price-Anderson Act is a federal law that limits the liability for claims from an incident involving any licensed United States commercial nuclear energy center. The limit is based on the number of licensed reactors. The limit of liability and the maximum potential annual payments are adjusted at least every five years for inflation to reflect changes in the Consumer Price Index. The most recent five-year inflationary adjustment became effective in November 2018. Owners of a nuclear reactor cover this exposure through a combination of private insurance and mandatory participation in a financial protection pool, as established by the Price-Anderson Act.

Losses resulting from terrorist attacks on nuclear facilities insured by NEIL are subject to industrywide aggregates, such that terrorist acts against one or more commercial nuclear power plants within a stated time period would be treated as a single event, and the owners of the nuclear power plants would share the limit of liability. NEIL policies have an aggregate limit of $3.2 billion within a 12-month period for radiation events, or $1.8 billion for events not involving radiation contamination, resulting from terrorist attacks. The EMANI policies are not subject to industrywide aggregates in the event of terrorist attacks on nuclear facilities.

If losses from a nuclear incident at the Callaway Energy Center exceed the limits of, or are not covered by insurance, or if coverage is unavailable, Ameren Missouri is at risk for any uninsured losses. If a serious nuclear incident were to occur, it could have a material adverse effect on Ameren’s and Ameren Missouri’s results of operations, financial position, or liquidity.

NOTE 10 – RETIREMENT BENEFITS

The primary objective of the Ameren pension and postretirement benefit plans is to provide eligible employees with pension and postretirement health care and life insurance benefits. Ameren has defined benefit pension plans covering substantially all of its employees. Ameren has postretirement benefit plans covering non-union employees hired before October 2015 and union employees hired before January 2020. Ameren uses a measurement date of December 31 for its pension and postretirement benefit plans. Ameren Missouri and Ameren Illinois each participate in Ameren’s single-employer pension and other postretirement plans. Ameren’s qualified pension plan is the

Ameren Retirement Plan. Ameren also has an unfunded nonqualified pension plan, the Ameren Supplemental Retirement Plan, which is available to provide certain management employees and retirees with a supplemental benefit when their qualified pension plan benefits are capped in compliance with Internal Revenue Code limitations. Ameren’s other postretirement plan is the Ameren Retiree Welfare Benefit Plan. Only Ameren subsidiaries participate in the plans listed above.

Ameren’s unfunded obligation under its pension and other postretirement benefit plans was $216 million and $481 million as of December 31, 2019 and 2018, respectively. These net liabilities are recorded in “Other current liabilities,” “Pension and other postretirement benefits,” and “Other assets” on Ameren’s consolidated balance sheet. The decrease in the unfunded obligation during 2019 was primarily the result of an increase in the return on plan assets of the pension and postretirement trusts offset by a 75 basis point decrease in the pension and other postretirement benefit plan discount rates used to determine the present value of the obligation. The decrease in the unfunded obligation also resulted in a decrease to “Regulatory assets” on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ balance sheets.

The following table presents the net benefit liability/(asset) recorded on the balance sheets as of December 31, 2019 and 2018:

	2019			2018
Ameren(a)	$	216		$	481
Ameren Missouri	142			229
Ameren Illinois(a)	(16		)	120

(a)	Assets associated with other postretirement benefits are recorded in “Other assets” on the balance sheet.

Ameren recognizes the underfunded status of its pension and postretirement plans as a liability on its consolidated balance sheet, with offsetting entries to accumulated OCI and regulatory assets. The following table presents the funded status of Ameren’s pension and postretirement benefit plans as of December 31, 2019 and 2018. It also provides the amounts included in regulatory assets and accumulated OCI at December 31, 2019 and 2018, that have not been recognized in net periodic benefit costs.

	2019							2018
	Pension Benefits				Postretirement Benefits			Pension Benefits				Postretirement Benefits
Accumulated benefit obligation at end of year	$	4,735		$	(a)			$	4,258		$	(a)
Change in benefit obligation:
Net benefit obligation at beginning of year	$	4,459		$	1,034			$	4,827		$	1,240
Service cost	88				18			100				21
Interest cost	187				43			169				40
Plan amendments	—				2			—				(49	)
Participant contributions	—				8			—				9
Actuarial (gain) loss	469				69			(401		)		(163	)
Benefits paid	(236		)		(64	)		(236		)		(64	)
Net benefit obligation at end of year	4,967				1,110			4,459				1,034
Change in plan assets:
Fair value of plan assets at beginning of year	3,899				1,113			4,293				1,223
Actual return on plan assets	878				237			(218		)		(57	)
Employer contributions	23				3			60				2
Participant contributions	—				8			—				9
Benefits paid	(236		)		(64	)		(236		)		(64	)
Fair value of plan assets at end of year	4,564				1,297			3,899				1,113
Funded status – deficiency (surplus)	403				(187	)		560				(79	)
Accrued benefit cost (asset) at December 31	$	403		$	(187	)		$	560		$	(79	)
Amounts recognized in the balance sheet consist of:
Noncurrent asset(b)	$	—		$	(187	)		$	—		$	(79	)
Current liability(c)	2				—			2				—
Noncurrent liability	401				—			558				—
Net liability (asset) recognized	$	403		$	(187	)		$	560		$	(79	)
Amounts recognized in regulatory assets consist of:
Net actuarial (gain) loss	$	244		$	(170	)		$	393		$	(91	)
Prior service credit	—				(41	)		(2		)		(48	)
Amounts recognized in accumulated OCI (pretax) consist of:
Net actuarial loss	26				4			35				3
Total	$	270		$	(207	)		$	426		$	(136	)

(a)	Not applicable.

(b)	Included in “Other assets” on Ameren’s consolidated balance sheet.

(c)	Included in “Other current liabilities” on Ameren’s consolidated balance sheet.

The following table presents the assumptions used to determine our benefit obligations at December 31, 2019 and 2018:

	Pension Benefits						Postretirement Benefits
	2019			2018			2019			2018
Discount rate at measurement date	3.50	%		4.25	%		3.50	%		4.25	%
Increase in future compensation	3.50			3.50			3.50			3.50
Medical cost trend rate (initial)(a)	(b)			(b)			5.00			5.00
Medical cost trend rate (ultimate)(a)	(b)			(b)			5.00			5.00

(a)	Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.

(b)	Not applicable.

Ameren determines discount rate assumptions by identifying a theoretical settlement portfolio of high-quality corporate bonds sufficient to provide for a plan’s projected benefit payments. The settlement portfolio of bonds is selected from a pool of nearly 900 high-quality corporate bonds. A single discount rate is then determined; that rate results in a discounted value of the plan’s benefit payments that equates to the market value of the selected bonds. In addition, during 2019, Ameren adopted the Society of Actuaries mortality table and adopted the

Society of Actuaries 2019 Mortality Improvement Scale. The updated mortality table reflects lower life expectancy in aggregate compared with the 2018 Society of Actuaries mortality table. The updated improvement scale assumes a lower rate of mortality improvement, compared with the 2018 Mortality Improvement Scale. The impact of the adoption of the table and the scale results in a decrease to our pension and other postretirement benefit obligations.

Funding

Pension benefits are based on the employees’ years of service, age, and compensation. Ameren’s pension plans are funded in compliance with income tax regulations, federal funding, and other regulatory requirements. As a result, Ameren expects to fund its pension plan at a level equal to the greater of the pension cost or the legally required minimum contribution. Based on its assumptions at December 31, 2019, its investment performance in 2019, and its pension funding policy, Ameren expects to make annual contributions of up to approximately $45 million in each of the next five years, with aggregate estimated contributions of $70 million. Ameren Missouri and Ameren Illinois estimate that their portion of the future funding requirements will be 30% and 60%, respectively. These estimates may change based on actual investment performance, changes in interest rates, changes in our assumptions, changes in government regulations, and any voluntary contributions. Our funding policy for postretirement benefits is primarily to fund the Voluntary Employee Beneficiary Association (VEBA) trusts to match the annual postretirement expense.

The following table presents the cash contributions made to our defined benefit retirement plan and to our postretirement plans during 2019, 2018, and 2017:

	Pension Benefits												Postretirement Benefits
	2019				2018				2017				2019				2018				2017
Ameren Missouri	$	3			$	18			$	19			$	1			$	1			$	1
Ameren Illinois	19				35				37				1				1				1
Other	1				7				8				1				—				—
Ameren	$	23			$	60			$	64			$	3			$	2			$	2

Investment Strategy and Policies

Ameren manages plan assets in accordance with the “prudent investor” guidelines contained in ERISA. The investment committee, which includes members of senior management, approves and implements investment strategy and asset allocation guidelines for the plan assets. The investment committee’s goals are twofold: first, to ensure that sufficient funds are available to provide the benefits at the time they are payable; and second, to maximize total return on plan assets and to minimize expense volatility consistent with its tolerance for risk. Ameren delegates the task of investment management to specialists in each asset class. As appropriate, Ameren provides each investment manager with guidelines that specify allowable and prohibited investment types. The investment committee regularly monitors manager performance and compliance with investment guidelines.

The expected return on plan assets assumption is based on historical and projected rates of return for current and planned asset classes in the investment portfolio. Projected rates of return for each asset class were estimated after an analysis of historical experience, future expectations, and the volatility of the various asset classes. After considering the target asset allocation for each asset class, we adjusted the overall expected rate of return for the portfolio for historical and expected experience of active portfolio management results compared with benchmark returns and for the effect of expenses paid from plan assets. Ameren will use an expected return on plan assets for its pension and postretirement plan assets of 7.00% in 2020. No plan assets are expected to be returned to Ameren during 2020.

Ameren’s investment committee strives to assemble a portfolio of diversified assets that does not create a significant concentration of risks. The investment committee develops asset allocation guidelines between asset classes, and it creates diversification through investments in assets that differ by type (equity, debt, real estate, private equity), duration, market capitalization, country, style (growth or value), and industry, among other factors. The diversification of assets is displayed in the target allocation table below. The investment committee also routinely rebalances the plan assets to adhere to the diversification goals. The investment committee’s strategy reduces the concentration of investment risk; however, Ameren is still subject to overall market risk. The following table presents our target allocations for 2020 and our pension and postretirement plans’ asset categories as of December 31, 2019 and 2018:

Asset Category	Target Allocation 2020		Percentage of Plan Assets at December 31,
2019			2018
Pension Plan:
Cash and cash equivalents	0% – 5%		3	%		1	%
Equity securities:
U.S. large-capitalization	21% – 31%		27	%		24	%
U.S. small- and mid-capitalization	3% – 13%		7	%		7	%
International	9% – 19%		14	%		13	%
Global	3% – 13%		9	%		8	%
Total equity	51% – 61%		57	%		52	%
Debt securities	35% – 45%		36	%		42	%
Real estate	0% – 9%		4	%		5	%
Private equity	0% – 5%		(a)			(a)
Total			100	%		100	%
Postretirement Plans:
Cash and cash equivalents	0% – 7%		1	%		2	%
Equity securities:
U.S. large-capitalization	23% – 33%		31	%		40	%
U.S. small- and mid-capitalization	3% – 13%		9	%		7	%
International	9% – 19%		14	%		13	%
Global	5% – 15%		11	%		—	%
Total equity	55% – 65%		65	%		60	%
Debt securities	33% – 43%		34	%		38	%
Total			100	%		100	%

(a)	Less than 1% of plan assets.

In general, the United States large-capitalization equity investments are passively managed or indexed, whereas the international, global, United States small-capitalization, and United States mid-capitalization equity investments are actively managed by investment managers. Debt securities include a broad range of fixed-income vehicles. Debt security investments in high-yield securities and non-United-States-dollar-denominated securities are owned by the plans, but in limited quantities to reduce risk. Most of the debt security investments are under active management by investment managers. Real estate investments include private real estate vehicles; however, Ameren does not, by policy, hold direct investments in real estate property. Additionally, Ameren’s investment committee allows investment managers to use derivatives, such as index futures, foreign exchange futures, and options, in certain situations to increase or to reduce market exposure in an efficient and timely manner.

Fair Value Measurements of Plan Assets

Investments in the pension and postretirement benefit plans were stated at fair value as of December 31, 2019. The fair value of an asset is the amount that would be received upon its sale in an orderly transaction between market participants at the measurement date. Cash and cash equivalents have initial maturities of three months or less and are recorded at cost plus accrued interest. Investments traded in active markets on national or international securities exchanges are valued at closing prices on the measurement date or, if that is not a business day, on the last business day before that date. Securities traded in over-the-counter markets are valued by quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Investments measured under NAV as a practical expedient are based on the fair values of the underlying assets provided by the funds and their administrators. The fair value of real estate investments is based on NAV; it is determined by annual appraisal reports prepared by an independent real estate appraiser. Investments measured at NAV often provide for daily, monthly, or quarterly redemptions with 60 or less days of notice depending on the fund. For some funds, redemption may also require approval from the fund’s board of directors. Derivative contracts are valued at fair value, as determined by the investment managers (or independent third parties on behalf of the investment managers), who use proprietary models and take into consideration exchange quotations on underlying instruments, dealer quotations, and other market information.

The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the pension plans’ assets measured at fair value and NAV as of December 31, 2019 and 2018:

	December 31, 2019																	December 31, 2018
	Level 1				Level 2				NAV				Total					Level 1				Level 2				NAV				Total
Cash and cash equivalents	$	—			$	—			$	139			$	139				$	—			$	—			$	41			$	41
Equity securities:
U.S. large-capitalization	—				—				1,253				1,253					—				—				955				955
U.S. small- and mid-capitalization	344				—				—				344					272				—				—				272
International	296				—				363				659					224				—				298				522
Global	—				—				407				407					—				—				321				321
Debt securities:
Corporate bonds	—				597				13				610					—				701				19				720
Municipal bonds	—				75				—				75					—				87				—				87
U.S. Treasury and agency securities	5				1,010				—				1,015					—				891				—				891
Other	—				8				—				8					1				11				—				12
Real estate	—				—				211				211					—				—				202				202
Private equity	—				—				2				2					—				—				3				3
Total	$	645			$	1,690			$	2,388			$	4,723				$	497			$	1,690			$	1,839			$	4,026
Less: Medical benefit assets(a)													(176		)															(144		)
Plus: Net receivables(b)													17																	17
Fair value of pension plans’ assets													$	4,564																$	3,899

(a)	Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation.

(b)	Receivables related to pending securities sales, offset by payables related to pending securities purchases.

The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the postretirement benefit plans’ assets measured at fair value and NAV as of December 31, 2019 and 2018:

	December 31, 2019																	December 31, 2018
	Level 1				Level 2				NAV				Total					Level 1				Level 2				NAV				Total
Cash and cash equivalents	$	12			$	—			$	—			$	12				$	32			$	—			$	—			$	32
Equity securities:
U.S. large-capitalization	238				—				112				350					297				—				89				386
U.S. small- and mid-capitalization	93				—				—				93					63				—				—				63
International	59				—				102				161					45				—				84				129
Global	—				—				120				120					—				—				—				—
Other	—				—				—				—					—				12				—				12
Debt securities:
Corporate bonds	—				—				—				—					—				144				—				144
Municipal bonds	—				107				—				107					—				107				—				107
U.S. Treasury and agency securities	—				—				—				—					—				62				—				62
Other	—				—				277				277					—				7				34				41
Total	$	402			$	107			$	611			$	1,120				$	437			$	332			$	207			$	976
Plus: Medical benefit assets(a)													176																	144
Less: Net payables(b)													1																	(7		)
Fair value of postretirement benefit plans’ assets													$	1,297																$	1,113

(a)	Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation. These 401(h) assets are included in the pension plan assets shown above.

(b)	Payables related to pending securities purchases, offset by interest receivables and receivables related to pending securities sales.

Net Periodic Benefit Cost

The following table presents the components of the net periodic benefit cost of Ameren’s pension and postretirement benefit plans during 2019, 2018, and 2017:

	Pension Benefits													Postretirement Benefits
	2019				2018				2017					2019				2018				2017
Service cost(a)	$	88			$	100			$	93				$	18			$	21			$	21
Non-service cost components:
Interest cost	187				169				179					43				40				47
Expected return on plan assets	(276		)		(276		)		(262		)			(77		)		(77		)		(75		)
Amortization of:
Prior service credit	(1		)		(1		)		(1		)			(5		)		(4		)		(5		)
Actuarial (gain) loss	25				68				55					(15		)		(6		)		(6		)
Total non-service cost components(b)	$	(65	)		$	(40	)		$	29				$	(54	)		$	(47	)		$	(39	)
Net periodic benefit cost (income)	$	23			$	60			$	64				$	(36	)		$	(26	)		$	(18	)

(a) Service cost, net of capitalization, is reflected in “Operating Expenses - Other operations and maintenance” on Ameren’s statement of income.

(b)	2019 and 2018 amounts and the non-capitalized portion of 2017 non-service cost components are reflected in “Other Income, Net” on Ameren’s consolidated statement of income. See Note 6 – Other Income, Net for additional information.

The estimated amounts that will be amortized from regulatory assets and accumulated OCI into Ameren’s net periodic benefit cost in 2020 are as follows:

	Pension Benefits				Postretirement Benefits
Regulatory assets:
Prior service credit	$	(1	)		$	(4	)
Net actuarial (gain) loss	52				(9		)
Accumulated OCI:
Net actuarial loss	5				—
Total	$	56			$	(13	)

Prior service cost is amortized on a straight-line basis over the average future service of active participants benefiting under the plan amendment. Net actuarial gains or losses subject to amortization are amortized on a straight-line basis over 10 years.

The Ameren Companies are responsible for their share of the pension and postretirement benefit costs. The following table presents the pension costs and the postretirement benefit costs incurred for the years ended December 31, 2019, 2018, and 2017:

	Pension Costs												Postretirement Costs
	2019				2018				2017				2019				2018				2017
Ameren Missouri(a)	$	5			$	22			$	24			$	(6	)		$	(1	)		$	(4	)
Ameren Illinois	20				39				41				(30		)		(25		)		(14		)
Other	(2		)		(1		)		(1		)		—				—				—
Ameren	$	23			$	60			$	64			(36		)		$	(26	)		$	(18	)

(a)	Does not include the impact of the regulatory tracking mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri and the level of such costs included in customer rates.

The expected pension and postretirement benefit payments from qualified trust and company funds, which reflect expected future service, as of December 31, 2019, are as follows:

	Pension Benefits								Postretirement Benefits
	Paid from Qualified Trust Funds				Paid from Company Funds				Paid from Qualified Trust Funds				Paid from Company Funds
2020	$	257			$	3			$	58			$	2
2021	269				3				60				2
2022	274				3				61				2
2023	279				3				63				2
2024	284				3				64				2
2025 – 2029	1,446				12				313				12

The following table presents the assumptions used to determine net periodic benefit cost for our pension and postretirement benefit plans for the years ended December 31, 2019, 2018, and 2017:

	Pension Benefits									Postretirement Benefits
	2019			2018			2017			2019			2018			2017
Discount rate at measurement date	4.25	%		3.50	%		4.00	%		4.25	%		3.50	%		4.00	%
Expected return on plan assets	7.00			7.00			7.00			7.00			7.00			7.00
Increase in future compensation	3.50			3.50			3.50			3.50			3.50			3.50
Medical cost trend rate (initial)(a)	(b)			(b)			(b)			5.00			5.00			5.00
Medical cost trend rate (ultimate)(a)	(b)			(b)			(b)			5.00			5.00			5.00

(a)	Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.

(b)	Not applicable.

The table below reflects the sensitivity of Ameren’s plans to potential changes in key assumptions:

	Pension Benefits												Postretirement Benefits
	Service Cost and Interest Cost				Expected Return on Assets				Projected Benefit Obligation				Service Cost and Interest Cost				Expected Return on Assets				Postretirement Benefit Obligation
0.25% decrease in discount rate	$	(1	)		$	—			$	165			$	—			$	—			$	36
0.25% decrease in return on assets	—				10				—				—				3				—
0.25% increase in future compensation	2				—				14				—				—				—
1.00% increase in annual medical trend	—				—				—				3				—				57
1.00% decrease in annual medical trend	—				—				—				(3		)		—				(57		)

Other

Ameren sponsors a 401(k) plan for eligible employees. The Ameren 401(k) plan covered all eligible Ameren employees at December 31, 2019. The plan allows employees to contribute a portion of their compensation in accordance with specific guidelines. Ameren matches a percentage of the employee contributions up to certain limits. The following table presents the portion of the matching contribution to the Ameren 401(k) plan attributable to each of the Ameren Companies for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Ameren Missouri	$	19			$	17			$	16
Ameren Illinois	16				15				13
Other	—				1				1
Ameren	$	35			$	33			$	30

NOTE 11 – STOCK-BASED COMPENSATION

The 2014 Omnibus Incentive Compensation Plan is Ameren’s long-term stock-based compensation plan for eligible employees and directors. It provides for a maximum of 8 million common shares to be available for grant to eligible employees and directors. At December 31, 2019, there were 3.1 million common shares remaining for grant. Awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards, and other stock-based awards. Ameren used newly issued shares to fulfill its stock-based compensation obligations for 2019 and 2018, and intends to use newly issued shares to fulfill its stock-based compensation obligations for 2020.

The following table summarizes Ameren’s nonvested performance share unit and restricted stock unit activity for the year ended December 31, 2019:

	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, 2019(a)	682,811			$	56.58			155,253			$	57.38
Granted	304,384			67.42				132,526			65.89
Forfeitures	(35,120	)		64.40				(11,802	)		62.75
Vested and undistributed(b)	(235,275	)		62.28				(53,297	)		61.99
Vested and distributed	(176,923	)		44.13				(2,403	)		54.30
Nonvested at December 31, 2019(c)	539,877			$	63.79			220,277			$	61.13

(a)	Does not include 619,783 performance share units and 26,557 restricted stock units that were vested and undistributed.

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

(c)	Does not include 503,283 of performance share units and 79,854 of restricted stock units that were vested and undistributed.

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, which is approximately 38 months after the grant date. In the event of a participant’s death or retirement at age 55 or older with five years or more of service, awards vest on a pro-rata basis over the three-year performance period. 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 fair value of each share unit is based on Ameren’s closing common share price at December 31st of the year prior to the award year and a Monte Carlo simulation. The Monte Carlo simulation is used to estimate expected share payout based on Ameren’s TSR for a three-year performance period relative to the designated peer group beginning January 1st of the award year. The simulation can produce a greater fair value for the share unit than the applicable closing common share price because it includes the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also include a three-year risk-free rate, Ameren’s common stock volatility, volatility for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period. The following table presents the fair value of each share unit along with the significant assumptions used to calculate the fair value of each share unit for the years ended December 31, 2019, 2018, and 2017:

	2019	2018	2017
Fair value of share units awarded	$67.42	$62.88	$59.16
Three-year risk-free rate	2.46%	1.98%	1.47%
Ameren’s common stock volatility(a)	17%	17%	19%
Volatility range for the peer group(a)	15% – 25%	15% – 23%	15% – 21%

(a)	Based on a historical period that is equal to the remaining term of the performance period as of the grant date.

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 at age 55 or older with five years or more of service, 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 grant date.

Stock-Based Compensation Expense

The following table presents the stock-based compensation expense for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Ameren Missouri	$	4			$	4			$	4
Ameren Illinois	3				3				2
Other(a)	13				13				12
Ameren	20				20				18
Less income tax benefit	5				6				7
Stock-based compensation expense, net	$	15			$	14			$	11

(a)	Represents compensation expense for employees of Ameren Services. These amounts are not included in the Ameren Missouri and Ameren Illinois amounts above.

Ameren settled performance share units and restricted stock units of $83 million, $54 million, and $39 million for the years ended December 31, 2019, 2018, and 2017. There were no significant stock-based compensation costs capitalized during the years ended December 31, 2019, 2018, and 2017. As of December 31, 2019, total compensation cost of $28 million related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 22 months.

For the years ended December 31, 2019, 2018, and 2017, excess tax benefits associated with the settlement of stock-based compensation awards reduced income tax expense by $15 million, $6 million, and $4 million, respectively.

NOTE 12 – INCOME TAXES

Federal Tax Reform

The TCJA was enacted on December 22, 2017. Substantially all of the provisions of the TCJA affecting the Ameren Companies, other than certain transition depreciation rules, are effective for taxable years beginning after December 31, 2017. The TCJA includes significant changes to the Internal Revenue Code, including amendments that significantly change the taxation of business entities and specific provisions related to regulated public utilities. The most significant change that affects the Ameren Companies is the reduction in the federal corporate statutory income tax rate from 35% to 21%. Specific provisions related to regulated public utilities generally allow for the continued deductibility of interest expense, the elimination of accelerated depreciation tax benefits from certain regulated utility capital investments acquired after September 27, 2017, and the continuation of certain rate normalization requirements related to the flow back of excess deferred income taxes. Ameren (parent) is subject to provisions of the TCJA that limit the deductibility of interest expense, but such limitation did not affect Ameren in 2018 or 2019.

In accordance with GAAP, the tax effects of changes in tax laws must be recognized in the period in which the law is enacted. GAAP also requires deferred tax assets and liabilities to be measured at the tax rate that is expected to apply when temporary differences are realized or settled. Thus, in December 2017, the Ameren Companies’ deferred taxes were revalued using the new tax rate. To the extent deferred tax balances are included in rate base, the revaluation of deferred taxes was deferred as a regulatory asset or liability on the balance sheet and will be collected from, or refunded, to customers. For deferred tax balances not included in rate base, the revaluation of deferred taxes was recorded as income tax expense. During the year ended December 31, 2017, Ameren, Ameren Missouri, and Ameren Illinois recorded provisional estimates of $154 million, $32 million, and ($5) million, respectively, of income tax expense (benefit) primarily related to depreciation transition rules and 2017 property, plant, and equipment, compensation, and pension-related deductions. During the year ended December 31, 2018, Ameren, Ameren Missouri, and Ameren Illinois updated their respective provisional estimates in accordance with SEC staff guidance and recorded $13 million, $4 million, and $4 million, respectively, of income tax expense, primarily due to the application of proposed IRS regulations on depreciation transition rules. As of December 31, 2018, Ameren, Ameren Missouri, and Ameren Illinois completed their accounting for certain effects of the TCJA.

For our regulated operations, reductions in accumulated deferred income tax balances due to the reduction in the federal statutory corporate income tax rate to 21% will result in amounts previously collected from utility customers for these deferred taxes being refundable to those customers, generally through reductions in future rates. The TCJA includes provisions related to the IRS normalization rules that address the time period in which certain plant-related components of the excess deferred income taxes are to be reflected in customer rates. This time period for the Ameren Companies is approximately 25 to 65 years. Other components of the excess deferred income taxes will be reflected in customer rates as determined by our state and federal regulators, which could be a shorter time period than that applicable to certain plant-related components.

Missouri Income Tax Rate

In 2018, legislation modifying Missouri tax law was enacted to decrease the state’s corporate income tax rate from 6.25% to 4%, effective January 1, 2020. As a result, in 2018, Ameren’s and Ameren Missouri’s accumulated deferred tax balances were revalued, resulting in a net decrease of $122 million to their accumulated deferred tax liability, which was offset by a regulatory liability. Additionally, Ameren recorded an immaterial amount to income tax expense. Ameren Missouri anticipates that the effect of this tax decrease will be reflected in customer rates upon completion of its current electric service regulatory rate review. Ameren (parent) and nonregistrant subsidiaries do not expect this income tax decrease to have a material impact on net income.

Illinois Income Tax Rate

In July 2017, Illinois enacted a law that increased the state’s corporate income tax rate from 7.75% to 9.5% as of July 1, 2017. The law made the increase in the state’s corporate income tax rate permanent. That rate was previously scheduled to go to 7.3% in 2025. In 2017, Ameren recorded an expense of $14 million at Ameren (parent) due to the revaluation of accumulated deferred taxes and the estimated state apportionment of such taxes. Beyond this expense, Ameren and Ameren Illinois do not expect this tax increase to have a material impact on their net income prospectively. The tax increase is not expected to materially affect the earnings of the Ameren Illinois Electric Distribution, the Ameren Transmission, or the Ameren Illinois Transmission segments, since these businesses operate under formula ratemaking frameworks. The tax increase unfavorably affected the 2017 net income of the Ameren Illinois Natural Gas segment by less than $1 million.

The following table presents the principal reasons for the difference between the effective income tax rate and the federal statutory corporate income tax rate for the years ended December 31, 2019, 2018, and 2017:

	Ameren Missouri			Ameren Illinois			Ameren
2019
Federal statutory corporate income tax rate:	21	%		21	%		21	%
Increases (decreases) from:
Amortization of excess deferred income taxes	(11	)		(4	)		(7	)
Amortization of deferred investment tax credit	(1	)		—			(1	)
State tax	5			7			6
Stock-based compensation	—			—			(1	)
Effective income tax rate	14	%		24	%		18	%
2018
Federal statutory corporate income tax rate:	21	%		21	%		21	%
Increases (decreases) from:
Amortization of excess deferred income taxes	(4	)		(4	)		(4	)
Depreciation differences	—			(1	)		—
Amortization of deferred investment tax credit	(1	)		—			(1	)
State tax	4			7			6
TCJA	1			1			1
Tax credits	(1	)		—			—
Other permanent items	—			—			(1	)
Effective income tax rate	20	%		24	%		22	%
2017
Federal statutory corporate income tax rate:	35	%		35	%		35	%
Increases (decreases) from:
Depreciation differences	1			(1	)		—
Amortization of deferred investment tax credit	(1	)		—			(1	)
State tax	4			6			6
TCJA	6			(1	)		14
Tax credits	(1	)		—			—
Other permanent items	—			(1	)		(2	)
Effective income tax rate	44	%		38	%		52	%

The following table presents the components of income tax expense for the years ended December 31, 2019, 2018, and 2017:

	Ameren Missouri				Ameren Illinois				Other				Ameren
2019
Current taxes:
Federal	$	65			$	19			$	(88	)		$	(4	)
State	22				11				(14		)		19
Deferred taxes:
Federal	37				66				82				185
State	5				29				25				59
Amortization of excess deferred income taxes	(56		)		(15		)		(1		)		(72		)
Amortization of deferred investment tax credits	(5		)		—				—				(5		)
Total income tax expense	$	68			$	110			$	4			$	182
2018
Current taxes:
Federal	$	104			$	4			$	(118	)		$	(10	)
State	29				6				(12		)		23
Deferred taxes:
Federal	22				75				123				220
State	(2		)		28				23				49
Amortization of excess deferred income taxes	(24		)		(15		)		(1		)		(40		)
Amortization of deferred investment tax credits	(5		)		—				—				(5		)
Total income tax expense	$	124			$	98			$	15			$	237
2017
Current taxes:
Federal	$	149			$	(34	)		$	(110	)		$	5
State	23				29				(20		)		32
Deferred taxes:
Federal	76				185				250				511
State	11				(13		)		36				34
Amortization of deferred investment tax credits	(5		)		(1		)		—				(6		)
Total income tax expense	$	254			$	166			$	156			$	576

The following table presents the accumulated deferred income tax assets and liabilities recorded as a result of temporary differences and accumulated deferred investment tax credits at December 31, 2019 and 2018:

	Ameren Missouri				Ameren Illinois				Other				Ameren
2019
Accumulated deferred income taxes, net liability (asset):
Plant-related	$	2,000			$	1,423			$	193			$	3,616
Regulatory assets and liabilities, net	(310		)		(214		)		(24		)		(548		)
Deferred employee benefit costs	(59		)		7				(59		)		(111		)
Tax carryforwards	(25		)		(3		)		(70		)		(98		)
Other	(33		)		11				43				21
Total net accumulated deferred income tax liabilities (assets)	$	1,573			$	1,224			$	83			$	2,880
Accumulated deferred investment tax credits	39				—				—				39
Accumulated deferred income taxes and investment tax credits	$	1,612			$	1,224			$	83			$	2,919
2018
Accumulated deferred income taxes, net liability (asset):
Plant-related	$	2,010			$	1,345			$	179			$	3,534
Regulatory assets and liabilities, net	(343		)		(221		)		(25		)		(589		)
Deferred employee benefit costs	(58		)		(4		)		(64		)		(126		)
Tax carryforwards	(35		)		(26		)		(166		)		(227		)
Other	(40		)		24				47				31
Total net accumulated deferred income tax liabilities (assets)	$	1,534			$	1,118			$	(29	)		$	2,623
Accumulated deferred investment tax credits	42				1				—				43
Accumulated deferred income taxes and investment tax credits	$	1,576			$	1,119			$	(29	)		$	2,666

The following table presents the components of accumulated deferred income tax assets relating to net operating loss carryforwards, tax credit carryforwards, and charitable contribution carryforwards at December 31, 2019 and 2018:

	Ameren Missouri				Ameren Illinois				Other				Ameren
2019
Tax credit carryforwards:
Federal(a)	$	25			$	3			$	67			$	95
State(b)	—				—				3				3
Total tax credit carryforwards	$	25			$	3			$	70			$	98
Charitable contribution carryforwards(c)	$	—			$	—			$	3			$	3
Valuation allowance(c)	—				—				(3		)		(3		)
Total charitable contribution carryforwards	$	—			$	—			$	—			$	—
2018
Net operating loss carryforwards:
Federal	$	—			$	23			$	55			$	78
State	—				—				13				13
Total net operating loss carryforwards	$	—			$	23			$	68			$	91
Tax credit carryforwards:
Federal	$	35			$	3			$	79			$	117
State	—				—				10				10
Total tax credit carryforwards	$	35			$	3			$	89			$	127
Charitable contribution carryforwards	$	—			$	—			$	14			$	14
Valuation allowance	—				—				(5		)		(5		)
Total charitable contribution carryforwards	$	—			$	—			$	9			$	9

(a)	Will expire between 2029 and 2039.

(b)	Will expire between 2022 and 2024.

(c)	See Schedule II under Part IV, Item 15, in this report for information on changes in the valuation allowance.

Uncertain Tax Positions

As of December 31, 2019 and 2018, the Ameren Companies did not record any uncertain tax positions.

The Internal Revenue Service is currently examining Ameren’s 2018 federal income tax return. State income tax returns are generally subject to examination for a period of three years after filing. The state impact of any federal changes remains subject to examination by various states for up to one year after formal notification to the states. The Ameren Companies currently do not have material income tax issues under examination, administrative appeals, or litigation.

Ameren Missouri has an uncertain tax position tracker. Under Missouri’s regulatory framework, uncertain tax positions do not reduce Ameren Missouri’s electric rate base. When an uncertain income tax position liability is resolved, the MoPSC requires, through the uncertain tax position tracker, the creation of a regulatory asset or regulatory liability to reflect the time value, with a return at the applicable WACC included in each of the electric rate orders in effect before the tax position was resolved, of the difference between the uncertain tax position liability that was excluded from rate base and the final tax liability. The resulting regulatory asset or liability will affect earnings in the year it is created. It will then be amortized over three years, beginning on the effective date of new rates established in the next electric service regulatory rate review.

NOTE 13 – RELATED-PARTY TRANSACTIONS

In the normal course of business, Ameren Missouri and Ameren Illinois engage in affiliate transactions. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings. Transactions between Ameren’s subsidiaries are reported as affiliate transactions on their individual financial statements, but those transactions are eliminated in consolidation for Ameren’s consolidated financial statements, except as noted in Software Licensing Agreement discussion below. Below are the material related-party agreements.

Electric Power Supply Agreements

Ameren Illinois must acquire capacity and energy sufficient to meet its obligations to customers. Ameren Illinois uses periodic RFP processes, administered by the IPA and approved by the ICC, to contract capacity and energy on behalf of its customers. Ameren Missouri participates in the RFP process and has been a winning supplier for certain periods.

Energy Swaps and Energy Products

Based on the outcome of IPA-administered procurement events, Ameren Missouri and Ameren Illinois have entered into energy product agreements by which Ameren Missouri agreed to sell, and Ameren Illinois agreed to purchase, a set amount of megawatthours at a predetermined price over a specified period of time. The following table presents the specified performance period, price, and amount of megawatthours included in the agreements:

IPA Procurement Event	Performance Period	MWh		Average Price per MWh
September 2015	November 2015 – May 2018	339,000		$	38
April 2016	June 2017 – September 2018	375,200		35
September 2016	May 2017 – September 2018	82,800		34
April 2017	March 2019 – May 2020	85,600		34
April 2018	June 2019 – September 2020	110,000		32
April 2019	January 2020 – December 2021	288,000		35
September 2019	April 2020 – November 2021	170,800		29

Collateral Postings

Under the terms of the Illinois energy product agreements entered into through RFP processes administered by the IPA, suppliers must post collateral under certain market conditions to protect Ameren Illinois in the event of nonperformance. The collateral postings are unilateral, which means that only the suppliers can be required to post collateral. Therefore, Ameren Missouri, as a winning supplier in the RFP process, may be required to post collateral. As of December 31, 2019 and 2018, there were no collateral postings required of Ameren Missouri related to the Illinois energy product agreements.

Interconnection and Transmission Agreements

Ameren Missouri and Ameren Illinois are parties to an interconnection agreement for the use of their respective transmission lines and other facilities for the distribution of power. These agreements have no contractual expiration date, but may be terminated by either party with three years’ notice.

Support Services Agreements

Ameren Services provides support services to its affiliates. The costs of support services including wages, employee benefits, professional services, and other expenses, are based on, or are an allocation of, actual costs incurred. The support services agreement can be terminated at any time by the mutual agreement of Ameren Services and that affiliate or by either party with 60 days’ notice before the end of a calendar year.

In addition, Ameren Missouri and Ameren Illinois provide affiliates with access to their facilities for administrative purposes and with use of other assets. The costs of the rent and facility services and other assets are based on, or are an allocation of, actual costs incurred.

Ameren Missouri and Ameren Illinois also provide storm-related and miscellaneous support services to each other on an as-needed basis.

Transmission Services

Ameren Illinois receives transmission services from ATXI for its retail load.

Electric Transmission Maintenance and Construction Agreements

ATXI entered into separate agreements with Ameren Missouri and Ameren Illinois in which Ameren Missouri or Ameren Illinois, as applicable, may perform certain maintenance and construction services related to ATXI’s electric transmission assets.

Money Pool

See Note 4 – Short-term Debt and Liquidity for a discussion of affiliate borrowing arrangements.

Software Licensing Agreement

In September 2019, Ameren Missouri purchased a license for advanced metering infrastructure software from Ameren Illinois. The amount of the $24 million cost-based transaction price over the $5 million remaining carrying value of the software was recorded as revenue by Ameren Illinois, with $14 million of revenue recorded at Ameren Illinois Electric Distribution and $5 million recorded at Ameren Illinois

Natural Gas. The revenue recorded at Ameren Illinois Electric Distribution was reflected in formula ratemaking, which resulted in no impact to net income. Per authoritative accounting guidance for sales to rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation by Ameren. Ameren Missouri’s $24 million software investment is included in “Property, Plant, and Equipment, Net.”

Tax Allocation Agreement

See Note 1 – Summary of Significant Accounting Policies for a discussion of the tax allocation agreement. The following table presents the affiliate balances related to income taxes for Ameren Missouri and Ameren Illinois as of December 31, 2019 and 2018:

	2019								2018
	Ameren Missouri			Ameren Illinois					Ameren Missouri			Ameren Illinois
Income taxes payable to parent(a)	$	15		$	43				$	16		$	7
Income taxes receivable from parent(b)	15			17					—			6

(a)	Included in “Accounts payable – affiliates” on the balance sheet.

(b)	Included in “Accounts receivable – affiliates” on the balance sheet.

Capital Contributions

The following table presents cash capital contributions received from Ameren (parent) by Ameren Missouri and Ameren Illinois for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Ameren Missouri(a)	$	124			$	45			$	30
Ameren Illinois	15			(a)	160				8

(a)	As a result of the tax allocation agreement.

Effects of Related-party Transactions on the Statement of Income

The following table presents the impact on Ameren Missouri and Ameren Illinois of related-party transactions for the years ended December 31, 2019, 2018, and 2017. It is based primarily on the agreements discussed above and the money pool arrangements discussed in Note 4 – Short-term Debt and Liquidity.

Agreement	Income Statement Line Item				Ameren Missouri			Ameren Illinois
Ameren Missouri power supply agreements	Operating Revenues		2019	$	3		$	(a)
with Ameren Illinois			2018		11			(a)
			2017		23			(a)
Ameren Missouri and Ameren Illinois	Operating Revenues		2019		27			2
rent and facility services			2018		22			3
			2017		26			4
Ameren Missouri and Ameren Illinois miscellaneous	Operating Revenues		2019		1			2
support services and services provided to ATXI			2018		1			1
			2017		(b)			1
Ameren Missouri software licensing	Operating Revenues		2019		(a)			19
with Ameren Illinois			2018		(a)			(a)
			2017		(a)			(a)
Total Operating Revenues			2019	$	31		$	23
			2018		34			4
			2017		49			5
Ameren Illinois power supply	Purchased Power		2019	$	(a)		$	3
agreements with Ameren Missouri			2018		(a)			11
			2017		(a)			23
Ameren Illinois transmission	Purchased Power		2019		(a)			2
services from ATXI			2018		(a)			1
			2017		(a)			2
Total Purchased Power			2019	$	(a)		$	5
			2018		(a)			12
			2017		(a)			25
Ameren Missouri and Ameren Illinois	Other Operations and		2019	$	2		$	5
rent and facility services	Maintenance		2018		3			6
			2017		(b)			(b)
Ameren Services support services	Other Operations and		2019		135			127
agreement	Maintenance		2018		136			126
			2017		149			139
Total Other Operations and			2019	$	137		$	132
Maintenance Expenses			2018		139			132
			2017		149			139
Money pool borrowings (advances)	(Interest Charges)		2019	$	(b)		$	(b)
	Other Income, Net		2018		1			(b)
			2017		1			(b)

(a)	Not applicable.

(b)	Amount less than $1 million.

NOTE 14 – COMMITMENTS AND CONTINGENCIES

We are involved in legal, tax, and regulatory proceedings before various courts, regulatory commissions, authorities, and governmental agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in the notes to our financial statements, will not have a material adverse effect on our results of operations, financial position, or liquidity.

See also Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, Note 13 – Related-party Transactions, and Note 15 – Supplemental Information in this report.

Other Obligations

To supply a portion of the fuel requirements of Ameren Missouri’s energy centers, Ameren Missouri has entered into various long-term commitments for the procurement of coal, natural gas, nuclear fuel, and methane gas. Ameren Missouri and Ameren Illinois also have entered into various long-term commitments for purchased power and natural gas for distribution. The table below presents our estimated minimum fuel, purchased power, and other commitments at December 31, 2019. Ameren’s and Ameren Illinois’ purchased power commitments include the Ameren Illinois agreements entered into as part of the IPA-administered power procurement process. Included in the Other column are minimum purchase commitments under contracts for equipment, design and construction, and meter reading services, among other agreements, at December 31, 2019.

	Coal				Natural Gas**(a)**				Nuclear Fuel				Purchased Power**(b)(c)**				Methane Gas				Other				Total
Ameren:
2020	$	325			$	171			$	42			$	147		(d)	$	3			$	75			$	763
2021	197				109				60				51				3				33				453
2022	137				55				13				13				3				22				243
2023	46				35				43				3				3				22				152
2024	53				12				15				—				3				25				108
Thereafter	27				43				15				—				24				58				167
Total	$	785			$	425			$	188			$	214			$	39			$	235			$	1,886
Ameren Missouri:
2020	$	325			$	40			$	42			$	—			$	3			$	61			$	471
2021	197				26				60				—				3				26				312
2022	137				14				13				—				3				22				189
2023	46				13				43				—				3				22				127
2024	53				6				15				—				3				25				102
Thereafter	27				19				15				—				24				24				109
Total	$	785			$	118			$	188			$	—			$	39			$	180			$	1,310
Ameren Illinois:
2020	$	—			$	131			$	—			$	147		(d)	$	—			$	3			$	281
2021	—				83				—				51				—				2				136
2022	—				41				—				13				—				—				54
2023	—				22				—				3				—				—				25
2024	—				6				—				—				—				—				6
Thereafter	—				24				—				—				—				—				24
Total	$	—			$	307			$	—			$	214			$	—			$	5			$	526

(a)	Includes amounts for generation and for distribution.

(b)	The purchased power amounts for Ameren and Ameren Illinois exclude agreements for renewable energy credits through 2035 with various renewable energy suppliers due to the contingent nature of the payment amounts, with the exception of expected payments of $13 million through 2024.

(c)	The purchased power amounts for Ameren and Ameren Missouri exclude a 102-megawatt power purchase agreement with a wind farm operator, which expires in 2024, due to the contingent nature of the payment amounts.

(d)

In January 2018, as required by the FEJA, Ameren Illinois entered into agreements to acquire zero emission credits, through 2026. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent planning year. The amounts above reflect Ameren Illinois’ commitment to acquire approximately $27 million of zero emission credits through May 2020.

Environmental Matters

We are subject to various environmental laws, including statutes and regulations, enforced by federal, state, and local authorities. The development and operation of electric generation, transmission, and distribution facilities and natural gas storage, transmission, and distribution facilities can trigger compliance obligations with respect to environmental laws. These laws address emissions, discharges to water, water intake, impacts to air, land, and water, and chemical and waste handling. Complex and lengthy processes are required to obtain and renew approvals, permits, and licenses for new, existing or modified facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures.

The EPA has promulgated environmental regulations that have a significant impact on the electric utility industry. Over time, compliance with these regulations could be costly for Ameren Missouri, which operates coal-fired power plants. Regulations that apply to air emissions from the electric utility industry include the NSPS, the CSAPR, the MATS, and the National Ambient Air Quality Standards, which are subject to periodic review for certain pollutants. Collectively, these regulations cover a variety of pollutants, such as SO2, particulate matter, NOx, mercury, toxic metals, and acid gases, and CO2 emissions from new power plants. Water intake and discharges from power plants are regulated under the Clean Water Act. Such regulation could require modifications to water intake structures or more stringent limitations on wastewater discharges at Ameren Missouri’s energy centers, either of which could result in significant capital expenditures. The management

and disposal of coal ash is regulated under the CCR rule, which will require the closure of surface impoundments and the installations of dry ash handling systems at several of Ameren Missouri’s energy centers. The individual or combined effects of existing environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of operations at some of Ameren Missouri’s energy centers. Ameren and Ameren Missouri expect that such compliance costs would be recoverable through rates, subject to MoPSC prudence review, but the timing of costs and their recovery could be subject to regulatory lag.

Ameren and Ameren Missouri estimate that they will need to make capital expenditures of $200 million to $250 million from 2020 through 2024 in order to comply with existing environmental regulations. Additional environmental controls beyond 2024 could be required. This estimate of capital expenditures includes expenditures required by the CCR regulations, by the Clean Water Act rule applicable to cooling water intake structures at existing power plants, and by effluent limitation guidelines applicable to steam electric generating units, all of which are discussed below. This estimate does not include capital expenditures that may be required as a result of the NSR and Clean Air Act litigation discussed below. Ameren Missouri’s current plan for compliance with existing air emission regulations includes burning low-sulfur coal and installing new or optimizing existing air pollution control equipment. The actual amount of capital expenditures required to comply with existing environmental regulations may vary substantially from the above estimate because of uncertainty as to whether the EPA will substantially revise regulatory obligations, exactly which compliance strategies will be used and their ultimate cost, among other things.

The following sections describe the more significant environmental laws and rules and environmental enforcement and remediation matters that affect or could affect our operations. The EPA has initiated an administrative review of several regulations and proposed amendments to regulations and guidelines, including to the effluent limitation guidelines and the CCR Rule, which could ultimately result in the revision of all or part of such rules.

Clean Air Act

Federal and state laws, including CSAPR, regulate emissions of SO2 and NOx through the reduction of emissions at their source and the use and retirement of emission allowances. The first phase of the CSAPR emission reduction requirements became effective in 2015. The second phase of emission reduction requirements, which were revised by the EPA in 2016, became effective in 2017; additional emission reduction requirements may apply in subsequent years. To achieve compliance with the CSAPR, Ameren Missouri burns low-sulfur coal, operates two scrubbers at its Sioux Energy Center, and optimizes other existing air pollution control equipment. Ameren Missouri expects to incur additional costs to lower its emissions at one or more of its energy centers to comply with the CSAPR in future years. These higher costs are expected to be recovered from customers through the FAC or higher base rates.

CO**2 Emissions Standards

In July 2019, the EPA issued the Affordable Clean Energy Rule, which establishes emission guidelines for states to follow in developing plans to limit CO2 emissions from coal-fired electric generating units. The EPA has identified certain efficiency measures as the best system of emission reduction for coal-fired electric generating units. The Affordable Clean Energy Rule went into effect on September 6, 2019. The rule requires the state of Missouri to develop a compliance plan and submit it to the EPA for approval by September 2022. The plan is expected to include a standard of performance for each affected generating unit. We are evaluating the impact of the adoption and implementation of the Affordable Clean Energy Rule and, along with other stakeholders, will be working with the state of Missouri to develop the compliance plan submitted to the EPA. At this time, we cannot predict the outcome of Missouri’s compliance plan development process. As such, the impact on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri is uncertain. We also cannot predict the outcome of any potential legal challenges to the rule.

NSR and Clean Air Act Litigation

In January 2011, the Department of Justice, on behalf of the EPA, filed a complaint against Ameren Missouri in the United States District Court for the Eastern District of Missouri alleging that in performing projects at its coal-fired Rush Island Energy Center in 2007 and 2010, Ameren Missouri violated provisions of the Clean Air Act and Missouri law. In January 2017, the district court issued a liability ruling and, in September 2019, entered a final order that required Ameren Missouri to install a flue gas desulfurization system at the Rush Island Energy Center and a dry sorbent injection system at the Labadie Energy Center. There were no fines in the order. In October 2019, Ameren Missouri appealed the district court’s ruling to the United States Court of Appeals for the Eighth Circuit. Additionally, in October 2019, following a request by Ameren Missouri, the district court stayed implementation of the majority of its order’s requirements while the case is appealed. Ameren Missouri believes that the district court both misinterpreted and misapplied the law in its ruling. We are unable to predict the ultimate resolution of this matter. Based on the initial procedural schedule, the Court of Appeals for the Eighth Circuit is expected to hear oral arguments in 2020; however, it is under no deadline to issue a ruling in this case.

The ultimate resolution of this matter could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Among other things and subject to economic and regulatory considerations, resolution of this matter could result in increased capital expenditures for the installation of air pollution control equipment, as well as increased operations and maintenance expenses. Based upon engineering studies, capital expenditures to comply with the district court’s order for installation of a flue

gas desulfurization system at the Rush Island Energy Center are estimated at approximately $1 billion. Further, the flue gas desulfurization system would result in additional operation and maintenance expenses of $30 million to $50 million annually for the life of the energy center. Engineering studies required to develop estimated capital expenditures and estimated additional operation and maintenance expenses for the Labadie Energy Center to comply with the district court’s order will not be undertaken while the case is under appeal. As a result of the district court’s stay, Ameren Missouri does not expect to make significant capital expenditures or incur operations and maintenance expenses related to the district court’s order while the case is under appeal.

Clean Water Act

In July 2018, the United States Court of Appeals for the Second Circuit upheld the EPA’s Section 316(b) Rule applicable to cooling water intake structures at existing power plants. The rule requires a case-by-case evaluation and plan for reducing the number of aquatic organisms impinged on a power plant’s cooling water intake screens or entrained through the plant’s cooling water system. All of Ameren Missouri’s coal-fired and nuclear energy centers are subject to the cooling water intake structures rule. Requirements of the rule are being implemented by Ameren Missouri during the permit renewal process of each energy center’s water discharge permit, which is expected to be completed by 2023.

In 2015, the EPA issued a rule to revise the effluent limitation guidelines applicable to steam electric generating units. These guidelines established national standards for water discharges that are based on the effectiveness of available control technology. The EPA’s 2015 rule prohibits effluent discharges of certain waste streams and imposes more stringent limitations on certain water discharges from power plants. In September 2017, the EPA published a rule that postponed the compliance dates by two years for the limitations applicable to two specific waste streams so that it could potentially revise those standards. To meet the requirements of the guidelines, Ameren Missouri is constructing wastewater treatment facilities and dry ash handling systems at three of its energy centers and is scheduled to complete the projects in 2020. Estimated capital expenditures to complete these projects are included in the CCR management compliance plan, discussed below.

CCR Management

In 2015, the EPA issued the CCR rule, which established requirements for the management and disposal of CCR from coal-fired power plants. These regulations affect CCR disposal and handling costs at Ameren Missouri’s energy centers. Ameren Missouri is in the process of closing its surface impoundments, with the last of such closures scheduled for 2023. The EPA issued revisions to the CCR rule in July 2018, proposed additional revisions in July and November 2019, and indicated that additional revisions to the CCR rule are likely. Ameren and Ameren Missouri have AROs of $151 million recorded on their respective balance sheets as of December 31, 2019, associated with CCR storage facilities. Ameren Missouri estimates it will need to make capital expenditures of $75 million to $125 million from 2020 through 2024 to implement its CCR management compliance plan, which includes installation of dry ash handling systems, wastewater treatment facilities, and groundwater monitoring equipment.

Remediation

The Ameren Companies are involved in a number of remediation actions to clean up sites impacted by the use or disposal of materials containing hazardous substances. Federal and state laws can require responsible parties to fund remediation regardless of their degree of fault, the legality of original disposal, or the ownership of a disposal site. Ameren Missouri and Ameren Illinois have each been identified as a potentially responsible party at several contaminated sites.

As of December 31, 2019, Ameren Illinois has remediated the majority of the 44 former MGP sites in Illinois it owned or for which it was otherwise responsible. Ameren Illinois estimates it could substantially conclude remediation efforts at the remaining sites by 2023. The ICC allows Ameren Illinois to recover such remediation and related litigation costs from its electric and natural gas utility customers through environmental cost riders. Costs are subject to annual prudence review by the ICC. As of December 31, 2019, Ameren Illinois estimated the remaining obligation related to these former MGP sites at $129 million to $213 million. Ameren and Ameren Illinois recorded a liability of $129 million to represent the estimated minimum obligation for these sites, as no other amount within the range was a better estimate.

The scope of the remediation activities at these former MGP sites may increase as remediation efforts continue. Considerable uncertainty remains in these estimates because many site-specific factors can influence the ultimate actual costs, including unanticipated underground structures, the degree to which groundwater is encountered, regulatory changes, local ordinances, and site accessibility. The actual costs and timing of completion may vary substantially from these estimates.

Our operations or those of our predecessor companies involve the use of, disposal of, and, in appropriate circumstances, the cleanup of substances regulated under environmental laws. We are unable to determine whether such practices will result in future environmental commitments or will affect our results of operations, financial position, or liquidity.

NOTE 15 – SUPPLEMENTAL INFORMATION

Cash, Cash Equivalents, and Restricted Cash

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 December 31, 2019 and 2018:

	December 31, 2019											December 31, 2018
Ameren			Ameren Missouri			Ameren Illinois					Ameren			Ameren Missouri			Ameren Illinois
Cash and cash equivalents	$	16		$	9		$	—				$	16		$	—		$	—
Restricted cash included in “Other current assets”	14			4			5					13			4			6
Restricted cash included in “Other assets”	120			—			120					74			—			74
Restricted cash included in “Nuclear decommissioning trust fund”	26			26			—					4			4			—
Total cash, cash equivalents, and restricted cash	$	176		$	39		$	125				$	107		$	8		$	80

Restricted cash included in “Other current assets” primarily represents funds held by an irrevocable Voluntary Employee Beneficiary Association (VEBA) trust, which provides health care benefits for active employees. Restricted cash included in “Other assets” on Ameren’s and Ameren Illinois’ balance sheets primarily represents amounts collected under a cost recovery rider that are restricted for use in the procurement of renewable energy credits and amounts in a trust fund restricted for the use of funding certain asbestos-related claims.

Accounts Receivable

“Accounts receivable – trade” on Ameren’s and Ameren Illinois’ balance sheets include certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At December 31, 2019 and 2018, “Other current liabilities” on Ameren’s and Ameren Illinois’ balance sheets included payables for purchased receivables of $32 million and $33 million, respectively.

For the years ended December 31, 2019, 2018, and 2017, the Ameren Companies recorded immaterial bad debt expense.

Inventories

The following table presents the components of inventories for each of the Ameren Companies at December 31, 2019 and 2018:

	December 31, 2019											December 31, 2018
	Ameren Missouri			Ameren Illinois			Ameren					Ameren Missouri			Ameren Illinois			Ameren
Fuel(a)	$	126		$	—		$	126				$	123		$	—		$	123
Natural gas stored underground	6			57			63					7			64			71
Materials, supplies, and other	241			64			305					228			61			289
Total inventories	$	373		$	121		$	494				$	358		$	125		$	483

(a)	Consists of coal, oil, and propane.

Leases

In the first quarter of 2019, we adopted authoritative accounting guidance related to leases, which affected our financial position, but did not materially affect our results of operations or liquidity. The most significant impact for us was the recognition of right-of-use assets and lease liabilities for operating leases, while the accounting for our finance leases remained substantially unchanged. Ameren and Ameren Missouri recognized right-of-use assets and offsetting lease liabilities of $38 million and $36 million at January 1, 2019, respectively, primarily related to rail car leases. The effect of the adoption was immaterial at Ameren Illinois. No adjustment to comparative periods was made. We elected the available practical expedients upon adoption.

Ameren Missouri primarily leases rail cars under operating lease arrangements for the transportation of coal inventory to its energy centers. Although Ameren Missouri has options to renew a portion of these arrangements for up to five years on similar terms, the exercise of these options was not assumed in the recognition of right-of-use assets and lease obligations. For rail car leases, we account for the lease and non-lease components as a single lease component.

The operating lease expense and the cash paid for amounts included in the measurement of operating lease liabilities at Ameren and Ameren Missouri were immaterial for the years ended December 31, 2019, 2018, and 2017.

The following table provides supplemental balance sheet information related to operating leases as of December 31, 2019:

	Ameren				Ameren Missouri
Other assets	$	36			$	34
Other current liabilities	7				7
Other deferred credits and liabilities	29				27
Weighted average remaining operating lease term	5 years				5 years
Weighted average discount rate(a)	3.5		%		3.4		%

(a)	As an implicit rate is not readily determinable under most of our lease agreements, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use an implicit rate when readily determinable.

The following table presents remaining maturities of operating lease liabilities as of December 31, 2019:

	Ameren				Ameren Missouri
2020	$	8			$	8
2021	8				7
2022	7				6
2023	6				6
2024	5				5
Thereafter	5				5
Total lease payments	39				37
Less imputed interest	3				3
Total(a)	$	36			$	34

(a)

The amount of remaining maturities of operating lease liabilities under previous authoritative accounting guidance as of December 31, 2018, is materially consistent with the amount as of December 31, 2019. Maturities of certain financing arrangements, including the Peno Creek and Audrain energy centers' long-term agreements, are no longer required to be disclosed as lease-related maturities. See Note 5 – Long-Term Debt and Equity Financings, for further information on financing arrangements.

Asset Retirement Obligations

The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the years ended December 31, 2019 and 2018:

	December 31, 2019														December 31, 2018
	Ameren Missouri				Ameren Illinois				Ameren						Ameren Missouri				Ameren Illinois				Ameren
Beginning balance at January 1	$	646		(a)	$	4		(b)	$	650		(a)			$	640			$	4			$	644
Liabilities settled	(20		)		—				(20		)				(7		)		—				(7		)
Accretion(c)	28				—				28						27				—				27
Change in estimates	33			(d)	—				33			(d)			(14		)	(e)	—				(14		)	(e)
Ending balance at December 31	$	687		(a)	$	4		(b)	$	691		(a)			$	646		(a)	$	4		(b)	$	650		(a)

(a)	Balance included $53 million and $23 million in “Other current liabilities” on the balance sheet as of December 31, 2019 and 2018, respectively.

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

(c)	Ameren Missouri’s accretion expense was deferred as a decrease to regulatory liabilities.

(d)	Ameren Missouri changed its fair value estimate primarily due to an increase in the cost estimate for closure of certain CCR storage facilities.

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

Noncontrolling Interests

As of December 31, 2019 and 2018, Ameren’s noncontrolling interests included the preferred stock of Ameren Missouri and Ameren Illinois.

Deferred Compensation

As of December 31, 2019, and 2018, “Other current liabilities’ and “Other deferred credits and liabilities” on Ameren’s balance sheet included deferred compensation obligations of $86 million and $80 million, respectively, recorded at the present value of future benefits to be paid.

Excise Taxes

Ameren Missouri and Ameren Illinois collect from their customers excise taxes, including municipal and state excise taxes and gross receipts taxes, that are levied on the sale or distribution of natural gas and electricity. The following table presents the excise taxes recorded on a gross basis in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” on the statements of income for the years ended December 31, 2019, 2018, and 2017:

	2019				2018				2017
Ameren Missouri	$	147			$	164			$	153
Ameren Illinois	117				118				112
Ameren	$	264			$	282			$	265

Allowance for Funds Used During Construction

The following table presents the average rate that was applied to eligible construction work in progress and the amounts of allowance for funds used during construction capitalized in 2019, 2018, and 2017:

	2019				2018				2017
Average rate:
Ameren Missouri	6		%		7		%		7		%
Ameren Illinois	5		%		5		%		4		%
Ameren:
Allowance for equity funds used during construction	$	28			$	36			$	24
Allowance for borrowed funds used during construction	20				21				14
Total Ameren	$	48			$	57			$	38
Ameren Missouri:
Allowance for equity funds used during construction	$	19			$	27			$	21
Allowance for borrowed funds used during construction	12				14				10
Total Ameren Missouri	$	31			$	41			$	31
Ameren Illinois:
Allowance for equity funds used during construction	$	9			$	9			$	3
Allowance for borrowed funds used during construction	8				7				4
Total Ameren Illinois	$	17			$	16			$	7

Earnings per Share

Earnings per basic and diluted share are computed by dividing “Net Income Attributable to Ameren Common Shareholders” by the weighted-average number of basic and diluted common shares outstanding, respectively, during the applicable period. The weighted-average shares outstanding for earnings per diluted share includes the incremental effects resulting from performance share units, restricted stock units, and the forward sale agreement relating to common stock when the impact would be dilutive, as calculated using the treasury stock method. For information regarding performance share units and restricted stock units, see Note 11 – Stock-based Compensation. For information regarding the forward sale agreement, see Note 5 – Long-term Debt and Equity Financings.

The following table reconciles the weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the years ended December 31, 2019, 2018, and 2017:

	2019			2018			2017
Weighted-average Common Shares Outstanding – Basic	245.6			243.8			242.6
Assumed settlement of performance share units and restricted stock units	1.4			2.0			1.6
Dilutive effect of forward sale agreement related to common stock	0.1			—			—
Weighted-average Common Shares Outstanding – Diluted(a)	247.1			245.8			244.2

(a)	There were no potentially dilutive securities excluded from the earnings per diluted share calculations for the years ended December 31, 2019, 2018, and 2017.

Supplemental Cash Flow Information

The following table provides noncash financing and investing activity excluded from the statements of cash flows for the years ended December 31, 2019 and 2018. There was no noncash financing or investing activity for the year ended December 31, 2017.

	December 31, 2019										December 31, 2018										December 31, 2017
Ameren			Ameren Missouri			Ameren Illinois				Ameren			Ameren Missouri			Ameren Illinois				Ameren			Ameren Missouri			Ameren Illinois
Investing
Exchange of bond investments for the extinguishment of senior unsecured notes(a)	$	17		$	—		$	17			$	—		$	—		$	—			$	—		$	—		$	—
Accrued capital expenditures	333			140			163				272			121			138				361			159			175
Accrued nuclear fuel expenditures	19			19			—				20			20			—				10			10			—
Net realized and unrealized gain – nuclear decommissioning trust fund	143			143			—				(38		)	(38		)	—				3			3			—
Financing
Exchange of bond investments for the extinguishment of senior unsecured notes(a)	$	(17	)	$	—		$	(17	)		$	—		$	—		$	—			$	—		$	—		$	—
Issuance of common stock for stock-based compensation	54			—			—				35			—			—				—			—			—

(a)	See Note 4 – Long-term Debt and Equity Financings for additional information.

NOTE 16 – SEGMENT INFORMATION

Ameren has four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. The Ameren Missouri segment includes all of the operations of Ameren Missouri. Ameren Illinois Electric Distribution consists of the electric distribution business of Ameren Illinois. Ameren Illinois Natural Gas consists of the natural gas business of Ameren Illinois. Ameren Transmission primarily consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI. The category called Other primarily includes Ameren (parent) activities and Ameren Services.

Ameren Missouri has one segment. Ameren Illinois has three segments: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission. See Note 1 – Summary of Significant Accounting Policies for additional information regarding the operations of Ameren Missouri, Ameren Illinois, and ATXI.

Segment operating revenues and a majority of operating expenses are directly recognized and incurred by Ameren Illinois to each Ameren Illinois segment. Common operating expenses, miscellaneous income and expenses, interest charges, and income tax expense are allocated by Ameren Illinois to each Ameren Illinois segment based on certain factors, which primarily relate to the nature of the cost. Additionally, Ameren Illinois Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution, other retail electric suppliers, and wholesale customers. The transmission expense for Illinois customers who have elected to purchase their power from Ameren Illinois is recovered through a cost recovery mechanism with no net effect on Ameren Illinois Electric Distribution earnings, as costs are offset by corresponding revenues. Transmission revenues from these transactions are reflected in Ameren Transmission’s and Ameren Illinois Transmission’s operating revenues. An intersegment elimination at Ameren and Ameren Illinois occurs to eliminate these transmission revenues and expenses.

The following tables present information about the reported revenue and specified items reflected in net income attributable to common shareholders and capital expenditures by segment at Ameren and Ameren Illinois for the years ended December 31, 2019, 2018, and 2017. Ameren, Ameren Missouri, and Ameren Illinois management review segment capital expenditure information rather than any individual or total asset amount.

Ameren

	Ameren Missouri				Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Transmission				Other				Intersegment Eliminations				Ameren
2019
External revenues	$	3,212			$	1,487			$	791			$	401			$	—			$	—			$	5,891
Intersegment revenues	31				17				6				63			(a)	—				(98		)		19			(b)
Depreciation and amortization	556				273				78				84				4				—				995
Interest income	26				6				—				1				5				(5		)		33
Interest charges	178				71				38				74			(c)	25				(5		)		381
Income taxes (benefit)	68				45				30				64				(25		)		—				182
Net income (loss) attributable to Ameren common shareholders	426				146				84				185				(13		)		—				828
Capital expenditures	1,076				518				318				528				3				(32		)	(d)	2,411
2018
External revenues	$	3,555			$	1,544			$	814			$	378			$	—			$	—			$	6,291
Intersegment revenues	34				3				1				55			(a)	—				(93		)		—
Depreciation and amortization	550				259				65				77				4				—				955
Interest income	28				6				—				—				4				(5		)		33
Interest charges	200				73				38				75			(c)	19				(4		)		401
Income taxes (benefit)	124				41				25				56				(9		)		—				237
Net income (loss) attributable to Ameren common shareholders	478				136				70				164				(33		)		—				815
Capital expenditures	914				503				311				562				5				(9		)		2,286
2017
External revenues	$	3,488			$	1,564			$	742			$	382			$	(2	)		$	—			$	6,174
Intersegment revenues	49				4				1				44			(a)	—				(98		)		—
Depreciation and amortization	533				239				59				60				5				—				896
Interest income	27				7				—				—				11				(11		)		34
Interest charges	207				73				36				67			(c)	19				(11		)		391
Income taxes	254				83				36				90				113				—				576
Net income (loss) attributable to Ameren common shareholders	323				131				60				140				(131		)		—				523
Capital expenditures	773				476				245				644				1				(7		)		2,132

(a)	Ameren Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution. See discussion of transactions above.

(b)

Intersegment revenues at Ameren include $14 million and $5 million of revenue from Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. Under authoritative accounting guidance for rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation. See Note 13 – Related-party Transactions for additional information.

(c)	Ameren Transmission interest charges include an allocation of financing costs from Ameren (parent).

(d)	Intersegment capital expenditure eliminations include $24 million of eliminations for the year ended December 31, 2019 for a software licensing agreement between Ameren Illinois and Ameren Missouri. See Note 13 – Related-party Transactions for additional information.

Ameren Illinois

	Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Illinois Transmission				Intersegment Eliminations				Ameren Illinois
2019
External revenues	$	1,504			$	797			$	226			$	—			$	2,527
Intersegment revenues	—				—				62			(a)	(62		)		—
Depreciation and amortization	273				78				55				—				406
Interest income	6				—				—				—				6
Interest charges	71				38				38				—				147
Income taxes	45				30				35				—				110
Net income available to common shareholder	146				84				113				—				343
Capital expenditures	518				318				372				—				1,208
2018
External revenues	$	1,547			$	815			$	214			$	—			$	2,576
Intersegment revenues	—				—				53			(a)	(53		)		—
Depreciation and amortization	259				65				50				—				374
Interest income	6				—				—				—				6
Interest charges	73				38				38				—				149
Income taxes	41				25				32				—				98
Net income available to common shareholder	136				70				98				—				304
Capital expenditures	503				311				444				—				1,258
2017
External revenues	$	1,568			$	743			$	216			$	—			$	2,527
Intersegment revenues	—				—				42			(a)	(42		)		—
Depreciation and amortization	239				59				43				—				341
Interest income	7				—				—				—				7
Interest charges	73				36				35				—				144
Income taxes	83				36				47				—				166
Net income available to common shareholder	131				60				77				—				268
Capital expenditures	476				245				355				—				1,076

(a)	Ameren Illinois Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution. See discussion of transactions above.

The following tables present disaggregated revenues by segment at Ameren and Ameren Illinois for the years ended December 31, 2019, 2018, and 2017. Economic factors affect the nature, timing, amount, and uncertainty of revenues and cash flows in a similar manner across customer classes. Revenues from alternative revenue programs have a similar distribution among customer classes as revenues from contracts with customers. Other revenues not associated with contracts with customers are presented in the Other customer classification, along with electric transmission and off-system revenues.

Ameren

	Ameren Missouri				Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Transmission				Other				Intersegment Eliminations				Ameren
2019
Residential	$	1,403			$	848			$	—			$	—			$	—			$	—			$	2,251
Commercial	1,157				497				—				—				—				—				1,654
Industrial	278				127				—				—				—				—				405
Other	271				32			(a)	—				464				—				(96		)		671
Total electric revenues	$	3,109			$	1,504			$	—			$	464			$	—			$	(96	)		$	4,981
Residential	$	81			$	—			$	570			$	—			$	—			$	—			$	651
Commercial	34				—				154				—				—				—				188
Industrial	4				—				13				—				—				—				17
Other	15				—				60			(a)	—				—				(2		)		73
Total gas revenues	$	134			$	—			$	797			$	—			$	—			$	(2	)		$	929
Total revenues**(b)**	$	3,243			$	1,504			$	797			$	464			$	—			$	(98	)		$	5,910
2018
Residential	$	1,560			$	867			$	—			$	—			$	—			$	—			$	2,427
Commercial	1,271				511				—				—				—				—				1,782
Industrial	312				130				—				—				—				—				442
Other	308			(c)	39				—				433				—				(92		)		688			(c)
Total electric revenues	$	3,451			$	1,547			$	—			$	433			$	—			$	(92	)		$	5,339
Residential	$	90			$	—			$	581			$	—			$	—			$	—			$	671
Commercial	37				—				159				—				—				—				196
Industrial	4				—				17				—				—				—				21
Other	7				—				58				—				—				(1		)		64
Total gas revenues	$	138			$	—			$	815			$	—			$	—			$	(1	)		$	952
Total revenues(b)	$	3,589			$	1,547			$	815			$	433			$	—			$	(93	)		$	6,291
2017
Residential	$	1,417			$	870			$	—			$	—			$	—			$	—			$	2,287
Commercial	1,208				527				—				—				—				—				1,735
Industrial	305				113				—				—				—				—				418
Other	481				58				—				426				(2		)		(96		)		867
Total electric revenues	$	3,411			$	1,568			$	—			$	426			$	(2	)		$	(96	)		$	5,307
Residential	$	77			$	—			$	531			$	—			$	—			$	—			$	608
Commercial	31				—				146				—				—				—				177
Industrial	4				—				12				—				—				—				16
Other	14				—				54				—				—				(2		)		66
Total gas revenues	$	126			$	—			$	743			$	—			$	—			$	(2	)		$	867
Total revenues(b)	$	3,537			$	1,568			$	743			$	426			$	(2	)		$	(98	)		$	6,174

(a)	Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. See Note 13 – Related-party Transactions for additional information.

(b)The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the years ended December 31, 2019, 2018, and 2017:

	Ameren Missouri				Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Transmission				Ameren
2019
Revenues from alternative revenue programs	$	35			$	(74	)		$	—			$	(31	)		$	(70	)
Other revenues not from contracts with customers	19				7				2				—				28
2018
Revenues from alternative revenue programs	$	(8	)		$	(3	)		$	(23	)		$	(25	)		$	(59	)
Other revenues not from contracts with customers	24				16				2				—				42
2017
Revenues from alternative revenue programs	$	(28	)		$	(5	)		$	5			$	13			$	(15	)
Other revenues not from contracts with customers	15				6				2				—				23

(c)	Includes $60 million for the year ended December 31, 2018, for the reduction to revenue for the excess amounts collected in rates to be refunded related to the TCJA from January 1, 2018, through July 31, 2018. See Note 2 – Rate and Regulatory Matters for additional information.

Ameren Illinois

	Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Illinois Transmission				Intersegment Eliminations				Ameren Illinois
2019
Residential	$	848			$	570			$	—			$	—			$	1,418
Commercial	497				154				—				—				651
Industrial	127				13				—				—				140
Other	32			(a)	60			(a)	288				(62		)		318
Total revenues(b)	$	1,504			$	797			$	288			$	(62	)		$	2,527
2018
Residential	$	867			$	581			$	—			$	—			$	1,448
Commercial	511				159				—				—				670
Industrial	130				17				—				—				147
Other	39				58				267				(53		)		311
Total revenues(b)	$	1,547			$	815			$	267			$	(53	)		$	2,576
2017
Residential	$	870			$	531			$	—			$	—			$	1,401
Commercial	527				146				—				—				673
Industrial	113				12				—				—				125
Other	58				54				258				(42		)		328
Total revenues(b)	$	1,568			$	743			$	258			$	(42	)		$	2,527

(a)	Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. See Note 13 – Related-party Transactions for additional information.

(b)	The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the Ameren Illinois segments for the years ended December 31, 2019, 2018, and 2017:

	Ameren Illinois Electric Distribution				Ameren Illinois Natural Gas				Ameren Illinois Transmission				Ameren Illinois
2019
Revenues from alternative revenue programs	$	(74	)		$	—			$	(33	)		$	(107	)
Other revenues not from contracts with customers	7				2				—				9
2018
Revenues from alternative revenue programs	$	(3	)		$	(23	)		$	(25	)		$	(51	)
Other revenues not from contracts with customers	16				2				—				18
2017
Revenues from alternative revenue programs	$	(5	)		$	5			$	9			$	9
Other revenues not from contracts with customers	6				2				—				8

SELECTED QUARTERLY INFORMATION (Unaudited) (In millions, except per share amounts)

Ameren	2019																	2018
Quarter ended	March 31				June 30				September 30				December 31					March 31				June 30				September 30				December 31
Operating revenues	$	1,556			$	1,379			$	1,659			$	1,316				$	1,585			$	1,563			$	1,724			$	1,419
Operating income	288				280				520				179					273				385				533				166
Net income	193				180				366				95					153				240				359				69
Net income attributable to Ameren common shareholders	$	191			$	179			$	364			$	94				$	151			$	239			$	357			$	68
Earnings per common share – basic	$	0.78			$	0.73			$	1.48			$	0.38				$	0.62			$	0.98			$	1.46			$	0.28
Earnings per common share – diluted	$	0.78			$	0.72			$	1.47			$	0.38				$	0.62			$	0.97			$	1.45			$	0.28

Ameren Missouri Quarter ended		Operating Revenues				Operating Income				Net Income (Loss)				Net Income (Loss) Available to Common Shareholder
March 31, 2019		$	758			$	79			$	40			$	39
March 31, 2018		792				90				39				38
June 30, 2019		798				152				108				107
June 30, 2018		955				258				169				168
September 30, 2019		1,059				381				301				300
September 30, 2018		1,129				394				295				294
December 31, 2019		628				5				(20		)		(20		)
December 31, 2018		713				7				(22		)		(22		)

Ameren Illinois Quarter ended		Operating Revenues				Operating Income				Net Income				Net Income Available to Common Shareholder
March 31, 2019		$	762			$	186			$	121			$	120
March 31, 2018		760				159				96				95
June 30, 2019		547				104				63				62
June 30, 2018		578				105				63				62
September 30, 2019		564				110				65				65
September 30, 2018		564				113				63				63
December 31, 2019		654				150				97				96
December 31, 2018		674				135				85				84