AEE 2014 10-K
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X)
 
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2014.
 
 
 
 
OR
 
 
(   )
 
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from           to        .
Commission
File Number
 
Exact name of registrant as specified in its charter;
State of Incorporation;
Address and Telephone Number
 
IRS Employer
Identification No.
 
 
 
1-14756
 
Ameren Corporation
 
43-1723446
 
 
(Missouri Corporation)
 
 
 
 
1901 Chouteau Avenue
 
 
 
 
St. Louis, Missouri 63103
 
 
 
 
(314) 621-3222
 
 
 
 
 
1-2967
 
Union Electric Company
 
43-0559760
 
 
(Missouri Corporation)
 
 
 
 
1901 Chouteau Avenue
 
 
 
 
St. Louis, Missouri 63103
 
 
 
 
(314) 621-3222
 
 
 
 
 
1-3672
 
Ameren Illinois Company
 
37-0211380
 
 
(Illinois Corporation)
 
 
 
 
6 Executive Drive
 
 
 
 
Collinsville, Illinois 62234
 
 
 
 
(618) 343-8150
 
 
Securities Registered Pursuant to Section 12(b) of the Act:
The following security is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 and is listed on the New York Stock Exchange:
Registrant
Title of each class
Ameren Corporation
Common Stock, $0.01 par value per share
Securities Registered Pursuant to Section 12(g) of the Act:
Registrant
Title of each class
Union Electric Company
Preferred Stock, cumulative, no par value, stated value $100 per share
Ameren Illinois Company
Preferred Stock, cumulative, $100 par value per share Depositary Shares, each representing one-fourth of a share of 6.625% Preferred Stock, cumulative, $100 par value per share

Indicate by checkmark if each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Ameren Corporation
Yes
(X)
No
( )
Union Electric Company
Yes
( )
No
(X)
Ameren Illinois Company
Yes
( )
No
(X)
Indicate by checkmark if each registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Ameren Corporation
Yes
( )
No
(X)
Union Electric Company
Yes
( )
No
(X)
Ameren Illinois Company
Yes
( )
No
(X)
Indicate by checkmark whether the registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Ameren Corporation
Yes
(X)
No
( )
Union Electric Company
Yes
(X)
No
( )
Ameren Illinois Company
Yes
(X)
No
( )
Indicate by checkmark whether each registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Ameren Corporation
Yes
(X)
No
( )
Union Electric Company
Yes
(X)
No
( )
Ameren Illinois Company
Yes
(X)
No
( )
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of each registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Ameren Corporation
 
(X)
Union Electric Company
 
(X)
Ameren Illinois Company
 
(X)
Indicate by checkmark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 
Large
Accelerated
Filer
 
Accelerated
Filer
 
Non-accelerated
Filer
 
Smaller
Reporting
Company
Ameren Corporation
 
(X)
 
( )
 
( )
 
( )
Union Electric Company
 
( )
 
( )
 
(X)
 
( )
Ameren Illinois Company
 
( )
 
( )
 
(X)
 
( )
Indicate by checkmark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).
Ameren Corporation
Yes
( )
No
(X)
Union Electric Company
Yes
( )
No
(X)
Ameren Illinois Company
Yes
( )
No
(X)
As of June 30, 2014, Ameren Corporation had 242,634,798 shares of its $0.01 par value common stock outstanding. The aggregate market value of these shares of common stock (based upon the closing price of the common stock on the New York Stock Exchange on June 30, 2014) held by nonaffiliates was $9,918,910,542. The shares of common stock of the other registrants were held by Ameren Corporation as of June 30, 2014.
The number of shares outstanding of each registrant’s classes of common stock as of January 30, 2015, was as follows:
Ameren Corporation
Common stock, $0.01 par value per share: 242,634,798
 
 
Union Electric Company
Common stock, $5 par value per share, held by Ameren
Corporation (parent company of the registrant): 102,123,834
 
 
Ameren Illinois Company
Common stock, no par value, held by Ameren
Corporation (parent company of the registrant): 25,452,373
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement of Ameren Corporation and portions of the definitive information statements of Union Electric Company and Ameren Illinois Company for the 2015 annual meetings of shareholders are incorporated by reference into Part III of this Form 10-K.
 
This combined Form 10-K is separately filed by Ameren Corporation, Union Electric Company, and Ameren Illinois Company. Each registrant hereto is filing on its own behalf all of the information contained in this annual report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.


Table of Contents

TABLE OF CONTENTS
 
 
Page
PART I
 
 
Item 1.
 
 
 
 
 
 
 
 
 
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
 
 
 
PART II
 
 
Item 5.
Item 6.
Item 7.
 
 
 
 
 
 
 
Item 7A.
Item 8.
 
Item 9.
Item 9A.
Item 9B.
 
 
 
PART III
 
 
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
 
 
 
PART IV
 
 
Item 15.
This report contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements should be read with the cautionary statements and important factors under the heading “Forward-looking Statements.” Forward-looking statements are all statements other than statements of historical fact, including those statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” and similar expressions.


Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
We use the words “our,” “we” or “us” with respect to certain information that relates to Ameren, Ameren Missouri, and Ameren Illinois, collectively. When appropriate, subsidiaries of Ameren Corporation are named specifically as their various business activities are discussed.
2006 Incentive Plan - The 2006 Omnibus Incentive Compensation Plan, provides for compensatory stock-based awards to eligible employees and directors. The 2006 Omnibus Incentive Compensation Plan was replaced prospectively for new grants by the 2014 Incentive Plan.
2012 Credit Agreements - The 2012 Illinois Credit Agreement and the 2012 Missouri Credit Agreement, collectively.
2012 Illinois Credit Agreement - Ameren's and Ameren Illinois' $1.1 billion multiyear senior unsecured credit agreement. The agreement was amended and restated in December 2014 and expires on December 11, 2019.
2012 Missouri Credit Agreement - Ameren's and Ameren Missouri's $1 billion multiyear senior unsecured credit agreement. The agreement was amended and restated in December 2014 and expires on December 11, 2019.
2014 Incentive Plan - The 2014 Omnibus Incentive Compensation Plan, which became effective in April 2014 and provides for compensatory stock-based awards to eligible employees and directors.
AER - Ameren Energy Resources Company, LLC, a former Ameren Corporation subsidiary that consisted of non-rate-regulated operations. In December 2013, AER contributed substantially all of its assets and liabilities, including its ownership interests in Genco, AERG, and Marketing Company, to New AER. Medina Valley was distributed from AER to Ameren in March 2013.
AERG - Ameren Energy Resources Generating Company, a former AER subsidiary that operated a merchant electric generation business in Illinois. In December 2013, AERG was included in the divestiture of New AER to IPH. Following the New AER divestiture, AERG became Illinois Power Resources Generating, LLC.
Ameren - Ameren Corporation and its subsidiaries on a consolidated basis. In references to financing activities, acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.
Ameren Companies - Ameren Corporation, Ameren Missouri, and Ameren Illinois, collectively, which are individual registrants within the Ameren consolidated group.
Ameren Illinois or AIC - Ameren Illinois Company, an Ameren Corporation subsidiary that operates rate-regulated electric and natural gas transmission and distribution businesses in Illinois, doing business as Ameren Illinois. Ameren Illinois is also defined as a financial reporting segment.
Ameren Illinois Merger - In 2010, CILCO and IP merged with and into CIPS, with the surviving corporation renamed Ameren Illinois Company.
Ameren Missouri or AMO - Union Electric Company, an Ameren Corporation subsidiary that operates a rate-regulated electric generation, transmission and distribution business and a rate-regulated natural gas transmission and distribution business in Missouri, doing business as Ameren Missouri. Ameren Missouri is also defined as a financial reporting segment.
Ameren Services - Ameren Services Company, an Ameren
 
Corporation subsidiary that provides support services to Ameren and its subsidiaries.
AMIL - The MISO balancing authority area operated by Ameren, which includes the load of Ameren Illinois and ATXI.
AMMO - The MISO balancing authority area operated by Ameren, which includes the load and energy centers of Ameren Missouri.
ARO - Asset retirement obligations.
ATXI - Ameren Transmission Company of Illinois, an Ameren Corporation subsidiary that is engaged in the construction and operation of electric transmission assets.
Baseload - The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Btu - British thermal unit, a standard unit for measuring the quantity of heat energy required to raise the temperature of one pound of water by one degree Fahrenheit.
CAIR - Clean Air Interstate Rule.
CCR - Coal combustion residuals, which include fly ash, bottom ash, boiler slag and flue gas desulfurization materials generated from burning coal to generate electricity.
CILCO - Central Illinois Light Company, a former Ameren Corporation subsidiary that operated rate-regulated electric and natural gas transmission and distribution businesses in Illinois, before the Ameren Illinois Merger.
CIPS - Central Illinois Public Service Company, an Ameren Corporation subsidiary, renamed Ameren Illinois Company upon the effectiveness of the Ameren Illinois Merger, which operates rate-regulated electric and natural gas transmission and distribution businesses in Illinois.
Clean Power Plan - “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” a proposed rule published by the EPA in June 2014.
CO2 - Carbon dioxide.
COL - Nuclear energy center combined construction and operating license.
Cooling degree-days - The summation of positive differences between the mean daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of electricity demand by residential and commercial customers for summer cooling.
CSAPR - Cross-State Air Pollution Rule.
CSRA - Natural Gas Consumer, Safety and Reliability Act, an Illinois law that encourages natural gas utilities to accelerate modernization of the state's natural gas infrastructure through the use of a QIP rider.
CT - Combustion turbine used primarily for peaking electric generation capacity.
Dekatherm - A standard unit of energy equivalent to one million Btus.
DOE - Department of Energy, a United States government agency.
DRPlus - Ameren Corporation’s dividend reinvestment and direct stock purchase plan.
Dynegy - Dynegy Inc.
EEI - Electric Energy, Inc., a former 80%-owned Genco


1

Table of Contents

subsidiary that operated merchant electric generation energy centers and FERC-regulated transmission facilities in Illinois. In December 2013, Genco's ownership interest in EEI was included in the divestiture of New AER to IPH.
Entergy - Entergy Arkansas, Inc.
EPA - Environmental Protection Agency, a United States government agency.
ERISA - Employee Retirement Income Security Act of 1974, as amended.
Exchange Act - Securities Exchange Act of 1934, as amended.
FAC - Fuel adjustment clause, a fuel and purchased power cost recovery mechanism that allows Ameren Missouri to recover, through customer rates, 95% of changes in net energy costs greater or less than the amount set in base rates without a traditional rate proceeding, subject to MoPSC prudence reviews. Net energy costs include fuel and purchased power costs, including transportation charges and revenues, net of off-system sales.
FASB - Financial Accounting Standards Board, a rulemaking organization that establishes financial accounting and reporting standards in the United States.
FERC - Federal Energy Regulatory Commission, a United States government agency.
Fitch - Fitch Ratings, a credit rating agency.
FTRs - Financial transmission rights, financial instruments that specify whether the holder shall pay or receive compensation for certain congestion-related transmission charges between two designated points.
GAAP - Generally accepted accounting principles in the United States.
Genco - Ameren Energy Generating Company, a former AER subsidiary that operated a merchant electric generation business in Illinois and held an 80% ownership interest in EEI. In December 2013, Genco was included in the divestiture of New AER to IPH. Following the New AER divestiture, Genco became Illinois Power Generating Company. 
Heating degree-days - The summation of negative differences between the mean daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of demand for electricity and natural gas for winter heating by residential and commercial customers.
IBEW - International Brotherhood of Electrical Workers, a labor union.
ICC - Illinois Commerce Commission, a state agency that regulates Illinois utility businesses, including Ameren Illinois and ATXI.
IEIMA - Illinois Energy Infrastructure Modernization Act, an Illinois law that established a performance-based formula process for determining electric delivery service rates. By its election to participate in this regulatory framework, Ameren Illinois is required to make incremental capital expenditures to modernize its electric distribution system, meet performance standards, and create jobs in Illinois, among other requirements.
IP - Illinois Power Company, a former Ameren Corporation subsidiary that operated rate-regulated electric and natural gas transmission and distribution businesses in Illinois, before the Ameren Illinois Merger.
IPA - Illinois Power Agency, a state government agency that has broad authority to assist in the procurement of electric power for
 
residential and small commercial customers.
IPH - Illinois Power Holdings, LLC, an indirect wholly owned subsidiary of Dynegy.
IRS - Internal Revenue Service, a United States government agency.
ISRS - Infrastructure system replacement surcharge, which is a cost recovery mechanism that allows Ameren Missouri to recover natural gas infrastructure replacement costs from utility customers without a traditional rate proceeding.
IUOE - International Union of Operating Engineers, a labor union.
Kilowatthour - A measure of electricity consumption equivalent to the use of 1,000 watts of power over one hour.
LIUNA - Laborers’ International Union of North America, a labor union.
Marketing Company - Ameren Energy Marketing Company, a former AER subsidiary that marketed power for Genco, AERG, and EEI. Marketing Company was included in the divestiture of New AER to IPH in December 2013. Following the New AER divestiture, Marketing Company became Illinois Power Marketing Company. 
MATS - Mercury and Air Toxics Standards.
Medina Valley - AmerenEnergy Medina Valley Cogen, LLC, an Ameren Corporation subsidiary. This company was distributed from AER to Ameren in March 2013.
MEEIA - Missouri Energy Efficiency Investment Act, a Missouri law that allows electric utilities to recover costs related to MoPSC-approved customer energy efficiency programs.
Megawatthour or MWh - One thousand kilowatthours.
Merchant Generation - A former financial reporting segment that, prior to the divestiture of New AER to IPH in December 2013, consisted primarily of the operations of AER, including Genco, AERG, Marketing Company and, through March 2013, Medina Valley.
MGP - Manufactured gas plant.
MIEC - Missouri Industrial Energy Consumers, an association of industrial companies.
MISO - Midcontinent Independent System Operator, Inc., an RTO.
Missouri Environmental Authority - Environmental Improvement and Energy Resources Authority of the state of Missouri, a governmental body authorized to finance environmental projects by issuing tax-exempt bonds and notes.
Mmbtu - One million Btus.
Money pool - Borrowing agreements among Ameren and its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements.
Moody’s - Moody’s Investors Service Inc., a credit rating agency.
MoOPC - Missouri Office of the Public Counsel.
MoPSC - Missouri Public Service Commission, a state agency that regulates Missouri utility businesses, including Ameren Missouri.
MTM - Mark-to-market.
MW - Megawatt.
Native load - End-use retail customers whom we are obligated to serve by statute, franchise, contract, or other regulatory requirement.
NEIL - Nuclear Electric Insurance Limited, which includes all of its affiliated companies.
NERC - North American Electric Reliability Corporation.


2

Table of Contents

Net energy costs- Net energy costs, as defined in the FAC, include fuel and purchased power costs, including transportation charges and revenues, net of off-system sales.
New AER - New Ameren Energy Resources Company, LLC, a limited liability company formed as a direct wholly owned subsidiary of AER. New AER, acquired by IPH in December 2013, included substantially all of the assets and liabilities of AER, except for certain assets and liabilities retained by Ameren. Following the New AER divestiture, New AER became Illinois Power Resources, LLC. 
NO2 - Nitrogen dioxide.
NOx - Nitrogen oxides.
Noranda - Noranda Aluminum, Inc.
NPNS - Normal purchases and normal sales.
NRC - Nuclear Regulatory Commission, a United States government agency.
NSPS - New Source Performance Standards, a provision under the Clean Air Act.
NSR - New Source Review provisions of the Clean Air Act, which include Nonattainment New Source Review and Prevention of Significant Deterioration regulations.
NWPA - Nuclear Waste Policy Act of 1982, as amended.
NYMEX - New York Mercantile Exchange.
NYSE - New York Stock Exchange, Inc.
OATT - Open Access Transmission Tariff.
OCI - Other comprehensive income (loss) as defined by GAAP.
Off-system sales revenues - Revenues from other than native load sales, including wholesale sales.
OTC - Over-the-counter.
PGA - Purchased Gas Adjustment tariffs, which permit prudently incurred natural gas costs to be recovered directly from utility customers without a traditional rate proceeding.
PJM - PJM Interconnection LLC., an RTO.
PUHCA 2005 - The Public Utility Holding Company Act of 2005.
QIP - Qualifying infrastructure plant. Costs of qualifying infrastructure plant that may be included in a recovery mechanism enacted as part of the CSRA.
 
Rate base - The net value of property on which a public utility is permitted to earn an allowed rate of return.
Regulatory lag - The exposure to differences in costs incurred and actual sales volume levels as compared with the associated amounts included in customer rates. Rate increase requests in traditional rate case proceedings can take up to 11 months to be acted upon by the MoPSC and the ICC. As a result, revenue increases authorized by regulators will lag behind changing costs and sales volume levels when based on historical periods.
Revenue requirement - The cost of providing utility service to customers, which is calculated as the sum of a utility's recoverable operating and maintenance expenses, depreciation and amortization expense, taxes, and an allowed return on investment.
RFP - Request for proposal.
Rockland Capital - Rockland Capital, LLC, together with the special purpose entity affiliated with, and formed by, Rockland Capital, LLC, that acquired the Elgin, Gibson City, and Grand Tower gas-fired energy centers in January 2015.
RTO - Regional transmission organization.
S&P - Standard & Poor’s Ratings Services, a credit rating agency.
SEC - Securities and Exchange Commission, a United States government agency.
SERC - SERC Reliability Corporation, one of the regional electric reliability councils organized for coordinating the planning and operation of the nation’s bulk power supply.
SO2 - Sulfur dioxide.
Test year - The selected period of time, typically a twelve-month period, for which a utility's historical or forecasted operating results are used to determine the appropriate revenue requirement.
UA - United Association of Plumbers and Pipefitters, a labor union.


 



3

Table of Contents

FORWARD-LOOKING STATEMENTS
Statements in this report not based on historical facts are considered “forward-looking” and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors and elsewhere in this report and in our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations, such as Ameren Missouri’s July 2014 electric rate case filing; Ameren Missouri's December 2014 MEEIA filing; Ameren Illinois' appeal of the ICC's natural gas rate order issued in December 2013; Ameren Illinois' January 2015 natural gas delivery service rate case filing; FERC settlement procedures regarding a potential Ameren Illinois electric transmission rate refund; the complaint case filed with the FERC seeking a reduction in the allowed return on common equity under the MISO tariff; and future regulatory, judicial, or legislative actions that seek to change regulatory recovery mechanisms;
the effect of Ameren Illinois participating in a performance-based formula ratemaking process under the IEIMA, including the direct relationship between Ameren Illinois' return on common equity and 30-year United States Treasury bond yields, the related financial commitments required by the IEIMA, and the resulting uncertain impact on the financial condition, results of operations, and liquidity of Ameren Illinois;
the potential extension of the IEIMA after its current sunset provision at the end of 2017, and any changes to the performance-based formula ratemaking process or required financial commitments;
the effects of increased competition in the future due to, among other factors, deregulation of certain aspects of our business at either the state or federal level;
changes in laws and other governmental actions, including monetary, fiscal, tax, and energy policies;
the effects on demand for our services resulting from technological advances, including advances in customer energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
the effectiveness of Ameren Missouri's customer energy efficiency programs and the ability to earn incentive awards under the MEEIA;
the timing of increasing capital expenditure and operating
 
expense requirements and our ability to recover these costs in a timely manner;
the cost and availability of fuel such as coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including our ability to recover the costs for such commodities and our customers' tolerance for the related rate increases;
the effectiveness of our risk management strategies and our use of financial and derivative instruments;
business and economic conditions, including their impact on key customers, interest rates, bad debt expense, and demand for our products;
disruptions of the capital markets, deterioration in credit metrics of the Ameren Companies, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity;
our assessment of our liquidity;
the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;
actions of credit rating agencies and the effects of such actions;
the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages;
the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets;
the effects of our increasing investment in electric transmission projects and uncertainty as to whether we will achieve our expected returns in a timely fashion, if at all;
the extent to which Ameren Missouri prevails in its claim against an insurer in connection with the December 2005 breach of the upper reservoir at its Taum Sauk pumped-storage hydroelectric energy center;
the extent to which Ameren Missouri is permitted by its regulators to recover in rates the investments it made in connection with additional nuclear generation at its Callaway energy center;
operation of Ameren Missouri's Callaway energy center, including planned and unplanned outages, and decommissioning costs;
the effects of strategic initiatives, including mergers, acquisitions and divestitures, and any related tax implications;
the impact of current environmental regulations and new, more stringent, or changing requirements, including those related to greenhouse gases, other emissions and discharges, cooling water intake structures, CCR, and energy efficiency, that are enacted over time and that could limit or terminate the operation of certain of our energy centers, increase our costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
the impact of complying with renewable energy portfolio requirements in Missouri;


4

Table of Contents

labor disputes, work force reductions, future wage and employee benefits costs, including changes in discount rates, mortality tables, and returns on benefit plan assets;
the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;
the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri's energy sales;
 
the inability of Dynegy and IPH to satisfy their indemnity and other obligations to Ameren in connection with the divestiture of New AER to IPH;
legal and administrative proceedings; and
acts of sabotage, war, terrorism, cyber attacks, or other intentionally disruptive acts.


Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.
PART I
ITEM 1.
BUSINESS
GENERAL
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company under PUHCA 2005, administered by the FERC. Ameren was formed in 1997 by the merger of Ameren Missouri and CIPSCO Inc., which was the parent company of CIPS. Ameren acquired CILCORP Inc., which was the parent company of CILCO, in 2003 and IP in 2004. CIPS, CILCO, and IP were merged to form Ameren Illinois in 2010. Ameren’s primary assets are its equity interests in its subsidiaries, including Ameren Missouri and Ameren Illinois. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of other expenses by Ameren depend on distributions made to it by its subsidiaries.
Below is a summary description of Ameren Missouri and Ameren Illinois. A more detailed description can be found in Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas transmission and distribution business in Missouri.
Ameren Illinois operates rate-regulated electric and natural gas transmission and distribution businesses in Illinois.
Ameren has various other subsidiaries responsible for activities such as the provision of shared services. Ameren also has a subsidiary, ATXI, that operates a FERC rate-regulated electric transmission business. ATXI is developing MISO-approved electric transmission projects, including the Illinois Rivers, Spoon River, and Mark Twain projects. Ameren is also pursuing reliability projects within Ameren Missouri's and Ameren Illinois' service territories as well as competitive electric transmission investment opportunities outside of these territories, including investments outside of MISO.
In December 2013, Ameren completed the divestiture of New AER to IPH. In January 2014, Medina Valley completed its sale of the Elgin, Gibson City, and Grand Tower gas-fired energy
 
centers to Rockland Capital. In addition, in 2013, Ameren abandoned the Meredosia and Hutsonville energy centers upon the completion of the divestiture of New AER to IPH. Ameren has begun to demolish the Hutsonville energy center and expects to demolish the Meredosia energy center thereafter. As a result of these events, Ameren segregated the operating results, assets, and liabilities for New AER and for the Elgin, Gibson City, Grand Tower, Meredosia, and Hutsonville energy centers and presented them separately as discontinued operations for all periods presented in this report. Unless otherwise stated, the following information presented in Part I, Item 1, of this report excludes discontinued operations for all periods presented. See Note 16 – Divestiture Transactions and Discontinued Operations under Part II, Item 8, of this report for additional information.
The following table presents our total employees at December 31, 2014:
Ameren Missouri
3,924

Ameren Illinois
3,208

Ameren Services and Other
1,395

Ameren
8,527

As of January 1, 2015, the IBEW, the IUOE, the LIUNA, and the UA labor unions collectively represented about 55% of Ameren’s total employees. They represented 63% of the employees at Ameren Missouri and 60% at Ameren Illinois. The collective bargaining agreements have terms ranging from two to six years, and expire between 2015 and 2017.
For additional information about the development of our businesses, our business operations, and factors affecting our operations and financial position, see Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report and Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.


5

Table of Contents

BUSINESS SEGMENTS
Ameren has two reportable segments: Ameren Missouri and Ameren Illinois. Ameren Missouri and Ameren Illinois each have one reportable segment. The Ameren Missouri segment for both Ameren and Ameren Missouri includes all the operations of Ameren Missouri. The Ameren Illinois segment for both Ameren and Ameren Illinois consists of all of the operations of Ameren Illinois. See Note 1 – Summary of Significant Accounting Policies and Note 17 – Segment Information under Part II, Item 8, of this report for additional information on reporting segments.
RATES AND REGULATION
Rates
The rates that Ameren Missouri, Ameren Illinois, and ATXI are allowed to charge for their utility services significantly influence the results of operations, financial position, and liquidity of these companies and Ameren. The electric and natural gas utility industry is highly regulated. The utility rates charged to customers are determined, in large part, by governmental entities, including the MoPSC, the ICC, and the FERC. Decisions by these entities are influenced by many factors, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, economic conditions, public policy, and
 
social and political views. Decisions made by these governmental entities regarding rates are largely outside of our control. These decisions, as well as the regulatory lag involved in filing and getting new rates approved, could have a material effect on the results of operations, financial position, and liquidity of Ameren, Ameren Missouri, and Ameren Illinois. The extent of the regulatory lag varies for each of Ameren's electric and natural gas jurisdictions, with the FERC-regulated electric and Illinois electric distribution jurisdictions experiencing the least amount of regulatory lag. Depending on the jurisdiction, the effects of regulatory lag are mitigated through a variety of means, including the use of a future test year, the implementation of trackers and riders, the deferral of depreciation for assets not yet included in rate base, the level and timing of expenditures, and by regulatory frameworks that include annual revenue requirement reconciliations.
The MoPSC regulates rates and other matters for Ameren Missouri. The ICC regulates rates and other matters for Ameren Illinois, as well as non-rate utility matters for ATXI. ATXI does not have retail distribution customers; therefore, the ICC does not have authority to regulate its rates. The FERC regulates Ameren Missouri's, Ameren Illinois', and ATXI's cost-based rates for the wholesale distribution and transmission of energy in interstate commerce and various other matters discussed below under General Regulatory Matters.

The following table summarizes, by rate jurisdiction, the key terms of the rate orders in effect for customer billings for each of Ameren's rate-regulated utilities as of January 1, 2015.
 
Regulator
Allowed
Return on Equity
Percent of
 Common Equity
Rate Base (in billions)
Portion of Ameren's 2014 Operating Revenues(a)
Ameren Missouri
 
 
 
 
 
   Electric service(b)(c)
MoPSC
9.8%
52.3%
$6.8
56%
   Natural gas delivery service(d)
MoPSC
(d)
52.9%
$0.2
  3%
Ameren Illinois
 
 
 
 
 
   Electric distribution delivery service(e)
ICC
9.25%
51.0%
$2.1
23%
   Natural gas delivery service(f)
ICC
9.1%
51.7%
$1.1
16%
   Electric transmission delivery service(g)
FERC
12.38%
53.8%
$0.9
  2%
ATXI
 
 
 
 
 
   Electric transmission delivery service(g)
FERC
12.38%
56.0%
$0.5
(h)
(a)
Includes pass-through costs recovered from customers, such as purchased power for electric distribution delivery service and gas purchased for resale for natural gas delivery service, and intercompany eliminations.
(b)
Ameren Missouri's electric generation, transmission, and delivery service rates are bundled together and charged to retail customers under a combined electric service rate.
(c)
Based on the MoPSC's December 2012 rate order, which became effective on January 2, 2013. Ameren Missouri will have new electric service rates effective by June 2015, upon the completion of its rate case proceeding that was filed in July 2014.
(d)
Based on the MoPSC's January 2011 rate order, which became effective on February 20, 2011. This rate order did not specify the allowed return on equity.
(e)
Based on the ICC's December 2014 rate order, which became effective on January 1, 2015. The December 2014 rate order was based on 2013 recoverable costs, expected net plant additions for 2014, and the monthly yields during 2013 of the 30-year United States Treasury bonds plus 580 basis points. Ameren Illinois' 2015 electric distribution delivery service revenues will be based on its 2015 actual recoverable costs, rate base, and return on common equity, as calculated under the IEIMA's performance-based formula ratemaking framework.
(f)
Based on the ICC's December 2013 rate order, which became effective on January 1, 2014. The rate order was based on a 2014 future test year.
(g)
Transmission rates are updated and become effective each January. They are determined by a company-specific, forward-looking rate formula based on each year's forecasted information. The 12.38% return is the subject of two FERC complaint proceedings that challenge the allowed return on common equity for MISO transmission owners.
(h)
Less than 1%.

6

Table of Contents

Ameren Missouri
Electric
Ameren Missouri’s electric operating revenues are subject to regulation by the MoPSC. If certain criteria are met, then Ameren Missouri’s electric rates may be adjusted without a traditional rate proceeding. The FAC permits Ameren Missouri to recover, through customer rates, 95% of changes in net energy costs greater than or less than the amount set in base rates without a traditional rate proceeding, subject to prudence reviews. Net energy costs, as defined in the FAC, include fuel and purchased power costs, including transportation charges and revenues, net of off-system sales. Similarly, all of Ameren Missouri's MEEIA costs, including customer energy efficiency program costs, lost revenues, and any incentive awards, are recovered through a rider that may be adjusted without a traditional rate proceeding.
In addition to the FAC and the MEEIA recovery mechanisms, Ameren Missouri employs other cost recovery mechanisms, including a vegetation management and infrastructure inspection cost tracker, a pension and postretirement benefit cost tracker, an uncertain tax position tracker, a renewable energy standards cost tracker, a solar rebate program tracker, and a storm cost tracker. Each of these trackers allows Ameren Missouri to record the difference between the level of incurred costs under GAAP and the level of such costs built into rates as a regulatory asset or regulatory liability, which will be included in rates in a future MoPSC rate order.
The FERC regulates the rates charged and the terms and conditions for electric transmission services. Because Ameren Missouri is a member of MISO, its transmission rate is calculated in accordance with the MISO OATT. The transmission rate is updated each June based on Ameren Missouri’s filings with the FERC. This rate is not directly charged to Missouri retail customers because, in Missouri, the MoPSC includes transmission-related costs and revenues in bundled retail rates. As discussed above, Ameren Missouri transportation charges and revenues are included in the FAC.
Natural Gas
Ameren Missouri’s natural gas operating revenues are subject to regulation by the MoPSC. If certain criteria are met, then Ameren Missouri’s natural gas rates may be adjusted without a traditional rate proceeding. PGA clauses permit prudently incurred natural gas costs to be passed directly to customers. The ISRS also permits certain prudently incurred natural gas infrastructure replacement costs to be recovered from customers on a more timely basis between rate cases. The return on equity to be used by Ameren Missouri for purposes of the ISRS tariff is 10%.
 
Ameren Illinois
Electric
Ameren Illinois' electric distribution delivery service operating revenues are regulated by the ICC, while its electric transmission delivery service operating revenues are regulated by the FERC. In 2014, Ameren Illinois' electric distribution delivery service accounted for 91% of its total electric operating revenues. The remainder were related to electric transmission delivery service.
Under Illinois law, electric customers may choose their own electric energy provider. However, Ameren Illinois is required to serve as the provider of last resort for electric customers within its territory who have not chosen an alternative retail electric supplier. In 2014, Ameren Illinois was the provider of last resort for approximately 26% of electric customers within its territory. Ameren Illinois’ obligation to provide this required electric service varies by customer size. Ameren Illinois is not required to offer fixed-priced electric service to customers with electric demands of 400 kilowatts or greater, as the market for service to this group of customers has been declared competitive. Power and related procurement costs incurred by Ameren Illinois are passed directly to its customers through a cost recovery mechanism.
Ameren Illinois participates in the performance-based formula ratemaking process established pursuant to the IEIMA. The IEIMA was designed to provide for the recovery of actual costs of electric delivery service that are prudently incurred and to reflect the utility's actual regulated capital structure through a formula for calculating the return on equity component of the cost of capital. The return on equity component of the formula rate is equal to the average for the calendar year of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. Ameren Illinois' actual return on equity relating to electric delivery service is subject to a collar adjustment on earnings in excess of 50 basis points greater or less than its allowed return. The IEIMA provides for an annual reconciliation of the revenue requirement necessary to reflect the actual costs incurred in a given year with the revenue requirement included in customer rates for that year, including an allowed return on equity. This annual revenue reconciliation, along with the collar adjustment, if necessary, will be collected from or refunded to customers within the next two years.
Ameren Illinois is also subject to performance standards under the IEIMA. Failure to achieve the standards would result in a reduction in the company's allowed return on equity calculated under the formula. The performance standards include improvements in service reliability to reduce both the frequency and duration of outages, reduction in the number of estimated bills, reduction of consumption on inactive meters, and a reduction in uncollectible accounts expense. The IEIMA provides for return on equity penalties totaling up to 30 basis points in 2015, 34 basis points in 2016 through 2018, and 38 basis points in 2019 through 2022 if the performance standards are not met. The formula ratemaking process is currently effective until the end of 2017. Legislation passed by the Illinois General Assembly,


7

Table of Contents

which is awaiting the governor's approval, would extend the formula rate process until the end of 2019, with further extension possible through 2022.
Between 2012 and 2021, Ameren Illinois is required, pursuant to the IEIMA, to invest $625 million in capital projects incremental to its average electric delivery service capital projects investments of $228 million for calendar years 2008 through 2010, to modernize its distribution system. Through 2014, Ameren Illinois has invested $149 million in IEIMA capital projects toward its $625 million requirement. Such investments are expected to encourage economic development and to create an estimated 450 additional jobs within Illinois. Ameren Illinois is subject to monetary penalties if 450 additional jobs are not created during the peak program year.
Ameren Illinois employs cost recovery mechanisms for power procurement, customer energy efficiency programs, certain environmental costs, and bad debt expense not recovered in base rates. Ameren Illinois also has a tariff rider to recover the costs of certain asbestos-related claims.
Because Ameren Illinois is a member of MISO, its transmission rate is calculated in accordance with the MISO OATT. Currently, the FERC-allowed return on common equity in the ratemaking formula for MISO transmission owners is 12.38%. However, the 12.38% return is the subject of two FERC complaint proceedings that challenge the allowed return on common equity for MISO transmission owners. In January 2015, the FERC scheduled the initial case for hearing proceedings, requiring an initial decision to be issued no later than November 30, 2015. Also in January 2015, FERC approved an incentive adder of up to 50 basis points on the allowed base return on common equity for Ameren Illinois' participation in an RTO. Ameren Illinois will defer collection of this incentive adder until the issuance of the final order addressing the initial MISO complaint case. Ameren Illinois has received FERC approval to use a company-specific, forward-looking rate formula framework in setting its transmission rates. These forward-looking rates are updated each January with forecasted information. A reconciliation during the year, which adjusts for the actual revenue requirement and actual sales volumes, is used to adjust billing rates in a subsequent year. In Illinois, the AMIL pricing zone transmission rate is charged directly to wholesale customers and alternative retail electric suppliers, which serve unbundled retail load. The AMIL pricing zone transmission rate and other MISO-related costs are collected from retail customers who have not chosen an alternative retail electric supplier through a rider mechanism in Ameren Illinois' retail distribution tariffs.
Natural Gas
Ameren Illinois’ natural gas operating revenues are subject to regulation by the ICC. If certain criteria are met, then Ameren Illinois’ natural gas rates may be adjusted without a traditional rate proceeding. PGA clauses permit prudently incurred natural gas costs to be passed directly to customers. Also, Ameren Illinois employs cost recovery mechanisms for customer energy efficiency programs, certain environmental costs, and bad debt
 
expenses not recovered in base rates.
In July 2013, Illinois enacted the CSRA, which encourages Illinois natural gas utilities to accelerate modernization of the state's natural gas infrastructure. The law allows natural gas utilities to file for a QIP rider. A QIP rider provides for a surcharge to be added to customers' bills to recover depreciation expense for and to earn a return on qualifying natural gas investments that were not previously included in base rates. Recovery begins two months after the natural gas investments are placed in service and will continue until the investments are included in the base rates of a future natural gas rate case. Ameren Illinois received ICC approval for its QIP rider in January 2015, and subsequently began including qualified investments and recording revenue under this regulatory framework.
In January 2015, Ameren Illinois filed a request with the ICC seeking approval to increase its annual revenues for natural gas delivery service. In an attempt to reduce regulatory lag, Ameren Illinois' request employed a 2016 future test year and also included a proposal to implement a decoupling rider mechanism for residential and small nonresidential customers. This decoupling rider is designed to ensure that changes in natural gas sales volumes do not affect Ameren Illinois' annual revenues for these rate classes. A decision by the ICC in this proceeding is required by December 2015.
ATXI
Like Ameren Illinois, ATXI is a member of MISO, and its transmission rate is calculated in accordance with the MISO OATT. Currently, the FERC-allowed return on common equity in the ratemaking formula for MISO transmission owners is 12.38%. However, as discussed above, the 12.38% return is the subject of two FERC complaint proceedings that challenge the allowed return on common equity for MISO transmission owners. In January 2015, the FERC scheduled the initial case for hearing proceedings, requiring an initial decision to be issued no later than November 30, 2015. Also in January 2015, FERC approved an incentive adder of up to 50 basis points on the allowed base return on common equity for ATXI's participation in an RTO. ATXI will defer collection of this incentive adder until the issuance of the final order addressing the initial MISO complaint case. ATXI has received FERC approval to use a company-specific, forward-looking rate formula framework in setting its transmission rates. These forward-looking rates are updated each January with forecasted information. A reconciliation during the year, which adjusts for the actual revenue requirement and actual sales volumes, is used to adjust billing rates in a subsequent year. Additionally, the FERC has approved transmission rate incentives relating to the three MISO-approved multi-value projects discussed below, which allow construction work in progress to be included in rate base, thereby improving the timeliness of cash recovery.
The three MISO-approved multi-value projects being developed by ATXI are the Illinois Rivers, Spoon River, and Mark Twain projects. The first project, Illinois Rivers, involves the construction of a 345-kilovolt line from western Indiana across the


8

Table of Contents

state of Illinois to eastern Missouri. ATXI has obtained a certificate of public convenience and necessity and project approval from the ICC for the entire Illinois Rivers project. A full range of construction activities for the Illinois Rivers project began in 2014. The first sections of the Illinois Rivers project are expected to be completed in 2016. The last section of this project is expected to be completed in 2019. The Spoon River project is in northwest Illinois and the Mark Twain project is in northeast Missouri. In August 2014, ATXI filed a request for a certificate of public convenience and necessity and project approval from the ICC for the Spoon River project. A decision is expected from the ICC in 2015. ATXI expects to file a request for a certificate of public convenience and necessity and project approval from the MoPSC for the Mark Twain project in 2015. These two projects are expected to be completed in 2018. The total investment by ATXI in these three projects is expected to be more than $1.6 billion.
For additional information on Ameren Missouri, Ameren Illinois, and ATXI rate matters, including the FERC complaint cases challenging the allowed return on common equity for MISO transmission owners, see Results of Operations and Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, Quantitative and Qualitative Disclosures About Market Risk under Part II, Item 7A, and Note 2 – Rate and Regulatory Matters and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.
General Regulatory Matters
Ameren Missouri, Ameren Illinois, and ATXI must receive FERC approval to enter into various transactions, such as issuing short-term debt securities and conducting certain acquisitions, mergers, and consolidations involving electric utility holding companies. In addition, Ameren Missouri, Ameren Illinois, and ATXI must receive authorization from the applicable state public utility regulatory agency to issue stock and long-term debt securities (with maturities of more than 12 months) and to conduct mergers, affiliate transactions, and various other activities.
Ameren Missouri, Ameren Illinois, and ATXI are also subject to mandatory reliability standards, including cybersecurity standards adopted by the FERC, to ensure the reliability of the bulk power electric system. These standards are developed and enforced by NERC pursuant to authority given to it by the FERC. If Ameren or its subsidiaries were determined not to be in compliance with any of these mandatory reliability standards, they could incur substantial monetary penalties and other sanctions.
Under PUHCA 2005, the FERC and any state public utility regulatory agency may access books and records of Ameren and its subsidiaries that are determined to be relevant to costs incurred by Ameren’s rate-regulated subsidiaries that may affect jurisdictional rates. PUHCA 2005 also permits the MoPSC and the ICC to request that the FERC review cost allocations by Ameren Services to other Ameren companies.
 
Operation of Ameren Missouri’s Callaway energy center is subject to regulation by the NRC. Its facility operating license expires in October 2024. In December 2011, Ameren Missouri submitted an application to the NRC to extend the energy center's operating license to 2044. There is no date by which the NRC must act on this relicensing request. Ameren Missouri’s Osage hydroelectric energy center and Taum Sauk pumped-storage hydroelectric energy center, as licensed projects under the Federal Power Act, are subject to FERC regulations affecting, among other aspects, the general operation and maintenance of the projects. The license for the Osage hydroelectric energy center expires in March 2047. The license for the Taum Sauk pumped-storage hydroelectric energy center expires in June 2044. Ameren Missouri’s Keokuk energy center and its dam in the Mississippi River between Hamilton, Illinois, and Keokuk, Iowa, are operated under authority granted by an Act of Congress in 1905.
For additional information on regulatory matters, see Note 2 – Rate and Regulatory Matters, Note 10 – Callaway Energy Center, and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.
Environmental Matters
Certain of our operations are subject to federal, state, and local environmental statutes and regulations relating to the safety and health of personnel, the public, and the environment. These environmental statutes and regulations include requirements relating to identification, generation, storage, handling, transportation, disposal, recordkeeping, labeling, reporting, and emergency response in connection with hazardous and toxic materials; safety and health standards; and environmental protection requirements, including standards and limitations relating to the discharge of air and water pollutants and the management of waste and byproduct materials. Failure to comply with these statutes or regulations could have material adverse effects on us. We could be subject to criminal or civil penalties by regulatory agencies or we could be ordered by the courts to pay private parties. Except as indicated in this report, we believe that we are in material compliance with existing statutes and regulations that currently apply to our operations.
The EPA is developing and implementing environmental regulations that will have a significant impact on the electric utility industry. Over time, compliance with these regulations could be costly for certain companies, including Ameren Missouri, that operate coal-fired power plants. Significant new rules proposed or promulgated include the regulation of CO2 emissions from existing power plants through the proposed Clean Power Plan and from new power plants through the revised NSPS; revised national ambient air quality standards for ozone, fine particulates, SO2, and NOx emissions; the CSAPR, which requires further reductions of SO2 emissions and NOx emissions from power plants; a regulation governing management of CCR and CCR impoundments; the MATS, which require reduction of emissions of mercury, toxic metals, and acid gases from power plants; revised NSPS for particulate matter, SO2, and NOx emissions from new sources; new effluent standards applicable to waste


9

Table of Contents

water discharges from power plants and new regulations under the Clean Water Act that could require significant capital expenditures, such as modifications to water intake structures or new cooling towers at Ameren Missouri’s energy centers. Certain of these new and proposed regulations, if adopted, are likely to be challenged through litigation, so their ultimate implementation, as well as the timing of any such implementation, is uncertain. Although many details of the future regulations are unknown, the combined effects of the new and proposed environmental regulations could result in significant capital expenditures and increased operating costs for Ameren and Ameren Missouri. Compliance with these environmental laws and regulations could be prohibitively expensive, result in the closure or alteration of the operation of some of Ameren Missouri’s energy centers, or require capital investment. Ameren and Ameren Missouri expect these costs would be recoverable through rates, subject to MoPSC prudence review, but the nature and timing of costs, as well as the applicable regulatory framework, could result in regulatory lag. These new and proposed environmental regulations could also impact the cost of, and demand for, power and natural gas, which is acquired for Ameren Missouri's natural gas customers and Ameren Illinois' electric and natural gas customers.
For additional discussion of environmental matters, including NOx, SO2, and mercury emission reduction requirements, proposed reductions to CO2 emissions, remediation efforts, CCR management regulations, and a discussion of the EPA’s allegations of violations of the Clean Air Act and Missouri law in connection with projects at Ameren Missouri's Rush Island energy center, see Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.
TRANSMISSION AND SUPPLY OF ELECTRIC POWER
Ameren owns an integrated transmission system that is comprised of the transmission assets of Ameren Missouri, Ameren Illinois, and ATXI. Ameren also operates two balancing authority areas: AMMO and AMIL. During 2014, the peak demand was 8,199 megawatts in AMMO and 8,913 megawatts in AMIL. The Ameren transmission system directly connects with 15 other balancing authority areas for the exchange of electric energy.
Ameren Missouri, Ameren Illinois, and ATXI are transmission-owning members of MISO. Ameren Missouri is authorized by the MoPSC to participate in MISO through May 2018. Ameren Missouri is required to file a study with the MoPSC in November 2017, as it has done periodically since it began participating in MISO in 2003, that evaluates the costs and benefits of Ameren Missouri's continued participation in MISO beyond May 2018.
The Ameren Companies are members of the SERC. The SERC is responsible for the bulk electric power system in all or portions of Missouri, Illinois, Arkansas, Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Mississippi, Alabama,
 
Louisiana, Virginia, Florida, Oklahoma, Iowa, and Texas. Owners and operators, including the Ameren Companies, of the bulk electric power system are subject to mandatory reliability standards promulgated by the NERC and its regional entities, such as the SERC, which are all enforced by the FERC.
Ameren Missouri
Ameren Missouri’s electric supply is primarily generated from its energy centers. Factors that could cause Ameren Missouri to purchase power include, among other things, absence of sufficient owned generation, energy center outages, the fulfillment of renewable energy portfolio requirements, the failure of suppliers to meet their power supply obligations, extreme weather conditions, and the availability of power at a cost lower than its generation cost.
Ameren Missouri continues to evaluate its longer-term needs for new baseload capacity, including nuclear and peaking electric generation capacity. The potential need for new energy center construction is dependent on several key factors, including continuation of, and customer participation in, energy efficiency programs beyond 2015, load growth, and the potential for more stringent environmental regulation of coal-fired power plants, which could lead to the retirement of current baseload assets or alterations in the manner in which those assets operate. Because of the significant time required to plan, acquire permits for, and build a baseload energy center, Ameren Missouri continues to study alternatives and is taking steps to preserve options to meet future demand. Steps include evaluating the potential for further customer energy efficiency programs and evaluating potential sites for natural-gas-fired generation. Additional steps include maintaining options for future nuclear generation and obtaining an operating license extension for the existing Callaway energy center from 2024 until 2044. Ameren Missouri is also exploring options to expand renewable generation and further diversify its generation portfolio.
Ameren Missouri filed its integrated resource plan with the MoPSC in October 2014. The integrated resource plan is a 20-year plan that supports a more fuel-diverse energy portfolio in Missouri, including coal, solar, wind, natural gas and nuclear power. The plan includes expanding renewable generation, retiring coal-fired generation as energy centers reach the end of their useful lives, and adding natural-gas-fired combined cycle generation. Ameren Missouri continues to study alternatives, including additional customer energy efficiency programs, that could help defer new energy center construction.
See also Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, Note 2 – Rate and Regulatory Matters, Note 10 – Callaway Energy Center, and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.
Ameren Illinois
Any electric supply purchased by Ameren Illinois for its retail customers comes either through procurement processes conducted by the IPA or through markets operated by MISO. The


10

Table of Contents

IPA administers an RFP process through which Ameren Illinois procures its expected supply obligation. The power and related procurement costs incurred by Ameren Illinois are passed directly to its customers through a cost recovery mechanism.
Under Illinois law, transmission and distribution service rates are regulated, while electric customers are allowed to purchase power from an alternative retail electric supplier. In 2014, approximately 741,000 retail customers representing 74% of Ameren Illinois' annual retail kilowatthour sales had elected to
 
purchase their electricity from alternative retail electric suppliers. Ameren Illinois continues to collect delivery charges for distribution and transmission services from customers who purchase electricity from alternative retail electric suppliers.
See Note 2 – Rate and Regulatory Matters, Note 14 – Related Party Transactions and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report for additional information on power procurement in Illinois.

POWER GENERATION
The following table presents the source of Ameren's and Ameren Missouri's electric generation, excluding purchased power, for the years ended December 31, 2014, 2013, and 2012:
 
Coal
 
Nuclear
 
Natural Gas/Oil
 
Renewables(a)
2014
76%
 
21%
 
            (b)
 
3%
2013
77
 
19
 
            (b)
 
3
2012
73
 
24
 
1
 
2
(a)
Renewable power generation includes production from Ameren Missouri's hydroelectric, methane gas, and solar energy centers but excludes purchased renewable energy credits.
(b)
Less than 1% of total fuel supply.
The following table presents the cost of fuels for electric generation for the years ended December 31, 2014, 2013, and 2012:
Cost of Fuels (dollars per mmbtu)
2014
 
2013
 
2012
Coal(a)
$
2.151

 
$
2.050

 
$
1.925

Nuclear
0.918

 
0.942

 
0.964

Natural gas(b)
11.226

 
7.907

 
4.517

Weighted average – all fuels(c)
$
1.936

 
$
1.874

 
$
1.743

(a)
Represents the cost of coal and the costs for transportation, which include hedges for railroad diesel fuel surcharges.
(b)
Represents the cost of natural gas and fixed and variable costs for transportation, storage, balancing, and fuel losses for delivery to the energy center.
(c)
Represents all costs, including transportation, for fuels used in our energy centers, including coal, nuclear, natural gas, methane gas, oil, and propane. Methane gas, oil, and propane are not individually listed in this table because their use is minimal.
Coal
Ameren Missouri has an ongoing need for coal for generation, so it pursues a price-hedging strategy consistent with this requirement. Ameren Missouri has agreements in place to purchase coal and to transport it to energy centers. Coal supply agreements for Ameren Missouri expire at the end of 2017. Coal transport agreements for Ameren Missouri expire at the end of 2019. Ameren Missouri has coal transport agreements with Union Pacific Railroad and Burlington Northern Santa Fe Railway. As of December 31, 2014, Ameren Missouri had price-hedged 100% of its expected coal supply and coal transportation requirements for generation in 2015. Ameren Missouri burned 20 million tons of coal in 2014.
About 98% of Ameren Missouri’s coal is purchased from the Powder River Basin in Wyoming. The remaining coal is typically purchased from the Illinois Basin. Inventory may be adjusted because of generation levels or uncertainties of supply due to potential work stoppages, delays in coal deliveries, equipment breakdowns, and other factors. Deliveries from the Powder River Basin have occasionally been restricted because of rail congestion and maintenance, derailments, and weather. As of December 31, 2014, coal inventories for Ameren Missouri were below targeted levels due to delivery delays. Disruptions in coal
 
deliveries could cause Ameren Missouri to pursue a strategy that could include reducing sales of power during low-margin periods, buying higher-cost fuels to generate required electricity, and purchasing power from other sources.
Nuclear
The production of nuclear fuel involves the mining and milling of uranium ore to produce uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride gas, the enrichment of that gas, the conversion of the enriched uranium hexafluoride gas into uranium dioxide fuel pellets and the fabrication into usable fuel assemblies. Ameren Missouri has entered into uranium, uranium conversion, uranium enrichment, and fabrication contracts to procure the fuel supply for its Callaway nuclear energy center.
The Callaway energy center requires refueling at 18-month intervals. The last refueling was completed in November 2014. The next refueling is scheduled for spring 2016. There is no refueling scheduled for 2015 and 2018. Ameren Missouri currently has agreements or inventories to price-hedge approximately 97%, 71%, and 60% of Callaway's 2016, 2017, and 2019 refueling requirements, respectively. Ameren Missouri has uranium (concentrate and hexafluoride) inventories and


11

Table of Contents

supply contracts sufficient to meet all of its uranium and conversion requirements through at least 2017. Ameren Missouri has enriched uranium inventories and enrichment supply contracts sufficient to satisfy enrichment requirements through at least 2019 and fuel fabrication service contracts through at least 2019. Ameren Missouri expects to enter into additional contracts to purchase nuclear fuel. The nuclear fuel markets are competitive, and prices can be volatile; however, Ameren Missouri does not anticipate any significant problems in meeting its future supply requirements.
Natural Gas Supply for Generation
To maintain deliveries to natural-gas-fired energy centers throughout the year, especially during the summer peak demand, Ameren Missouri’s portfolio of natural gas supply resources includes firm transportation capacity and firm no-notice storage capacity leased from interstate pipelines. Ameren Missouri primarily uses the interstate pipeline systems of Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Natural Gas Pipeline Company of America, and Mississippi River Transmission Corporation to transport natural gas to energy centers. In addition to physical transactions, Ameren Missouri uses financial instruments, including some in the NYMEX futures market and some in the OTC financial markets, to hedge the price paid for natural gas.
Ameren Missouri’s natural gas procurement strategy is designed to ensure reliable and immediate delivery of natural gas to its energy centers. This strategy is accomplished by optimizing transportation and storage options and by minimizing cost and price risk through various supply and price-hedging agreements that allow access to multiple gas pools, supply basins, and storage services. As of December 31, 2014, Ameren Missouri had price-hedged about 3% of its expected natural gas supply requirements for generation in 2015.
Renewable Energy
Illinois and Missouri have enacted laws requiring electric utilities to include renewable energy resources in their portfolios. Illinois required renewable energy resources to equal or exceed 2% of the total electricity that Ameren Illinois supplied to its eligible retail customers as of June 1, 2008, with that percentage increasing to 10% by June 1, 2015, and to 25% by June 1, 2025. For the 2014 plan year, Ameren Illinois met its requirement that 9% of its total electricity for eligible retail customers be procured from renewable energy resources. Based on current forecasts, Ameren Illinois has committed to procure sufficient renewable energy credits under the IPA-administered procurement process to meet the renewable energy portfolio requirement through at least May 2017. Ameren Illinois has entered into agreements through 2032 with renewable energy suppliers to obtain renewable energy credits. Approximately 65% of the 2015 plan year renewable energy requirement is expected to be met through these agreements. The remaining requirement will be met through IPA procurements, which resulted in contracts that have terms through December 2017.
 
In Missouri, utilities are required to purchase or generate electricity equal to at least 2% of native load sales from renewable sources, with that percentage increasing to at least 15% by 2021, subject to a 1% annual limit on customer rate impacts. At least 2% of each renewable energy portfolio requirement must be derived from solar energy. In 2014, Ameren Missouri met its requirement to purchase or generate at least 5% of its native load sales from renewable energy resources. Ameren Missouri expects to satisfy the nonsolar requirement into 2018 with its Keokuk energy center, its Maryland Heights energy center, and with a 102-megawatt power purchase agreement through June 2024 with a wind farm operator in Iowa. The Maryland Heights energy center generates electricity by burning methane gas collected from a landfill. Ameren Missouri is meeting the solar energy requirement through the purchase of solar-generated renewable energy credits from customer-installed systems and generation from its O'Fallon energy center.
Under the same Missouri statute that requires utilities to purchase or generate electricity from renewable sources, Ameren Missouri is required to have a rebate program to provide an incentive for customers to install solar generation on their premises. In accordance with the statute and a 2013 MoPSC order, Ameren Missouri is required to provide $92 million of solar rebates by 2020, which was substantially completed by December 31, 2014. Also included in its 2013 order, the MoPSC authorized Ameren Missouri to employ a tracker to allow Ameren Missouri to record the costs it incurred under its solar rebate program as a regulatory asset. Ameren Missouri expects to recover the costs of these rebates, along with the estimated $9 million carrying cost of the regulatory asset, over a three-year period beginning with the effective date of rates in its July 2014 electric rate case.
Energy Efficiency
Ameren Missouri and Ameren Illinois have implemented energy efficiency programs to educate and help their customers become more efficient users of energy. In Missouri, the MEEIA established a regulatory framework that, among other things, allows electric utilities to recover costs related to MoPSC-approved customer energy efficiency programs. The law requires the MoPSC to ensure that a utility’s financial incentives are aligned to help customers use energy more efficiently, to provide timely cost recovery, and to provide earnings opportunities associated with cost-effective energy efficiency programs. Missouri does not have a law mandating energy efficiency standards.
The MoPSC's December 2012 electric rate order approved Ameren Missouri's implementation of the MEEIA megawatthour savings targets, customer energy efficiency programs, and associated cost recovery mechanisms and incentive awards. Ameren Missouri invested $76 million in these programs through 2014 and expects to invest an additional $71 million in 2015. A 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 and its lost revenues.


12

Table of Contents

Additionally, the MEEIA provides for incentive awards that would allow Ameren Missouri to earn additional revenues by achieving certain energy efficiency goals. Under its current energy efficiency plan, which is effective for 2013 through 2015, Ameren Missouri can earn approximately $19 million if 100% of its energy efficiency goals are achieved during that time period, with the potential to earn more if energy savings exceed those goals. Ameren Missouri must achieve at least 70% of its energy efficiency goals before it can earn any incentive award. The recovery of the incentive award from customers, if the energy efficiency goals are achieved, is expected in 2017 through the above-mentioned rider.
In December 2014, Ameren Missouri filed an energy efficiency plan with the MoPSC under the MEEIA. This filing proposed a three-year plan that includes a portfolio of customer energy efficiency programs along with a cost recovery mechanism. If the plan is approved, beginning in January 2016, Ameren Missouri intends to invest $135 million over three years in the proposed customer energy efficiency programs. Ameren Missouri requested continued use of a MEEIA rider that allows it to collect from or refund to customers any difference in the actual amounts incurred and the amounts collected from customers for the MEEIA program costs and its lost revenues. In addition, Ameren Missouri requested incentives to earn additional revenues by achieving certain energy efficiency goals, including approximately $25 million if 100% of its energy efficiency goals are achieved during the three-year period. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for additional information.
Illinois has enacted a law requiring Ameren Illinois to offer customer energy efficiency programs. The law also allows recovery mechanisms of the programs’ costs. The ICC has issued orders approving Ameren Illinois’ electric and natural gas energy efficiency plans as well as cost recovery mechanisms by which program costs can be recovered from customers. Additionally, as part of its IEIMA upgrades, Ameren Illinois expects to invest $360 million in smart grid infrastructure, including smart meters that enable customers to improve energy efficiency. Ameren Illinois began the installation of smart meters in 2014.
NATURAL GAS SUPPLY FOR DISTRIBUTION
Ameren Missouri and Ameren Illinois are responsible for the purchase and delivery of natural gas to their utility customers. Ameren Missouri and Ameren Illinois each develop and manage a portfolio of natural gas supply resources. These resources include firm gas supply under term agreements with producers, interstate and intrastate firm transportation capacity, firm storage capacity leased from interstate pipelines, and on-system storage facilities to maintain natural gas deliveries to customers throughout the year and especially during peak demand periods. Ameren Missouri and Ameren Illinois primarily use Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Natural Gas Pipeline Company of America, Mississippi River Transmission Corporation, Northern Border Pipeline Company, and Texas Eastern Transmission Corporation interstate pipeline
 
systems to transport natural gas to their systems. In addition to transactions requiring physical delivery, financial instruments, including those entered into in the NYMEX futures market and in the OTC financial markets, are used to hedge the price paid for natural gas. Natural gas purchase costs are passed on to customers of Ameren Missouri and Ameren Illinois under PGA clauses, subject to prudence reviews by the MoPSC and the ICC. As of December 31, 2014, Ameren Missouri had price-hedged 80% and Ameren Illinois had price-hedged 78% of their expected 2015 natural gas supply requirements.
For additional information on our fuel and purchased power supply, see Results of Operations, Liquidity and Capital Resources and Effects of Inflation and Changing Prices in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report. Also see Note 1 – Summary of Significant Accounting Policies, Note 7 – Derivative Financial Instruments, Note 10 – Callaway Energy Center, Note 14 – Related Party Transactions, and Note 15 – Commitments and Contingencies under Part II, Item 8 of this report.
INDUSTRY ISSUES
We are facing issues common to the electric and natural gas utility industry. These issues include:
political, regulatory, and customer resistance to higher rates;
the potential for changes in laws, regulations, and policies at the state and federal levels;
tax law changes that accelerate depreciation deductions, which reduce current tax payments but also result in rate base reductions and limit the ability to claim other deductions and use carryforward tax benefits;
cybersecurity risks, including loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or loss of data, such as utility customer data and account information;
the potential for more intense competition in generation, supply, and distribution, including new technologies;
pressure on customer growth and usage in light of economic conditions and energy efficiency initiatives;
changes in the structure of the industry as a result of changes in federal and state laws, including the formation and growth of independent transmission entities;
pressure to reduce the allowed return on common equity on FERC-regulated electric transmission assets;
the availability of fuel and fluctuations in fuel prices;
the availability of qualified labor and material, and rising costs;
the availability of a skilled workforce, including retaining the specialized skills of those who are nearing retirement;
regulatory lag;
the influence of macroeconomic factors, such as yields on United States Treasury securities and allowed rates of return on equity provided by regulators;
higher levels of infrastructure investments could result in negative or decreased free cash flows, defined as cash flows from operating activities less cash flows from investing


13

Table of Contents

activities and dividends paid;
public concern about the siting of new facilities;
complex new and proposed environmental laws, regulations and requirements, including air and water quality standards, mercury emissions standards, CCR management requirements, and greenhouse gas limitations;
public concern about the potential impacts to the environment from the combustion of fossil fuels;
aging infrastructure and the need to construct new power generation, transmission and distribution facilities, which have long time frames for completion, with little long-term ability to predict power and commodity prices and regulatory requirements;
legislation or proposals for programs to encourage or mandate energy efficiency and renewable sources of power,
 
such as solar, and the macroeconomic debate over who should pay for those programs;
public concern about nuclear generation and decommissioning and the disposal of nuclear waste; and
consolidation of electric and natural gas utility companies.
We are monitoring these issues. Except as otherwise noted in this report, we are unable to predict what impact, if any, these issues will have on our results of operations, financial position, or liquidity. For additional information, see Risk Factors under Part I, Item 1A, and Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Note 2 – Rate and Regulatory Matters and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.



14

Table of Contents

OPERATING STATISTICS
The following tables present key electric and natural gas operating statistics for Ameren for the past three years:
Electric Operating Statistics – Year Ended December 31,
2014
 
2013
 
2012
Electric Sales – kilowatthours (in millions):
 
 
 
 
 
Ameren Missouri:
 
 
 
 
 
Residential
13,649

 
13,562

 
13,385

Commercial
14,649

 
14,634

 
14,575

Industrial
8,600

 
8,709

 
8,660

Off-system
6,170

 
6,128

 
7,293

Other
124

 
125

 
126

Ameren Missouri total
43,192

 
43,158

 
44,039

Ameren Illinois:
 
 
 
 
 
Residential
 
 
 
 
 
Power supply and delivery service
4,662

 
5,474

 
9,507

Delivery service only
7,222

 
6,310

 
2,103

Commercial
 
 
 
 
 
Power supply and delivery service
2,535

 
2,606

 
2,985

Delivery service only
9,643

 
9,541

 
9,175

Industrial
 
 
 
 
 
Power supply and delivery service
1,741

 
1,667

 
1,595

Delivery service only
10,576

 
10,861

 
11,753

Other
518

 
522

 
523

Ameren Illinois total
36,897

 
36,981

 
37,641

Eliminate affiliate sales
(67
)
 
(82
)
 

Ameren total
80,022

 
80,057

 
81,680

Electric Operating Revenues (in millions):
 
 
 
 
 
Ameren Missouri:
 
 
 
 
 
Residential
$
1,417

 
$
1,428

 
$
1,297

Commercial
1,203

 
1,216

 
1,088

Industrial
475

 
491

 
435

Off-system
173

 
183

 
208

Other
120

 
61

 
104

Ameren Missouri total
$
3,388

 
$
3,379

 
$
3,132

Ameren Illinois:
 
 
 
 
 
Residential
 
 
 
 
 
Power supply and delivery service
$
468

 
$
501

 
$
961

Delivery service only
308

 
282

 
90

Commercial
 
 
 
 
 
Power supply and delivery service
233

 
215

 
254

Delivery service only
185

 
184

 
177

Industrial
 
 
 
 
 
Power supply and delivery service
90

 
70

 
57

Delivery service only
42

 
44

 
46

Other
196

 
165

 
154

Ameren Illinois total
$
1,522

 
$
1,461

 
$
1,739

ATXI:
 
 
 
 
 
Transmission services
$
33

 
$
19

 
$
9

Eliminate affiliate revenues
(30
)
 
(27
)
 
(23
)
Ameren total
$
4,913

 
$
4,832

 
$
4,857


15

Table of Contents

Electric Operating Statistics – Year Ended December 31,
2014
 
2013
 
2012
Electric Generation – Ameren Missouri – kilowatthours (in millions)
43,474

 
43,213

 
44,658

Price per ton of delivered coal (average) – Ameren Missouri
$
37.36

 
$
36.19

 
$
34.21

Source of Ameren Missouri energy supply:
 
 
 
 
 
Coal
73.5
%
 
74.1
%
 
70.6
%
Nuclear
20.6

 
18.6

 
23.3

Hydroelectric
2.2

 
2.9

 
2.1

Natural gas
0.2

 
0.4

 
1.2

Methane gas
0.1

 
0.1

 
0.1

Purchased – Wind
0.8

 
0.7

 
0.7

Purchased – Other
2.6

 
3.2

 
2.0

 
100.0
%
 
100.0
%
 
100.0
%
Gas Operating Statistics – Year Ended December 31,
2014
 
2013
 
2012
Natural Gas Sales - dekatherms (in millions):
 
 
 
 
 
Ameren Missouri:
 
 
 
 
 
Residential
8

 
8

 
6

Commercial
4

 
4

 
3

Industrial
1

 
1

 
1

Transport
7

 
6

 
6

Ameren Missouri total
20

 
19

 
16

Ameren Illinois:
 
 
 
 
 
Residential
66

 
62

 
49

Commercial
23

 
21

 
17

Industrial
3

 
6

 
5

Transport
91

 
87

 
86

Ameren Illinois total
183

 
176

 
157

Ameren total
203

 
195

 
173

Natural Gas Operating Revenues (in millions):
 
 
 
 
 
Ameren Missouri:
 
 
 
 
 
Residential
$
102

 
$
102

 
$
85

Commercial
40

 
42

 
36

Industrial
7

 
8

 
8

Transport and other
15

 
9

 
10

Ameren Missouri total
$
164

 
$
161

 
$
139

Ameren Illinois:
 
 
 
 
 
Residential
$
675

 
$
611

 
$
547

Commercial
208

 
185

 
172

Industrial
23

 
26

 
24

Transport and other
70

 
25

 
43

Ameren Illinois total
$
976

 
$
847

 
$
786

Eliminate affiliate revenues

 
(2
)
 
(1
)
Ameren total
$
1,140

 
$
1,006

 
$
924


16

Table of Contents

AVAILABLE INFORMATION
The Ameren Companies make available free of charge through Ameren’s website (www.ameren.com) their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, eXtensible Business Reporting Language (XBRL) documents, and any amendments to those reports filed with or furnished to pursuant to Sections 13(a) or 15(d) of the Exchange Act as soon as reasonably possible after such reports are electronically filed with, or furnished to, the SEC. These documents are also available through an Internet website maintained by the SEC (www.sec.gov). Ameren also uses its website as a channel of distribution for material information about the Ameren Companies. Financial and other material information regarding the Ameren Companies is routinely posted to and accessible at Ameren’s website.
The Ameren Companies also make available free of charge through Ameren’s website the charters of Ameren’s board of directors’ audit and risk committee, human resources committee, nominating and corporate governance committee, finance committee, and nuclear oversight and environmental committee; the corporate governance guidelines; a policy regarding communications to the board of directors; a policy and procedures with respect to related-person transactions; a code of ethics for principal executive and senior financial officers; a code of business conduct applicable to all directors, officers and employees; and a director nomination policy that applies to the Ameren Companies. The information on Ameren’s website, or any other website referenced in this report, is not incorporated by reference into this report. 
ITEM 1A.
RISK FACTORS
Investors should review carefully the following material risk factors and the other information contained in this report. The risks that the Ameren Companies face are not limited to those in this section. There may be further risks and uncertainties that are not presently known or that are not currently believed to be material that may adversely affect the results of operations, financial position, and liquidity of the Ameren Companies.
REGULATORY AND LEGISLATIVE RISKS
We are subject to extensive regulation of our businesses, which could adversely affect our results of operations, financial position, and liquidity.
We are subject to extensive federal, state, and local regulation. This extensive regulatory framework, some but not all of which is more specifically identified in the following risk factors, regulates, among other matters, the electric and natural gas utility industries; rate and cost structure of utilities; operation of nuclear energy centers; construction and operation of generation, transmission, and distribution facilities; acquisition, disposal, depreciation and amortization of assets and facilities; transmission reliability; and present or prospective wholesale and retail competition. In the planning and management of our operations, we must address the effects of existing and proposed laws and regulations and potential changes in the regulatory
 
framework, including initiatives by federal and state legislatures, RTOs, utility regulators, and taxing authorities. Significant changes in the nature of the regulation of our businesses could require changes to our business planning and management of our businesses and could adversely affect our results of operations, financial position, and liquidity. Failure to obtain adequate rates or regulatory approvals in a timely manner; failure to obtain necessary licenses or permits from regulatory authorities; the impact of new or modified laws, regulations, standards, interpretations, or other legal requirements; or increased compliance costs could adversely affect our results of operations, financial position, and liquidity.
The electric and natural gas rates that we are allowed to charge are determined through regulatory proceedings, which are subject to intervention and appeal and also to legislative actions, which are largely outside of our control. Any events that prevent us from recovering our costs or from earning adequate returns on our investments could adversely affect our results of operations, financial position, and liquidity.
The rates that we are allowed to charge for our utility services significantly influence our results of operations, financial position, and liquidity. The electric and natural gas utility industries are extensively regulated. The utility rates charged to our customers are determined by governmental entities, including the MoPSC, the ICC, and the FERC. Many factors influence decisions by these entities, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, economic conditions, public policy, as well as social and political views. Decisions made by these governmental entities regarding rates are largely outside of our control. We are exposed to regulatory lag to varying degrees by jurisdiction, which, if unmitigated, could have a material adverse effect on our results of operations, financial position, and liquidity. Rate orders are also subject to appeal, which creates additional uncertainty as to the rates we will ultimately be allowed to charge for our services. From time to time, our regulators will approve trackers, riders, or other mechanisms that allow electric or natural gas rates to be adjusted without a traditional rate proceeding. These mechanisms are not permanent and could be changed or terminated.
Ameren Missouri's electric and natural gas utility rates and Ameren Illinois' natural gas utility rates are typically established in regulatory proceedings that take up to 11 months to complete. Rates established in those proceedings for Ameren Missouri are primarily based on historical costs and revenues. Natural gas rates established in those proceedings for Ameren Illinois may be based on historical or estimated future costs and revenues. Thus, the rates that a utility is allowed to charge may not match its costs at any given time.
Rates include an allowed rate of return on investments determined by the regulator. Although rate regulation is premised on providing an opportunity to earn a reasonable rate of return on invested capital, there can be no assurance that the regulator will


17

Table of Contents

determine that our costs were prudently incurred or that the regulatory process will result in rates that will produce full recovery of such costs or provide for an adequate return on those investments.
In years when capital investments and operations costs rise or customer usage declines, we may not be able to earn the allowed return established by the regulator. This could result in the deferral or elimination of planned capital investments, which could reduce the rate base investments on which we earn a rate of return. Additionally, increasing rates could result in regulatory and legislative actions, as well as competitive and political pressures, all of which could adversely affect our results of operations, financial position, and liquidity.
As a result of its participation in the performance-based formula ratemaking process established pursuant to the IEIMA, Ameren Illinois’ return on equity for its electric distribution business is directly correlated to yields on United States Treasury bonds. Additionally, Ameren Illinois is required to achieve performance objectives, capital spending levels, and job creation targets. Failure to meet these requirements could adversely affect Ameren's and Ameren Illinois' results of operations, financial position, and liquidity.
Ameren Illinois is participating in the performance-based formula ratemaking process established pursuant to the IEIMA for its electric distribution business. The ICC annually reviews Ameren Illinois’ performance-based rate filings under the IEIMA for reasonableness and prudency. If the ICC were to conclude that Ameren Illinois’ incurred costs were not prudently incurred, the ICC would disallow recovery of such costs.
The return on equity component of the formula rate is equal to the average for the calendar year of the monthly yields of 30-year United States Treasury bonds plus 580 basis points. Therefore, Ameren Illinois’ annual return on equity under the formula ratemaking process for its electric distribution business is directly correlated to yields on such bonds, which are outside of Ameren Illinois’ control. A 50 basis point change in the average monthly yields of the 30-year United States Treasury bonds would result in an estimated $6 million change in Ameren's and Ameren Illinois' 2015 net income.
Ameren Illinois is also subject to performance standards. Failure to achieve the standards would result in a reduction in the company’s allowed return on equity calculated under the formula. The IEIMA provides for return on equity penalties totaling 30 basis points in 2015, 34 basis points in each year from 2016 through 2018, and 38 basis points in each year from 2019 through 2022 if the performance standards are not met.
Between 2012 and 2021, Ameren Illinois is required to invest $625 million in capital projects incremental to its average electric delivery capital projects investments of $228 million for calendar years 2008 through 2010, in order to modernize its distribution system. Ameren Illinois is subject to monetary penalties if 450 additional jobs are not created in Illinois during the peak program year.
 
Unless it is extended, the IEIMA formula ratemaking process will expire in 2017. When the performance-based formula rate process expires, Ameren Illinois would be required to establish future rates through a traditional rate proceeding with the ICC, which might not result in rates that produce a full or timely recovery of costs or provide for an adequate return on investments.
We are subject to various environmental laws and regulations. Significant capital expenditures are required to achieve and maintain compliance with these laws and regulations. Failure to comply with these laws and regulations could result in closure of facilities, alterations to the manner in which these facilities operate, increased operating costs, adverse impacts to our results of operations, financial position, and liquidity, or exposure to fines and liabilities.
We are subject to various environmental laws and regulations enforced by federal, state, and local authorities. From the beginning phases of siting and development to the operation of existing or new electric generation, transmission and distribution facilities and natural gas storage, transmission and distribution facilities, our activities involve compliance with diverse environmental laws and regulations. These laws and regulations address emissions; discharges to water, water usage, impacts to air, land, and water, and chemical and waste handling. Complex and lengthy processes are required to obtain and renew approvals, permits, or 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.
We are also subject to liability under environmental laws that address the remediation of environmental contamination of property currently or formerly owned by us or by our predecessors, as well as property contaminated by hazardous substances that we generated. Such properties include MGP sites and third-party sites, such as landfills. Additionally, private individuals may seek to enforce environmental laws and regulations against us. They could allege injury from exposure to hazardous materials, could seek to compel remediation of environmental contamination, or could recover damages resulting from that contamination.
The EPA is developing and implementing environmental regulations that will have a significant impact on the electric utility industry. Over time, compliance with these regulations could be costly for certain companies, including Ameren Missouri, that operate coal-fired power plants. Certain of these new and proposed regulations, if adopted, are likely to be challenged through litigation, so their ultimate implementation, as well as the timing of any such implementation, is uncertain.
Ameren is also subject to risks in connection with changing or conflicting interpretations of existing laws and regulations. The EPA is engaged in an enforcement initiative to determine whether coal-fired power plants failed to comply with the requirements of the NSR and NSPS provisions under the Clean Air Act when the


18

Table of Contents

power plants implemented modifications. 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. An outcome in this matter adverse to Ameren Missouri could require substantial capital expenditures and the payment of substantial penalties, neither of which can be determined at this time. Such expenditures could affect unit retirement and replacement decisions.
In January 2014, the EPA published proposed regulations that would set revised CO2 emissions standards for new power plants. The proposed standards would establish separate emissions limits for new natural-gas-fired plants and new coal-fired plants. In June 2014, the EPA proposed the Clean Power Plan, which sets forth CO2 emissions standards that would be applicable to existing power plants. The proposed Clean Power Plan would require each state to develop plans to achieve CO2 emission standards that the EPA calculated for each state. The EPA believes that the Clean Power Plan would achieve a 30% reduction in the nation's existing power plant CO2 emissions from 2005 levels by 2030. The proposed rule also has interim goals of aggressively reducing CO2 emissions by 2020. The EPA expects the proposed rule will be finalized in 2015. Ameren Missouri’s integrated resource plan is projected to achieve the carbon emissions reductions proposed in the EPA’s Clean Power Plan by 2035, rather than the EPA’s final target date of 2030 or its interim target dates beginning in 2020. Ameren Missouri continues to evaluate its potential compliance plans for the proposed Clean Power Plan. Preliminary studies suggest that if the proposed Clean Power Plan were to be finalized in its current form, Ameren Missouri may need to incur new or accelerated capital expenditures and increased fuel costs in order to achieve compliance. As proposed, the Clean Power Plan would require states, including Missouri and Illinois, to submit compliance plans as early as 2016. The states’ compliance plans might require Ameren Missouri to construct natural-gas-fired combined cycle generation and renewable generation, at a currently estimated cost of approximately $2 billion by 2020, that Ameren Missouri believes would otherwise not be necessary to meet the energy needs of its customers. Additionally, Missouri’s implementation of the proposed rules, if adopted, could result in the closure or alteration of the operation of some of Ameren Missouri’s coal and natural gas-fired energy centers, which could result in increased operating costs or impairment of assets. The Clean Power Plan may negatively impact electric system reliability for Ameren Missouri and Ameren Illinois.
Ameren and Ameren Missouri have incurred and expect to incur significant costs related to environmental compliance and site remediation. New or revised environmental regulations, enforcement initiatives, or legislation could result in a significant increase in capital expenditures and operating costs, decreased revenues, increased financing requirements, penalties or fines, or reduced operations of some of Ameren Missouri's coal-fired energy centers, which, in turn, could lead to increased liquidity needs and higher financing costs. Actions required to ensure that our facilities and operations are in compliance with environmental laws and regulations could be prohibitively expensive if the costs are not recovered through rates. Environmental laws could
 
require Ameren Missouri to close or to alter significantly the operation of its energy centers. Moreover, if Ameren Missouri requests recovery of these capital expenditures and costs through rates, the MoPSC could deny recovery of all or a portion of these costs, prevent timely recovery, or make changes to the regulatory framework in an effort to minimize rate volatility and customer rate increases. Capital expenditures and costs to comply with future legislation or regulations that are not recoverable through rates might result in Ameren Missouri closing coal-fired energy centers earlier than planned, which would lead to an impairment of assets and reduced revenues. We are unable to predict the ultimate impact of these matters on our results of operations, financial position, and liquidity.
Government challenges to our tax positions, as well as tax law changes and the inherent difficulty in quantifying potential tax effects of business decisions, could adversely affect our results of operations and liquidity.
We are required to make judgments in order to estimate tax obligations. These judgments include reserves for potential adverse outcomes for tax positions that may be challenged by tax authorities. The obligations, which include income taxes and taxes other than income taxes, involve complex matters that ultimately could be litigated. We also estimate our ability to use tax benefits, including those in the form of carryforwards and tax credits that are recorded as deferred tax assets on our balance sheets. A disallowance of these tax benefits could have a material adverse impact on our results of operation, financial position, and liquidity.
Customers’, legislators’ and regulators’ opinions of us are affected by many factors, including system reliability, implementation of our investment plans, protection of customer information, rates, and media coverage. To the extent that customers, legislators or regulators develop a negative opinion of us, our results of operations, financial position, and liquidity could be negatively affected.
Service interruptions due to failures of equipment or facilities as a result of severe or destructive weather or other causes, and the ability of Ameren Missouri and Ameren Illinois to promptly respond to such failures, can affect customer satisfaction. In addition to system reliability issues, the success of modernization efforts, such as those planned for Ameren Illinois’ electric and natural gas delivery systems, our ability to safeguard sensitive customer information, and other actions can affect customer satisfaction. The timing and magnitude of rate increases and volatility of rates can also affect customer satisfaction. Customers', legislators' and regulators' opinions of us can also be affected by media coverage, including the proliferation of social media, which may include information, whether factual or not, that damages our brand and reputation.
If customers, legislators or regulators have a negative opinion of us and our utility services, this could result in increased regulatory oversight and could impact the returns on common equity we are allowed to earn. Additionally, negative opinions about us could make it more difficult for our utilities to achieve


19

Table of Contents

favorable legislative or regulatory outcomes. Negative opinions could also result in sales volume reductions and increased use of distributed generation. Any of these consequences could adversely affect our results of operations, financial position, and liquidity.
We are subject to federal regulatory compliance and proceedings, which increase our risk of regulatory penalties and other sanctions.
The FERC can impose civil penalties of $1 million per violation per day for violation of FERC statutes, rules, and orders, including mandatory NERC reliability standards. As owners and operators of bulk power transmission systems and electric energy centers, we are subject to mandatory NERC reliability standards, including cybersecurity standards. Compliance with these mandatory reliability standards may subject us to higher operating costs and may result in increased capital expenditures. If we were found not to be in compliance with these mandatory reliability standards or the FERC statutes, rules, and orders, we could incur substantial monetary penalties and other sanctions, which could adversely affect our results of operations, financial position, and liquidity. The FERC also conducts audits and reviews of Ameren Missouri's, Ameren Illinois', and ATXI's accounting records to assess the accuracy of its formula ratemaking process and has the ability to require retroactive refunds to customers for previously billed amounts, with interest.
OPERATIONAL RISKS
The construction of and capital improvements to our electric and natural gas utility infrastructure involve substantial risks. These risks include escalating costs, unsatisfactory performance by the projects when completed, the inability to complete projects as scheduled, cost disallowances by regulators, and the inability to earn an adequate return on invested capital, any of which could result in higher costs and the closure of facilities.
We expect to incur significant capital expenditures in order to make investments to improve our electric and natural gas utility infrastructure and to comply with existing environmental regulations. We estimate that we will incur up to $9.3 billion (Ameren Missouri - up to $3.9 billion; Ameren Illinois - up to $4.0 billion; ATXI - up to $1.4 billion) of capital expenditures during the period from 2015 through 2019. These estimates include allowance for equity funds used during construction.
Investments in Ameren’s rate-regulated operations are expected to be recoverable from ratepayers, but are subject to prudence reviews and, depending on the jurisdiction, regulatory lag.
Our ability to complete construction projects successfully within projected estimates is contingent upon many variables and subject to substantial risks. These variables include, but are not limited to, project management expertise and escalating costs for materials, labor, and environmental compliance. Delays in obtaining permits, shortages in materials and qualified labor, suppliers and contractors who do not perform as required under
 
their contracts, changes in the scope and timing of projects, the inability to raise capital on reasonable terms, or other events beyond our control that could occur may materially affect the schedule, cost, and performance of these projects. With respect to capital expenditures for pollution control equipment, there is a risk that a power plant may not be permitted to continue to operate if pollution control equipment is not installed by prescribed deadlines or does not perform as expected. Should any such pollution control equipment not be installed on time or perform as expected, Ameren Missouri could be subject to additional costs and to the loss of its investment in the project or facility. All of these risks could adversely affect our results of operations, financial position, and liquidity.
As of December 31, 2014, Ameren Missouri had capitalized $69 million of costs incurred to license additional nuclear generation at its existing Callaway energy center site. If efforts are abandoned or if management concludes that it is probable the costs incurred will be disallowed in rates, a charge to earnings would be recognized in the period in which that determination was made. The NRC review of the COL application to license additional nuclear generation at the Callaway energy center site is currently suspended through the end of 2015.
Ameren and Ameren Illinois may not be able to execute their electric transmission investment plans or to realize the expected return on those investments.
Ameren, through ATXI and Ameren Illinois, is allocating significant additional capital resources to electric transmission investments. This allocation of capital resources is based on the FERC's regulatory framework and a rate of return on common equity that is currently higher than that allowed by our state commissions. However, the FERC regulatory framework and rate of return is subject to change, including changes as a result of third-party complaints and challenges at the FERC. The regulatory framework may not be as favorable, or the rate of return may be lower, in the future. Currently, the FERC-allowed return on common equity for MISO transmission owners is 12.38%. In November 2013, a complaint case was filed with the FERC seeking a reduction in the allowed return on common equity under the MISO tariff. A second complaint case was filed in February 2015. These complaint cases could negatively affect Ameren Illinois' and ATXI's allowed return. Any such reduction would also result in a refund of transmission service revenues earned since the filing of the initial complaint case in November 2013. A 50 basis point reduction in the FERC-allowed return on common equity would reduce Ameren's and Ameren Illinois' 2015 earnings by an estimated $4 million and $2 million, respectively, based on projected rate base.
A significant portion of Ameren's planned electric transmission investments consists of three separate projects to be constructed by ATXI, which have been approved by MISO as multi-value projects. The total investment by ATXI in these three projects is expected to be more than $1.6 billion. The last of these projects is expected to be completed in 2019. A failure by ATXI to complete these three projects on time and within projected cost estimates could adversely affect Ameren's results


20

Table of Contents

of operations, financial position, and liquidity.
The FERC has issued multiple orders, which are subject to ongoing litigation, eliminating the right of first refusal for an electric utility to construct within its service territory certain new transmission projects for which there will be regional cost sharing. If these orders are upheld by the courts, Ameren might need to compete to build certain future electric transmission projects in its subsidiaries' service territories. Such competition could prevent Ameren from investing in future electric transmission projects to the extent desired. Also, Ameren may not be successful in its efforts to build transmission assets outside of its subsidiaries' service territories or MISO.
Our electric generation, transmission and distribution facilities are subject to operational risks that could adversely affect our results of operations, financial position, and liquidity.
Our financial performance depends on the successful operation of electric generation, transmission, and distribution facilities. Operation of electric generation, transmission, and distribution facilities involves many risks, including:
facility shutdowns due to operator error or a failure of equipment or processes;
longer-than-anticipated maintenance outages;
aging infrastructure that may require significant expenditures to operate and maintain;
disruptions in the delivery of fuel or lack of adequate inventories, including ultra-low-sulfur coal used for Ameren Missouri’s compliance with environmental regulations;
lack of adequate water required for cooling plant operations;
labor disputes;
inability to comply with regulatory or permit requirements, including those relating to environmental laws;
disruptions in the delivery of electricity that impact our customers;
handling, storage, and disposition of CCR;
unusual or adverse weather conditions or other natural disasters, including severe storms, droughts, floods, tornadoes, earthquakes, solar flares, and electromagnetic pulses;
accidents that might result in injury or loss of life, extensive property damage, or environmental damage;
cybersecurity risks, including loss of operational control of Ameren Missouri's energy centers and our transmission and distribution systems and loss of data, such as utility customer data and account information through insider or outsider actions;
failure of other operators' facilities and the effect of that failure on our electric system and customers;
the occurrence of catastrophic events such as fires, explosions, acts of sabotage or terrorism, pandemic health events, or other similar occurrences;
limitations on amounts of insurance available to cover losses that might arise in connection with operating our electric generation, transmission, and distribution facilities; and
 
other unanticipated operations and maintenance expenses and liabilities.
Ameren Missouri’s ownership and operation of a nuclear energy center creates business, financial, and waste disposal risks.
Ameren Missouri’s ownership of the Callaway energy center subjects it to the risks of nuclear generation, which include the following:
potential harmful effects on the environment and human health resulting from the operation of nuclear facilities and the storage, handling, and disposal of radioactive materials;
continued uncertainty in the federal government plan to permanently store spent nuclear fuel and the risk of being required to provide for long-term storage of spent nuclear fuel at the Callaway energy center;
limitations on the amounts and types of insurance available to cover losses that might arise in connection with the Callaway energy center or other United States nuclear facilities;
uncertainties with respect to contingencies and retrospective premium assessments relating to claims at the Callaway energy center or any other United States nuclear facilities;
public and governmental concerns about the adequacy of security at nuclear facilities;
uncertainties with respect to the technological and financial aspects of decommissioning nuclear facilities at the end of their licensed lives;
limited availability of fuel supply;
costly and extended outages for scheduled or unscheduled maintenance and refueling; and
potential adverse effects of a natural disaster or acts of sabotage or terrorism.
The NRC has broad authority under federal law to impose licensing and safety requirements for nuclear facilities. In the event of noncompliance, the NRC has the authority to impose fines or to shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated from time to time by the NRC could necessitate substantial capital expenditures at nuclear facilities such as Ameren Missouri’s Callaway energy center. In addition, if a serious nuclear incident were to occur, it could have a material but indeterminable adverse effect on Ameren's and Ameren Missouri’s results of operations, financial condition, and liquidity. A major incident at a nuclear facility anywhere in the world could cause the NRC to limit or prohibit the operation or relicensing of any domestic nuclear unit and could also cause the NRC to impose additional conditions or requirements on the industry, which could increase costs and result in additional capital expenditures. Under revised standards relating to seismic risk, the NRC may require Ameren Missouri to further evaluate the impact of an earthquake on its Callaway energy center due its proximity to a fault line, which could require the installation of additional capital equipment.
Our natural gas distribution and storage activities


21

Table of Contents

involve numerous risks that may result in accidents and other operating risks and costs that could adversely affect our results of operations, financial position, and liquidity.
Inherent in our natural gas distribution and storage activities are a variety of hazards and operating risks, such as leaks, accidental explosions, mechanical problems and cybersecurity risks, which could cause substantial financial losses. In addition, these hazards could result in serious injury, loss of human life, significant damage to property, environmental impacts, and impairment of our operations, which in turn could lead us to incur substantial losses. In accordance with customary industry practice, we maintain insurance against some, but not all, of these risks and losses. The location of distribution lines and storage facilities near populated areas, including residential areas, business centers, industrial sites, and other public gathering places, could increase the level of damages resulting from these risks. A major domestic incident involving natural gas systems could lead to additional capital expenditures and increased regulation of natural gas utilities. The occurrence of any of these events could materially adversely affect our results of operations, financial position, and liquidity.
Significant portions of our electric generation, transmission, and distribution facilities and natural gas transmission and distribution facilities are aging. This aging infrastructure may require additional maintenance expenditures or may require replacement.
Our aging infrastructure may pose risks to system reliability and expose us to expedited or additional unplanned capital expenditures and operating costs. All of Ameren Missouri’s coal-fired energy centers were constructed prior to 1978, while its Callaway nuclear energy center was constructed prior to 1984. The age of these energy centers increases the risks of unplanned outages, reduced generation output, and higher maintenance expense. If, at the end of its life, an energy center's cost has not been fully recovered, Ameren Missouri may be negatively affected if such cost is not allowed in rates by the MoPSC. Aging transmission and distribution facilities are more prone to failure than new facilities, which results in higher maintenance expense and the need to replace these facilities with new infrastructure. Even if the system is properly maintained, its reliability may ultimately deteriorate and negatively affect our ability to serve our customers, which could result in additional oversight by our regulators. The higher maintenance costs and capital expenditures for new replacement infrastructure could cause additional rate volatility for our customers, resistance by our regulators to allow customer rate increases, and/or regulatory lag in some of our jurisdictions, any of which could adversely affect our results of operations, financial position, and liquidity.
Energy conservation, energy efficiency, distributed generation, and other factors that reduce energy demand could adversely affect our results of operations, financial position, and liquidity.
Requirements and incentives to reduce energy consumption have been proposed by regulatory agencies and introduced by
 
legislatures. Conservation and energy efficiency programs are designed to reduce energy demand. Unless there is a regulatory mechanism ensuring recovery, a decline in usage will result in an under-recovery of fixed costs at our rate-regulated businesses. Ameren Missouri, even with the implementation of customer energy efficiency programs under the MEEIA, is exposed to declining usage losses from energy efficiency efforts not related to its specific programs as well as from distributed generation sources such as solar panels. Additionally, macroeconomic factors resulting in low economic growth or contraction within our service territories could reduce energy demand.
Technological advances could reduce customer electricity consumption. Ameren Missouri generates power at utility-scale energy centers to achieve economies of scale and to produce power at a competitive cost. Some distributed generation technologies have recently become more cost-competitive. It is possible that advances in technology and legislative or regulatory actions will continue to reduce the costs of these alternative methods of producing power to a level that is competitive with that of Ameren Missouri's energy centers. Increased adoption of these technologies could decrease our revenues as customers might not use our generation, transmission, and distribution services at current levels. Ameren Missouri and Ameren Illinois might incur stranded costs, which ultimately might not be recovered through rates.
Failure to retain and attract key officers and other skilled professional and technical employees could adversely affect our operations.
Our businesses depend upon our ability to employ and retain key officers and other skilled professional and technical employees. A significant portion of our work force is nearing retirement, including many employees with specialized skills, such as maintaining and servicing our electric and natural gas infrastructure and operating our energy centers.
Our operations are subject to acts of sabotage, war, terrorism, cyber attacks, and other intentionally disruptive acts.
Like other electric and natural gas utilities, our energy centers, fuel storage facilities, transmission and distribution facilities, and information systems may be targets of terrorist activities, including cyber attacks, which could disrupt our ability to produce or distribute some portion of our energy products. Any such disruption could result in a significant decrease in revenues or significant additional costs for repair, which could adversely affect our results of operations, financial position, and liquidity.
Our industry has begun to see an increase in volume and sophistication of cybersecurity incidents from international activist organizations, countries, and individuals. A security breach of our physical assets or information systems could affect the reliability of the transmission and distribution system, disrupt electric generation, and/or subject us to financial harm associated with theft or inappropriate release of certain types of information, including sensitive customer and employee data. If a significant breach occurred, our reputation could be adversely affected,


22

Table of Contents

customer confidence could be diminished, or we could be subject to legal claims, any of which could result in a significant decrease in revenues or significant additional costs for remedying the impacts of such a breach. Our generation, transmission and distribution systems are part of an interconnected system. Therefore, a disruption caused by a cybersecurity incident at another utility, electric generator, RTO, or commodity supplier could also adversely affect our businesses. We maintain insurance against some, but not all, of these risks and losses. In addition, regulations could require changes in our security measures and could adversely affect our results of operations, financial position, and liquidity.
Ameren Missouri may ultimately not collect its receivable from an insurance company that provided liability coverage at the time of the breach of the upper reservoir of its Taum Sauk pumped-storage hydroelectric energy center, which could have a material adverse effect on Ameren’s and Ameren Missouri’s results of operations, financial condition, and liquidity.
In December 2005, there was a breach of the upper reservoir at Ameren Missouri’s Taum Sauk pumped-storage hydroelectric energy center. This breach resulted in significant flooding in the local area, which damaged a state park. Ameren Missouri had liability insurance coverage for the Taum Sauk incident, subject to certain limits and deductibles. Ameren’s and Ameren Missouri’s results of operations, financial position, and liquidity could be adversely affected if Ameren Missouri’s remaining liability insurance claim of $41 million as of December 31, 2014, is not paid. The insurance claim is currently subject to litigation.
FINANCIAL, ECONOMIC AND MARKET RISKS
Our businesses are dependent on our ability to access the capital markets successfully. We may not have access to sufficient capital in the amounts and at the times needed.
We rely on short-term and long-term debt as significant sources of liquidity and funding for capital requirements not satisfied by our operating cash flow, as well as to refinance long-term debt. The inability to raise debt or equity capital on reasonable terms, or at all, could negatively affect our ability to maintain and to expand our businesses. Events beyond our control, such as a recession or extreme volatility in the debt, equity, or credit markets, may create uncertainty that could increase our cost of capital or impair or eliminate our ability to access the debt, equity, or credit markets, including our ability to draw on bank credit facilities. Any adverse change in our credit ratings could reduce access to capital and trigger additional collateral postings and prepayments. Such changes could also increase the cost of borrowing and fuel, power and natural gas supply, among other things, which could have a material adverse effect on our results of operations, financial position, and liquidity. Certain Ameren subsidiaries, such as ATXI, rely on Ameren for access to capital. Circumstances that limit Ameren’s access to capital could impair its ability to provide those subsidiaries with needed capital.
 
Ameren’s holding company structure could limit its ability to pay common stock dividends and to service its debt obligations.
Ameren is a holding company; therefore, its primary assets are its investments in the common stock of its subsidiaries, including Ameren Missouri and Ameren Illinois. As a result, Ameren’s ability to pay dividends on its common stock depends on the earnings of its subsidiaries and the ability of its subsidiaries to pay dividends or otherwise transfer funds to Ameren. Similarly, Ameren’s ability to service its debt obligations is dependent upon the earnings of operating subsidiaries and the distribution of those earnings and other payments, including payments of principal and interest under intercompany indebtedness. The payment of dividends to Ameren by its subsidiaries in turn depends on their results of operations and available cash and other items affecting retained earnings. Ameren’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany borrowing arrangements and cash payments under the tax allocation agreement) to Ameren. Certain financing agreements, corporate organizational documents, and certain statutory and regulatory requirements may impose restrictions on the ability of Ameren Missouri and Ameren Illinois to transfer funds to Ameren in the form of cash dividends, loans, or advances.
Dynegy’s or its subsidiaries' failure to satisfy certain of their indemnity and other obligations to Ameren in connection with the divestiture of New AER to IPH could have a material adverse effect on Ameren’s results of operations, financial position, and liquidity.
In December 2013, Ameren completed the divestiture of New AER to IPH. The transaction agreement between Ameren and IPH requires Ameren, until December 2, 2015, to maintain its financial obligations in existence as of December 2, 2013, under all credit support arrangements or obligations that pertain to New AER and its subsidiaries. Ameren must also provide any additional credit support that may be contractually required pursuant to any of the contracts of New AER, and its subsidiaries as of December 2, 2013. IPH, New AER and its subsidiaries, and Dynegy have agreed to indemnify Ameren for certain losses relating to this credit support. IPH’s indemnification obligations are secured by certain AERG and Genco assets. However, these indemnification obligations and security interests might not cover all losses that could be incurred by Ameren in connection with providing this credit support. As of December 31, 2014, the balance of the Marketing Company note to Ameren was $12 million. Additionally, as of December 31, 2014, Ameren provided $114 million in guarantees and $9 million in letters of credit relating to its credit support of New AER. Dynegy emerged from its Chapter 11 bankruptcy case in 2012. As of December 31, 2014, Dynegy’s credit ratings were sub-investment-grade. IPH, New AER and its subsidiaries also do not have investment-grade credit ratings. Dynegy, IPH, New AER, or their subsidiaries might not be able to satisfy their indemnity and other obligations under the transaction agreement, Marketing Company’s note to


23

Table of Contents

Ameren, or Dynegy’s limited guarantee to Ameren, which could have a material adverse impact on Ameren’s results of operations, financial position, and liquidity.
Increasing costs associated with our defined benefit retirement and postretirement plans, health care plans, and other employee benefits could adversely affect our financial position and liquidity.
We offer defined benefit retirement and postretirement plans that cover substantially all of our employees. Assumptions related to future costs, returns on investments, interest rates, timing of employee retirements, and mortality, as well as other actuarial matters, have a significant impact on our customers' rates and our plan funding requirements. Ameren's total unfunded obligation under its pension and postretirement benefit plans was $710 million as of December 31, 2014. Ameren expects to fund its pension plans at a level equal to the greater of the pension expense or the legally required minimum contribution. Considering Ameren’s assumptions at December 31, 2014, its investment performance in 2014, and its pension funding policy, Ameren expects to make annual contributions of $25 million to $115 million in each of the next five years, with aggregate estimated contributions of $290 million. We expect Ameren Missouri’s and Ameren Illinois’ portion of the future funding requirements to be 41% and 40%, respectively. These amounts are estimates. They may change with actual investment performance, changes in interest rates, changes in our assumptions, changes in government regulations, and any voluntary contributions.
In addition to the costs of our retirement plans, the costs of providing health care benefits to our employees and retirees have increased in recent years. We believe that our employee benefit costs, including costs of health care plans for our employees and former employees, will continue to rise. The increasing costs and funding requirements associated with our defined benefit retirement plans, health care plans, and other employee benefits could increase our financing needs and otherwise materially adversely affect our financial position and liquidity.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.


24

Table of Contents

ITEM 2.PROPERTIES
For information on our principal properties, see the energy center table below. See also Liquidity and Capital Resources and Regulatory Matters in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report for a discussion of planned additions, replacements or transfers. See also Note 5 – Long-term Debt and Equity Financings, and Note 15 – Commitments and Contingencies under Part II, Item 8, of this report.
The following table shows the anticipated capability of Ameren Missouri's energy centers at the time of Ameren Missouri's expected 2015 peak summer electrical demand:
Primary Fuel Source
Energy Center
Location
Net Kilowatt Capability(a)
Coal
Labadie
Franklin County, Missouri
2,372,000

 
Rush Island
Jefferson County, Missouri
1,180,000

 
Sioux
St. Charles County, Missouri
970,000

 
Meramec
St. Louis County, Missouri
831,000

Total coal
 
 
5,353,000

Nuclear
Callaway
Callaway County, Missouri
1,193,000

Hydroelectric
Osage
Lakeside, Missouri
240,000

 
Keokuk
Keokuk, Iowa
140,000

Total hydroelectric
 
 
380,000

Pumped-storage
Taum Sauk
Reynolds County, Missouri
440,000

Oil (CTs)
Meramec
St. Louis County, Missouri
54,000

 
Fairgrounds
Jefferson City, Missouri
54,000

 
Mexico
Mexico, Missouri
53,000

 
Moberly
Moberly, Missouri
53,000

 
Moreau
Jefferson City, Missouri
53,000

Total oil
 
 
267,000

Natural gas (CTs)
Audrain(b)
Audrain County, Missouri
600,000

 
Venice(c)
Venice, Illinois
487,000

 
Goose Creek
Piatt County, Illinois
432,000

 
Pinckneyville
Pinckneyville, Illinois
316,000

 
Raccoon Creek
Clay County, Illinois
300,000

 
Kinmundy(c)
Kinmundy, Illinois
206,000

 
Peno Creek(b)(c)
Bowling Green, Missouri
188,000

 
Meramec(c)
St. Louis County, Missouri
44,000

 
Kirksville
Kirksville, Missouri
13,000

Total natural gas
 
 
2,586,000

Methane gas (CT)
Maryland Heights
Maryland Heights, Missouri
8,000

Solar
O'Fallon
O'Fallon, Missouri
3,000

Total Ameren and Ameren Missouri
 
 
10,230,000

(a)
Net kilowatt capability is the generating capacity available for dispatch from the energy center into the electric transmission grid.
(b)
There are economic development lease arrangements applicable to these CTs.
(c)
These CTs have the capability to operate on either oil or natural gas (dual fuel).
The following table presents in-service electric and natural gas utility-related properties for Ameren Missouri and Ameren Illinois as of December 31, 2014:
 
Ameren
Missouri
 
Ameren
Illinois
Circuit miles of electric transmission lines(a)
2,956

 
4,558

Circuit miles of electric distribution lines
33,144

 
46,071

Circuit miles of electric distribution lines underground
23
%
 
15
%
Miles of natural gas transmission and distribution mains
3,334

 
18,246

Underground gas storage fields

 
12

Total working capacity of underground gas storage fields in billion cubic feet

 
24

(a)
ATXI owns 29 miles of transmission lines not reflected in this table.
Our other properties include office buildings, warehouses, garages, and repair shops.
With only a few exceptions, we have fee title to all principal
 
energy centers and other units of property material to the operation of our businesses, and to the real property on which such facilities are located (subject to mortgage liens securing our outstanding first mortgage bonds and to certain permitted liens and judgment liens). The exceptions are as follows:
A portion of Ameren Missouri’s Osage energy center reservoir, certain facilities at Ameren Missouri’s Sioux energy center, most of Ameren Missouri’s Peno Creek and Audrain CT energy centers, certain substations, and most transmission and distribution lines and natural gas mains are situated on lands occupied under leases, easements, franchises, licenses, or permits. The United States or the state of Missouri may own or may have paramount rights to certain lands lying in the bed of the Osage River or located between the inner and outer harbor lines of the Mississippi River on which certain of Ameren Missouri’s energy centers and other properties are located.
The United States, the state of Illinois, the state of Iowa, or the city of Keokuk, Iowa, may own or may have paramount


25

Table of Contents

rights with respect to certain lands lying in the bed of the Mississippi River on which a portion of Ameren Missouri’s Keokuk energy center is located.
Substantially all of the properties and plant of Ameren Missouri and Ameren Illinois are subject to the first liens of the indentures securing their mortgage bonds.
Ameren Missouri has conveyed most of its Peno Creek CT energy center to the city of Bowling Green, Missouri, and leased the energy center back from the city through 2022. Under the terms of this capital lease, Ameren Missouri is responsible for all operation and maintenance for the energy center. Ownership of the energy center will transfer to Ameren Missouri at the expiration of the lease, at which time the property and plant will become subject to the lien of any Ameren Missouri first mortgage bond indenture in effect at such time.
Ameren Missouri operates a CT energy center located in Audrain County, Missouri. Ameren Missouri has rights and obligations as lessee of the CT energy center under a long-term lease with Audrain County. The lease will expire on December 1, 2023. Under the terms of this capital lease, Ameren Missouri is responsible for all operation and maintenance for the energy center. Ownership of the energy center will transfer to Ameren Missouri at the expiration of the lease, at which time the property and plant will become subject to the lien of any Ameren Missouri first mortgage bond indenture then in effect.
ITEM 3.
LEGAL PROCEEDINGS
We are involved in legal and administrative proceedings before various courts and 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 this report, will not have a material adverse effect on our results of operations, financial position, or liquidity. Risk of loss is mitigated, in some cases, by insurance or contractual or statutory indemnification. We believe that we have established appropriate reserves for potential losses. Material legal and administrative proceedings, which are discussed in Note 2 – Rate and Regulatory Matters and Note 15 – Commitment and
 
Contingencies under Part II, Item 8, of this report and are incorporated herein by reference, include the following:
Ameren Missouri’s electric rate case filed with the MoPSC in July 2014, including the rate shift request filed by the MoOPC, the MIEC and other parties;
Ameren Missouri's MEEIA filing with the MoPSC in December 2014;
Ameren Illinois' appeal of the ICC's December 2013 natural gas rate order;
Ameren Illinois' natural gas rate case filed with the ICC in January 2015;
Ameren Illinois’ request for rehearing of a September 2014 FERC order requiring refunds to wholesale customers;
ATXI’s request for a certificate of public convenience and necessity and project approval from the ICC for the Spoon River project;
Entergy's appeal of a May 2012 FERC order requiring Entergy to refund to Ameren Missouri additional charges paid under an expired power purchase agreement;
Ameren Illinois' request for rehearing of the FERC's June 2014 orders, the appeal filed with the United States Court of Appeals for the District of Columbia Circuit, and settlement procedures regarding a potential electric transmission rate refund;
the complaint cases filed with the FERC seeking a reduction in the allowed base return on common equity under the MISO tariff;
the EPA's Clean Air Act-related litigation against Ameren Missouri;
remediation matters associated with former MGP and waste disposal sites of the Ameren Companies;
litigation associated with Ameren Missouri's liability insurance claim for the breach of the upper reservoir of its Taum Sauk pumped-storage hydroelectric energy center in December 2005; and
asbestos-related litigation associated with the Ameren Companies.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANTS (ITEM 401(b) OF REGULATION S-K):
The executive officers of the Ameren Companies, including major subsidiaries, are listed below, along with their ages as of December 31, 2014, all positions and offices held with the Ameren Companies as of February 23, 2015, tenure as officer, and business background for at least the last five years. Some executive officers hold multiple positions within the Ameren Companies; their titles are given in the description of their business experience. References to “Ameren Illinois companies” below refers to CIPS, CILCO, and IP collectively prior to the Ameren Illinois Merger and to Ameren Illinois following the Ameren Illinois Merger.

26

Table of Contents

AMEREN CORPORATION:
Name
Age
 
Positions and Offices Held
 
 
 
 
Warner L. Baxter
53

 
Chairman, President and Chief Executive Officer, and Director
Baxter joined Ameren Missouri in 1995. Baxter was elected to the positions of executive vice president and chief financial officer of Ameren, Ameren Missouri, CIPS, CILCO, and Ameren Services in 2003 and of IP in 2004. He was elected chairman, president, chief executive officer, and chief financial officer of Ameren Services in 2007. In 2009, Baxter was elected chairman, president and chief executive officer of Ameren Missouri. In February 2014, Baxter was elected president of Ameren and was appointed to the Ameren board. In April 2014, he relinquished his positions at Ameren Missouri and was elected chief executive officer of Ameren. In July 2014, Baxter was elected chairman of the Ameren board.
 
 
 
 
Martin J. Lyons, Jr.
48

 
Executive Vice President and Chief Financial Officer
Lyons joined Ameren Services in 2001. In 2008, Lyons was elected senior vice president and principal accounting officer of the Ameren Companies. In 2009, Lyons was also elected chief financial officer of the Ameren Companies. In 2013, Lyons was elected executive vice president and chief financial officer of the Ameren Companies, and relinquished his duties as principal accounting officer.
 
 
 
 
Gregory L. Nelson
57

 
Senior Vice President, General Counsel, and Secretary
Nelson joined Ameren Missouri in 1995. Nelson was elected vice president and tax counsel of Ameren Services in 1999 and vice president of Ameren Missouri, CIPS, and CILCO in 2003 and of IP in 2004. In 2010, Nelson was elected vice president, tax and deputy general counsel of Ameren Services. He remained vice president of Ameren Missouri and the Ameren Illinois companies. In 2011, Nelson was elected senior vice president, general counsel and secretary of the Ameren Companies.
 
 
 
 
Bruce A. Steinke
53

 
Senior Vice President, Finance, and Chief Accounting Officer
Steinke joined Ameren Services in 2002. In 2008, he was elected vice president and controller of Ameren, the Ameren Illinois companies, and Ameren Services. In 2009, Steinke relinquished his positions at the Ameren Illinois companies. In 2013, Steinke was elected senior vice president, finance, and chief accounting officer of the Ameren Companies.

27

Table of Contents

SUBSIDIARIES:
Name
Age
 
Positions and Offices Held
Mark C. Birk
50

 
Senior Vice President, Corporate Planning and Oversight (Ameren Services)
Birk joined Ameren Missouri in 1986. In 2005, Birk was elected vice president, power operations, of Ameren Missouri. In 2012, Birk was elected senior vice president, corporate planning, of Ameren Services. In November 2014, he was also elected senior vice president, oversight, of Ameren Services.
 
 
 
 
Maureen A. Borkowski
57

 
Chairman and President (ATXI)
Borkowski joined Ameren Missouri in 1981. She left the company in 2000 and rejoined Ameren in 2005 as vice president, transmission, of Ameren Services. In 2011, Borkowski was elected chairman and president of ATXI. In 2011, she was also elected senior vice president, transmission, of Ameren Services.
 
 
 
 
Daniel F. Cole
61

 
Chairman and President (Ameren Services)
Cole joined Ameren Missouri in 1976. He was elected senior vice president of Ameren Missouri and Ameren Services in 1999 and of CIPS in 2001. He was elected senior vice president of CILCO in 2003 and of IP in 2004. In 2009, Cole was elected chairman and president of Ameren Services; he remained senior vice president of Ameren Missouri and the Ameren Illinois companies.
 
 
 
 
Fadi M. Diya
52

 
Senior Vice President and Chief Nuclear Officer (Ameren Missouri)
Diya joined Ameren Missouri in 2005. In 2008, Diya was elected vice president of nuclear operations at Ameren Missouri. In January 2014, Diya was elected senior vice president and chief nuclear officer of Ameren Missouri.
 
 
 
 
Richard J. Mark
59

 
Chairman and President (Ameren Illinois)
Mark joined Ameren Services in 2002. He was elected senior vice president, customer operations of Ameren Missouri in 2005. In 2012, Mark relinquished his position at Ameren Missouri and was elected chairman and president of Ameren Illinois.
 
 
 
 
Michael L. Moehn
45

 
Chairman and President (Ameren Missouri)
Moehn joined Ameren Services in 2000. In 2008, he was elected senior vice president, corporate planning and business risk management, of Ameren Services. In 2012, Moehn relinquished his position at Ameren Services and was elected senior vice president of customer operations of Ameren Illinois. Subsequently in 2012, Moehn relinquished his position at Ameren Illinois and was elected senior vice president, customer operations, of Ameren Missouri. In April 2014, Moehn was elected chairman and president of Ameren Missouri.
 
 
 
 
Charles D. Naslund
62

 
Executive Vice President (Ameren Missouri)
Naslund joined Ameren Missouri in 1974. In 2008, he was elected chairman, president and chief executive officer of AER. In 2011, Naslund assumed the position of senior vice president, generation and environmental projects, of Ameren Missouri and relinquished his positions of chairman, president, and chief executive officer of AER. In 2013, Naslund relinquished his position at Ameren Missouri and was elected executive vice president of Ameren Services. Subsequently in 2013, Naslund was elected executive vice president of Ameren Missouri. Naslund retired from each of his positions with Ameren effective March 1, 2015.
Officers are generally elected or appointed annually by the respective board of directors of each company, following the election of board members at the annual meetings of shareholders. No special arrangement or understanding exists between any of the above-named executive officers and the Ameren Companies nor, to our knowledge, with any other person or persons pursuant to which any executive officer was selected as an officer. There are no family relationships among the executive officers or between the executive officers and any directors of the Ameren Companies. All of the above-named executive officers have been employed by an Ameren company for more than five years in executive or management positions.

28

Table of Contents

PART II
ITEM 5.
MARKET FOR REGISTRANTS' COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES
Ameren’s common stock is listed on the NYSE (ticker symbol: AEE). Ameren common shareholders of record totaled 54,755 on January 31, 2015. The following table presents the price ranges, closing prices, and dividends declared per Ameren common share for each quarter during 2014 and 2013.
 
High
 
Low
 
Close
 
Dividends Declared
2014 Quarter Ended:
 
 
 
 
 
 
 
March 31
$
42.24

 
$
35.22

 
$
41.20

 
$
0.40

June 30
41.92

 
37.67

 
40.88

 
0.40

September 30
40.96

 
36.65

 
38.33

 
0.40

December 31
48.14

 
38.25

 
46.13

 
0.41

2013 Quarter Ended:
 
 
 
 
 
 
 
March 31
$
35.12

 
$
30.64

 
$
35.02

 
$
0.40

June 30
36.74

 
32.34

 
34.44

 
0.40

September 30
36.70

 
32.61

 
34.84

 
0.40

December 31
37.31

 
34.18

 
36.16

 
0.40

There is no trading market for the common stock of Ameren Missouri and Ameren Illinois. Ameren holds all outstanding common stock of Ameren Missouri and Ameren Illinois.
The following table sets forth the quarterly common stock dividend payments made by Ameren and its registrant subsidiaries during 2014 and 2013:
 
 
2014
 
2013
(In millions)
Quarter Ended
 
Quarter Ended
Registrant
December 31
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
March 31
Ameren Missouri
$
72

(a) 
$
113

 
$
78

 
$
77

 
$
140

 
$
140

 
$
90

 
$
90

Ameren Illinois

 

 

 

 
65

 
15

 
15

 
15

Ameren
99

 
97

 
97

 
97

 
97

 
97

 
97

 
97

(a)
Additionally, during the fourth quarter of 2014, Ameren Missouri returned capital of $215 million to Ameren (parent).
On February 13, 2015, the board of directors of Ameren declared a quarterly dividend on Ameren’s common stock of 41 cents per share. The common share dividend is payable March 31, 2015, to shareholders of record on March 11, 2015.
For a discussion of restrictions on the Ameren Companies’ payment of dividends, see Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report.
Purchases of Equity Securities
Ameren, Ameren Missouri, and Ameren Illinois did not purchase equity securities reportable under Item 703 of Regulation S-K during the period from October 1, 2014, to December 31, 2014.
Performance Graph
The following graph shows Ameren’s cumulative total shareholder return during the five years ended December 31, 2014. The graph also shows the cumulative total returns of the S&P 500 Index and the Edison Electric Institute Index (EEI Index), which comprises most investor-owned electric utilities in the United States. The comparison assumes that $100 was invested on December 31, 2009, in Ameren common stock and in each of the indices shown, and it assumes that all of the dividends were reinvested.




29

Table of Contents


December 31,
2009
 
2010
 
2011
 
2012
 
2013
 
2014
Ameren (AEE)
$
100.00

 
$
106.85

 
$
132.24

 
$
128.89

 
$
158.94

 
$
210.96

S&P 500 Index
100.00

 
115.06

 
117.49

 
136.29

 
180.43

 
205.13

EEI Index
100.00

 
107.04

 
128.44

 
131.12

 
148.18

 
191.02

Ameren management cautions that the stock price performance shown in the graph above should not be considered indicative of potential future stock price performance.

30

Table of Contents

ITEM 6.
SELECTED FINANCIAL DATA
For the years ended December 31,
(In millions, except per share amounts)
2014
 
2013
 
2012
 
2011
 
2010
Ameren(a):
 
 
 
 
 
 
 
 
 
Operating revenues
$
6,053

 
$
5,838

 
$
5,781

 
$
6,148

 
$
6,188

Operating income(b)
1,254

 
1,184

 
1,188

 
1,033

 
1,175

Income from continuing operations
593

 
518

 
522

 
437

 
523

Income (loss) from discontinued operations, net of taxes(c)
(1
)
 
(223
)
 
(1,496
)
 
89

 
(372
)
Net income (loss) attributable to Ameren Corporation
586

 
289

 
(974
)
 
519

 
139

Common stock dividends
390

 
388

 
382

 
375

 
368

Continuing operations earnings per share – basic
2.42

 
2.11

 
2.13

 
1.79

 
2.15

Continuing operations earnings per share – diluted
2.40

 
2.10

 
2.13

 
1.79

 
2.15

Common stock dividends per share
1.61

 
1.60

 
1.60

 
1.555

 
1.54

As of December 31:
 
 
 
 
 
 
 
 
 
Total assets(d)
$
22,676

 
$
21,042

 
$
22,230

 
$
23,723

 
$
23,511

Long-term debt, excluding current maturities
6,120

 
5,504

 
5,802

 
5,853

 
6,029

Total Ameren Corporation stockholders’ equity
6,713

 
6,544

 
6,616

 
7,919

 
7,730

Ameren Missouri:
 
 
 
 
 
 
 
 
 
Operating revenues
$
3,553

 
$
3,541

 
$
3,272

 
$
3,383

 
$
3,197

Operating income(b)
785

 
803

 
845

 
609

 
711

Net income available to common stockholder
390

 
395

 
416

 
287

 
364

Dividends to parent
340

 
460

 
400

 
403

 
235

As of December 31:
 
 
 
 
 
 
 
 
 
Total assets
$
13,541

 
$
12,904

 
$
13,043

 
$
12,757

 
$
12,504

Long-term debt, excluding current maturities
3,879

 
3,648

 
3,801

 
3,772

 
3,949

Total stockholders’ equity
4,052

 
3,993

 
4,054

 
4,037

 
4,153

Ameren Illinois:
 
 
 
 
 
 
 
 
 
Operating revenues
$
2,498

 
$
2,311

 
$
2,525

 
$
2,787

 
$
3,014

Operating income
450

 
415

 
377

 
458

 
498

Net income available to common stockholder
201

 
160

 
141

 
193

 
248

Dividends to parent

 
110

 
189

 
327

 
133

As of December 31:
 
 
 
 
 
 
 
 
 
Total assets
$
8,381

 
$
7,454

 
$
7,282

 
$
7,213

 
$
7,406

Long-term debt, excluding current maturities
2,241

 
1,856

 
1,577

 
1,657

 
1,657

Total stockholders’ equity
2,661

 
2,448

 
2,401

 
2,452

 
2,576

(a)
Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.
(b)
Includes regulatory disallowance associated with the Taum Sauk incident of $89 million recorded at Ameren and Ameren Missouri for the year ended December 31, 2011.
(c)
See Note 16 – Divestiture Transactions and Discontinued Operations under Part II, Item 8, of this report for additional information.
(d)
Includes total assets from discontinued operations of $15 million, $165 million, $1,611 million, $3,721 million, and $3,825 million at December 31, 2014, 2013, 2012, 2011, and 2010, respectively.


31

Table of Contents

ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company under PUHCA 2005, administered by the FERC. Ameren’s primary assets are its equity interests in its subsidiaries, including Ameren Missouri and Ameren Illinois. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of other expenses by Ameren depend on distributions made to it by its subsidiaries.
Below is a summary description of Ameren Missouri and Ameren Illinois. A more detailed description can be found in Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas transmission and distribution business in Missouri.
Ameren Illinois operates rate-regulated electric and natural gas transmission and distribution businesses in Illinois.
Ameren has various other subsidiaries responsible for activities such as the provision of shared services. Ameren also has a subsidiary, ATXI, that operates a FERC rate-regulated electric transmission business. ATXI is developing MISO-approved electric transmission projects, including the Illinois Rivers, Spoon River, and Mark Twain projects. Ameren is also pursuing reliability projects within Ameren Missouri's and Ameren Illinois' service territories as well as competitive electric transmission investment opportunities outside of these territories, including investments outside of MISO.
Unless otherwise stated, the following sections of Management's Discussion and Analysis of Financial Condition and Results of Operations exclude discontinued operations for all periods presented. See Note 16 – Divestiture Transactions and Discontinued Operations under Part II, Item 8, of this report for additional information regarding that presentation.
The financial statements of Ameren are prepared on a consolidated basis and therefore include the accounts of its majority-owned subsidiaries. Ameren Missouri and Ameren Illinois have no subsidiaries, and therefore their financial statements are not prepared on a consolidated basis. All intercompany transactions have been eliminated. All tabular dollar amounts are in millions, unless otherwise indicated.
In addition to presenting results of operations and earnings amounts in total, we present certain information in cents per share. These amounts reflect factors that directly affect Ameren’s earnings. We believe that this per share information helps readers to understand the impact of these factors on Ameren’s earnings per share. All references in this report to earnings per share are based on average diluted common shares outstanding.
 
OVERVIEW
In 2014, Ameren successfully executed its strategy to invest in and to grow its utilities through investment in rate-regulated infrastructure while remaining focused on operational improvement and disciplined cost management, leading to an improved earned return on equity. During 2014, Ameren continued to make progress on the three elements of its strategy: (1) to invest in and to operate its utilities in a manner consistent with existing regulatory frameworks; (2) to enhance regulatory frameworks and to advocate for responsible energy policies; and (3) to create and to capitalize on opportunities for investment for the benefit of its customers and shareholders. These results, along with confidence in Ameren’s long-term outlook, led the board of directors to increase Ameren's quarterly dividend rate in October 2014.
In 2014, Ameren Missouri completed several key infrastructure projects, including a nuclear reactor vessel head replacement project at the Callaway energy center, electrostatic precipitator upgrades at the coal-fired Labadie energy center, a new substation in St. Louis, and the O’Fallon energy center. In July 2014, Ameren Missouri filed a request with the MoPSC seeking approval to increase its annual revenues for electric service. The request, as amended in February 2015, seeks an annual revenue increase of approximately $190 million. In February 2015, the MoPSC staff recommended an increase in annual revenues of $89 million in this proceeding. A decision by the MoPSC is expected by May 2015, with new rates effective by June 2015. Additionally, in December 2014, Ameren Missouri filed a new proposed energy efficiency plan with the MoPSC under the MEEIA for 2016 through 2018.
Ameren Missouri continues to seek a modernized regulatory framework that reduces regulatory lag and supports increased investment to upgrade aging electric infrastructure and to advocate for responsible energy policies, notably in the environmental arena. In October 2014, Ameren Missouri filed its integrated resource plan with the MoPSC which targets to achieve the CO2 emissions reductions proposed in the EPA’s Clean Power Plan by 2035, rather than the EPA’s final target date of 2030 or its interim target dates beginning in 2020. Ameren Missouri's plan outlined its ongoing transition to a more fuel-diverse generation portfolio over the next 20 years, which it believes maximizes the use of its current generation fleet for the benefit of its customers while leveraging energy efficiency, environmental controls, renewable energy resources, and lower cost generation to meet future needs.
Ameren Illinois continued to implement its electric and natural gas distribution system modernization action plan, including the installation of advanced electric and upgraded natural gas meters. In December 2014, the ICC authorized an electric delivery service rate increase that was within $1 million of Ameren Illinois' revised request, which demonstrated that the formula ratemaking framework is working as intended. In January 2015, Ameren Illinois filed a request with the ICC seeking


32

Table of Contents

approval to increase its annual revenues for natural gas delivery service by $53 million. A decision by the ICC in this proceeding is required by December 2015, with new rates expected to be effective in January 2016. Also in January 2015, Ameren Illinois received approval for its QIP rider under the CSRA and subsequently began including qualified investments and recording revenue under this regulatory framework. Ameren Illinois will start recovering costs from these investments in March 2015.
Ameren Illinois continues to seek enhancements to its regulatory frameworks. On this front, legislation was passed by the Illinois General Assembly, which is awaiting the governor's approval, that would extend the IEIMA's formula ratemaking framework until the end of 2019 with further extension possible through 2022. Additionally, in its January 2015 natural gas delivery service rate request, Ameren Illinois proposed to implement a decoupling rider mechanism for residential and small nonresidential customers that would ensure that changes in sales volumes do not affect Ameren Illinois’ annual natural gas revenues for these customers.
In addition to the Ameren Missouri investments discussed above, Ameren invested more than $1 billion in Ameren Illinois electric and natural gas delivery service infrastructure and FERC-regulated electric transmission service infrastructure in 2014. Ameren continues to focus on creating and capitalizing on opportunities for investment for the benefit of its customers and shareholders. To that end, Ameren identified needed reliability projects within Ameren Missouri's and Ameren Illinois' service territories while pursuing competitive electric transmission investment opportunities both within and outside of these service territories, including investments outside of MISO, leveraging past success as an experienced transmission developer and operator. Consistent with previous plans, Ameren intends to allocate significant and increasing amounts of discretionary capital to FERC-regulated electric transmission service projects and Ameren Illinois electric and natural gas delivery service projects. Ameren plans to invest $2.3 billion in FERC-regulated electric transmission projects from 2015 through 2019, with $1.3 billion invested by ATXI and the remaining $1 billion by Ameren Illinois.
In November 2013, a customer group filed a complaint case with the FERC seeking a reduction in the 12.38% allowed base return on common equity under the MISO tariff. In January 2015, the FERC scheduled the case for hearings, requiring an initial decision to be issued no later than November 30, 2015. As the original 15-month refund period ended in February 2015, another customer complaint case was filed in February 2015, seeking a reduction in the allowed base return on common equity. In the fourth quarter of 2014, Ameren recorded a reserve representing its estimate of the potential refund from November 2013 through December 31, 2014.
In November 2014, we filed a request with the FERC to include an incentive adder of up to 50 basis points on the allowed base return on common equity for participation in an RTO. FERC approved the request to implement the incentive adder
 
prospectively from January 6, 2015, and to defer collection of the incentive adder until the issuance of the final order addressing the initial MISO case.
Earnings
Ameren reported net income of $586 million, or $2.40 per diluted share, for 2014, and $289 million, or $1.18 per diluted share, for 2013. Net income attributable to Ameren Corporation from continuing operations was $587 million, or $2.40 per diluted share, for 2014, and $512 million, or $2.10 per diluted share, for 2013. Ameren’s earnings from continued operations increased in 2014, compared with 2013, due in part to increased electric delivery service earnings at Ameren Illinois and increased electric transmission earnings at Ameren Illinois and ATXI, which included a reserve for a potential reduction in the FERC-allowed return on equity for electric transmission services. Additionally, earnings from continuing operations were favorably affected by increased rates for Ameren Illinois’ natural gas delivery service, effective January 2014, as well as decreased interest charges resulting from higher-cost debt being replaced with lower-cost debt. Interest charges also declined in 2014, compared with 2013, as a result of the ICC's December 2014 order allowing partial recovery of certain previously disallowed debt premium costs, which were charged to earnings in 2013. The absence in 2014 of a reduction in Ameren Missouri revenues resulting from a July 2013 MoPSC order that required a refund to customers for the earnings associated with certain long-term partial requirements sales recognized for the period from October 1, 2009, to May 31, 2011, also positively affected earnings comparisons. Ameren’s earnings from continuing operations were negatively affected by increased depreciation and amortization expenses, a higher effective income tax rate, and increased other operations and maintenance expenses.
Liquidity
Cash generated by operating activities associated with continuing operations of $1.6 billion, short-term borrowings, and available cash on hand were used to fund capital expenditures of $1.8 billion and to pay dividends to common stockholders of $390 million. At December 31, 2014, Ameren, on a consolidated basis, had available liquidity, in the form of cash on hand and amounts available under existing credit agreements, of $1.4 billion.
Capital Spending
In 2014, Ameren made significant investments in its utilities. It expects that trend to continue into the future. From 2015 through 2019, Ameren's cumulative capital spending is projected to range between $8.6 billion and $9.3 billion. The projected spending includes approximately $3.7 billion, $3.8 billion, and $1.3 billion for Ameren Missouri, Ameren Illinois, and ATXI, respectively.
RESULTS OF OPERATIONS
Our results of operations and financial position are affected by many factors. Weather, economic conditions, and the actions of key customers can significantly affect the demand for our


33

Table of Contents

services. Our results are also affected by seasonal fluctuations in winter heating and summer cooling demands. Almost all of Ameren’s revenues are subject to state or federal regulation. This regulation has a material impact on the prices we charge for our services. Ameren Missouri principally uses coal, nuclear fuel, and natural gas for fuel in its operations. The prices for these commodities can fluctuate significantly because of the global economic and political environment, weather, supply and demand, and many other factors. We have natural gas cost recovery mechanisms for our Illinois and Missouri natural gas delivery service businesses, a purchased power cost recovery mechanism for Ameren Illinois' electric delivery service business, and a FAC for Ameren Missouri's electric utility business. Ameren Illinois' electric delivery service utility business, pursuant to the IEIMA, conducts an annual reconciliation of the revenue requirement necessary to reflect the actual costs incurred in a given year with the revenue requirement included in customer rates for that year, with recoveries from or refunds to customers made in a subsequent year. Included in Ameren Illinois' revenue requirement reconciliation is a formula for the return on equity, which is equal to the average of the monthly yields of 30-year United States Treasury bonds plus 580 basis points. Therefore, Ameren Illinois' annual return on equity is directly correlated to yields on United States Treasury bonds. Ameren Illinois and ATXI have received FERC approval to use a company-specific, forward-looking rate formula framework in setting their transmission rates. These forward-looking rates are updated each January with forecasted information. A reconciliation during the year, which adjusts for the actual revenue requirement and actual sales volumes, is used to adjust billing rates in a subsequent year. Fluctuations in interest rates and conditions in the capital and credit markets also affect our cost of borrowing and our pension and postretirement benefits costs. We employ various risk management strategies to reduce our exposure to commodity risk and other risks inherent in our business. The reliability of Ameren Missouri's energy centers and our transmission and distribution systems and the level of purchased power costs, operations and maintenance costs, and capital investment are key factors that we seek to optimize our results of operations, financial position, and liquidity.
Earnings Summary
The following table presents a summary of Ameren's earnings for the years ended December 31, 2014, 2013, and 2012:
 
2014
 
2013
 
2012
Net income (loss) attributable to Ameren Corporation
$
586

 
$
289

 
$
(974
)
Earnings (loss) per common share – diluted
2.40

 
1.18

 
(4.01
)
 
 
 
 
 
 
Net income attributable to Ameren Corporation – continuing operations
587

 
512

 
516

Earnings per common share – diluted – continuing operations
2.40

 
2.10

 
2.13

 
2014 versus 2013
Net income attributable to Ameren Corporation from continuing operations in 2014 increased $75 million, or $0.30 per diluted share, from 2013. The increase was due to a $41 million increase in net income from the Ameren Illinois segment and a $39 million decrease in net loss from Ameren (parent) and nonregistrant subsidiaries partially offset by a $5 million decrease in net income from the Ameren Missouri segment.
Compared with 2013, 2014 earnings per share from continuing operations were favorably affected by:
higher natural gas rates at Ameren Illinois pursuant to a December 2013 order (8 cents per share);
decreased interest expense, excluding the effects of the ICC's December 2014 order discussed below, primarily due to the maturity of higher-cost debt replaced with issuances of lower-cost debt (8 cents per share);
the absence in 2014 of a reduction in Ameren Missouri revenues resulting from a July 2013 MoPSC order that required a refund to customers associated with certain long-term partial requirements sales recognized from October 1, 2009, to May 31, 2011 (7 cents per share);
the ICC's December 2014 order allowing partial recovery of certain previously disallowed debt premium costs that were charged to earnings in 2013 (7 cents per share);
an increase in Ameren Illinois' and ATXI's electric transmission earnings under formula ratemaking due to additional rate base investment, partially offset by a reserve for a potential refund to customers due to a reduction in the FERC-allowed return on equity (6 cents per share). ATXI's net income was $13 million (5 cents per share) and $7 million (3 cents per share) in 2014 and 2013, respectively;
an increase in Ameren Illinois’ electric delivery service earnings under formula ratemaking pursuant to the IEIMA due to increased rate base investment (estimated at 5 cents per share);
higher revenues associated with Ameren Missouri's MEEIA lost revenue recovery mechanism (4 cents per share), which were partially offset by lower revenues resulting from reduced demand due to customer energy efficiency programs; and
increased electric and natural gas demand primarily resulting from colder winter temperatures in early 2014 and warmer early summer temperatures (estimated at 1 cent per share).
Compared with 2013, 2014 earnings per share from continuing operations were unfavorably affected by:
increased depreciation and amortization expenses, primarily resulting from electric distribution capital additions at Ameren Missouri (5 cents per share);
an increase in the effective tax rate (4 cents per share); and
increased other operations and maintenance expenses for Ameren Missouri and for Ameren Illinois' natural gas business, primarily due to increased labor and litigation costs, offset in part by decreased costs at Ameren (parent),


34

Table of Contents

primarily resulting from the substantial elimination of costs previously incurred in support of the divested merchant generation business (3 cents per share).
The cents per share information presented above is based on the diluted average shares outstanding in 2013.
2013 versus 2012
Net income attributable to Ameren Corporation from continuing operations in 2013 decreased $4 million, or $0.03 per diluted share, from 2012. The decrease was due to a $21 million decrease in net income from the Ameren Missouri segment and a $2 million increase in net loss from Ameren (parent) and nonregistrant subsidiaries, partially offset by a $19 million increase in net income from the Ameren Illinois segment.
Compared with 2012, 2013 earnings per share from continuing operations were unfavorably affected by:
the cost of the Callaway energy center's scheduled refueling and maintenance outage in 2013. There was no Callaway refueling and maintenance outage in 2012 (10 cents per share);
a reduction in Ameren Missouri revenues resulting from a July 2013 MoPSC order that required a refund to customers associated with certain long-term partial requirements sales recognized for the period from October 1, 2009, to May 31, 2011 (7 cents per share);
the absence in 2013 of a reduction in Ameren Missouri's purchased power expense and an increase in interest income, each as a result of a FERC-ordered refund received in 2012 from Entergy for a power purchase agreement that expired in 2009 (7 cents per share);
decreased electric demand resulting from summer temperatures in 2013 that were milder than the warmer-than-normal temperatures in 2012, partially offset by increased electric and natural gas demand resulting from winter temperatures in 2013 that were colder than winter temperatures in 2012 (estimated at 6 cents per share);
 
the ICC's December 2013 orders disallowing recovery of a portion of the premium paid by Ameren Illinois for a tender offer in August 2012 to repurchase senior secured notes (4 cents per share); and
increased depreciation primarily due to infrastructure additions at Ameren Missouri (3 cents per share).
Compared with 2012, 2013 earnings per share from continuing operations were favorably affected by:
higher Ameren Missouri utility rates pursuant to an order issued by the MoPSC, which became effective in January 2013, partially offset by increased regulatory asset amortization as directed by the rate order. This excludes MEEIA impacts, which are discussed separately below (12 cents per share);
higher revenues associated with Ameren Missouri's MEEIA lost revenue recovery mechanism (9 cents per share), which were partially offset by lower revenues resulting from reduced demand due to customer energy efficiency programs;
higher electric transmission rates at Ameren Illinois and ATXI (8 cents per share); and
an increase in Ameren Illinois' electric delivery service earnings under formula ratemaking, favorably affected primarily by an increased rate base, a higher allowed return on equity, and lower required contributions pursuant to the IEIMA (estimated at 8 cents per share).
The cents per share information presented above is based on the diluted average shares outstanding in 2012.
For additional details regarding the Ameren Companies’ results of operations, including explanations of Margins, Other Operations and Maintenance Expenses, Depreciation and Amortization, Taxes Other Than Income Taxes, Other Income and Expenses, Interest Charges, Income Taxes, and Income (Loss) from Discontinued Operations, Net of Taxes, see the major headings below.


35

Table of Contents

Below is a table of income statement components by segment for the years ended December 31, 2014, 2013, and 2012:
2014
Ameren
Missouri
 
Ameren
Illinois
 
Other /
Intersegment
Eliminations
 
Total
Electric margins
$
2,443

 
$
1,179

 
$
11

 
$
3,633

Natural gas margins
82

 
443

 

 
525

Other revenues
1

 

 
(1
)
 

Other operations and maintenance
(946
)
 
(771
)
 
26

 
(1,691
)
Depreciation and amortization
(473
)
 
(263
)
 
(9
)
 
(745
)
Taxes other than income taxes
(322
)
 
(138
)
 
(8
)
 
(468
)
Other income
48

 
9

 

 
57

Interest charges
(211
)
 
(112
)
 
(18
)
 
(341
)
Income taxes
(229
)
 
(143
)
 
(5
)
 
(377
)
Income (loss) from continuing operations
393

 
204

 
(4
)
 
593

Loss from discontinued operations, net of taxes

 

 
(1
)
 
(1
)
Net income (loss)
393

 
204

 
(5
)
 
592

Net income attributable to noncontrolling interests – continuing operations
(3
)
 
(3
)
 

 
(6
)
Net income (loss) attributable to Ameren Corporation
$
390

 
$
201

 
$
(5
)
 
$
586

2013
 
 
 
 
 
 
 
Electric margins
$
2,407

 
$
1,081

 
$
(3
)
 
$
3,485

Natural gas margins
83

 
399

 
(2
)
 
480

Other revenues
1

 
3

 
(4
)
 

Other operations and maintenance
(915
)
 
(693
)
 
(9
)
 
(1,617
)
Depreciation and amortization
(454
)
 
(243
)
 
(9
)
 
(706
)
Taxes other than income taxes
(319
)
 
(132
)
 
(7
)
 
(458
)
Other income and (expenses)
47

 
1

 
(5
)
 
43

Interest charges
(210
)
 
(143
)
 
(45
)
 
(398
)
Income (taxes) benefit
(242
)
 
(110
)
 
41

 
(311
)
Income (loss) from continuing operations
398

 
163

 
(43
)
 
518

Loss from discontinued operations, net of taxes

 

 
(223
)
 
(223
)
Net income (loss)
398

 
163

 
(266
)
 
295

Net income attributable to noncontrolling interests – continuing operations
(3
)
 
(3
)
 

 
(6
)
Net income (loss) attributable to Ameren Corporation
$
395

 
$
160

 
$
(266
)
 
$
289

2012
 
 
 
 
 
 
 
Electric margin