Ameren Illinois 10Q 2020 Q1 Quarterly report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Quarterly Period Ended March 31, 2020



☐	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)

10 Executive Drive

Collinsville, Illinois 62234

(618) 343-8150

Securities Registered Pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	AEE	New York Stock Exchange

Indicate by check mark 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	☒	No	☐
Union Electric Company	Yes	☒	No	☐
Ameren Illinois Company	Yes	☒	No	☐

Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).



Ameren Corporation	Yes	☒	No	☐
Union Electric Company	Yes	☒	No	☐
Ameren Illinois Company	Yes	☒	No	☐

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Ameren Corporation	Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
			Smaller reporting company	☐	Emerging growth company	☐
Union Electric Company	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒
			Smaller reporting company	☐	Emerging growth company	☐
Ameren Illinois Company	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒
			Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Ameren Corporation	☐
Union Electric Company	☐
Ameren Illinois Company	☐

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Ameren Corporation	Yes	☐	No	☒
Union Electric Company	Yes	☐	No	☒
Ameren Illinois Company	Yes	☐	No	☒

The number of shares outstanding of each registrant’s classes of common stock as of April 30, 2020, was as follows:



Registrant	Title of each class of common stock	Shares outstanding
Ameren Corporation	Common stock, $0.01 par value per share	246,891,031
Union Electric Company	Common stock, $5 par value per share, held by Ameren Corporation	102,123,834
Ameren Illinois Company	Common stock, no par value, held by Ameren Corporation	25,452,373

______________________________________________________________________________________________________

This combined Form 10-Q 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 quarterly 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



		Page
Glossary of Terms and Abbreviations		1

Forward-looking Statements		1

PART I. Financial Information

Item 1.	Financial Statements (Unaudited)	3
	Ameren Corporation	3
	Consolidated Statement of Income and Comprehensive Income	3
	Consolidated Balance Sheet	4
	Consolidated Statement of Cash Flows	5
	Consolidated Statement of Shareholders’ Equity	6
	Union Electric Company (d/b/a Ameren Missouri)	7
	Statement of Income (Loss)	7
	Balance Sheet	8
	Statement of Cash Flows	9
	Statement of Shareholders’ Equity	10
	Ameren Illinois Company (d/b/a Ameren Illinois)	11
	Statement of Income	11
	Balance Sheet	12
	Statement of Cash Flows	13
	Statement of Shareholders’ Equity	14
	Note 1. Summary of Significant Accounting Policies	15
	Note 2. Rate and Regulatory Matters	16
	Note 3. Short-term Debt and Liquidity	19
	Note 4. Long-term Debt and Equity Financings	20
	Note 5. Other Income, Net	21
	Note 6. Derivative Financial Instruments	21
	Note 7. Fair Value Measurements	23
	Note 8. Related-party Transactions	25
	Note 9. Commitments and Contingencies	26
	Note 10. Callaway Energy Center	30
	Note 11. Retirement Benefits	31
	Note 12. Income Taxes	31
	Note 13. Supplemental Information	34
	Note 14. Segment Information	34
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 4.	Controls and Procedures	61

PART II. Other Information

Item 1.	Legal Proceedings	61
Item 1A.	Risk Factors	61
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 6.	Exhibits	64

Signatures		65

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. Refer to the Form 10-K for a complete listing of glossary terms and abbreviations. Only new or significantly changed terms and abbreviations are included below.

COVID-19 pandemic – the global pandemic resulting from the outbreak of the 2019 novel coronavirus, which causes coronavirus disease 2019 (COVID-19).

Form 10-K – The combined Annual Report on Form 10-K for the year ended December 31, 2019, filed by the Ameren Companies with the SEC.

Net energy costs - Net energy costs, as defined in the FAC, which include fuel, certain fuel additives, ash disposal costs and revenues, emission allowances, and purchased power costs, including transportation, net of off-system sales and capacity revenues. Substantially all transmission revenues and charges are excluded from net energy costs. The MoPSC's March 2020 electric rate order changed the FAC to include certain fuel additives and ash disposal costs and revenues, as of April 1, 2020.

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 within Risk Factors in the Form 10-K and in this report, 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, and any changes in regulatory policies and ratemaking determinations, that may change regulatory recovery mechanisms, such as those that may result from a rehearing of the November 2019 FERC order determining the allowed base ROE under the MISO tariff, the Notices of Inquiry issued by the FERC in March 2019, the Notice of Proposed Rulemaking issued by the FERC in March 2020, Ameren Illinois’ April 2020 annual electric distribution formula rate update filing, Ameren Illinois’ natural gas delivery service regulatory rate review filed with the ICC in February 2020, and the March 2020 ICC service disconnection moratorium proceeding;

•

the length and severity of the COVID-19 pandemic, and its impacts on our business continuity plans and our results of operations, financial position, and liquidity, including but not limited to changes in customer demand resulting in changes to sales volumes, customers’ ability to pay for our services, the health and welfare of our workforce and that of our contractors, supplier disruptions, delays in the completion of capital or other construction projects, which could impact our planned capital expenditures and expected planned rate base growth, our attempt to earn our allowed ROEs, the ability to meet customer energy-efficiency program goals and earn performance incentives related to those programs, increased data security risks as a result of the transition to remote working arrangements for a significant portion of our workforce, and our ability to access the capital markets on reasonable terms and when needed;


•	the effect and continuation of Ameren Illinois’ election to participate in performance-based formula ratemaking frameworks for its electric distribution service and its participation in electric energy-efficiency programs, including the direct relationship between Ameren Illinois’ ROE and the 30-year United States Treasury bond yields;


•	the effect on Ameren Missouri of any customer rate caps pursuant to Ameren Missouri’s election to use the PISA, including an extension of use beyond 2023, if requested by Ameren Missouri and approved by the MoPSC;


•	the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, and energy policies;


•	the effects of changes in federal, state, or local tax laws, regulations, interpretations, or rates, including as a result of amendments or technical corrections to the TCJA, and challenges to the tax positions taken by the Ameren Companies, if any;


•	the effects on demand for our services resulting from technological advances, including advances in customer energy efficiency, energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive;


•	the effectiveness of Ameren Missouri’s customer energy-efficiency programs and the related revenues and performance incentives earned under its MEEIA programs;


•	Ameren Illinois’ ability to achieve the performance standards applicable to its electric distribution business and the FEJA electric customer energy-efficiency goals and the resulting impact on its allowed ROE;


•	our ability to align overall spending, both operating and capital, with frameworks established by our regulators and to recover these costs in a timely manner in our attempt to earn our allowed ROEs;

•

the cost and availability of fuel, such as low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power, zero emission credits, renewable energy credits, and natural gas for distribution; and the level and volatility of future market prices for such commodities and credits, including our ability to recover the costs for such commodities and credits and our customers’ tolerance for any related price increases;


•	disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies from the one NRC-licensed supplier of Ameren Missouri’s Callaway Energy Center’s assemblies;


•	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 effectiveness of our risk management strategies and our use of financial and derivative instruments;


•	the ability to obtain sufficient insurance, including insurance for Ameren Missouri’s nuclear and coal-fired energy centers, or, in the absence of insurance, the ability to recover uninsured losses from our customers;


•	the impact of cyberattacks on us or our suppliers, which could, among other things, result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer, employee, financial, and operating system information;


•	business and economic conditions, which have been affected by, and will be affected by the length and severity of, the COVID-19 pandemic, including the impact of such conditions on interest rates, collection of our receivable balances, 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;


•	the actions of credit rating agencies and the effects of such actions, including any impacts on our credit ratings that may result from the economic conditions of the COVID-19 pandemic;


•	the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;


•	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 failures of electric generation, electric and natural gas transmission or distribution, or natural gas storage facilities systems and equipment, which could result in unanticipated liabilities or unplanned outages;


•	the operation of Ameren Missouri’s Callaway Energy Center, including planned and unplanned outages, and decommissioning costs;


•	Ameren Missouri’s ability to recover the remaining investment, if any, and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs;

•

the impact of current environmental laws and new, more stringent, or changing requirements, including those related to NSR, CO₂ and the implementation of the Affordable Clean Energy Rule, other emissions and discharges, cooling water intake structures, CCR, and energy efficiency, that could limit or terminate the operation of certain of Ameren Missouri’s energy centers, increase our operating 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 standards in Missouri and Illinois and with the zero emission standard in Illinois;

•

Ameren Missouri’s ability to acquire wind and other renewable energy generation facilities and recover its cost of investment and related return in a timely manner, which is affected by the ability to obtain all necessary project approvals; the ability of developers to meet contractual commitments and timely complete projects, which is dependent upon the availability of necessary materials and equipment, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic, among other things; the availability of federal production and investment tax credits related to renewable energy and Ameren Missouri’s ability to use such credits; the cost of wind and solar generation technologies; and Ameren Missouri’s ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost for each facility;


•	labor disputes, work force reductions, changes in future wage and employee benefits costs, including those resulting from changes in discount rates, mortality tables, returns on benefit plan assets, and other assumptions;

•

the impact of negative opinions of us or our utility services that our customers, investors, legislators, or regulators may have or develop, which could result from a variety of factors, including failures in system reliability, failure to implement our investment plans or to protect sensitive customer information, increases in rates, negative media coverage, or concerns about environmental, social, and/or governance practices;


•	the impact of adopting new accounting guidance;


•	the effects of strategic initiatives, including mergers, acquisitions, and divestitures;


•	legal and administrative proceedings; and


•	acts of sabotage, war, terrorism, or other intentionally disruptive acts.

New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. 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. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AMEREN CORPORATION

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

(Unaudited) (In millions, except per share amounts)



	Three Months Ended March 31,
	2020		2019
Operating Revenues:
Electric	$	1,120	$	1,182
Natural gas	320		374
Total operating revenues	1,440		1,556
Operating Expenses:
Fuel	140		160
Purchased power	134		156
Natural gas purchased for resale	107		161
Other operations and maintenance	438		417
Depreciation and amortization	255		248
Taxes other than income taxes	125		126
Total operating expenses	1,199		1,268
Operating Income	241		288
Other Income, Net	21		29
Interest Charges	93		97
Income Before Income Taxes	169		220
Income Taxes	21		27
Net Income	148		193
Less: Net Income Attributable to Noncontrolling Interests	2		2
Net Income Attributable to Ameren Common Shareholders	$	146	$	191


Net Income	$	148	$	193
Other Comprehensive Income, Net of Taxes
Pension and other postretirement benefit plan activity, net of income taxes of $- and $-, respectively	1		1
Comprehensive Income	149		194
Less: Comprehensive Income Attributable to Noncontrolling Interests	2		2
Comprehensive Income Attributable to Ameren Common Shareholders	$	147	$	192


Earnings per Common Share – Basic and Diluted	$	0.59	$	0.78

Weighted-average Common Shares Outstanding – Basic	246.4		244.9
Weighted-average Common Shares Outstanding – Diluted	248.1		246.4

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

AMEREN CORPORATION

CONSOLIDATED BALANCE SHEET

(Unaudited) (In millions, except per share amounts)



	March 31, 2020			December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	42		$	16
Accounts receivable – trade (less allowance for doubtful accounts of $19 and $17, respectively)	456			393
Unbilled revenue	212			278
Miscellaneous accounts receivable	65			63
Inventories	471			494
Current regulatory assets	91			69
Other current assets	127			118
Total current assets	1,464			1,431
Property, Plant, and Equipment, Net	24,678			24,376
Investments and Other Assets:
Nuclear decommissioning trust fund	742			847
Goodwill	411			411
Regulatory assets	1,092			992
Other assets	885			876
Total investments and other assets	3,130			3,126
TOTAL ASSETS	$	29,272		$	28,933
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	357		$	442
Short-term debt	615			440
Accounts and wages payable	544			874
Current regulatory liabilities	189			164
Other current liabilities	662			585
Total current liabilities	2,367			2,505
Long-term Debt, Net	9,378			8,915
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	2,948			2,919
Regulatory liabilities	4,842			4,887
Asset retirement obligations	631			638
Pension and other postretirement benefits	397			401
Other deferred credits and liabilities	482			467
Total deferred credits and other liabilities	9,300			9,312
Commitments and Contingencies (Notes 2, 9, and 10)
Ameren Corporation Shareholders’ Equity:
Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 246.9 and 246.2, respectively	2			2
Other paid-in capital, principally premium on common stock	5,695			5,694
Retained earnings	2,404			2,380
Accumulated other comprehensive loss	(16		)	(17		)
Total Ameren Corporation shareholders’ equity	8,085			8,059
Noncontrolling Interests	142			142
Total equity	8,227			8,201
TOTAL LIABILITIES AND EQUITY	$	29,272		$	28,933

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



AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
	Three Months Ended March 31,
	2020			2019
Cash Flows From Operating Activities:
Net income	$	148		$	193
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	263			245
Amortization of nuclear fuel	23			23
Amortization of debt issuance costs and premium/discounts	5			5
Deferred income taxes and investment tax credits, net	23			32
Allowance for equity funds used during construction	(4		)	(6		)
Stock-based compensation costs	6			6
Other	17			(8		)
Changes in assets and liabilities:
Receivables	(5		)	4
Inventories	23			81
Accounts and wages payable	(221		)	(213		)
Taxes accrued	47			28
Regulatory assets and liabilities	(14		)	26
Assets, other	(3		)	(14		)
Liabilities, other	(18		)	(11		)
Pension and other postretirement benefits	—			(4		)
Net cash provided by operating activities	290			387
Cash Flows From Investing Activities:
Capital expenditures	(636		)	(544		)
Nuclear fuel expenditures	(35		)	(21		)
Purchases of securities – nuclear decommissioning trust fund	(96		)	(39		)
Sales and maturities of securities – nuclear decommissioning trust fund	81			36
Other	2			1
Net cash used in investing activities	(684		)	(567		)
Cash Flows From Financing Activities:
Dividends on common stock	(122		)	(116		)
Dividends paid to noncontrolling interest holders	(2		)	(2		)
Short-term debt, net	175			202
Maturities of long-term debt	(85		)	(329		)
Issuances of long-term debt	465			450
Issuances of common stock	13			19
Employee payroll taxes related to stock-based compensation	(20		)	(29		)
Debt issuance costs	(3		)	(4		)
Net cash provided by financing activities	421			191
Net change in cash, cash equivalents, and restricted cash	27			11
Cash, cash equivalents, and restricted cash at beginning of year	176			107
Cash, cash equivalents, and restricted cash at end of period	$	203		$	118

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

AMEREN CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (In millions, except per share amounts)

	Three Months Ended March 31,
	2020			2019
Common Stock	$	2		$	2

Other Paid-in Capital:
Beginning of year	5,694			5,627
Shares issued under the DRPlus and 401(k) plan	13			19
Stock-based compensation activity	(12		)	(21		)
Other paid-in capital, end of period	5,695			5,625

Retained Earnings:
Beginning of year	2,380			2,024
Net income attributable to Ameren common shareholders	146			191
Dividends	(122		)	(116		)
Retained earnings, end of period	2,404			2,099

Accumulated Other Comprehensive Income (Loss):
Deferred retirement benefit costs, beginning of year	(17		)	(22		)
Change in deferred retirement benefit costs	1			1
Deferred retirement benefit costs, end of period	(16		)	(21		)
Total accumulated other comprehensive loss, end of period	(16		)	(21		)
Total Ameren Corporation Shareholders’ Equity	$	8,085		$	7,705

Noncontrolling Interests:
Beginning of year	142			142
Net income attributable to noncontrolling interest holders	2			2
Dividends paid to noncontrolling interest holders	(2		)	(2		)
Noncontrolling interests, end of period	142			142
Total Equity	$	8,227		$	7,847


Common stock shares outstanding at beginning of year	246.2			244.5
Shares issued under the DRPlus and 401(k) plan	0.2			0.3
Shares issued for stock-based compensation	0.5			0.8
Common stock shares outstanding at end of period	246.9			245.6

Dividends per common share	$	0.4950		$	0.4750

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

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

STATEMENT OF INCOME (LOSS)

(Unaudited) (In millions)



	Three Months Ended March 31,
	2020			2019
Operating Revenues:
Electric	$	631		$	704
Natural gas	49			54
Total operating revenues	680			758
Operating Expenses:
Fuel	140			160
Purchased power	39			51
Natural gas purchased for resale	18			27
Other operations and maintenance	239			224
Depreciation and amortization	139			140
Taxes other than income taxes	79			77
Total operating expenses	654			679
Operating Income	26			79
Other Income, Net	4			12
Interest Charges	40			47
Income (Loss) Before Income Taxes	(10		)	44
Income Taxes (Benefit)	(1		)	4
Net Income (Loss)	(9		)	40
Preferred Stock Dividends	1			1
Net Income (Loss) Available to Common Shareholder	$	(10	)	$	39

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

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

BALANCE SHEET

(Unaudited) (In millions, except per share amounts)



	March 31, 2020		December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	3	$	9
Accounts receivable – trade (less allowance for doubtful accounts of $8 and $7, respectively)	174		164
Accounts receivable – affiliates	34		30
Unbilled revenue	117		139
Miscellaneous accounts receivable	43		33
Inventories	391		373
Other current assets	96		66
Total current assets	858		814
Property, Plant, and Equipment, Net	12,731		12,635
Investments and Other Assets:
Nuclear decommissioning trust fund	742		847
Regulatory assets	305		285
Other assets	357		356
Total investments and other assets	1,404		1,488
TOTAL ASSETS	$	14,993	$	14,937
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	7	$	92
Short-term debt	130		234
Accounts and wages payable	238		465
Accounts payable – affiliates	48		52
Taxes accrued	64		24
Interest accrued	46		48
Current asset retirement obligations	53		53
Current regulatory liabilities	80		62
Other current liabilities	128		96
Total current liabilities	794		1,126
Long-term Debt, Net	4,560		4,098
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	1,627		1,612
Regulatory liabilities	2,855		2,937
Asset retirement obligations	627		634
Pension and other postretirement benefits	139		141
Other deferred credits and liabilities	52		40
Total deferred credits and other liabilities	5,300		5,364
Commitments and Contingencies (Notes 2, 8, 9, and 10)
Shareholders’ Equity:
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding	511		511
Other paid-in capital, principally premium on common stock	2,027		2,027
Preferred stock	80		80
Retained earnings	1,721		1,731
Total shareholders’ equity	4,339		4,349
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	14,993	$	14,937

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

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)



	Three Months Ended March 31,
	2020			2019
Cash Flows From Operating Activities:
Net income (loss)	$	(9	)	$	40
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	148			138
Amortization of nuclear fuel	23			23
Amortization of debt issuance costs and premium/discounts	2			2
Deferred income taxes and investment tax credits, net	(5		)	(1		)
Allowance for equity funds used during construction	(2		)	(4		)
Other	2			2
Changes in assets and liabilities:
Receivables	(3		)	56
Inventories	(18		)	29
Accounts and wages payable	(172		)	(167		)
Taxes accrued	55			44
Regulatory assets and liabilities	16			11
Assets, other	2			(16		)
Liabilities, other	—			(4		)
Pension and other postretirement benefits	2			(1		)
Net cash provided by operating activities	41			152
Cash Flows From Investing Activities:
Capital expenditures	(278		)	(240		)
Nuclear fuel expenditures	(35		)	(21		)
Purchases of securities – nuclear decommissioning trust fund	(96		)	(39		)
Sales and maturities of securities – nuclear decommissioning trust fund	81			36
Net cash used in investing activities	(328		)	(264		)
Cash Flows From Financing Activities:
Dividends on preferred stock	(1		)	(1		)
Short-term debt, net	(104		)	—
Maturities of long-term debt	(85		)	(329		)
Issuances of long-term debt	465			450
Debt issuance costs	(3		)	(4		)
Net cash provided by financing activities	272			116
Net change in cash, cash equivalents, and restricted cash	(15		)	4
Cash, cash equivalents, and restricted cash at beginning of year	39			8
Cash, cash equivalents, and restricted cash at end of period	$	24		$	12

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

UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI) STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (In millions)

	Three Months Ended March 31,
	2020			2019
Common Stock	$	511		$	511

Other Paid-in Capital	2,027			1,903

Preferred Stock	80			80

Retained Earnings:
Beginning of year	1,731			1,735
Net income (loss)	(9		)	40
Preferred stock dividends	(1		)	(1		)
Retained earnings, end of period	1,721			1,774

Total Shareholders’ Equity	$	4,339		$	4,268

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

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

STATEMENT OF INCOME

(Unaudited) (In millions)



	Three Months Ended March 31,
	2020		2019
Operating Revenues:
Electric	$	452	$	442
Natural gas	271		320
Total operating revenues	723		762
Operating Expenses:
Purchased power	98		105
Natural gas purchased for resale	89		134
Other operations and maintenance	199		191
Depreciation and amortization	107		101
Taxes other than income taxes	42		45
Total operating expenses	535		576
Operating Income	188		186
Other Income, Net	11		11
Interest Charges	39		37
Income Before Income Taxes	160		160
Income Taxes	39		39
Net Income	121		121
Preferred Stock Dividends	1		1
Net Income Available to Common Shareholder	$	120	$	120

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

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

BALANCE SHEET

(Unaudited) (In millions)



	March 31, 2020		December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents	$	6	$	—
Accounts receivable – trade (less allowance for doubtful accounts of $11 and $10, respectively)	268		215
Accounts receivable – affiliates	15		28
Unbilled revenue	95		139
Miscellaneous accounts receivable	19		25
Inventories	80		121
Current regulatory assets	57		57
Other current assets	31		29
Total current assets	571		614
Property and Plant, Net	10,280		10,083
Investments and Other Assets:
Goodwill	411		411
Regulatory assets	771		694
Other assets	400		383
Total investments and other assets	1,582		1,488
TOTAL ASSETS	$	12,433	$	12,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt	$	60	$	53
Accounts and wages payable	246		299
Accounts payable – affiliates	84		82
Customer deposits	80		77
Current environmental remediation	52		42
Current regulatory liabilities	90		84
Other current liabilities	195		207
Total current liabilities	807		844
Long-term Debt, Net	3,575		3,575
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net	1,251		1,224
Regulatory liabilities	1,884		1,849
Pension and other postretirement benefits	212		214
Environmental remediation	75		87
Other deferred credits and liabilities	277		260
Total deferred credits and other liabilities	3,699		3,634
Commitments and Contingencies (Notes 2, 8 and 9)
Shareholders' Equity:
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding	—		—
Other paid-in capital	2,288		2,188
Preferred stock	62		62
Retained earnings	2,002		1,882
Total shareholders' equity	4,352		4,132
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	12,433	$	12,185

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

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

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)



	Three Months Ended March 31,
	2020			2019
Cash Flows From Operating Activities:
Net income	$	121		$	121
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	106			100
Amortization of debt issuance costs and premium/discounts	2			3
Deferred income taxes and investment tax credits, net	22			24
Other	(2		)	(1		)
Changes in assets and liabilities:
Receivables	(6		)	(56		)
Inventories	41			52
Accounts and wages payable	(20		)	(34		)
Taxes accrued	16			12
Regulatory assets and liabilities	(28		)	18
Assets, other	(4		)	3
Liabilities, other	(14		)	(12		)
Pension and other postretirement benefits	(2		)	(3		)
Net cash provided by operating activities	232			227
Cash Flows From Investing Activities:
Capital expenditures	(324		)	(267		)
Other	1			—
Net cash used in investing activities	(323		)	(267		)
Cash Flows From Financing Activities:
Dividends on preferred stock	(1		)	(1		)
Short-term debt, net	7			54
Capital contribution from parent	100			—
Net cash provided by financing activities	106			53
Net change in cash, cash equivalents, and restricted cash	15			13
Cash, cash equivalents and restricted cash at beginning of year	125			80
Cash, cash equivalents, and restricted cash at end of period	$	140		$	93

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

AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS) STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (In millions)

	Three Months Ended March 31,
	2020			2019
Common Stock	$	—		$	—

Other Paid-in Capital:
Beginning of year	2,188			2,173
Capital contribution from parent	100			—
Other paid-in capital, end of period	2,288			2,173

Preferred Stock	62			62

Retained Earnings:
Beginning of year	1,882			1,539
Net income	121			121
Preferred stock dividends	(1		)	(1		)
Retained earnings, end of period	2,002			1,659

Total Shareholders’ Equity	$	4,352		$	3,894

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

AMEREN CORPORATION (Consolidated)

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

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

COMBINED NOTES TO FINANCIAL STATEMENTS

(Unaudited)

March 31, 2020

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Ameren has other subsidiaries that conduct other activities, such as providing shared services.


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


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


•	ATXI operates a FERC rate-regulated electric transmission business in the MISO.

The COVID-19 pandemic is a rapidly evolving situation. While the COVID-19 pandemic did not have a material impact on our results of operations, financial position, or liquidity for the three months ended March 31, 2020, it may adversely affect our results of operations, financial position, or liquidity in subsequent periods. The effect will depend on the severity and longevity of the COVID-19 pandemic and the resulting impact on business, economic, and capital market conditions. As a result of the COVID-19 pandemic, measures have been taken by local, state, and federal governments, such as travel bans, quarantines, and shelter-in place orders. On March 21, 2020, a shelter-in-place order for the state of Illinois became effective and will remain in effect until at least May 30, 2020. Similar orders became effective for Saint Louis City and County on March 23, 2020, and the state of Missouri on April 6, 2020. The state of Missouri order was effective through May 3, 2020, while Saint Louis City and County are expected to begin easing restrictions on May 18, 2020. These orders generally preclude or limit the operation of businesses that are deemed nonessential. Ameren's business operations are deemed essential and are not directly impacted by the shelter-in-place orders. As a result of the COVID-19 pandemic, economic activity has been disrupted in the service territories of Ameren Missouri and Ameren Illinois. It has also caused disruptions in the capital markets, which could adversely affect our ability to access these markets on reasonable terms and when needed. These disruptions could continue for a prolonged period of time or become more severe. On March 13, 2020, and March 16, 2020, Ameren Illinois and Ameren Missouri, respectively, suspended customer disconnections for non-payment and began to waive late fees. Regarding bad debt expense, Ameren Illinois' electric distribution and natural gas distribution businesses have bad debt riders, which would provide for recovery of increased bad debt expense. However, Ameren Missouri’s earnings are exposed to potential increases in future bad debt expense, which could result in incremental accounts receivable write-offs in future periods as Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism. Our customers’ ability to pay for our services may be adversely affected by the COVID-19 pandemic. A reduction in collections from our tariff-based revenues could reduce our cash from operations and cause an adverse impact to our liquidity.

The Coronavirus Aid, Relief, and Economic Security Act is a federal law enacted in March 2020. Provisions in the act include temporary changes to the utilization of net operating losses, temporary suspension of the payment of the employer portion of Social Security taxes, and additional funding for customer energy assistance, among other things. Ameren has implemented certain provisions of the act, and is currently evaluating other provisions of the act. As of March 31, 2020, there was no material impact to Ameren’s, Ameren Missouri’s, and Ameren Illinois’ financial statements.

Ameren’s financial statements are prepared on a consolidated basis and therefore include the accounts of its majority-owned subsidiaries. All intercompany transactions have been eliminated. Ameren Missouri and Ameren Illinois have no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.

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

Variable Interest Entities

As of March 31, 2020, Ameren and Ameren Missouri had interests in unconsolidated variable interest entities that were established to construct wind generation facilities and, ultimately, sell those constructed facilities to Ameren Missouri. Neither Ameren nor Ameren Missouri are the primary beneficiary of these variable interest entities because neither has the power to direct matters that most significantly affect the entities' activities, which include designing, financing, and constructing the wind generation facilities. As a result, these variable interest entities have not been consolidated. As of March 31, 2020, the maximum exposure to loss related to these variable interest entities was approximately $15 million, which primarily represents due diligence and legal costs incurred by Ameren Missouri associated with the acquisitions. The risk of a loss was assessed to be remote and, accordingly, Ameren and Ameren Missouri have not recognized a liability associated with any portion of the maximum exposure to loss. See Note 2 – Rate and Regulatory Matters for additional information on the agreements to acquire these wind generation facilities.

As of March 31, 2020, and December 31, 2019, Ameren had unconsolidated variable interests as a limited partner in various equity method investments, totaling $31 million and $28 million, respectively, included in “Other assets” on Ameren’s consolidated balance sheet. Ameren is not the primary beneficiary of these investments because it does not have the power to direct matters that most significantly affect the activities of these variable interest entities. As of March 31, 2020, the maximum exposure to loss related to these variable interests is limited to the investment in these partnerships of $31 million plus associated outstanding funding commitments of $34 million.

Company-owned Life Insurance

Ameren and Ameren Illinois have company-owned life insurance, which is recorded at the net cash surrender value. The net cash surrender value is the amount that can be realized under the insurance policies at the balance sheet date. As of March 31, 2020, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $245 million (December 31, 2019 – $264 million) and $118 million (December 31, 2019 – $123 million), respectively, while total borrowings against the policies were $109 million (December 31, 2019 – $114 million) at both Ameren and Ameren Illinois. Ameren and Ameren Illinois have the right to offset the borrowings against the cash surrender value of the policies and, consequently, present the net asset in “Other assets” on their respective balance sheets. The cash surrender value decreased during the three months ended March 31, 2020, primarily because of a decrease in the market value of underlying investments.

Accounting and Reporting Developments

See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of the Form 10-K for additional information about recently issued authoritative accounting guidance relating to defined benefit plan disclosures.

Measurement of Credit Losses on Financial Instruments

On January 1, 2020, the Ameren Companies adopted authoritative accounting guidance that requires credit losses on most financial assets carried at amortized cost and off-balance sheet credit exposures, such as financial guarantees or loan commitments, to be measured using a current expected credit loss (CECL) model. The guidance requires an entity to measure expected credit losses using relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In addition, the guidance made certain changes to the impairment model applicable to available-for-sale debt securities, such as requiring credit losses to be presented as an allowance rather than a write-down on impaired debt securities for which there is neither an intent nor a more-likely-than-not requirement to sell. Our adoption of this guidance did not have a material impact on the Ameren Companies’ financial statements and did not result in a cumulative effect adjustment to retained earnings as of the adoption date. See Note 13 – Supplemental Information for additional information regarding credit losses on accounts receivable.

NOTE 2 – RATE AND REGULATORY MATTERS

Below is a summary of updates to significant regulatory proceedings and related legal proceedings. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for additional information and a summary of our regulatory frameworks. We are unable to predict the ultimate outcome of these matters, the timing of the final decisions of the various agencies and courts, or the impact on our results of operations, financial position, or liquidity.

Missouri

2019 Electric Service Regulatory Rate Review

positions, and certain excess deferred income taxes that the MoPSC previously authorized in earlier electric rate orders. The order reduced the annualized base level of net energy costs pursuant to the FAC by approximately $115 million from the base level established in the MoPSC’s March 2017 electric rate order. The order also changed the annualized regulatory asset and liability amortization amounts and the base level of expenses for regulatory tracking mechanisms. These changes will result in approximately $20 million of increased revenues and approximate decreases in purchased power expenses of $15 million, other operating and maintenance expenses of $60 million, and income tax expenses of $20 million. An estimated $70 million would have otherwise been deferred under the PISA. A stipulation and agreement approved by the MoPSC’s March 2020 order states that the net impact of the revenue and expense changes noted above reflect a 9.4% to 9.8% ROE on an unspecified percent of common equity applicable to rate base. In addition, the order required Ameren Missouri to donate $8 million to low-income assistance programs, which was reflected in results of operations for the three months ended March 31, 2020. The new rates, base level of expenses, and amortizations became effective on April 1, 2020. In April 2020, the MoPSC issued another order in Ameren Missouri’s July 2019 electric service regulatory rate review, reaffirming the existing percentage of net energy cost variances allowed to be recovered or refunded under the FAC.

Wind Generation Facilities

In 2020, the developers of the wind generation facilities received notices from the wind turbine supplier, and the developer of the up-to 300-megawatt project received a notice from the construction contractor, of changes in supply and/or construction activities resulting from the COVID-19 pandemic. There have been changes to the schedules for both projects, particularly with regard to wind turbine deliveries. Ameren Missouri and the developers continue to monitor the impact to each project schedule. To date, neither developer has reported to Ameren Missouri that the projects will not be completed in 2020. Ameren Missouri expects the up-to 400-megawatt project to be placed in-service by the end of 2020. However, at this time, due to manufacturing, shipping, and other supply chain issues, and based on Ameren Missouri’s discussions with the developer, Ameren Missouri expects that a portion of the up-to 300-megawatt project, representing approximately $100 million of investment, could be placed in-service in the first quarter of 2021. The build-transfer agreements include provisions for the event in which any portion of either project is completed after 2020. In such an event, according to the terms of the agreements, Ameren Missouri would pay a reduced contract price on the portion of the project completed after 2020, to account for risks associated with qualifying for production tax credits, subject to an obligation to later pay such price differential should Ameren Missouri be entitled to receive production tax credits.

MEEIA

As a result of MoPSC orders issued in September 2017, October 2018, and January 2019 related to performance incentives for the MEEIA 2013 and MEEIA 2016 programs, and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $20 million during the first quarter of 2019. Ameren Missouri did not recognize revenues related to MEEIA performance incentives during the first quarter of 2020.

Illinois

Electric Distribution Service Rates

In April 2020, Ameren Illinois filed its annual electric distribution service formula rate update to establish the revenue requirement to be used for 2021 rates with the ICC. Pending ICC approval, this update filing will result in a $45 million decrease in Ameren Illinois’ electric distribution service rates, beginning in January 2021. This update reflects a decrease to the annual formula rate based on 2019 actual costs, a decrease to include the 2019 revenue requirement reconciliation adjustment, and a decrease for the conclusion of the 2018 revenue requirement reconciliation adjustment, which will be fully collected from customers in 2020, consistent with the ICC’s December 2019 annual update filing order. It also reflects an increase based on expected net plant additions for 2020. An ICC decision in this proceeding is expected by December 2020.

2020 Natural Gas Delivery Service Regulatory Rate Review

with new rates expected to be effective in February 2021. Ameren Illinois cannot predict the level of any delivery service rate change the ICC may approve, nor whether any rate change that may eventually be approved will be sufficient to enable Ameren Illinois to earn a reasonable return on investments when the rate changes go into effect.

QIP Reconciliation Hearing

In March 2019, Ameren Illinois filed a request with the ICC for a reconciliation hearing to determine the accuracy and prudence of natural gas infrastructure investments recovered under the QIP rider during 2018. In November 2019, the Illinois Attorney General's office challenged the recovery of capital investments, among other things, that were made during 2018, alleging that the amount of investments is excessive based on a comparison to historical investment levels. The Illinois Attorney General's office is not alleging project imprudence or that the investments do not qualify for recovery. In March 2020, the ICC staff filed testimony that supports the prudence and reasonableness of capital investments made during 2018. Ameren Illinois’ 2018 QIP rate recovery under review by the ICC is within the rate increase limitations allowed by law. The ICC is under no deadline to issue an order in this proceeding.

Service Disconnection Moratorium Proceeding

In March 2020, the ICC issued an order requiring all Illinois electric distribution, natural gas, water, and sewer utilities to suspend disconnections for customer non-payment and waive late fees, on an interim basis, effective March 18, 2020, and for as long as the public health emergency related to the COVID-19 pandemic remains in effect for the state of Illinois. At this time, the state of Illinois’ public health emergency remains in effect until May 30, 2020. The order also requires utilities to design and implement, upon ICC approval and on a temporary basis, more flexible credit and collection practices. In March 2020, Ameren Illinois filed a response to the ICC order stating their compliance with the suspension of disconnections and late fees for electric distribution and natural gas customers, and proposing more flexible credit and collection practices, including longer deferred payment arrangements for customers that fall behind on bill payments. In April 2020, similar to other utilities in Illinois, Ameren Illinois also requested approval to recover forgone late fees related to natural gas service through its existing bad debt rider and the ability to defer, as a regulatory asset, costs incurred related to the COVID-19 pandemic. Recovery of electric distribution forgone late fees and costs incurred related to the COVID-19 pandemic are included in Ameren Illinois’ electric distribution formula rates. In April 2020, the ICC staff recommended extending the suspension of disconnections and late fees for 60 days beyond when the state of Illinois’ public health emergency has ended. The ICC is under no deadline to issue an order in this proceeding.

Federal

Ameren Illinois Transmission Formula Rate Revisions

In February 2020, MISO, on behalf of Ameren Illinois, filed a request with the FERC to revise Ameren Illinois’ transmission formula rate calculation with respect to calculation inputs for materials and supplies. In May 2020, the FERC issued an order approving the revisions prospectively. In addition, the FERC noted that the FERC staff should review historical rate recovery in connection with an ongoing FERC audit. At this time, Ameren and Ameren Illinois are evaluating this order, but do not expect the impact to be material on their results of operations, financial position, or liquidity.

FERC Complaint Cases

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

As of March 31, 2020, Ameren and Ameren Illinois had recorded current regulatory liabilities of $40 million and $23 million, respectively, to reflect the expected refunds, including interest, associated with the reduced ROEs in the November 2019 order in the November 2013 complaint case. The reduction in the FERC-allowed base ROE from 10.32% to 9.88% is not material to Ameren Missouri’s results of operations, financial position, or liquidity.

In December 2019, Ameren and the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI, filed requests for rehearing with the FERC. Additionally, in December 2019, various parties filed requests for rehearing with the FERC, challenging the dismissal of the February 2015 complaint case. The FERC has not ruled on the merits of the rehearing requests and is under no deadline to do so. The allowed base ROE for the 15-month period related to the February 2015 complaint case was 12.38%. Each 50 basis point

reduction in the allowed base ROE for this 15-month period would reduce Ameren’s and Ameren Illinois’ net income by an estimated $11 million and $6 million, respectively.

In March 2019, the FERC issued separate Notices of Inquiry regarding its allowed base ROE policy and its transmission incentives policy. Initial comments were due by June 2019, and reply comments were due by late August 2019. The Notice of Inquiry addressing the FERC’s base ROE policy, among other things, broadened the ability to comment on the new methodology beyond electric utilities that are participants in the complaint cases. The transmission incentives Notice of Inquiry was open for comment on the FERC’s transmission incentive policy, including incentive adders to the base ROE. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which included an increased incentive in the allowed base ROE for participation in an RTO to 100 basis points from the current 50 basis points and improved parameters for awarding incentives, while limiting the overall incentives to a cap of 250 basis points, among other things. Initial comments are due by July 2020. Ameren is unable to predict the ultimate impact of the Notices of Inquiry or the Notice of Proposed Rulemaking at this time.

NOTE 3 – SHORT-TERM DEBT AND LIQUIDITY

The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, in the Form 10-K for a description of our indebtedness provisions and other covenants as well as a description of money pool arrangements.

Credit Agreements

The Missouri Credit Agreement and the Illinois Credit Agreement are available to support issuances under Ameren (parent)’s, Ameren Missouri’s and Ameren Illinois’ commercial paper programs, respectively, subject to borrowing sublimits and issue letters of credit. As of March 31, 2020, based on credit facility borrowings, commercial paper outstanding, and letters of credit issued under the Credit Agreements, along with cash and cash equivalents, the net liquidity available to Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, was $1.7 billion. The Ameren Companies were in compliance with the covenants in their Credit Agreements as of March 31, 2020. As of March 31, 2020, the ratios of consolidated indebtedness to consolidated total capitalization, calculated in accordance with the provisions of the Credit Agreements, were 55%, 51%, and 46% for Ameren, Ameren Missouri, and Ameren Illinois, respectively.

The following table presents the credit facility borrowings and commercial paper outstanding, net of issuance discounts, as of March 31, 2020, and December 31, 2019:



	March 31, 2020						December 31, 2019
	Credit Facility Borrowings		Commercial Paper		Total Short-term Debt		Credit Facility Borrowings		Commercial Paper		Total Short-term Debt
Ameren (parent)	$	275	$	150	$	425	$	—	$	153	$	153
Ameren Missouri	130		—		130		—		234		234
Ameren Illinois	60		—		60		—		53		53
Ameren consolidated	$	465	$	150	$	615	$	—	$	440	$	440

The following table summarizes the borrowing activity and relevant interest rates under the Credit Agreements for the three months ended March 31, 2020. There were no borrowings under the Credit Agreements for the three months ended March 31, 2019.



	Ameren (parent)			Ameren Missouri			Ameren Illinois			Total
Missouri Credit Agreement
Average daily credit facility borrowings outstanding during the period	$	1		$	12		$	—		$	13
Weighted-average interest rate	2.06		%	2.36		%	—		%	2.33		%
Peak credit facility borrowings during the period^(a)	$	100		$	130		$	—		$	230
Peak interest rate	2.06		%	3.33		%	—		%	3.33		%
Illinois Credit Agreement
Average daily credit facility borrowings outstanding during the period	$	2		$	—		$	5		$	7
Weighted-average interest rate	2.06		%	—		%	2.05		%	2.06		%
Peak credit facility borrowings during the period^(a)	$	175		$	—		$	60		$	235
Peak interest rate	2.06		%	—		%	2.05		%	2.06		%


(a)	The timing of peak credit facility borrowings varies by company. Therefore, the sum of individual company peak amounts may not equal the Ameren consolidated peak credit facility borrowings for the period.

Commercial Paper

The following table summarizes the borrowing activity and relevant interest rates under Ameren (parent)’s, Ameren Missouri’s, and Ameren Illinois’ commercial paper programs for the three months ended March 31, 2020 and 2019:



	Ameren (parent)			Ameren Missouri				Ameren Illinois			Ameren Consolidated
2020
Average daily commercial paper outstanding at par value	$	154		$	383			$	71		$	608
Weighted-average interest rate	1.94		%	1.84		%		1.99		%	1.88		%
Peak commercial paper during period at par value^(a)	$	225		$	521			$	137		$	854
Peak interest rate	3.30		%	5.05		%	^(b)	3.40		%	5.05		%	^(b)
2019
Average daily commercial paper outstanding at par value	$	480		$	246			$	89		$	815
Weighted-average interest rate	2.87		%	2.84		%		2.76		%	2.85		%
Peak commercial paper during period at par value^(a)	$	618		$	549			$	130		$	1,113
Peak interest rate	3.10		%	2.97		%		2.90		%	3.10		%


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


(b)	In the first quarter of 2020, Ameren Missouri’s peak interest rate was affected by temporary disruptions in the commercial paper market.

Money Pools

Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. The average interest rate for borrowings under the money pool for the three months ended March 31, 2020, was 1.93% (2019 – 2.87%). See Note 8 – Related-party Transactions for the amount of interest income and expense from the money pool arrangements recorded by the Ameren Companies for the three months ended March 31, 2020 and 2019.

NOTE 4 – LONG-TERM DEBT AND EQUITY FINANCINGS

Ameren

For the three months ended March 31, 2020, Ameren issued a total of 0.2 million shares of common stock under its DRPlus and 401(k) plan, and received proceeds of $13 million. In addition, in the first quarter of 2020, Ameren issued 0.5 million shares of common stock valued at $38 million upon the vesting of stock-based compensation.

In August 2019, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million shares of common stock. The forward sale agreement will be physically settled unless Ameren elects to settle in cash or to net share settle. At March 31, 2020, Ameren could have settled the forward sale agreement with physical delivery of 7.5 million shares of common stock to the counterparty in exchange for $552 million. The forward sale agreement could also have been settled at March 31, 2020, with delivery of approximately $2 million or less than 0.1 million shares of common stock to the counterparty, if Ameren had elected to net cash or net share settle, respectively. For additional information about the forward sale agreement, see Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, in the Form 10-K.

In April 2020, Ameren (parent) issued $800 million of 3.50% senior unsecured notes due January 2031, with interest payable semiannually on January 15 and July 15, beginning July 15, 2020. Ameren received net proceeds of $793 million, which were used for general corporate purposes, including to repay outstanding short-term debt, and will be used to fund the repayment of Ameren’s 2.70% senior unsecured notes due November 2020.

Ameren Missouri

In March 2020, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due March 2030, with interest payable semiannually on March 15 and September 15 of each year, beginning September 15, 2020. Ameren Missouri received net proceeds of $462 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Missouri incurred in connection with the repayment of $85 million of its 5.00% senior secured notes that matured in February 2020.

Indenture Provisions and Other Covenants

See Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, in the Form 10-K for a description of our indenture provisions and other covenants, as well as restrictions on the payment of dividends. At March 31, 2020, the Ameren Companies were in compliance with the provisions and covenants contained in their indentures and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement.

Off-balance-sheet Arrangements

NOTE 5 – OTHER INCOME, NET

The following table presents the components of “Other Income, Net” in the Ameren Companies’ statements of income for the three months ended March 31, 2020 and 2019:



	Three Months
	2020				2019
Ameren:
Allowance for equity funds used during construction	$	4			$	6
Interest income on industrial development revenue bonds	6				6
Other interest income	1				2
Non-service cost components of net periodic benefit income^(a)	23				22
Miscellaneous income	2				2
Donations	(13		)	^(b)	(6		)
Miscellaneous expense	(2		)		(3		)
Total Other Income, Net	$	21			$	29
Ameren Missouri:
Allowance for equity funds used during construction	$	2			$	4
Interest income on industrial development revenue bonds	6				6
Non-service cost components of net periodic benefit income^(a)	5				4
Miscellaneous income	1				1
Donations	(8		)	^(b)	(2		)
Miscellaneous expense	(2		)		(1		)
Total Other Income, Net	$	4			$	12
Ameren Illinois:
Allowance for equity funds used during construction	$	2			$	2
Interest income	1				2
Non-service cost components of net periodic benefit income	13				12
Miscellaneous income	1				1
Donations	(4		)		(4		)
Miscellaneous expense	(2		)		(2		)
Total Other Income, Net	$	11			$	11


(a)	For the three months ended March 31, 2020 and 2019, the non-service cost components of net periodic benefit income were partially offset by a deferral of $6 million and $7 million, respectively, due to a regulatory tracking mechanism for the difference between the level of such costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.


(b)	Includes $8 million pursuant to Ameren Missouri’s March 2020 electric rate order. See Note 2 – Rate and Regulatory Matters for additional information.

NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS

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


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


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


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


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

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

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

If we determine that a contract meets the definition of a derivative and is not eligible for the NPNS exception, we review the contract to determine whether the resulting gains or losses qualify for regulatory deferral. Derivative contracts that qualify for regulatory deferral are recorded at fair value, with changes in fair value recorded as regulatory assets or liabilities in the period in which the change occurs. We believe derivative losses and gains deferred as regulatory assets and liabilities are probable of recovery, or refund, through future rates charged to customers. Regulatory assets and liabilities are amortized to operating income as related losses and gains are reflected in rates charged to customers. Therefore, gains and losses on these derivatives have no effect on operating income. As of March 31, 2020, and December 31, 2019, all contracts that met the definition of a derivative and were not eligible for the NPNS exception received regulatory deferral. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.

The following table presents open gross commodity contract volumes by commodity type for derivative assets and liabilities as of March 31, 2020, and December 31, 2019. As of March 31, 2020, these contracts extended through October 2023, March 2024, May 2032 and March 2023 for fuel oils, natural gas, power and uranium, respectively.



	Quantity (in millions, except as indicated)
	2020			2019
Commodity	Ameren Missouri	Ameren Illinois	Ameren	Ameren Missouri	Ameren Illinois	Ameren
Fuel oils (in gallons)	62	—	62	58	—	58
Natural gas (in mmbtu)	20	147	167	20	136	156
Power (in megawatthours)	5	7	12	5	7	12
Uranium (pounds in thousands)	365	—	365	565	—	565

The following table presents the carrying value and balance sheet location of all derivative commodity contracts, none of which were designated as hedging instruments, as of March 31, 2020, and December 31, 2019:



			March 31, 2020					December 31, 2019
	Balance Sheet Location		Ameren Missouri		Ameren Illinois		Ameren			Ameren Missouri		Ameren Illinois		Ameren
Fuel oils	Other current assets	$	3	$	—	$	3		$	4	$	—	$	4
	Other assets		1		—		1			2		—		2
Natural gas	Other current assets		—		2		2			—		3		3
	Other assets		—		2		2			—		1		1
Power	Other current assets		18		—		18			14		—		14
	Other assets		4		—		4			2		—		2
	Total assets	$	26	$	4	$	30		$	22	$	4	$	26
Fuel oils	Other current liabilities	$	19	$	—	$	19		$	4	$	—	$	4
	Other deferred credits and liabilities		12		—		12			3		—		3
Natural gas	Other current liabilities		3		17		20			1		12		13
	Other deferred credits and liabilities		—		5		5			1		6		7
Power	Other current liabilities		2		18		20			2		17		19
	Other deferred credits and liabilities		1		223		224			1		207		208
Uranium	Other deferred credits and liabilities		1		—		1			1		—		1
	Total liabilities	$	38	$	263	$	301		$	13	$	242	$	255

The Ameren Companies elect to present the fair value amounts of derivative assets and derivative liabilities subject to an enforceable master netting arrangement or similar agreement at the gross amounts on the balance sheet. However, if the gross amounts recognized on the balance sheet were netted with derivative instruments and cash collateral received or posted, the net amounts would not be materially different from the gross amounts at March 31, 2020, and December 31, 2019.

Credit Risk

In determining our concentrations of credit risk related to derivative instruments, we review our individual counterparties and categorize each counterparty into groupings according to the primary business in which each engages. As of March 31, 2020, if counterparty groups

were to fail completely to perform on contracts, the Ameren Companies’ maximum exposure related to derivative assets would have been immaterial with or without consideration of the application of master netting arrangements or similar agreements and collateral held.

Certain of our derivative instruments contain collateral provisions tied to the Ameren Companies’ credit ratings. If our credit ratings were downgraded below investment grade, or if a counterparty with reasonable grounds for uncertainty regarding our ability to satisfy an obligation requested adequate assurance of performance, additional collateral postings might be required. The additional collateral required is the net liability position allowed under master netting arrangements or similar agreements, assuming (1) the credit risk-related contingent features underlying these arrangements were triggered and (2) those counterparties with rights to do so requested collateral. As of March 31, 2020, the aggregate fair value of derivative instruments with credit risk-related contingent features in a gross liability position, the cash collateral posted, and the aggregate amount of additional collateral that counterparties could require were each immaterial to Ameren, Ameren Missouri, and Ameren Illinois.

NOTE 7 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAP. See Note 8 – Fair Value Measurements under Part II, Item 8, of the Form 10-K for information related to hierarchy levels and valuation techniques.

We consider nonperformance risk in our valuation of derivative instruments by analyzing our own credit standing and the credit standing of our counterparties, and by considering any credit enhancements (e.g., collateral). Included in our valuation, and based on current market conditions, is a valuation adjustment for counterparty default derived from market data such as the price of credit default swaps, bond yields, and credit ratings. No material gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in the three months ended March 31, 2020 or 2019. At March 31, 2020, and December 31, 2019, the counterparty default risk valuation adjustment related to derivative contracts was immaterial for Ameren, Ameren Missouri, and Ameren Illinois.

The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of March 31, 2020, and December 31, 2019:



		March 31, 2020									December 31, 2019
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets:
Ameren Missouri
	Derivative assets – commodity contracts:
	Fuel oils	$	—	$	—	$	4	$	4		$	—	$	—	$	6	$	6
	Power	4		—		18		22			—		2		14		16
	Total derivative assets – commodity contracts	$	4	$	—	$	22	$	26		$	—	$	2	$	20	$	22
	Nuclear decommissioning trust fund:
	Equity securities:
	U.S. large capitalization	$	457	$	—	$	—	$	457		$	569	$	—	$	—	$	569
	Debt securities:
	U.S. Treasury and agency securities	—		105		—		105			—		107		—		107
	Corporate bonds	—		96		—		96			—		93		—		93
	Other	—		68		—		68			—		73		—		73
	Total nuclear decommissioning trust fund	$	457	$	269	$	—	$	726	^(a)	$	569	$	273	$	—	$	842	^(a)
	Total Ameren Missouri	$	461	$	269	$	22	$	752		$	569	$	275	$	20	$	864
Ameren Illinois
	Derivative assets – commodity contracts:
	Natural gas	$	—	$	1	$	3	$	4		$	—	$	1	$	3	$	4



		March 31, 2020									December 31, 2019
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Ameren
	Derivative assets – commodity contracts^(b)	$	4	$	1	$	25	$	30		$	—	$	3	$	23	$	26
	Nuclear decommissioning trust fund^(c)	457		269		—		726		^(a)	569		273		—		842		^(a)
	Total Ameren	$	461	$	270	$	25	$	756		$	569	$	276	$	23	$	868
Liabilities:
Ameren Missouri
	Derivative liabilities – commodity contracts:
	Fuel oils	$	18	$	—	$	13	$	31		$	1	$	—	$	6	$	7
	Natural gas	—		3		—		3			—		2		—		2
	Power	2		—		1		3			—		2		1		3
	Uranium	—		—		1		1			—		—		1		1
	Total Ameren Missouri	$	20	$	3	$	15	$	38		$	1	$	4	$	8	$	13
Ameren Illinois
	Derivative liabilities – commodity contracts:
	Natural gas	$	2	$	15	$	5	$	22		$	3	$	12	$	3	$	18
	Power	—		—		241		241			—		—		224		224
	Total Ameren Illinois	$	2	$	15	$	246	$	263		$	3	$	12	$	227	$	242
Ameren
	Derivative liabilities – commodity contracts^(b)	$	22	$	18	$	261	$	301		$	4	$	16	$	235	$	255


(a)	Balance excludes $16 million and $5 million of cash and cash equivalents, receivables, payables, and accrued income, net, for March 31, 2020, and December 31, 2019, respectively.


(b)	See the Ameren Missouri and Ameren Illinois sections of the table for a breakout of the fair value of Ameren’s derivative assets and liabilities by type of commodity.


(c)	See the Ameren Missouri section of the table for a breakout of the fair value of Ameren's nuclear decommissioning trust fund by investment type.

Level 3 fuel oils, natural gas and uranium derivative contract assets and liabilities measured at fair value on a recurring basis were immaterial for all periods presented. The following table presents the fair value reconciliation of Level 3 power derivative contract assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2020 and 2019:



	2020									2019
	Ameren Missouri			Ameren Illinois			Ameren			Ameren Missouri		Ameren Illinois			Ameren
For the three months ended March 31:
Beginning balance at January 1	$	13		$	(224	)	$	(211	)	$	—	$	(183	)	$	(183	)
Realized and unrealized gains/(losses) included in regulatory assets/liabilities	11			(21		)	(10		)	—		(4		)	(4		)
Settlements	(7		)	4			(3		)	—		3			3
Ending balance at March 31	$	17		$	(241	)	$	(224	)	$	—	$	(184	)	$	(184	)
Change in unrealized gains/(losses) related to assets/liabilities held at March 31	$	10		$	(21	)	$	(11	)	$	—	$	(4	)	$	(4	)

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

The following table describes the valuation techniques and significant unobservable inputs utilized for the fair value of our Level 3 power derivative contract assets and liabilities as of March 31, 2020, and December 31, 2019:



			Fair Value						Weighted Average^(b)
	Commodity		Assets		Liabilities	Valuation Technique(s)	Unobservable Input^(a)	Range	Weighted Average^(b)
2020	Power^(c)	$	18	$	(242)	Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps ($/MWh)	16 – 33	25
							Nodal basis ($/MWh)	(6) – 0	(2)
							Trend rate (%)	2 – 3	2
2019	Power^(d)	$	14	$	(225)	Discounted cash flow	Average forward peak and off-peak pricing – forwards/swaps ($/MWh)	22 – 34	25
							Nodal basis ($/MWh)	(6) – 0	(2)
							Trend rate (%)	(1) – 0	0


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


(b)	Unobservable inputs were weighted by relative fair value


(c)	Valuations through 2029 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2029 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.


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

The following table sets forth, by level within the fair value hierarchy, the carrying amount and fair value of financial assets and liabilities disclosed, but not recorded, at fair value as of March 31, 2020, and December 31, 2019:



	March 31, 2020
	Carrying Amount			Fair Value
	Carrying Amount			Level 1		Level 2		Level 3			Total
Ameren:
Cash, cash equivalents, and restricted cash	$	203		$	203	$	—	$	—		$	203
Investments in industrial development revenue bonds^(a)	263			—		263		—			263
Short-term debt	615			—		615		—			615
Long-term debt (including current portion)^(a)	9,735		^(b)	—		10,189		449		^(c)	10,638
Ameren Missouri:
Cash, cash equivalents, and restricted cash	$	24		$	24	$	—	$	—		$	24
Investments in industrial development revenue bonds^(a)	263			—		263		—			263
Short-term debt	130			—		130		—			130
Long-term debt (including current portion)^(a)	4,567		^(b)	—		5,098		—			5,098
Ameren Illinois:
Cash, cash equivalents, and restricted cash	$	140		$	140	$	—	$	—		$	140
Short-term debt	60			—		60		—			60
Long-term debt (including current portion)	3,575		^(b)	—		3,945		—			3,945
	December 31, 2019
Ameren:
Cash, cash equivalents, and restricted cash	$	176		$	176	$	—	$	—		$	176
Investments in industrial development revenue bonds^(a)	263			—		263		—			263
Short-term debt	440			—		440		—			440
Long-term debt (including current portion)^(a)	9,357		^(b)	—		9,957		484		^(c)	10,441
Ameren Missouri:
Cash, cash equivalents, and restricted cash	$	39		$	39	$	—	$	—		$	39
Investments in industrial development revenue bonds^(a)	263			—		263		—			263
Short-term debt	234			—		234		—			234
Long-term debt (including current portion)^(a)	4,190		^(b)	—		4,772		—			4,772
Ameren Illinois:
Cash, cash equivalents, and restricted cash	$	125		$	125	$	—	$	—		$	125
Short-term debt	53			—		53		—			53
Long-term debt (including current portion)	3,575		^(b)	—		4,019		—			4,019

(a)

Ameren and Ameren Missouri have investments in industrial development revenue bonds, classified as held-to-maturity and recorded in “Other Assets,” that are equal to the finance obligations for the Peno Creek and Audrain CT energy centers. As of March 31, 2020, and December 31, 2019, the carrying amount of both the investments in industrial development revenue bonds and the finance obligations approximated fair value.

(b)

Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $73 million, $32 million, and $34 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of March 31, 2020. Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $72 million, $30 million, and $34 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2019.


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

NOTE 8 – RELATED-PARTY TRANSACTIONS

In the normal course of business, Ameren Missouri and Ameren Illinois have engaged in, and may in the future engage in, affiliate transactions. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings. Transactions between Ameren’s subsidiaries are reported as affiliate transactions on their individual financial statements, but those transactions are eliminated in consolidation for Ameren’s consolidated financial statements. For a discussion of material related-party agreements and money pool arrangements, see Note 13 – Related-party Transactions and Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of the Form 10-K.

Capacity Supply Agreement

In April 2020, Ameren Illinois conducted a procurement event, administered by the IPA, to acquire capacity. Ameren Missouri was among the winning suppliers in this event. As a result, in April 2020, Ameren Missouri contracted to supply a portion of Ameren Illinois’ capacity requirements for $2 million from June 2021 through May 2023.

Tax Allocation Agreement

See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of the Form 10-K for a discussion of the tax allocation agreement. The following table presents the affiliate balances related to income taxes for Ameren Missouri and Ameren Illinois as of March 31, 2020, and December 31, 2019:



	March 31, 2020				December 31, 2019
	Ameren Missouri		Ameren Illinois		Ameren Missouri		Ameren Illinois
Income taxes payable to parent^(a)	$	12	$	48	$	15	$	43
Income taxes receivable from parent^(b)	16		1		15		17


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


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

Effects of Related-party Transactions on the Statement of Income

The following table presents the effect on Ameren Missouri and Ameren Illinois of related-party transactions for the three months ended March 31, 2020 and 2019:



				Three Months
Agreement	Income Statement Line Item			Ameren Missouri		Ameren Illinois
Ameren Missouri power supply	Operating Revenues	2020	$	3	$	(a)
agreements with Ameren Illinois		2019		(b)		(a)
Ameren Missouri and Ameren Illinois	Operating Revenues	2020	$	7	$	1
rent and facility services		2019		7		1
Ameren Missouri and Ameren Illinois	Operating Revenues	2020	$	(b)	$	(b)
miscellaneous support services		2019		(b)		(b)
Total Operating Revenues		2020	$	10	$	1
		2019		7		1
Ameren Illinois power supply	Purchased Power	2020	$	(a)	$	3
agreements with Ameren Missouri		2019		(a)		(b)
Ameren Illinois transmission	Purchased Power	2020	$	(a)	$	(b)
services with ATXI		2019		(a)		(b)
Total Purchased Power		2020	$	(a)	$	3
		2019		(a)		(b)
Ameren Missouri and Ameren Illinois	Other Operations and Maintenance	2020	$	(b)	$	1
rent and facility services		2019		(b)		1
Ameren Services support services	Other Operations and Maintenance	2020	$	35	$	33
agreement		2019		32		30
Total Other Operations and		2020	$	35	$	34
Maintenance		2019		32		31
Money pool borrowings (advances)	(Interest Charges)/Other Income, Net	2020	$	(b)	$	(b)
		2019		—		—


(a)	Not applicable.


(b)	Amount less than $1 million.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

We are involved in legal, tax, and regulatory proceedings before various courts, regulatory commissions, authorities, and governmental agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in the notes to our financial statements in this report and in the Form 10-K, will not have a material adverse effect on our results of operations, financial position, or liquidity.

Reference is made to Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 13 – Related-party Transactions, and Note 14 – Commitments and Contingencies under Part II, Item 8, of the Form 10-K. See also Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 8 – Related-party Transactions, and Note 10 – Callaway Energy Center of this report.

Other Obligations

To supply a portion of the fuel requirements of Ameren Missouri’s energy centers, Ameren Missouri has entered into various long-term commitments for the procurement of coal, natural gas, nuclear fuel, and methane gas. Ameren Missouri and Ameren Illinois also have entered into various long-term commitments for purchased power and natural gas for distribution. The table below presents our estimated minimum fuel, purchased power, and other commitments at March 31, 2020. Ameren’s and Ameren Illinois’ purchased power commitments include the Ameren Illinois agreements entered into as part of the IPA-administered power procurement process. Included in the Other column are minimum purchase commitments under contracts for equipment, design and construction, and meter reading services, among other agreements, at March 31, 2020.



	Coal		Natural Gas^(a)		Nuclear Fuel		Purchased Power^(b)(c)			Methane Gas		Other		Total
Ameren:
2020	$	242	$	150	$	35	$	85	^(d)	$	2	$	55	$	569
2021	219		129		57		51			3		40		499
2022	185		69		11		13			3		24		305
2023	105		39		44		3			3		24		218
2024	94		13		15		—			3		23		148
Thereafter	55		43		16		—			24		59		197
Total	$	900	$	443	$	178	$	152		$	38	$	225	$	1,936
Ameren Missouri:
2020	$	242	$	32	$	35	$	—		$	2	$	43	$	354
2021	219		26		57		—			3		31		336
2022	185		15		11		—			3		23		237
2023	105		13		44		—			3		24		189
2024	94		6		15		—			3		23		141
Thereafter	55		19		16		—			24		26		140
Total	$	900	$	111	$	178	$	—		$	38	$	170	$	1,397
Ameren Illinois:
2020	$	—	$	118	$	—	$	85	^(d)	$	—	$	5	$	208
2021	—		103		—		51			—		4		158
2022	—		54		—		13			—		—		67
2023	—		26		—		3			—		—		29
2024	—		7		—		—			—		—		7
Thereafter	—		24		—		—			—		—		24
Total	$	—	$	332	$	—	$	152		$	—	$	9	$	493


(a)	Includes amounts for generation and for distribution.


(b)	The purchased power amounts for Ameren and Ameren Illinois exclude agreements for renewable energy credits through 2035 with various renewable energy suppliers due to the contingent nature of the payment amounts, with the exception of expected payments of $15 million through 2024.


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

(d)

In January 2018, as required by the FEJA, Ameren Illinois entered into agreements to acquire zero emission credits, through 2026. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent planning year. The amounts above reflect Ameren Illinois’ commitment to acquire approximately $11 million of zero emission credits through May 2020.

In April 2020, Ameren Illinois conducted procurement events, administered by the IPA, to purchase energy products and capacity through May 2023. In the April 2020 procurement events, Ameren Illinois contracted to purchase 3,550,800 megawatthours of energy products for $92 million from June 2020 through May 2023 and 617 megawatts of capacity for $4 million from June 2021 through May 2023. See Note 8 – Related-party Transactions for additional information regarding the capacity agreement between Ameren Missouri and Ameren Illinois as a result of the April 2020 capacity procurement event.

Environmental Matters

We are subject to various environmental laws, including statutes and regulations, enforced by federal, state, and local authorities. The development and operation of electric generation, transmission, and distribution facilities and natural gas storage, transmission, and distribution facilities can trigger compliance obligations with respect to environmental laws. These laws address emissions, discharges to

water, water intake, impacts to air, land, and water, and chemical and waste handling. Complex and lengthy processes are required to obtain and renew approvals, permits, and licenses for new, existing or modified facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures.

The EPA has promulgated environmental regulations that have a significant impact on the electric utility industry. Over time, compliance with these regulations could be costly for Ameren Missouri, which operates coal-fired power plants. Regulations that apply to air emissions from the electric utility industry include the NSPS, the CSAPR, the MATS, and the National Ambient Air Quality Standards, which are subject to periodic review for certain pollutants. Collectively, these regulations cover a variety of pollutants, such as SO₂, particulate matter, NO_x,mercury, toxic metals, and acid gases, and CO₂ emissions from new power plants. Water intake and discharges from power plants are regulated under the Clean Water Act. Such regulation could require modifications to water intake structures or more stringent limitations on wastewater discharges at Ameren Missouri’s energy centers, either of which could result in significant capital expenditures. The management and disposal of coal ash is regulated under the CCR rule, which will require the closure of surface impoundments and the installations of dry ash handling systems at several of Ameren Missouri’s energy centers. The individual or combined effects of existing environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of operations at some of Ameren Missouri’s energy centers. Ameren and Ameren Missouri expect that such compliance costs would be recoverable through rates, subject to MoPSC prudence review, but the timing of costs and their recovery could be subject to regulatory lag.

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

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

Clean Air Act

Federal and state laws, including CSAPR, regulate emissions of SO₂ and NO_x through the reduction of emissions at their source and the use and retirement of emission allowances. The first phase of the CSAPR emission reduction requirements became effective in 2015. The second phase of emission reduction requirements, which were revised by the EPA in 2016, became effective in 2017; additional emission reduction requirements may apply in subsequent years. To achieve compliance with the CSAPR, Ameren Missouri burns low-sulfur coal, operates 2 scrubbers at its Sioux Energy Center, and optimizes other existing air pollution control equipment. Ameren Missouri expects to incur additional costs to lower its emissions at one or more of its energy centers to comply with the CSAPR in future years. These higher costs are expected to be recovered from customers through the FAC or higher base rates.

CO₂ Emissions Standards

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

NSR and Clean Air Litigation

In January 2011, the Department of Justice, on behalf of the EPA, filed a complaint against Ameren Missouri in the United States District Court for the Eastern District of Missouri alleging that in performing projects at its coal-fired Rush Island Energy Center in 2007 and 2010, Ameren Missouri violated provisions of the Clean Air Act and Missouri law. In January 2017, the district court issued a liability ruling and, in September 2019, entered a final order that required Ameren Missouri to install a flue gas desulfurization system at the Rush Island Energy Center and a dry sorbent injection system at the Labadie Energy Center. There were no fines in the order. In October 2019, Ameren Missouri

appealed the district court’s ruling to the United States Court of Appeals for the Eighth Circuit. Additionally, in October 2019, following a request by Ameren Missouri, the district court stayed implementation of the majority of its order’s requirements while the case is appealed. Ameren Missouri believes the district court both misinterpreted and misapplied the law in its ruling. We are unable to predict the ultimate resolution of this matter. Ameren Missouri expects to file its brief in the appeal in late May 2020. Based on anticipated scheduling, the court is expected to hear oral arguments in 2020; however, it is under no deadline to issue a ruling in this case.

The ultimate resolution of this matter could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Among other things and subject to economic and regulatory considerations, resolution of this matter could result in increased capital expenditures for the installation of air pollution control equipment, as well as increased operations and maintenance expenses. Based upon engineering studies, capital expenditures to comply with the district court’s order for installation of a flue gas desulfurization system at the Rush Island Energy Center are estimated at approximately $1 billion. Further, the flue gas desulfurization system would result in additional operation and maintenance expenses of $30 million to $50 million annually for the life of the energy center. Engineering studies required to develop estimated capital expenditures and estimated additional operation and maintenance expenses for the Labadie Energy Center to comply with the district court’s order will not be undertaken while the case is under appeal. As a result of the district court’s stay, Ameren Missouri does not expect to make significant capital expenditures or incur operations and maintenance expenses related to the district court’s order while the case is under appeal.

Clean Water Act

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

In 2015, the EPA issued a rule to revise the effluent limitation guidelines applicable to steam electric generating units. These guidelines established national standards for water discharges that are based on the effectiveness of available control technology. The EPA’s 2015 rule prohibits effluent discharges of certain waste streams and imposes more stringent limitations on certain water discharges from power plants. In September 2017, the EPA published a rule that postponed the compliance dates by two years for the limitations applicable to 2 specific waste streams so that it could potentially revise those standards. To meet the requirements of the guidelines, Ameren Missouri is constructing wastewater treatment facilities and dry ash handling systems at 3 of its energy centers and is scheduled to complete the projects in 2020. Estimated capital expenditures to complete these projects are included in the CCR management compliance plan, discussed below.

CCR Management

In 2015, the EPA issued the CCR rule, which established requirements for the management and disposal of CCR from coal-fired power plants. These regulations affect CCR disposal and handling costs at Ameren Missouri’s energy centers. Ameren Missouri is in the process of closing its surface impoundments, with the last of such closures scheduled for 2023. The EPA issued revisions to the CCR rule in July 2018, proposed additional revisions in July and November 2019, and indicated that additional revisions to the CCR rule are likely. Ameren and Ameren Missouri have AROs of $137 million recorded on their respective balance sheets as of March 31, 2020, associated with CCR storage facilities. Ameren Missouri estimates it will need to make capital expenditures of $75 million to $125 million from 2020 through 2024 to implement its CCR management compliance plan, which includes installation of dry ash handling systems, wastewater treatment facilities, and groundwater monitoring equipment.

Remediation

The Ameren Companies are involved in a number of remediation actions to clean up sites impacted by the use or disposal of materials containing hazardous substances. Federal and state laws can require responsible parties to fund remediation regardless of their degree of fault, the legality of original disposal, or the ownership of a disposal site.

As of March 31, 2020, Ameren Illinois has remediated the majority of the 44 former MGP sites in Illinois it owned or for which it was otherwise responsible. Ameren Illinois estimates it could substantially conclude remediation efforts at the remaining sites by 2023. The ICC allows Ameren Illinois to recover such remediation and related litigation costs from its electric and natural gas utility customers through environmental cost riders. Costs are subject to annual prudence review by the ICC. As of March 31, 2020, Ameren Illinois estimated the remaining obligation related to these former MGP sites at $126 million to $213 million. Ameren and Ameren Illinois recorded a liability of $126 million to represent the estimated minimum obligation for these sites, as no other amount within the range was a better estimate.

The scope of the remediation activities at these former MGP sites may increase as remediation efforts continue. Considerable uncertainty remains in these estimates because many site-specific factors can influence the ultimate actual costs, including unanticipated

underground structures, the degree to which groundwater is encountered, regulatory changes, local ordinances, and site accessibility. The actual costs and timing of completion may vary substantially from these estimates.

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

NOTE 10 – CALLAWAY ENERGY CENTER

See Note 9 – Callaway Energy Center under Part II, Item 8, of the Form 10-K for information regarding spent nuclear fuel recovery, recovery of decommissioning costs, and the nuclear decommissioning trust fund. The fair value of the trust fund for Ameren Missouri’s Callaway Energy Center is reported as “Nuclear decommissioning trust fund” in Ameren’s and Ameren Missouri’s balance sheets. This amount is legally restricted and may be used only to fund the costs of nuclear decommissioning. Changes in the fair value of the trust fund are recorded as an increase or decrease to the nuclear decommissioning trust fund, with an offsetting adjustment to the related regulatory liability.

Insurance

The following table presents insurance coverage at Ameren Missouri’s Callaway Energy Center at April 1, 2020:



Type and Source of Coverage	Most Recent Renewal Date	Maximum Coverages			Maximum Assessments for Single Incidents
Public liability and nuclear worker liability:
American Nuclear Insurers	January 1, 2020	$	450		$	—
Pool participation	(a)	13,348		^(a)	138		^(b)
		$	13,798	^(c)	$	138
Property damage:
NEIL and EMANI	April 1, 2020	$	3,200	^(d)	$	25	^(e)
Replacement power:
NEIL	April 1, 2020	$	490	^(f)	$	7	^(e)


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


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


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


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


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


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

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

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

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

NOTE 11 – RETIREMENT BENEFITS

The following table presents the components of the net periodic benefit cost (income) incurred for Ameren’s pension and postretirement benefit plans for the three months ended March 31, 2020 and 2019:



	Pension Benefits						Postretirement Benefits
	Three Months						Three Months
	2020			2019			2020			2019
Service cost^(a)	$	27		$	22		$	4		$	4
Non-service cost components:
Interest cost	43			47			10			11
Expected return on plan assets	(73		)	(69		)	(20		)	(19		)
Amortization of:
Prior service benefit	—			—			(1		)	(1		)
Actuarial loss (gain)	14			6			(2		)	(4		)
Total non-service cost components^(b)	$	(16	)	$	(16	)	$	(13	)	$	(13	)
Net periodic benefit cost (income)	$	11		$	6		$	(9	)	$	(9	)


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


(b)	Non-service cost components are reflected in “Other Income, Net” on Ameren’s statement of income. See Note 5 – Other Income, Net for additional information.

Ameren Missouri and Ameren Illinois are responsible for their respective shares of Ameren’s pension and postretirement costs. The following table presents the respective share of net periodic pension and other postretirement benefit costs (income) incurred for the three months ended March 31, 2020 and 2019:



	Pension Benefits				Postretirement Benefits
	Three Months				Three Months
	2020		2019		2020			2019
Ameren Missouri^(a)	$	4	$	1	$	(1	)	$	(2	)
Ameren Illinois	7		5		(8		)	(7		)
Ameren^(a)	$	11	$	6	$	(9	)	$	(9	)


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

Funding

Ameren expects to make annual contributions of approximately $5 million to $45 million in each year through 2024, with aggregate estimated contributions of $115 million, based on its assumptions at March 31, 2020, its investment performance in 2020, and its pension funding policy. This is an increase from the aggregate estimated contributions of $70 million at December 31, 2019, due to year-to-date performance of Ameren’s pension and other postretirement benefit plan assets in 2020.

NOTE 12 – INCOME TAXES

The following table presents a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the three months ended March 31, 2020 and 2019:



	Ameren		Ameren Missouri		Ameren Illinois
	2020	2019	2020	2019	2020	2019
Three Months
Federal statutory corporate income tax rate:	21%	21%	21%	21%	21%	21%
Increases (decreases) from:
Amortization of excess deferred taxes	(9)	(7)	(15)	(12)	(3)	(3)
Depreciation differences	(1)	—	—	—	(1)	—
Amortization of deferred investment tax credit	—	(1)	(1)	(1)	—	—
State tax	6	6	3	4	7	7
Stock-based compensation	(5)	(7)	—	—	—	—
Other permanent items	—	—	—	(3)	—	—
Effective income tax rate	12%	12%	8%	9%	24%	25%

NOTE 13 – SUPPLEMENTAL INFORMATION

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows as of March 31, 2020, and December 31, 2019:



	March 31, 2020						December 31, 2019
	Ameren		Ameren Missouri		Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois
Cash and cash equivalents	$	42	$	3	$	6	$	16	$	9	$	—
Restricted cash included in “Other current assets”	16		4		6		14		4		5
Restricted cash included in “Other assets”	128		—		128		120		—		120
Restricted cash included in “Nuclear decommissioning trust fund”	17		17		—		26		26		—
Total cash, cash equivalents, and restricted cash	$	203	$	24	$	140	$	176	$	39	$	125

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

Accounts Receivable

“Accounts receivable – trade” on Ameren’s and Ameren Illinois’ balance sheets include certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At March 31, 2020, and December 31, 2019, “Other current liabilities” on Ameren’s and Ameren Illinois’ balance sheets included payables for purchased receivables of $33 million and $32 million, respectively.

The following table provides a reconciliation of the beginning and ending amount of the allowance for doubtful accounts for the three months ended March 31, 2020 and 2019:



	2020								2019
	Ameren			Ameren Missouri			Ameren Illinois^(a)		Ameren			Ameren Missouri			Ameren Illinois^(a)
Balance at January 1	$	17		$	7		$	10	$	18		$	7		$	11
Bad debt expense	3			2			1		3			1			2
Net write-offs	(1		)	(1		)	—		(2		)	(1		)	(1		)
Balance at March 31	$	19		$	8		$	11	$	19		$	7		$	12


(a)	Ameren Illinois has a rate-adjustment mechanism that allows it to recover the difference between its actual net bad debt write-offs under GAAP and the amount of net bad debt write-offs included in its base rates.

Supplemental Cash Flow Information

The following table provides noncash financing and investing activity excluded from the statements of cash flows for the three months ended March 31, 2020 and 2019:



	March 31, 2020								March 31, 2019
	Ameren			Ameren Missouri			Ameren Illinois		Ameren		Ameren Missouri		Ameren Illinois
Investing
Accrued capital expenditures	$	235		$	97		$	127	$	208	$	92	$	106
Accrued nuclear fuel expenditures	7			7			—		—		—		—
Net realized and unrealized gain (loss) – nuclear decommissioning trust fund	(111		)	(111		)	—		64		64		—
Financing
Issuance of common stock for stock-based compensation	$	38		$	—		$	—	$	54	$	—	$	—

Asset Retirement Obligations

The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the three months ended March 31, 2020:



	Ameren Missouri				Ameren Illinois			Ameren
Balance at December 31, 2019	$	687		^(a)	$	4	^(b)	$	691		^(a)
Liabilities settled	(14		)		—			(14		)
Accretion	7			^(c)	—			7			^(c)
Balance at March 31, 2020	$	680		^(a)	$	4	^(b)	$	684		^(a)


(a)	Balance included $53 million in “Other current liabilities” on the balance sheet as of both December 31, 2019, and March 31, 2020.


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


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

Stock-based Compensation

On January 1, 2020, Ameren granted 294,320 performance share units with a grant date fair value of $24 million and 132,307 restricted share units with a grant date fair value of $10 million. Awards vest approximately 38 months after the grant date or on a pro-rata basis upon death or eligible retirement. The performance share units vest based on the achievement of certain specified market performance measures (252,370 performance share units) or based on the achievement of renewable generation and energy storage installation targets (41,950 performance share units). The exact number of shares issued pursuant to a performance share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals.

For the three months ended March 31, 2020 and 2019, excess tax benefits associated with the settlement of stock-based compensation awards reduced income tax expense by $8 million and $14 million, respectively.

Deferred Compensation

As of March 31, 2020, and December 31, 2019, “Other current liabilities” and “Other deferred credits and liabilities” on Ameren’s balance sheet included deferred compensation obligations of $85 million and $86 million, respectively, recorded at the present value of future benefits to be paid.

Operating Revenues

As of March 31, 2020 and 2019, our remaining performance obligations for contracts with a term greater than one year were immaterial. The Ameren Companies elected not to disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of the end of the reporting period for contracts with an initial expected term of one year or less.

See Note 14 – Segment Information for disaggregated revenue information.

Excise Taxes

Ameren Missouri and Ameren Illinois collect from their customers excise taxes, including municipal and state excise taxes and gross receipts taxes that are levied on the sale or distribution of natural gas and electricity. The following table presents the excise taxes recorded on a gross basis in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” on the statements of income for the three months ended March 31, 2020 and 2019:



	Three Months
	2020		2019
Ameren Missouri	$	30	$	31
Ameren Illinois	35		39
Ameren	$	65	$	70

Earnings per Share

The following table reconciles the basic weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the three months ended March 31, 2020 and 2019:



	Three Months
	2020	2019
Weighted-average Common Shares Outstanding – Basic	246.4	244.9
Assumed settlement of performance share units and restricted stock units	1.1	1.5
Dilutive effect of forward sale agreement	0.6	—
Weighted-average Common Shares Outstanding – Diluted^(a)	248.1	246.4


(a)	There were 0 potentially dilutive securities excluded from the earnings per diluted share calculations for the three months ended March 31, 2020 and 2019.

NOTE 14 – SEGMENT INFORMATION

The following tables present revenues, net income (loss) attributable to common shareholders, and capital expenditures by segment at Ameren and Ameren Illinois for the three months ended March 31, 2020 and 2019. Ameren, Ameren Missouri, and Ameren Illinois management review segment capital expenditure information rather than any individual or total asset amount. For additional information about our segments, see Note 16 – Segment Information under Part II, Item 8, of the Form 10-K

Ameren



	Ameren Missouri			Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas		Ameren Transmission			Other		Intersegment Eliminations			Ameren
Three Months 2020:
External revenues	$	670		$	389	$	271	$	110		$	—	$	—		$	1,440
Intersegment revenues	10			1		—		13			—		(24		)	—
Net income (loss) attributable to Ameren common shareholders	(10		)	37		55		47		^(a)	17		—			146
Capital expenditures	278			123		61		170			3		1			636
Three Months 2019:
External revenues	$	751		$	386	$	320	$	99		$	—	$	—		$	1,556
Intersegment revenues	7			1		—		15			—		(23		)	—
Net income attributable to Ameren common shareholders	39			36		57		44		^(a)	15		—			191
Capital expenditures	240			124		51		121			10		(2		)	544


(a)	Ameren Transmission earnings reflect an allocation of financing costs from Ameren (parent).

Ameren Illinois



	Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas		Ameren Illinois Transmission			Intersegment Eliminations			Ameren Illinois
Three Months 2020:
External revenues	$	390	$	271	$	62		$	—		$	723
Intersegment revenues	—		—		12		^(a)	(12		)	—
Net income available to common shareholder	37		55		28			—			120
Capital expenditures	123		61		140			—			324
Three Months 2019:
External revenues	$	387	$	320	$	55		$	—		$	762
Intersegment revenues	—		—		15		^(a)	(15		)	—
Net income available to common shareholder	36		57		27			—			120
Capital expenditures	124		51		92			—			267


(a)	Ameren Illinois Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution.

The following tables present disaggregated revenues by segment at Ameren and Ameren Illinois for the three months ended March 31, 2020 and 2019. Economic factors affect the nature, timing, amount, and uncertainty of revenues and cash flows in a similar manner across customer classes. Revenues from alternative revenue programs have a similar distribution among customer classes as revenues from contracts with customers. Other revenues not associated with contracts with customers are presented in the Other customer classification, along with electric transmission and off-system revenues.

Ameren



	Ameren Missouri			Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas		Ameren Transmission		Intersegment Eliminations			Ameren
Three Months 2020:
Residential	$	297		$	220	$	—	$	—	$	—		$	517
Commercial	221			126		—		—		—			347
Industrial	53			35		—		—		—			88
Other	60			9		—		123		(24		)	168
Total electric revenues	$	631		$	390	$	—	$	123	$	(24	)	$	1,120
Residential	$	33		$	—	$	213	$	—	$	—		$	246
Commercial	13			—		54		—		—			67
Industrial	1			—		3		—		—			4
Other	2			—		1		—		—			3
Total natural gas revenues	$	49		$	—	$	271	$	—	$	—		$	320
Total revenues^(a)	$	680		$	390	$	271	$	123	$	(24	)	$	1,440
Three Months 2019:
Residential	$	312		$	217	$	—	$	—	$	—		$	529
Commercial	239			123		—		—		—			362
Industrial	55			34		—		—		—			89
Other	98			13		—		114		(23		)	202
Total electric revenues	$	704		$	387	$	—	$	114	$	(23	)	$	1,182
Residential	$	38		$	—	$	246	$	—	$	—		$	284
Commercial	16			—		65		—		—			81
Industrial	2			—		4		—		—			6
Other	(2		)	—		5		—		—			3
Total natural gas revenues	$	54		$	—	$	320	$	—	$	—		$	374
Total revenues^(a)	$	758		$	387	$	320	$	114	$	(23	)	$	1,556


(a)	The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the three months ended March 31, 2020 and 2019:



	Ameren Missouri			Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas			Ameren Transmission			Ameren
Three Months 2020:
Revenues from alternative revenue programs	$	(3	)	$	46	$	11		$	12		$	66
Other revenues not from contracts with customers	8			1		1			—			10
Three Months 2019:
Revenues from alternative revenue programs	$	15		$	22	$	(3	)	$	(5	)	$	29
Other revenues not from contracts with customers	5			3		1			—			9

Ameren Illinois



	Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas		Ameren Illinois Transmission		Intersegment Eliminations			Ameren Illinois
Three Months 2020:
Residential	$	220	$	213	$	—	$	—		$	433
Commercial	126		54		—		—			180
Industrial	35		3		—		—			38
Other	9		1		74		(12		)	72
Total revenues^(a)	$	390	$	271	$	74	$	(12	)	$	723
Three Months 2019:
Residential	$	217	$	246	$	—	$	—		$	463
Commercial	123		65		—		—			188
Industrial	34		4		—		—			38
Other	13		5		70		(15		)	73
Total revenues^(a)	$	387	$	320	$	70	$	(15	)	$	762


(a)	The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the Ameren Illinois segments for the three months ended March 31, 2020 and 2019:



	Ameren Illinois Electric Distribution		Ameren Illinois Natural Gas			Ameren Illinois Transmission			Ameren Illinois
Three Months 2020:
Revenues from alternative revenue programs	$	46	$	11		$	10		$	67
Other revenues not from contracts with customers	1		1			—			2
Three Months 2019:
Revenues from alternative revenue programs	$	22	$	(3	)	$	(5	)	$	14
Other revenues not from contracts with customers	3		1			—			4

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the financial statements contained in this Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors contained in the Form 10-K. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of our business segments to provide a better understanding of how those segments and their results affect the financial condition and results of operations of Ameren as a whole. Also see the Glossary of Terms and Abbreviations at the front of this report and in the Form 10-K.


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


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


•	ATXI operates a FERC rate-regulated electric transmission business in the MISO.

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 this per share information helps readers to understand the impact of these factors on Ameren’s earnings per share.

OVERVIEW

Ameren's first quarter 2020 net income attributable to common shareholders was $146 million, or $0.59 per diluted share, compared with first quarter 2019 net income attributable to common shareholders of $191 million, or $0.78 per diluted share. The decrease in year-over-year earnings reflected lower revenues due to the absence in 2020 of MEEIA performance incentives, decreased electric retail sales at Ameren Missouri primarily due to milder winter temperatures experienced in 2020, and a lower recognized ROE at Ameren Illinois Electric Distribution. The decreased earnings also reflected increased other operation and maintenance expenses not subject to riders or regulatory tracking mechanisms primarily due to changes in the cash surrender value of company-owned life insurance, partially offset by the absence in 2020 of expenses related to the Callaway Energy Center’s scheduled refueling and maintenance outage. Earnings were also unfavorably affected by increased charitable donations at Ameren Missouri pursuant to its March 2020 electric rate order. Net income, compared to the year-ago period, was favorably affected by infrastructure investments that drove higher earnings at Ameren Transmission and Ameren Illinois Electric Distribution, each of which benefits from formula ratemaking.

Ameren’s strategic plan includes investing and operating its utilities in a manner consistent with existing regulatory frameworks, enhancing those frameworks, and advocating for responsible energy and economic policies, as well as creating and capitalizing on opportunities for investment for the benefit of its customers and shareholders. Ameren remains focused on disciplined cost management and strategic capital allocation. Ameren believes it has constructive regulatory frameworks for investment at all of its utility businesses and invested $0.6 billion in those businesses in the three months ended March 31, 2020.

In February 2020, Ameren Missouri filed an update to its Smart Energy Plan with the MoPSC, which includes a five-year capital investment overview with a detailed one-year plan for 2020. The plan is designed to upgrade Ameren Missouri’s electric infrastructure and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $7.6 billion over the five-year period from 2020 through 2024, with expenditures largely recoverable under the PISA and the RESRAM. The planned investments in 2024 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA through December 2028. As a part of its Smart Energy Plan, Ameren Missouri expects to build solar generation facilities, including utility scale facilities and nonresidential customer site facilities. In September 2019, Ameren Missouri filed for certificates of convenience and necessity with the MoPSC to build three solar facilities in its service territory. Each 10-megawatt solar energy generation facility will connect to battery storage in order to improve system reliability. All three facilities are expected to be completed by 2022. Also in 2019, the MoPSC approved Ameren Missouri’s Charge Ahead program, which provides incentives for the development of over 1,000 electric vehicle charging stations along highways and at various locations in communities throughout Ameren Missouri’s service territory. The purpose of the program is to promote the development of electric vehicle charging infrastructure that will enable long-distance electric vehicle travel and encourage electrification of the transportation sector.

an up-to 400-megawatt wind generation facility. These two agreements are subject to customary contract terms and conditions. The two build-transfer acquisitions collectively represent $1.2 billion of capital expenditures and would support Ameren Missouri’s compliance with the Missouri renewable energy standard. Both acquisitions have received all regulatory approvals, and both projects have received all applicable zoning approvals, have entered into RTO interconnection agreements, and have begun construction activities. In 2020, the developers of the wind generation facilities received notices from the wind turbine supplier, and the developer of the up-to 300-megawatt project received a notice from the construction contractor, of changes in supply and/or construction activities resulting from the COVID-19 pandemic. There have been changes to the schedules for both projects, particularly with regard to wind turbine deliveries. Ameren Missouri and the developers continue to monitor the impact to each project schedule. To date, neither developer has reported to Ameren Missouri that the projects will not be completed in 2020. Ameren Missouri expects the up-to 400-megawatt project to be placed in-service by the end of 2020. However, at this time, due to manufacturing, shipping, and other supply chain issues, and based on Ameren Missouri’s discussions with the developer, Ameren Missouri expects that a portion of the up-to 300-megawatt project, representing approximately $100 million of investment, could be placed in-service in the first quarter of 2021. The build-transfer agreements include provisions for the event in which any portion of either project is completed after 2020. In such an event, according to the terms of the agreements, Ameren Missouri would pay a reduced contract price on the portion of the project completed after 2020, to account for risks associated with qualifying for production tax credits, subject to an obligation to later pay such price differential should Ameren Missouri be entitled to receive production tax credits. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for more information regarding Ameren Missouri wind generation investments.

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

RESULTS OF OPERATIONS

Our results of operations and financial position are affected by many factors. Economic conditions, including those resulting from the COVID-19 pandemic discussed below, energy-efficiency investments by our customers and by us, technological advances, distributed generation, and the actions of key customers can significantly affect the demand for our services. Ameren and Ameren Missouri results are also affected by seasonal fluctuations in winter heating and summer cooling demands, as well as by nuclear refueling and other energy center maintenance outages. Additionally, fluctuations in interest rates and conditions in the capital and credit markets affect our cost of borrowing, and our pension and postretirement benefits costs. Almost all of Ameren’s revenues are subject to state or federal regulation. This regulation has a material impact on the rates we charge customers for our services. Customer rates are determined under various regulatory mechanisms. See Note 2 – Rate and Regulatory Matters for additional information regarding Ameren Missouri’s, Ameren Illinois’, and ATXI’s regulatory mechanisms. Our results of operations, financial position, and liquidity are affected by our ability to align our overall spending, both operating and capital, within the frameworks established by our regulators.

March 23, 2020, and the state of Missouri on April 6, 2020. The state of Missouri order was effective through May 3, 2020, while Saint Louis City and County are expected to begin easing restrictions on May 18, 2020. These orders generally preclude or limit the operation of businesses that are deemed nonessential. While Ameren's business operations are deemed essential and are not directly impacted by the shelter-in-place orders, approximately 65% of our workforce transitioned to remote working arrangements in mid-March. We are monitoring the impacts the pandemic is having on our businesses, including impacts on electric and natural gas sales volumes, supply chain operations, and bad debt expense. On March 13, 2020, and March 16, 2020, Ameren Illinois and Ameren Missouri, respectively, suspended customer disconnections for non-payment and began to waive late fees. Regarding bad debt expense, Ameren Illinois' electric distribution and natural gas distribution businesses have bad debt riders, which would provide for recovery of increased bad debt expense. However, Ameren Missouri’s earnings are exposed to potential increases in future bad debt expense, which could result in incremental accounts receivable write-offs in future periods as Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism. In the three months ended March 31, 2020, Ameren Missouri’s total electric sales volumes were comparable with the same period in 2019, with a 2% decrease in industrial electric sales volumes and a 1.5% decrease in commercial electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. These decreases were offset by a 2.5% increase in higher margin residential electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. Ameren Illinois also experienced decreases in electric and natural gas sales volumes. However, Ameren Illinois' electric distribution and transmission businesses have formula ratemaking frameworks, which provide for recovery of their revenue requirements independent of sales volumes, and Ameren Illinois' natural gas distribution business has a VBA, which provides for recovery of the natural gas distribution service revenue requirement that is dependent on sales volumes for residential and small nonresidential customers. Additionally, ATXI’s electric transmission business has a formula ratemaking framework, which provides for recovery of its revenue requirements independent of sales volumes. Furthermore, none of Ameren’s businesses have experienced significant disruptions to their supply chain operations. However, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for information regarding supply chain disruptions related to Ameren Missouri’s acquisition of an up-to 300-megawatt wind generation facility.

Ameren Missouri principally uses coal and enriched uranium for fuel in its electric operations and purchases natural gas for its customers. Ameren Illinois purchases power and natural gas for its customers. The prices for these commodities can fluctuate significantly because of the global economic and political environment, weather, supply, demand, and many other factors. We have natural gas cost recovery mechanisms for our Illinois and Missouri natural gas distribution businesses, a purchased power cost recovery mechanism for Ameren Illinois’ electric distribution business, and a FAC for Ameren Missouri’s electric business.

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 and timing of operations and maintenance costs and capital investment, are key factors that we seek to manage in order to optimize our results of operations, financial position, and liquidity.

Earnings Summary

The following table presents a summary of Ameren’s earnings for the three months ended March 31, 2020 and 2019:



	Three Months
	2020		2019
Net income attributable to Ameren common shareholders	$	146	$	191
Earnings per common share – basic and diluted	0.59		0.78

Net income attributable to Ameren common shareholders decreased $45 million, or 19 cents per diluted share, in the three months ended March 31, 2020, compared with the year-ago period. The decrease was due to net income decreases of $49 million and $2 million at Ameren Missouri and Ameren Illinois Natural Gas, respectively. These decreases were partially offset by net income increases of $3 million, $2 million, and $1 million at Ameren Transmission, activity not reported as part of a segment, primarily at Ameren (parent), and Ameren Illinois Electric Distribution, respectively.

Earnings per diluted share were unfavorably affected between periods by:


•	increased other operation and maintenance expenses not subject to riders or regulatory tracking mechanisms, excluding the absence of the Callaway Energy Center’s scheduled refueling and maintenance outage costs, primarily due to changes in the cash surrender value of company-owned life insurance (8 cents per share);


•	the absence in 2020 of MEEIA 2013 and MEEIA 2016 performance incentives at Ameren Missouri recognized in the first quarter of 2019 (6 cents per share);


•	decreased electric retail sales at Ameren Missouri, primarily due to milder winter temperatures experienced in 2020 (estimated at 5 cents per share);


•	decreased income tax benefits at Ameren (parent) related to stock-based compensation and company-owned life insurance (5 cents per share);


•	decreased Ameren Illinois Electric Distribution earnings under formula ratemaking because of a lower recognized ROE (2 cents per share); and


•	increased charitable donations at Ameren Missouri pursuant to its March 2020 electric rate order (2 cents per share).

Earnings per diluted share were favorably affected between periods by:


•	increased Ameren Transmission and Ameren Illinois Electric Distribution earnings under formula ratemaking because of additional rate base investments (3 cents per share);


•	decreased other operation and maintenance expenses related to the absence of a Callaway Energy Center’s scheduled refueling and maintenance outage, which last occurred in the second quarter of 2019, and the deferral of 2020 outage expenses under the February 2020 MoPSC order (2 cents per share);


•	increased Ameren Illinois Natural Gas earnings from investments in qualifying infrastructure recovered under the QIP rider (1 cent per share); and


•	decreased net financing costs at Ameren Missouri, primarily as a result of the regulatory deferral of interest expense pursuant to the PISA, partially offset by lower levels of the allowance for funds used during construction (1 cent per share).

The cents per share information presented is based on the weighted-average basic common shares outstanding in the three months ended March 31, 2019, and does not reflect any change in earnings per share resulting from dilution, unless otherwise noted. Amounts other than variances related to income taxes have been presented net of income taxes using Ameren’s 2020 statutory tax rate of 26%. For additional details regarding the Ameren Companies’ results of operations, including explanations of Electric and Natural Gas Margins, Other Operations and Maintenance Expenses, Depreciation and Amortization, Taxes Other Than Income Taxes, Other Income, Net, Interest Charges, and Income Taxes, see the major headings below.

Below is Ameren’s table of income statement components by segment for the three months ended March 31, 2020 and 2019:



	Ameren Missouri			Ameren Illinois Electric Distribution			Ameren Illinois Natural Gas			Ameren Transmission			Other / Intersegment Eliminations			Ameren
Three Months 2020:
Electric margins	$	452		$	280		$	—		$	123		$	(9	)	$	846
Natural gas margins	31			—			182			—			—			213
Other operations and maintenance expenses	(239		)	(130		)	(57		)	(14		)	2			(438		)
Depreciation and amortization expenses	(139		)	(71		)	(21		)	(24		)	—			(255		)
Taxes other than income taxes	(79		)	(19		)	(22		)	(2		)	(3		)	(125		)
Other income, net	4			7			2			2			6			21
Interest charges	(40		)	(18		)	(10		)	(21		)	(4		)	(93		)
Income (taxes) benefit	1			(11		)	(19		)	(17		)	25			(21		)
Net income (loss)	(9		)	38			55			47			17			148
Noncontrolling interests – preferred stock dividends	(1		)	(1		)	—			—			—			(2		)
Net income (loss) attributable to Ameren common shareholders	$	(10	)	$	37		$	55		$	47		$	17		$	146
Three Months 2019:
Electric margins	$	493		$	267		$	—		$	114		$	(8	)	$	866
Natural gas margins	27			—			186			—			—			213
Other operations and maintenance expenses	(224		)	(119		)	(59		)	(15		)	—			(417		)
Depreciation and amortization expenses	(140		)	(68		)	(20		)	(20		)	—			(248		)
Taxes other than income taxes	(77		)	(20		)	(24		)	(1		)	(4		)	(126		)
Other income, net	12			6			3			1			7			29
Interest charges	(47		)	(18		)	(10		)	(19		)	(3		)	(97		)
Income (taxes) benefit	(4		)	(11		)	(19		)	(16		)	23			(27		)
Net income	40			37			57			44			15			193
Noncontrolling interests – preferred stock dividends	(1		)	(1		)	—			—			—			(2		)
Net income attributable to Ameren common shareholders	$	39		$	36		$	57		$	44		$	15		$	191

Below is Ameren Illinois’ table of income statement components by segment for the three months ended March 31, 2020 and 2019:



	Ameren Illinois Electric Distribution			Ameren Illinois Natural Gas			Ameren Illinois Transmission			Ameren Illinois
Three Months 2020:
Electric and natural gas margins	$	280		$	182		$	74		$	536
Other operations and maintenance expenses	(130		)	(57		)	(12		)	(199		)
Depreciation and amortization expenses	(71		)	(21		)	(15		)	(107		)
Taxes other than income taxes	(19		)	(22		)	(1		)	(42		)
Other income, net	7			2			2			11
Interest charges	(18		)	(10		)	(11		)	(39		)
Income taxes	(11		)	(19		)	(9		)	(39		)
Net income	38			55			28			121
Preferred stock dividends	(1		)	—			—			(1		)
Net income attributable to common shareholder	$	37		$	55		$	28		$	120
Three Months 2019:
Electric and natural gas margins	$	267		$	186		$	70		$	523
Other operations and maintenance expenses	(119		)	(59		)	(13		)	(191		)
Depreciation and amortization expenses	(68		)	(20		)	(13		)	(101		)
Taxes other than income taxes	(20		)	(24		)	(1		)	(45		)
Other income, net	6			3			2			11
Interest charges	(18		)	(10		)	(9		)	(37		)
Income taxes	(11		)	(19		)	(9		)	(39		)
Net income	37			57			27			121
Preferred stock dividends	(1		)	—			—			(1		)
Net income attributable to common shareholder	$	36		$	57		$	27		$	120

Electric and Natural Gas Margins

Electric margins are defined as electric revenues less fuel and purchased power costs. Natural gas margins are defined as natural gas revenues less natural gas purchased for resale. We consider electric and natural gas margins useful measures to analyze the change in profitability of our electric and natural gas operations between periods. We have included the analysis below to complement the financial information we provide in accordance with GAAP. However, these margins may not be a presentation defined under GAAP, and they may not be comparable to other companies’ presentations or more useful than the GAAP information we provide elsewhere in this report.

Electric Margins



	Total by Segment^(a)		Increase (Decrease) by Segment
	Total by Segment^(a)		(Overall Ameren Decrease of $20 Million)


(a)	Includes other/intersegment eliminations of $(9) million and $(8) million in the three months ended March 31, 2020 and 2019, respectively.

Natural Gas Margins



	Total by Segment		Increase (Decrease) by Segment
	Total by Segment		(Overall Ameren Change of $- Million)

The following table presents the favorable (unfavorable) variations by Ameren segment for electric and natural gas margins for the three months ended March 31, 2020, compared with the year-ago period.



Three Months	Ameren Missouri			Ameren Illinois Electric Distribution			Ameren Illinois Natural Gas			Ameren Transmission^(a)		Other / Intersegment Eliminations			Ameren
Electric revenue change:
Effect of weather (estimate)^(b)	$	(27	)	$	—		$	—		$	—	$	—		$	(27	)
Base rates (estimate)^(c)	—			11			—			9		—			20
Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA)	1			—			—			—		—			1
MEEIA 2013 and MEEIA 2016 performance incentives	(20		)	—			—			—		—			(20		)
Off-system sales	(22		)	—			—			—		—			(22		)
Energy-efficiency program investments	—			3			—			—		—			3
Other	1			—			—			—		(1		)	—
Cost recovery mechanisms – offset in fuel and purchased power^(d)	(3		)	(9		)	—			—		—			(12		)
Other cost recovery mechanisms^(e)	(3		)	(2		)	—			—		—			(5		)
Total electric revenue change	$	(73	)	$	3		$	—		$	9	$	(1	)	$	(62	)
Fuel and purchased power change:
Energy costs (excluding the estimated effect of weather)	$	24		$	—		$	—		$	—	$	—		$	24
Effect of weather (estimate)^(b)	7			—			—			—		—			7
Transmission services charges	(2		)	—			—			—		—			(2		)
Other	—			1			—			—		—			1
Cost recovery mechanisms – offset in electric revenue^(d)	3			9			—			—		—			12
Total fuel and purchased power change	$	32		$	10		$	—		$	—	$	—		$	42
Net change in electric margins	$	(41	)	$	13		$	—		$	9	$	(1	)	$	(20	)
Natural gas revenue change:
Effect of weather (estimate)^(b)	$	(1	)	$	—		$	—		$	—	$	—		$	(1	)
Change in rate design	4			—			—			—		—			4
QIP rider	—			—			5			—		—			5
Other	1			—			(1		)	—		—			—
Cost recovery mechanisms – offset in natural gas purchased for resale^(d)	(9		)	—			(45		)	—		—			(54		)
Other cost recovery mechanisms^(e)	—			—			(8		)	—		—			(8		)
Total natural gas revenue change	$	(5	)	$	—		$	(49	)	$	—	$	—		$	(54	)
Natural gas purchased for resale change:
Effect of weather (estimate)^(b)	$	—		$	—		$	—		$	—	$	—		$	—
Cost recovery mechanisms – offset in natural gas revenue^(d)	9			—			45			—		—			54
Total natural gas purchased for resale change	$	9		$	—		$	45		$	—	$	—		$	54
Net change in natural gas margins	$	4		$	—		$	(4	)	$	—	$	—		$	—


(a)	Includes an increase in transmission margins of $4 million at Ameren Illinois for the three months ended March 31, 2020, compared with the year-ago period.


(b)	Represents the estimated variation resulting primarily from changes in cooling and heating degree-days on electric and natural gas demand compared with the year-ago period; this variation is based on temperature readings from the National Oceanic and Atmospheric Administration weather stations at local airports in our service territories.


(c)	For Ameren Illinois Electric Distribution and Ameren Transmission, base rates include increases or decreases to operating revenues related to the revenue requirement reconciliation adjustment under formula rates.


(d)	Electric and natural gas revenue changes are offset by corresponding changes in “Fuel,” “Purchased power,” and “Natural gas purchased for resale” on the statement of income, resulting in no change to electric and natural gas margins.


(e)	Offsetting expense increases or decreases are reflected in “Other operations and maintenance,” “Depreciation and amortization,” or in “Taxes other than income taxes,” within the “Operating Expenses” section of the statement of income. These items have no overall impact on earnings.

Ameren

Ameren’s electric margins decreased $20 million, or 2%, for the three months ended March 31, 2020, compared with the year-ago period, primarily because of decreased margins at Ameren Missouri, partially offset by increased margins at Ameren Illinois Electric Distribution and Ameren Transmission, as discussed below. Ameren’s natural gas margins were comparable between periods because of increased margins at Ameren Missouri natural gas, offset by decreased margins at Ameren Illinois Natural Gas, as discussed below.

Ameren Transmission

Ameren Transmission’s margins increased $9 million, or 8%, for the three months ended March 31, 2020, compared with the year-ago period. Margins were favorably affected by increased capital investment, as evidenced by a 13% increase in rate base used to calculate the revenue requirement.

Ameren Missouri

Ameren Missouri’s electric margins decreased $41 million, or 8%, for the three months ended March 31, 2020, compared with the year-ago period.

The following items had an unfavorable effect on Ameren Missouri’s electric margins between periods:

•

Winter temperatures were milder as heating degree days decreased 16% for the three months ended March 31, 2020. The aggregate effect of weather decreased margins an estimated $20 million. The change in margins due to weather is the sum of the effect of weather (estimate) on electric revenues (-$27 million) and the effect of weather (estimate) on fuel and purchased power (+$7 million) in the table above.


•	The absence in 2020 of MEEIA 2013 and MEEIA 2016 performance incentives, which were recognized in the first quarter of 2019, decreased revenues $20 million. See Note 2 – Rate and Regulatory Matters under Part I, Item 1 of this report for information regarding the MEEIA 2013 and MEEIA 2016 performance incentives.

The following items had a favorable effect on Ameren Missouri’s electric margins between periods:


•	Net energy costs increased margins $2 million as a result of lower energy costs (+$24 million), largely offset by a reduction in off-system sales revenue (-$22 million). The decrease in energy costs is the result of lower fuel costs and decreased generation volumes, while the reduction in off-system sales revenues is primarily due to lower sales prices.

•

Excluding the estimated effects of weather and the MEEIA 2016 and 2019 customer energy-efficiency programs, electric revenues increased an estimated $1 million for the three months ended March 31, 2020. The increase was primarily due to an increase in the average retail price per kilowatthour due to changes in customer usage patterns (+$2 million). The benefit of the higher average retail price was partially offset by a decrease to sales volumes (-$1 million), which were unfavorably affected the COVID-19 pandemic, but favorably affected by an additional day in 2020 as a result of the leap year. While the MEEIA 2016 and 2019 customer energy-efficiency programs reduced retail sales volumes, the recovery of lost electric margins ensured that electric margins were not affected.

Ameren Missouri’s natural gas margins were favorably affected by the implementation of a change in rate design, which increased margins $4 million, or 15%, for the three months ended March 31, 2020, compared with the year-ago period. Pursuant to the MoPSC’s September 2019 natural gas order, this change in rate design concentrates more revenues in the winter heating season. As a result, the change is not expected to materially affect year-over-year earnings.

Ameren Illinois

Ameren Illinois’ electric margins increased $17 million, or 5%, for the three months ended March 31, 2020, compared with the year-ago period, driven by increased margins at Ameren Illinois Electric Distribution and Ameren Illinois Transmission. Ameren Illinois Natural Gas’ margins decreased $4 million, or 2%, between periods.

Ameren Illinois Electric Distribution

Ameren Illinois Electric Distribution’s margins increased $13 million, or 5%, for the three months ended March 31, 2020, compared with the year-ago period. Margins increased due to higher recoverable expenses related to other operations and maintenance and depreciation and amortization (+$14 million) and higher return on rate base (+$3 million), partially offset by a lower recognized ROE (-$6 million), as evidenced by a decrease of 134 basis points in the estimated annual average of the monthly yields of the 30-year United States Treasury bonds under formula ratemaking. The sum of these changes collectively increased margins $11 million. Revenues also increased $3 million due to recovery of energy-efficiency program investment expenses under formula ratemaking.

Ameren Illinois Natural Gas

Ameren Illinois Natural Gas’ margins decreased $4 million, or 2%, for the three months ended March 31, 2020, compared with the year-ago period, due to revenues from other cost recovery mechanisms, which decreased margins $8 million. The decrease was partially offset by increased revenues from QIP recoveries due to additional investment in qualified natural gas infrastructure, which increased margins $5 million.

Ameren Illinois Transmission

Ameren Illinois Transmission’s margins increased $4 million, or 6%, for the three months ended March 31, 2020, compared with the year-ago period. Margins were favorably affected by increased capital investment, as evidenced by an 18% increase in rate base used to calculate the revenue requirement.

Other Operations and Maintenance Expenses



	Total by Segment^(a)		Increase (Decrease) by Segment
	Total by Segment^(a)		(Overall Ameren Increase of $21 Million)


(a)	Includes other/intersegment eliminations of $(2) million in the three months ended March 31, 2020.

Ameren

Other operations and maintenance expenses were $21 million higher in thethree months ended March 31, 2020, compared with the year-ago period, due to changes discussed below.

Ameren Transmission

Other operations and maintenance expenses were comparable between periods.

Ameren Missouri

The $15 million increase in other operations and maintenance expense in the three months ended March 31, 2020, compared with the year-ago period, was primarily due to the following items:


•	The cash surrender value of company-owned life insurance decreased $15 million, because of unfavorable market returns.


•	Labor and benefit costs increased $7 million, primarily because of increased staffing to support the Smart Energy Plan and higher medical costs.

The following items partially offset the above increases in other operations and maintenance expenses between periods:


•	Callaway Energy Center refueling operations and maintenance costs decreased $7 million. Costs were incurred in the prior year period in preparation for the refueling and maintenance outage that began in April 2019. Costs for the current year’s fall refueling and maintenance outage are being deferred pursuant to the March 2020 MoPSC electric rate order.


•	MEEIA customer energy-efficiency program costs decreased $3 million because of lower participation in the MEEIA programs.

Ameren Illinois

Other operations and maintenance expenses were $8 million higher in the three months ended March 31, 2020, compared with the year-ago period, as discussed below. Other operations and maintenance expenses were comparable between periods at Ameren Illinois Transmission.

Ameren Illinois Electric Distribution

Other operations and maintenance expenses were $11 million higher in the three months ended March 31, 2020, compared with the year-ago period, primarily due to a $7 million decrease in the cash surrender value of company-owned life insurance, resulting from increased unfavorable market returns, and a $3 million increase in employee benefit costs due to higher medical costs.

Ameren Illinois Natural Gas

Other operations and maintenance expenses were comparable between periods, as a $5 million decrease in bad debt, customer energy-efficiency, and environmental remediation costs was partially offset by a $3 million decrease in the cash surrender value of company-owned life insurance.

Depreciation and Amortization Expenses



	Total by Segment		Increase (Decrease) by Segment
	Total by Segment		(Overall Ameren Increase of $7 Million)

Depreciation and amortization expenses increased $7 million and $6 million in the three months ended March 31, 2020, compared with the year-ago period, at Ameren and Ameren Illinois, respectively, primarily because of additional property, plant, and equipment investments across their respective segments. Depreciation and amortization expenses at Ameren Missouri were comparable between periods as incremental property, plant and equipment investments were offset by increased regulatory deferrals of depreciation and amortization expenses pursuant to PISA.

Taxes Other Than Income Taxes



	Total by Segment^(a)		Increase (Decrease) by Segment
	Total by Segment^(a)		(Overall Ameren Decrease of $1 Million)


(a)	Includes $2 million and $1 million at Ameren Transmission in the three months ended March 31, 2020 and 2019, respectively, and other/intersegment eliminations of $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively.

Taxes other than income taxes were comparable between periods at Ameren, Ameren Missouri, Ameren Illinois, and their respective segments.

Other Income, Net



	Total by Segment		Increase (Decrease) by Segment
	Total by Segment		(Overall Ameren Decrease of $8 Million)

Other income, net, decreased $8 million in the three months ended March 31, 2020 compared with the year-ago period, primarily due to

a $6 million increase in charitable donations at Ameren Missouri, pursuant to the March 2020 MoPSC electric rate order. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for additional information regarding the Ameren Missouri 2019 electric service regulatory rate review.

See Note 5 – Other Income, Net under Part I, Item 1, of this report for additional information.

Interest Charges



	Total by Segment		Increase (Decrease) by Segment
	Total by Segment		(Overall Ameren Decrease of $4 Million)

Interest charges decreased $4 million in the three months ended March 31, 2020, compared with the year-ago period. This decrease was primarily due to decreased interest charges at Ameren Missouri, which resulted from increased regulatory deferrals of interest expense pursuant to PISA of $7 million.

Income Taxes

The following table presents effective income tax rates for the three months ended March 31, 2020 and 2019:



	Three Months^(a)
	2020		2019
Ameren	12	%	12	%
Ameren Missouri	8	%	9	%
Ameren Illinois	24	%	25	%
Ameren Illinois Electric Distribution	22	%	24	%
Ameren Illinois Natural Gas	26	%	26	%
Ameren Illinois Transmission	24	%	25	%
Ameren Transmission	26	%	26	%


(a)	Estimate of the annual effective income tax rate adjusted to reflect the tax effect of items discrete to the three months ended March 31, 2020 and 2019.

See Note 12 – Income Taxes under Part I, Item 1, of this report for a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the Ameren Companies.

The effective income tax rate was lower at Ameren Illinois Electric Distribution in the three months ended March 31, 2020, compared with the year-ago period, primarily because of higher tax benefits from certain depreciation differences on property-related items largely attributable to the allowance for equity funds used during construction.

LIQUIDITY AND CAPITAL RESOURCES

Collections from our tariff-based revenues are our principal source of cash provided by operating activities. A diversified retail customer mix, primarily consisting of rate-regulated residential, commercial, and industrial customers, provides us with a reasonably predictable source of cash. In addition to using cash provided by operating activities, we use available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings to support normal operations and temporary capital requirements. We may reduce our short-term borrowings with cash provided by operations or, at our discretion, with long-term borrowings, or, in the case of Ameren Missouri and Ameren Illinois, with capital contributions from Ameren (parent). We expect to make significant capital expenditures over the next five years as we invest in our electric and natural gas utility infrastructure to support overall system reliability, grid modernization, renewable energy requirements, environmental compliance, and other improvements. As part of its plan to fund these cash flow requirements, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2024. Ameren expects these issuances to provide equity of about $100 million annually. Ameren also plans to issue incremental common equity to fund a portion of Ameren Missouri’s wind generation investments through the physical settlement of the forward sale agreement entered into in August 2019 relating to 7.5 million shares of common stock. Additionally, Ameren plans to issue incremental equity of about $150 million annually from 2021 to 2024. For additional information about the forward sale agreement, see Note 4 – Long-Term Debt and Equity Financings under Part I, Item 1, of this report. Ameren expects its equity to total capitalization to be about 45% through the period ending December 2024, with the long-term intent to support solid investment-grade credit ratings.

The use of cash provided by operating activities and short-term borrowings to fund capital expenditures and other long-term investments at the Ameren Companies frequently results in a working capital deficit, defined as current liabilities exceeding current assets, as was the case at March 31, 2020, for Ameren and Ameren Illinois. The working capital deficit at Ameren and Ameren Illinois as of March 31, 2020, was primarily the result of current maturities of long-term debt, direct borrowings on our credit facilities, and commercial paper issuances. With the credit capacity available under the Credit Agreements, and cash and cash equivalents, the Ameren Companies had net available liquidity of $1.7 billion at March 31, 2020. Additionally, in April 2020, Ameren (parent) issued $800 million of 3.50% senior unsecured notes due January 2031 and received net proceeds of $793 million, which were used for general corporate purposes, including to repay outstanding short-term debt and will be used to fund the repayment of Ameren’s 2.70% senior unsecured notes due November 2020. Further, Ameren expects to receive between $540 million and $550 million upon settlement of the forward sale agreement, which can be settled at Ameren’s discretion on or prior to March 31, 2021. As of April 30, 2020, Ameren had cash and cash equivalents of $149 million and did not have any credit facility borrowings or commercial paper outstanding. See Credit Facility Borrowings and Liquidity and Long-term Debt and Equity below for additional information.

The following table presents net cash provided by (used in) operating, investing, and financing activities for the three months ended March 31, 2020 and 2019:



	Net Cash Provided By Operating Activities							Net Cash Used In Investing Activities									Net Cash Provided by Financing Activities
	2020		2019		Variance			2020			2019			Variance			2020		2019		Variance
Ameren	$	290	$	387	$	(97	)	$	(684	)	$	(567	)	$	(117	)	$	421	$	191	$	230
Ameren Missouri	41		152		(111		)	(328		)	(264		)	(64		)	272		116		156
Ameren Illinois	232		227		5			(323		)	(267		)	(56		)	106		53		53

Cash Flows from Operating Activities

Our cash provided by operating activities is affected by fluctuations of trade accounts receivable, inventories, and accounts and wages payable, among other things, as well as the unique regulatory environment for each of our businesses. Substantially all expenditures related to fuel, purchased power, and natural gas purchased for resale are recovered from customers through rate adjustment mechanisms, which may be adjusted without a traditional rate proceeding. Similar regulatory mechanisms exist for certain other operating expenses that can also affect the timing of cash provided by operating activities. The timing of cash payments for costs recoverable under our regulatory mechanisms differs from the recovery period of those costs. Additionally, the seasonality of our electric and natural gas businesses, primarily caused by changes in customer demand due to weather, significantly affect the amount and timing of our cash provided by operating activities.

As a result of the COVID-19 pandemic, on March 13, 2020, and March 16, 2020, Ameren Illinois and Ameren Missouri, respectively, suspended customer disconnections for non-payment and began to waive late fees. Our customers’ ability to pay for our services may be adversely affected by the COVID-19 pandemic. A reduction in collections from our tariff-based revenues could reduce our cash from operations and cause an adverse impact to our liquidity.

Ameren

Ameren’s cash provided by operating activities decreased $97 million in the first three months of 2020, compared with the year-ago period. The following items contributed to the decrease:


•	A $39 million decrease resulting from decreased customer collections, primarily due to a decrease in weather-related sales volumes at Ameren Missouri, partially offset by a net increase attributable to regulatory recovery mechanisms, decreased fuel costs and production volumes at Ameren Missouri, and decreased purchase power costs and volumes and natural gas costs at Ameren Illinois.


•	A $30 million decrease resulting from an increase in coal inventory levels due to delivery disruptions that occurred from flooding in 2019.


•	A $15 million increase in property tax payments at Ameren Missouri due to higher property tax values in 2019, compared with 2018. Property tax payments in a given year are based on the preceding year’s property tax values.

Ameren Missouri

Ameren Missouri’s cash provided by operating activities decreased $111 million in the first three months of 2020, compared with the year-ago period. The following items contributed to the decrease:


•	A $44 million decrease resulting from decreased customer collections, primarily due to a decrease in weather-related sales volumes, partially offset by decreased fuel costs and production volumes and a net increase attributable to regulatory recovery mechanisms.


•	A $30 million decrease resulting from an increase in coal inventory levels due to delivery disruptions that occurred from flooding in 2019.


•	A $15 million increase in property tax payments due to higher property tax values in 2019, compared with 2018. Property tax payments in a given year are based on the preceding year’s property tax values.

Ameren Illinois

Ameren Illinois’ cash provided by operating activities increased $5 million in the first three months of 2020, compared with the year-ago period. The following items contributed to the increase:


•	A $5 million increase primarily resulting from decreased purchased power costs and volumes and decreased natural gas costs, as well as the change in customer receivable balances, partially offset by a net decrease attributable to regulatory recovery mechanisms.

Cash Flows from Investing Activities

Ameren’s cash used in investing activities increased $117 million in the first three months of 2020, compared with the year-ago period, primarily as a result of a $92 million increase in capital expenditures from increases at Ameren Missouri and Ameren Illinois, and a $14 million increase due to the timing of nuclear fuel expenditures at Ameren Missouri.

Ameren Missouri’s cash used in investing activities increased $64 million between periods, primarily as a result of a $38 million increase in capital expenditures and a $14 million increase due to the timing of nuclear fuel expenditures. The increase in capital expenditures primarily related to electric delivery infrastructure upgrades and electric transmission system reliability projects.

Ameren Illinois’ cash used in investing activities increased $56 million between periods, primarily due to a $57 million increase in capital expenditures primarily related to upgrades to natural gas main infrastructure, and electric transmission and distribution system reliability projects.

Cash Flows from Financing Activities

Cash provided by, or used in, financing activities is a result of our financing needs, which depend on the level of cash provided by operating activities, the level of cash used in investing activities, the level of dividends, and our long-term debt maturities, among other things.

Ameren’s cash provided by financing activities increased $230 million during the first three months of 2020, compared with the year-ago period. During the first three months of 2020, Ameren utilized proceeds of $640 million from a long-term debt issuance, credit facility borrowings, and net commercial paper issuances to repay at maturity long-term debt of $85 million and to fund, in part, investing activities. In comparison, during the first three months of 2019, Ameren utilized proceeds of $652 million from a long-term debt issuance and net commercial paper issuances to repay $329 million of higher-cost long-term debt and to fund, in part, investing activities. During the first three months of 2020, Ameren paid common stock dividends of $122 million, compared with $116 million in dividend payments in the year-ago period.

Ameren Missouri’s cash provided by financing activities increased $156 million during the first three months of 2020, compared with the year-ago period. During the first three months of 2020, Ameren Missouri utilized net proceeds from the issuance of $465 million of long-term debt to repay then-outstanding commercial paper issuances, including short-term debt incurred in connection with the repayment at maturity

of long-term debt of $85 million. In 2020, Ameren Missouri repaid net short-term debt of $104 million and used cash provided by financing activities to fund, in part, investing activities. In comparison, during the first three months of 2019, Ameren Missouri utilized net proceeds from the issuance of $450 million in long-term debt to repay then-outstanding commercial paper issuances, including short-term debt incurred in connection with the repayment at maturity of long-term debt of $329 million, and to fund, in part, investing activities.

Ameren Illinois’ cash provided by financing activities increased $53 million during the first three months of 2020, compared with the year-ago period. During the first three months of 2020, Ameren Illinois utilized net proceeds from credit facility and commercial paper issuances of $7 million to fund, in part, investing activities. In comparison, during the first three months of 2019, Ameren Illinois utilized net proceeds from commercial paper issuances of $54 million to fund, in part, investing activities. Ameren Illinois also received a $100 million capital contribution from Ameren (parent) in the current year period, compared to no capital contributions in the year-ago period.

See Long-term Debt and Equity in this section for additional information on maturities and issuances of long-term debt.

Credit Facility Borrowings and Liquidity

The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report for additional information on credit agreements, commercial paper issuances, Ameren’s money pool arrangements and related borrowings, and relevant interest rates.

The following table presents Ameren’s consolidated liquidity as of March 31, 2020:



Ameren (parent) and Ameren Missouri:
Missouri Credit Agreement – borrowing capacity	$	1,200
Less: Ameren (parent) credit facility borrowings outstanding	100
Less: Ameren (parent) commercial paper outstanding	96
Less: Ameren Missouri credit facility borrowings outstanding	130
Less: Ameren Missouri letters of credit	2
Missouri Credit Agreement – subtotal	872
Ameren (parent) and Ameren Illinois:
Illinois Credit Agreement – borrowing capacity	1,100
Less: Ameren (parent) credit facility borrowings outstanding	175
Less: Ameren (parent) commercial paper outstanding	54
Less: Ameren Illinois credit facility borrowings outstanding	60
Less: Ameren Illinois letters of credit	2
Illinois Credit Agreement – subtotal	809
Subtotal	$	1,681
Cash and cash equivalents	42
Net Available Liquidity	$	1,723

The Credit Agreements, among other things, provide $2.3 billion of credit until maturity in December 2024. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report for additional information on credit agreements. During the three months ended March 31, 2020, Ameren (parent), Ameren Missouri, and Ameren Illinois each borrowed cash and issued commercial paper under the Credit Agreements. Borrowings under the Credit Agreements and commercial paper issuances are based upon available interest rates at that time of the borrowing or issuance. In the first quarter of 2020, there was volatility in the capital markets. As a result of that volatility, the Ameren Companies borrowed cash under the Credit Agreements rather than issuing commercial paper, and accelerated a debt issuance at Ameren (parent), which was planned for later in 2020. See Long-term Debt and Equity below for additional information.

Ameren has a money pool agreement with and among its utility subsidiaries to coordinate and to provide for certain short-term cash and working capital requirements. As short-term capital needs arise, and based on availability of funding sources, Ameren Missouri and Ameren Illinois will access funds from the utility money pool, the Credit Agreements, or the commercial paper programs depending on which option has the lowest interest rates.

The issuance of short-term debt securities by Ameren’s utility subsidiaries is subject to FERC approval under the Federal Power Act. In March 2020, the FERC issued an order authorizing Ameren Missouri to issue up to $1 billion of short-term debt securities, which expires in March 2022. In 2018, the FERC issued an order authorizing Ameren Illinois to issue up to $1 billion of short-term debt securities, which expires in September 2020. In July 2019, the FERC issued an order authorizing ATXI to issue up to $300 million of short-term debt securities, which expires in July 2021.

The Ameren Companies continually evaluate the adequacy and appropriateness of their liquidity arrangements for changing business

conditions. When business conditions warrant, changes may be made to existing credit agreements or to other borrowing arrangements, or other arrangements may be made.

Long-term Debt and Equity

The following table presents Ameren’s issuances (net of any issuance premiums or discounts) of long-term debt and equity, as well as redemptions and maturities of long-term debt for the three months ended March 31, 2020 and 2019:



	Month Issued, Redeemed, or Matured	2020			2019
Issuances of Long-term Debt
Ameren Missouri:
2.95% First mortgage bonds due 2030	March	$	465		$	—
3.50% First mortgage bonds due 2029	March	—			450
Total Ameren long-term debt issuances		$	465		$	450
Issuances of Common Stock
Ameren:
DRPlus and 401(k)	Various	$	13	^{(a) (b)}	$	19	^{(a) (b)}
Total common stock issuances		$	13		$	19
Total Ameren long-term debt and common stock issuances		$	478		$	469
Redemptions and Maturities of Long-term Debt
Ameren Missouri:
5.00% Senior secured notes due 2020	February	$	85		$	—
6.70% Senior secured notes due 2019	February	—			329
Total Ameren long-term debt redemptions and maturities		$	85		$	329


(a)	Ameren issued a total of 0.2 million and 0.3 million shares of common stock under its DRPlus and 401(k) plan in the three months ended March 31, 2020 and 2019, respectively.


(b)	Excludes 0.5 million and 0.8 million shares of common stock valued at $38 million and $54 million issued for no cash consideration in connection with stock-based compensation for the three months ended March 31, 2020 and 2019, respectively.

See Note 4 – Long-Term Debt and Equity Financings under Part I, Item 1, of this report for additional information, including proceeds from issuances of long-term debt, the use of those proceeds and Ameren’s forward equity sale agreement relating to 7.5 million shares of common stock.

Indebtedness Provisions and Other Covenants

See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report and Note 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for a discussion of provisions (and applicable cross-default provisions) and covenants contained in our credit agreements, in ATXI’s note purchase agreement, and in certain of the Ameren Companies’ indentures and articles of incorporation.

At March 31, 2020, the Ameren Companies were in compliance with the provisions and covenants contained in their credit agreements, indentures, and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement.

We consider access to short-term and long-term capital markets to be a significant source of funding for capital requirements not satisfied by cash provided by our operating activities. Inability to raise capital on reasonable terms, particularly during times of uncertainty in the capital markets, could negatively affect our ability to maintain and expand our businesses. After assessing its current operating performance, liquidity, and credit ratings (see Credit Ratings below), Ameren, Ameren Missouri, and Ameren Illinois each believes that it will continue to have access to the capital markets on reasonable terms. However, events beyond Ameren’s, Ameren Missouri’s, and Ameren Illinois’ control may create uncertainty in the capital markets or make access to the capital markets uncertain or limited. Such events could increase our cost of capital and adversely affect our ability to access the capital markets.

Dividends

The amount and timing of dividends payable on Ameren’s common stock are within the sole discretion of Ameren’s board of directors. Ameren’s board of directors has not set specific targets or payout parameters when declaring common stock dividends, but it considers various factors, including Ameren’s overall payout ratio, payout ratios of our peers, projected cash flow and potential future cash flow requirements, historical earnings and cash flow, projected earnings, impacts of regulatory orders or legislation, and other key business considerations. Ameren expects its dividend payout ratio to be between 55% and 70% of annual earnings over the next few years. On May 8, 2020, Ameren’s board of directors declared a quarterly common stock dividend of 49.5 cents per share payable on June 30, 2020, to shareholders of record on June 10, 2020.

See Note 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for additional discussion of covenants and provisions contained in certain of the Ameren Companies’ financial agreements and articles of incorporation that would restrict the Ameren Companies’ payment of dividends in certain circumstances. At March 31, 2020, none of these circumstances existed at Ameren, Ameren Missouri, or Ameren Illinois and, as a result, these companies were not restricted from paying dividends.

The following table presents common stock dividends declared and paid by Ameren Corporation to its common shareholders and by Ameren subsidiaries to their parent, Ameren Corporation, for the three months ended March 31, 2020 and 2019:



	Three Months
	2020		2019
Ameren	$	122	$	116
ATXI	—		15

Commitments

For a listing of our obligations and commitments, see Other Obligations in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report. See Note 10 – Retirement Benefits under Part II, Item 8, of the Form 10-K for information regarding expected minimum funding levels for our pension plan.

Off-balance-sheet Arrangements

At March 31, 2020, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than the forward sale agreement relating to common stock, variable interest entities, letters of credit, and Ameren (parent) guarantee arrangements on behalf of its subsidiaries. See Note 1 – Summary of Significant Accounting Policies under Part I, Item 1, of this report for further detail concerning variable interest entities. See Note 5 – Long-Term Debt and Equity under Part II, Item 8, of the Form 10-K for further detail concerning the forward sale agreement relating to common stock.

Credit Ratings

Our credit ratings affect our liquidity, our access to the capital markets and credit markets, our cost of borrowing under our credit facilities and our commercial paper programs, and our collateral posting requirements under commodity contracts.

The following table presents the principal credit ratings by Moody’s and S&P, as applicable, effective on the date of this report:



	Moody’s	S&P
Ameren:
Issuer/corporate credit rating	Baa1	BBB+
Senior unsecured debt	Baa1	BBB
Commercial paper	P-2	A-2
Ameren Missouri:
Issuer/corporate credit rating	Baa1	BBB+
Secured debt	A2	A
Senior unsecured debt	Baa1	Not Rated
Commercial paper	P-2	A-2
Ameren Illinois:
Issuer/corporate credit rating	A3	BBB+
Secured debt	A1	A
Senior unsecured debt	A3	BBB+
Commercial paper	P-2	A-2
ATXI:
Issuer credit rating	A2	Not Rated
Senior unsecured debt	A2	Not Rated

A credit rating is not a recommendation to buy, sell, or hold securities. It should be evaluated independently of any other rating. Ratings are subject to revision or withdrawal at any time by the rating organization.

Collateral Postings

Any weakening of our credit ratings may reduce access to capital and trigger additional collateral postings and prepayments. Such changes may also increase the cost of borrowing, resulting in an adverse effect on earnings. Cash collateral postings and prepayments made with external parties, including postings related to exchange-traded contracts, and cash collateral posted by external parties were immaterial at March 31, 2020. A sub-investment-grade issuer or senior unsecured debt rating (below “Baa3” from Moody’s or below “BBB-” from S&P) at March 31, 2020, could have resulted in Ameren, Ameren Missouri, or Ameren Illinois being required to post additional collateral or other assurances for certain trade obligations amounting to $183 million, $150 million, and $33 million, respectively.

Changes in commodity prices could trigger additional collateral postings and prepayments. Based on credit ratings at March 31, 2020, if market prices were 15% higher or lower than March 31, 2020 levels in the next 12 months and 20% higher or lower thereafter through the end of the term of the commodity contracts, then Ameren, Ameren Missouri, or Ameren Illinois could be required to post an immaterial amount, compared to each company’s liquidity, of collateral or other assurances for certain trade obligations.

OUTLOOK

Below are some key trends, events, and uncertainties that may reasonably affect our results of operations, financial condition, or liquidity, as well as our ability to achieve strategic and financial objectives, for 2020 and beyond.

Operations

•

The COVID-19 pandemic is a rapidly evolving situation. While the COVID-19 pandemic did not have a material impact on our results of operations, financial position, or liquidity for the three months ended March 31, 2020, it may adversely affect our results of operations, financial position, or liquidity in subsequent periods. The effect will depend on the severity and longevity of the COVID-19 pandemic and the resulting impact on business, economic, and capital market conditions. Shelter-in-place orders began taking effect in our service territories in mid-March 2020. These orders generally require individuals to remain at home and preclude or limit the operation of businesses that are deemed nonessential. While Ameren's business operations are deemed essential and are not directly impacted by the shelter-in-place orders, approximately 65% of our workforce transitioned to remote working arrangements in mid-March. We are monitoring the impacts the pandemic is having on our businesses, including but not limited to potential impacts on our liquidity and financing plans; demand for residential, commercial, and industrial electric and natural gas services; more flexible payment plans for customers; bad debt expense; supply chain operations; the availability of our employees and contractors; counterparty credit; capital construction, infrastructure operations and maintenance, and energy efficiency programs; and pension valuations. On March 13, 2020, and March 16, 2020, Ameren Illinois and Ameren Missouri, respectively, suspended customer disconnections for non-payment and began to waive late fees. Regarding bad debt expense, Ameren Illinois' electric distribution and natural gas distribution businesses have bad debt riders, which would provide for recovery of increased bad debt expense. However, Ameren Missouri’s earnings are exposed to potential increases in future bad debt expense, which could result in incremental accounts receivable write-offs in future periods as

Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism. In the three months ended March 31, 2020, Ameren Missouri’s total electric sales volumes were comparable with the same period in 2019, with a 2% decrease in industrial electric sales volumes and a 1.5% decrease in commercial electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. These decreases were offset by a 2.5% increase in higher margin residential electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. In April 2020, a month that includes the most recent impacts of the COVID-19 pandemic, Ameren Missouri experienced a 7% decrease in total electric sales volumes, with a 15% decrease in commercial electric sales volumes and a 10% decrease in industrial electric sales volumes, compared with the same month in 2019, excluding the estimated effects of weather and customer energy-efficiency programs. These decreases were partially offset by a 6% increase in higher margin residential electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. Ameren Illinois' electric distribution and transmission businesses have formula ratemaking frameworks, which provide for recovery of their revenue requirements independent of sales volumes, and Ameren Illinois' natural gas distribution business has a VBA, which provides for recovery of the natural gas distribution service revenue requirement that is dependent on sales volumes for residential and small nonresidential customers. Additionally, ATXI’s electric transmission business has a formula ratemaking framework, which provides for recovery of its revenue requirements independent of sales volumes. Based on current projections that assume a gradual improvement in sales from those expected to be experienced in the second quarter of 2020 as stay-at-home restrictions are lifted or eased, we expect total Ameren Missouri electric sales volumes to decrease by approximately 2.5% in 2020, compared with 2019, with a 7% decrease in commercial electric sales volumes and a 4% decrease in industrial electric sales volumes, excluding the estimated effects of weather and any unanticipated impacts from the COVID-19 pandemic. These decreases are expected to be partially offset by a 2.5% increase in higher margin residential electric sales volumes. A 1% change in 2020 Ameren Missouri electric sales volumes to residential, commercial, and industrial customers would impact earnings per share by approximately 3 cents, 2 cents, and a half-cent, respectively.

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The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense and a return at the applicable WACC on investments in certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC, with all approved PISA deferrals added to rate base prospectively and recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the 15% of depreciation expense and a return at the applicable WACC for investments in renewable generation plant placed in service and not recovered under the PISA. Accumulated RESRAM deferrals earn carrying costs at short-term interest rates. The PISA and the RESRAM mitigate the effects of regulatory lag between regulatory rate reviews. Those investments not eligible for recovery under the PISA and the remaining 15% of certain property, plant, and equipment placed in service, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. Ameren Missouri recognizes the cost of debt on PISA deferrals in revenue, instead of using the applicable WACC, with the difference recognized in revenues when recovery of such deferrals is reflected in customer rates. As a result of the PISA election, additional provisions of the law apply to Ameren Missouri, including limitations on electric customer rate increases. Both the rate increase limitation and PISA are effective through December 2023, unless Ameren Missouri requests and receives MoPSC approval of an extension through December 2028.

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In 2018, the MoPSC issued an order approving Ameren Missouri’s MEEIA 2019 plan. The plan includes a portfolio of customer energy-efficiency programs through December 2021 and low-income customer energy-efficiency programs through December 2024, along with a rate-adjustment mechanism. Ameren Missouri intends to invest $226 million over the life of the plan, including $65 million per year through 2021. The plan includes the continued use of the MEEIA rider, which allows Ameren Missouri to collect from, or refund to, customers any difference in actual MEEIA program costs and related lost electric margins and the amounts collected from customers. In addition, the plan includes a performance incentive that provides Ameren Missouri an opportunity to earn additional revenues by achieving certain customer energy-efficiency goals. If the target goals are achieved for 2019, 2020, and 2021, which could be affected by the COVID-19 pandemic, additional revenues of $7 million, $10 million, and $13 million would be recognized in late 2020, 2021, and 2022, respectively. Incremental additional revenues of $1 million, $3 million, and $3 million may be earned for 2019, 2020, and 2021,

respectively, and would be recognized in the respective following year, if Ameren Missouri exceeds its targeted energy savings goals. Ameren Missouri recognized $28 million, $11 million, and $37 million in revenues related to MEEIA performance incentives in 2016, 2018, and 2019, respectively.

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In March 2020, the MoPSC issued an order in Ameren Missouri’s July 2019 electric service regulatory rate review, approving nonunanimous stipulation and agreements. The order resulted in a decrease of $32 million to Ameren Missouri's annual revenue requirement for electric retail service. The order also provided for the continued use of the FAC and trackers for pension and postretirement benefits, uncertain income tax positions, and certain excess deferred income taxes that the MoPSC previously authorized in earlier electric rate orders. The order reduced the annualized base level of net energy costs pursuant to the FAC by approximately $115 million from the base level established in the MoPSC’s March 2017 electric rate order. The order also changed the annualized regulatory asset and liability amortization amounts and the base level of expenses for regulatory tracking mechanisms. These changes will result in approximately $20 million of increased revenues and approximate decreases in purchased power expenses of $15 million, other operating and maintenance expenses of $60 million, and income tax expenses of $20 million. An estimated $70 million would have otherwise been deferred under the PISA. A stipulation and agreement approved by the MoPSC’s March 2020 order states that the net impact of the revenue and expense changes noted above reflect a 9.4% to 9.8% ROE on an unspecified percent of common equity applicable to rate base. In addition, the order required Ameren Missouri to donate $8 million to low-income assistance programs, which was reflected in results of operations for the three months ended March 31, 2020. The new rates, base level of expenses, and amortizations became effective on April 1, 2020. In April 2020, the MoPSC issued another order in Ameren Missouri’s July 2019 electric service regulatory rate review, reaffirming the existing percentage of net energy cost variances allowed to be recovered or refunded under the FAC.

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Ameren Illinois and ATXI use a forward-looking rate calculation with an annual revenue requirement reconciliation for each company’s electric transmission business. Based on expected rate base growth and the currently allowed 10.38% ROE, the revenue requirements included in 2020 rates for Ameren Illinois’ and ATXI’s electric transmission businesses are $311 million and $190 million, respectively. These revenue requirements represent an increase in Ameren Illinois’ and ATXI’s revenue requirements of $14 million and $13 million, respectively, from the revenue requirements reflected in 2019 rates, primarily due to expected rate base growth. These rates will affect Ameren Illinois’ and ATXI’s cash receipts during 2020, but will not determine their respective electric transmission service operating revenues, which will instead be based on 2020 actual recoverable costs, rate base, and a return on rate base at the applicable WACC as calculated under the FERC formula ratemaking framework.

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The ROE for MISO transmission owners, including Ameren Illinois and ATXI, is the subject of FERC complaint cases filed in November 2013 and February 2015 challenging the allowed base ROE. In November 2019, the FERC issued an order addressing the November 2013 complaint case, which set the allowed base ROE at 9.88% and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The order also dismissed the February 2015 complaint case. As a result of this order, Ameren and Ameren Illinois expect to pay refunds of approximately $40 million and $23 million, respectively, in 2020. In December 2019, Ameren and the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI, filed requests for rehearing with the FERC. Additionally, in December 2019, various parties filed requests for rehearing with the FERC, challenging the dismissal of the February 2015 complaint case. The FERC has not ruled on the merits of the rehearing requests and is under no deadline to do so. In March 2019, the FERC issued separate Notices of Inquiry regarding its allowed base ROE policy and its transmission incentives policy. Initial comments were due by June 2019, and reply comments were due by late August 2019. The Notice of Inquiry addressing the FERC’s base ROE policy, among other things, broadened the ability to comment on the new methodology beyond electric utilities that are participants in the complaint cases. The transmission incentives Notice of Inquiry was open for comment on the FERC’s transmission incentive policy, including incentive adders to the base ROE. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which included an increased incentive in the allowed base ROE for participation in an RTO to 100 basis points from the current 50 basis points and improved parameters for awarding incentives, while limiting the overall incentives to a cap of 250 basis points, among other things. Initial comments are due by July 2020. Ameren is unable to predict the ultimate impact of the Notices of Inquiry, the Notice of Proposed Rulemaking, or the requests for rehearing at this time. A 50 basis point reduction in the FERC-allowed base ROE would reduce Ameren’s and Ameren Illinois’ annual net income by an estimated $10 million and $6 million, respectively, based on each company’s 2020 projected rate base.

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Ameren Illinois’ electric distribution service performance-based formula ratemaking framework allows Ameren Illinois to reconcile electric distribution service rates to its actual revenue requirement on an annual basis. If a given year’s revenue requirement varies from the amount collected from customers, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to

reflect that year’s actual revenue requirement, independent of actual sales volumes. The regulatory balance is then collected from, or refunded to, customers within two years from the end of the year. Unless extended, the formula ratemaking framework expires at the end of 2022. If not extended, Ameren Illinois would then be required to establish future rates through a traditional regulatory rate review with the ICC. The decoupling provisions extend beyond the end of the formula ratemaking by law, which ensures that Ameren Illinois’ electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes.

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In 2019, the ICC issued an order in Ameren Illinois’ annual update filing that approved a $7 million decrease in Ameren Illinois’ electric distribution service rates beginning in January 2020. Illinois law provides for an annual reconciliation of the electric distribution revenue requirement as is necessary to reflect the actual costs incurred and a return at the applicable WACC on year-end rate base in a given year with the revenue requirement that was reflected in customer rates for that year. Consequently, Ameren Illinois’ 2020 electric distribution service revenues will be based on its 2020 actual recoverable costs, 2020 year-end rate base, and a return at the applicable WACC as calculated under the Illinois performance-based formula ratemaking framework. The 2020 revenue requirement reconciliation will be collected from, or refunded to, customers in 2022. A 50 basis point change in the annual average of the monthly yields of the 30-year United States Treasury bonds would result in an estimated $9 million change in Ameren’s and Ameren Illinois’ annual net income, based on Ameren Illinois’ 2020 projected year-end rate base. Ameren Illinois’ allowed ROE was based on an expected annual average of the monthly yields of the 30-year United States Treasury bonds of 1.6% and 3.1% for the first quarter of 2020 and 2019, respectively.

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In April 2020, Ameren Illinois filed its annual electric distribution service formula rate update to establish the revenue requirement to be used for 2021 rates with the ICC. Pending ICC approval, this update filing will result in a $45 million decrease in Ameren Illinois’ electric distribution service rates, beginning in January 2021. These rates will affect Ameren Illinois' cash receipts during 2021, but will not affect electric distribution service revenues, which will be based on actual recoverable costs, rate base, and return on common equity as calculated under the Illinois performance-based formula ratemaking framework. An ICC decision in this proceeding is expected by December 2020.

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Ameren Illinois earns a return at the applicable WACC on its electric energy-efficiency program investments. Ameren Illinois’ electric energy-efficiency investments are deferred as a regulatory asset and earn a return at the applicable WACC, with the ROE based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. The allowed ROE on electric energy-efficiency investments can be increased or decreased by up to 200 basis points, depending on the achievement of annual energy savings goals, which may be affected by the COVID-19 pandemic. Pursuant to the FEJA, Ameren Illinois plans to invest up to approximately $100 million per year in electric energy-efficiency programs through 2024, and will earn a return on those investments. While the ICC has approved a plan consistent with this spending level through 2021, the ICC has the ability to reduce the amount of electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not included in the electric distribution service performance-based formula ratemaking framework.

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In February 2020, the MoPSC issued an order approving a stipulation and agreement allowing Ameren Missouri to defer and amortize maintenance expenses related to scheduled refueling and maintenance outages at its Callaway Energy Center. Beginning with the fall 2020 refueling and maintenance outage, Ameren Missouri will defer the maintenance expenses incurred related to a refueling and maintenance outage as a regulatory asset and amortize those expenses after completion of the outage. Maintenance expenses will be amortized over the period between refueling and maintenance outages, which is approximately 18 months. Ameren Missouri expects to incur approximately $40 million in maintenance expenses related to the fall 2020 outage. During a scheduled outage, depending on the availability of its other generation sources and the market prices for power, Ameren Missouri’s purchased power costs may increase and the amount of excess power available for sale may decrease versus non-outage years. Changes in purchased power costs and excess power available for sale are included in the FAC, which results in limited impacts to earnings. Prior to 2020, maintenance expenses for refueling and maintenance outages were expensed as incurred.

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Ameren Missouri and Ameren Illinois continue to make infrastructure investments and expect to seek increases to electric and natural gas rates to recover the cost of investments and earn an adequate return. Ameren Missouri and Ameren Illinois will also seek new, or to maintain existing, legislative solutions to address regulatory lag and to support investment in their utility infrastructure for the benefit of their customers. Ameren Missouri and Ameren Illinois continue to face cost recovery pressures, including limited economic growth in their service territories, economic impacts of COVID-19, customer conservation efforts, the impacts of additional customer energy-efficiency programs, and increased customer use of increasingly cost-effective technological advances, including private generation and energy storage. However, over the long-term, we expect the decreased demand to be partially offset by increased demand resulting from increased electrification of the economy for efficiencies and as a means to address economywide CO₂ emission concerns. Increased investments, including expected future investments for environmental compliance, system reliability improvements, and potential new generation sources, result in rate base and revenue growth but also higher depreciation and financing costs.

For additional information regarding recent rate orders, lawsuits, and pending requests filed with state and federal regulatory commissions, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K.

Liquidity and Capital Resources

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The COVID-19 pandemic could adversely affect our liquidity and capital resources, including but not limited to potential impacts on collections from our tariff-based revenues, capital expenditures, our ability to access the capital markets on reasonable terms and when needed, Ameren Missouri’s expected 2020 wind generation acquisitions, and the timing of tax payments and the utilization of tax credits. Our customers’ ability to pay for our services may be adversely affected by the COVID-19 pandemic. A reduction in collections from our tariff-based revenues could reduce our cash from operations and cause an adverse impact to our liquidity. We expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, however, disruptions to the capital markets and the ability of our suppliers and contractors to perform as required under their contracts could impact the execution of our capital investment strategy. For further discussion on the impacts to our ability to access the capital markets, Ameren Missouri’s expected 2020 wind generation acquisitions, and the timing of tax payments and the utilization of tax credits, see below.

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Ameren Missouri’s 2017 IRP targets cleaner and more diverse sources of energy generation, including solar, wind, natural gas, hydro, and nuclear power. It also includes expanding renewable sources by adding 700 megawatts of wind generation by the end of 2020 in Missouri and adding 100 megawatts of solar generation by 2027. These new renewable energy sources would support Ameren Missouri’s compliance with the state of Missouri’s requirement of achieving 15% of native load sales from renewable energy sources by 2021, subject to customer rate increase limitations. Based on current and projected market prices for energy and for wind and solar generation technologies, among other factors, Ameren Missouri expects its ownership of these renewable resources would represent the lowest-cost option for customers. The plan also provides for the expected implementation of continued customer energy-efficiency programs. Ameren Missouri’s plan for the addition of renewable resources could be affected by, among other factors: Ameren Missouri’s ability to obtain a certificate of convenience and necessity from the MoPSC, and any other required project approvals; the ability of developers to meet contractual commitments and timely complete projects, which is dependent upon the availability of necessary materials and equipment, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic, among other things; the availability of federal production and investment tax credits related to renewable energy and Ameren Missouri’s ability to use such credits; the cost of wind and solar generation technologies; energy prices; and Ameren Missouri’s ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost. Ameren Missouri expects to file its next integrated resource plan in September 2020. Ameren Missouri will seek stakeholder feedback and assess different scenarios to meet future energy needs, which will be used to create an updated plan for its current generation portfolio and ongoing transition to cleaner sources of energy.


•	In connection with the 2017 IRP filing, Ameren Missouri established a goal of reducing CO₂ emissions 80% by 2050 from a 2005 base level. Ameren Missouri is also targeting a 35% CO₂ emission reduction by 2030 and a 50% reduction by 2040 from the 2005 level. In order to meet these goals, among other things, Ameren Missouri expects to retire its coal-fired generation at the end of each energy

center’s useful life. As indicated in the 2017 IRP, the Meramec, Sioux, Labadie, and Rush Island energy centers are expected to be retired in 2022, 2033, 2042, and 2045, respectively. The next integrated resource plan will be filed in September 2020.

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Consistent with its 2017 IRP filing, in 2019, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 300-megawatt wind generation facility. In 2018, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 400-megawatt wind generation facility. These two agreements are subject to customary contract terms and conditions. The two build-transfer acquisitions collectively represent $1.2 billion of capital expenditures and would support Ameren Missouri’s compliance with the Missouri renewable energy standard. Both acquisitions have received all regulatory approvals, and both projects have received all applicable zoning approvals, have entered into RTO interconnection agreements, and have begun construction activities. In 2020, the developers of the wind generation facilities received notices from the wind turbine supplier, and the developer of the up-to 300-megawatt project received a notice from the construction contractor, of changes in supply and/or construction activities resulting from the COVID-19 pandemic. There have been changes to the schedules for both projects, particularly with regard to wind turbine deliveries. Ameren Missouri and the developers continue to monitor the impact to each project schedule. To date, neither developer has reported to Ameren Missouri that the projects will not be completed in 2020. Ameren Missouri expects the up-to 400-megawatt project to be placed in-service by the end of 2020. However, at this time, due to manufacturing, shipping, and other supply chain issues, and based on Ameren Missouri’s discussions with the developer, Ameren Missouri expects that a portion of the up-to 300-megawatt project, representing approximately $100 million of investment, could be placed in-service in the first quarter of 2021. See discussion below related to production tax credits.

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Through 2024, we expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, with a major portion directed to our transmission and distribution systems. We estimate that we will invest up to $16.6 billion (Ameren Missouri – up to $8.4 billion; Ameren Illinois – up to $8.0 billion; ATXI – up to $0.2 billion) of capital expenditures during the period from 2020 through 2024. Ameren’s and Ameren Missouri’s estimates exclude any capital expenditures related to pollution control equipment that may be required as a result of the NSR and Clean Air Act litigation discussed in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report.

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Environmental regulations, including those related to CO₂emissions, or other actions taken by the EPA, could result in significant increases in capital expenditures and operating costs. Certain of these regulations are being challenged through litigation, or reviewed or recommended for repeal by the EPA, or new replacement or alternative regulations are being contemplated, proposed, or adopted by the EPA and state regulators. The ultimate implementation of any of these regulations, as well as the timing of any such implementation, is uncertain. However, the individual or combined effects of existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of some of Ameren Missouri’s coal-fired energy centers. Ameren Missouri’s capital expenditures are subject to MoPSC prudence reviews, which could result in cost disallowances as well as regulatory lag. The cost of Ameren Illinois’ purchased power and natural gas purchased for resale could increase. However, Ameren Illinois expects that these costs would be recovered from customers with no material adverse effect on its results of operations, financial position, or liquidity. Ameren’s and Ameren Missouri’s earnings could benefit from increased investment to comply with environmental regulations if those investments are reflected and recovered on a timely basis in customer rates.

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The Ameren Companies have multiyear credit agreements that cumulatively provide $2.3 billion of credit through December 2024, subject to a 364-day repayment term for Ameren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $2.7 billion. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report for additional information regarding the Credit Agreements. In November 2020, Ameren (parent)’s $350 million of senior unsecured notes mature, and are expected to be repaid using a portion of the proceeds from Ameren (parent)’s April 2020 issuance of $800 million of senior unsecured notes. The Ameren Companies have no additional maturities of long-term debt until 2022. With the recently completed Ameren Missouri and Ameren (parent) debt issuances and availability under the credit agreements, as well as anticipated proceeds from the settlement of the equity forward discussed below, Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, including the expected 2020 wind generation acquisitions, and related financing plans. The Ameren Companies will continue to monitor the effect of the COVID-19 pandemic on their liquidity, including as a result of decreased sales and expected increased customer nonpayment. To date, the Ameren Companies have been able to access the capital markets on reasonable terms when needed. However, there can be no assurance that significant changes in economic conditions, disruptions in the capital and credit markets, or other unforeseen events will not materially affect their ability to execute their expected operating, capital, or financing plans.

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Ameren expects its cash used for currently planned capital expenditures and dividends to exceed cash provided by operating activities over the next several years. As part of its plan to fund these cash flow requirements, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2024. Ameren expects these issuances to provide equity of about $100 million annually. Ameren also plans to issue incremental common equity to fund a portion of Ameren Missouri’s wind generation investments through the physical settlement of the forward sale agreement discussed below. Additionally, Ameren plans to issue incremental equity of about $150 million

annually from 2021 to 2024. Ameren expects its equity to total capitalization to be about 45% through the period ending December 2024, with the long-term intent to support solid investment-grade credit ratings. Ameren Missouri and Ameren Illinois expect to fund cash flow needs through debt issuances, adjustments of dividends to Ameren (parent), and/or capital contributions from Ameren (parent).

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In August 2019, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million shares of common stock. The forward sale agreement can be settled at Ameren’s discretion on or prior to March 31, 2021. On a settlement date or dates, if Ameren elects to physically settle the forward sale agreement, Ameren will issue shares of common stock to the counterparty at the then-applicable forward sale price. The forward sale agreement will be physically settled unless Ameren elects to settle in cash or to net share settle. If physically settled, Ameren expects to receive between $540 million and $550 million upon settlement. See Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for additional information.

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As of March 31, 2020, Ameren had $98 million in tax benefits related to federal and state income tax credit carryforwards and $11 million in outstanding income tax refunds and overpayments. Future expected income tax payments and refunds are based on planned capital expenditures and any related income tax credits and, in the case of Ameren Missouri and Ameren Illinois, are consistent with the tax allocation agreement between Ameren (parent) and its subsidiaries. Ameren expects to make income tax payments between $5 million and $75 million in each year from 2020 to 2024, totaling $150 million to $200 million for the five-year period. Ameren Missouri expects to make income tax payments to Ameren (parent) between $35 million and $45 million in 2020. Additionally, Ameren Missouri expects to receive refunds from Ameren (parent) in each year from 2021 to 2024, totaling $60 million to $100 million for the four-year period, primarily due to the expected utilization of federal production tax credits to be generated from its 2020 wind generation acquisitions. Ameren Illinois expects to make income tax payments to Ameren (parent) between $20 million and $30 million in 2020 and between $50 million and $90 million in each year from 2021 to 2024, totaling $260 million to $310 million for the five-year period.

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Ameren Missouri expects its 2020 wind generation acquisitions to generate federal production tax credits between $65 million and $70 million in each year from 2021 to 2030. Ameren expects to utilize approximately $140 million of these federal production tax credits from 2021 to 2024. Delays in the timely completion of the wind generation facilities may affect Ameren’s ability to realize some or all of the anticipated federal production tax credits. Unless relevant regulations are modified by the IRS or applicable legislation is enacted by Congress to include an extension of the December 31, 2020 in-service date criteria, if any portion of these facilities is completed after 2020, Ameren Missouri would need to satisfy additional IRS requirements in order to qualify for all of the anticipated federal production tax credits for such portion. The build-transfer agreements include provisions for the event in which any portion of either project is completed after 2020. In such an event, according to the terms of the agreements, Ameren Missouri would pay a reduced contract price on the portion of the project completed after 2020, to account for risks associated with qualifying for production tax credits, subject to an obligation to later pay such price differential should Ameren Missouri be entitled to receive production tax credits.

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In 2018, legislation modifying Missouri tax law was enacted to decrease the state’s corporate income tax rate from 6.25% to 4%, effective January 1, 2020. The effect of this tax decrease is reflected in Ameren Missouri’s electric service rates that became effective on April 1, 2020. Ameren (parent) and nonregistrant subsidiaries do not expect this income tax decrease to have a material impact on net income.

The above items could have a material impact on our results of operations, financial position, and liquidity. Additionally, in the ordinary course of business, we evaluate strategies to enhance our results of operations, financial position, and liquidity. These strategies may include acquisitions, divestitures, opportunities to reduce costs or increase revenues, and other strategic initiatives to increase Ameren’s shareholder value. We are unable to predict which, if any, of these initiatives will be executed. The execution of these initiatives may have a material impact on our future results of operations, financial position, or liquidity.

REGULATORY MATTERS

See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes to the quantitative and qualitative disclosures about interest rate risk, credit risk, investment price risk, commodity price risk, and commodity supplier risk included in the Form 10-K. See Item 7A under Part II of the Form 10-K for a more detailed discussion of our market risk.

ITEM 4. CONTROLS AND PROCEDURES.


(a)	Evaluation of Disclosure Controls and Procedures

As of March 31, 2020, evaluations were performed under the supervision and with the participation of management, including the principal executive officer and the principal financial officer of each of the Ameren Companies, of the effectiveness of the design and operation of such registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on those evaluations, as of March 31, 2020, the principal executive officer and the principal financial officer of each of the Ameren Companies concluded that such disclosure controls and procedures are effective to provide assurance that information required to be disclosed in such registrant’s reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to its management, including its principal executive officer and its principal financial officer, to allow timely decisions regarding required disclosure.


(b)	Changes in Internal Controls over Financial Reporting

There has been no change in any of the Ameren Companies’ internal control over financial reporting during their most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, each of their internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. 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. Material legal and administrative proceedings, which are discussed in Note 2 – Rate and Regulatory Matters, Note 9 – Commitments and Contingencies, and Note 10 – Callaway Energy Center, under Part I, Item 1, of this report, include the following:


•	Ameren Illinois’ annual electric distribution service formula rate update filed with the ICC in April 2020;


•	Ameren Illinois’ natural gas delivery service regulatory rate review filed with the ICC in February 2020;


•	Ameren Illinois’ QIP reconciliation hearing with the ICC requested in March 2019;


•	the March 2020 ICC service disconnection moratorium proceeding;


•	Ameren and the MISO transmission owners’ request for a rehearing of the November 2019 FERC order related to the November 2013 complaint case;


•	the March 2019 FERC separate Notices of Inquiry regarding its allowed base ROE policy and its transmission incentives policy;


•	the March 2020 FERC Notice of Proposed Rulemaking on its transmission incentives policy;


•	litigation against Ameren Missouri with respect to NSR and the Clean Air Act; and


•	remediation matters associated with former MGP sites of Ameren Illinois.

ITEM 1A. RISK FACTORS.

The Form 10-K includes a detailed discussion of our risk factors. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in the Form 10-K.

The international public health emergency associated with the COVID-19 pandemic may have a material adverse effect on our results of operations, financial position, or liquidity.

disruptions in the capital markets, which could adversely affect our ability to access these markets on reasonable terms and when needed. These disruptions could continue for a prolonged period of time or become more severe.

We rely on the issuance of short-term and long-term debt and equity as significant sources of liquidity and funding for capital requirements not satisfied by our operating cash flow, as well as to refinance existing long-term debt. Disruptions to the capital markets as a result of the COVID-19 pandemic could negatively affect our ability to maintain and to expand our businesses. In addition, our credit ratings may be impacted by the economic conditions of the COVID-19 pandemic. The COVID-19 pandemic could lead to events beyond our control, such as further depressed economic conditions or extreme volatility in the debt, equity, or credit markets, and might 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 or issue commercial paper.

As a result of the COVID-19 pandemic, we have experienced and expect to continue to experience changes to our sales volumes. In the three months ended March 31, 2020, Ameren Missouri’s total electric sales volumes were comparable with the same period in 2019, with a 2% decrease in industrial electric sales volumes and a 1.5% decrease in commercial electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. These decreases were offset by a 2.5% increase in higher margin residential electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. In April 2020, a month that includes the most recent impacts of the COVID-19 pandemic, Ameren Missouri experienced a 7% decrease in total electric sales volumes, with a 15% decrease in commercial electric sales volumes and a 10% decrease in industrial electric sales volumes, compared with the same month in 2019, excluding the estimated effects of weather and customer energy-efficiency programs. These decreases were partially offset by a 6% increase in higher margin residential electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. Pursuant to the PISA, Ameren Missouri’s electric rates are limited to a 2.85% compound annual growth rate cap. Continued long-term declines in sales volumes, along with increased capital investments and operating costs, could cause customer rates to exceed the rate cap. Ameren Illinois also experienced decreases in electric and natural gas sales volumes. While the revenues from Ameren Illinois’ electric distribution business, residential and small nonresidential customers of Ameren Illinois’ natural gas distribution business, and Ameren Illinois’ and ATXI’s electric transmission businesses are decoupled from changes in sales volumes, earnings at Ameren Missouri and Ameren Illinois, as it relates to large nonresidential natural gas customers, are exposed to such changes.

Further, our customers’ ability to pay for our services may be adversely affected by the COVID-19 pandemic. On March 13, 2020, and March 16, 2020, Ameren Illinois and Ameren Missouri, respectively, suspended customer disconnections for non-payment and began to waive late fees. In addition, future regulations could require long-term suspensions of customer disconnections and late fees, including as may be required in the ICC’s service disconnection moratorium proceeding. Regarding bad debt expense, Ameren Illinois' electric distribution and natural gas distribution businesses have bad debt riders, which would provide for recovery of increased bad debt expense. However, Ameren Missouri’s earnings are exposed to potential increases in future bad debt expense, which could result in incremental accounts receivable write-offs in future periods as Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism. If Ameren Missouri and Ameren Illinois seek recovery of certain COVID-19 pandemic related costs, they could be unsuccessful in obtaining regulatory approval to recover them, which may adversely affect their results of operations. A reduction in collections from our tariff-based revenues could reduce our cash from operations and cause an adverse impact to our liquidity.

In addition, suppliers and contractors may not perform as provided under their contracts. This could cause delays in construction projects or the performance of necessary maintenance to our electric and natural gas infrastructure, which could lead to failures of equipment that can result in unanticipated liabilities or unplanned outages. Delays in our construction projects could also result in reduced planned capital expenditures, and decreased rate base growth.

In 2019, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 300-megawatt wind generation facility. In 2018, Ameren Missouri entered into a build-transfer agreement to acquire, after construction, an up-to 400-megawatt wind generation facility. In 2020, the developers of the wind generation facilities received notices from the wind turbine supplier, and the developer of the up-to 300-megawatt project received a notice from the construction contractor, of changes in supply and/or construction activities resulting from the COVID-19 pandemic. There have been changes to the schedules for both projects, particularly with regard to wind turbine deliveries. Ameren Missouri and the developers continue to monitor the impact to each project schedule. To date, neither developer has reported to Ameren Missouri that the projects will not be completed in 2020. Ameren Missouri expects the up-to 400-megawatt project to be placed in-service by the end of 2020. However, at this time, due to manufacturing, shipping, and other supply chain issues, and based on Ameren Missouri’s discussions with the developer, Ameren Missouri expects that a portion of the up-to 300-megawatt project, representing approximately $100 million of investment, could be placed in-service in the first quarter of 2021. The build-transfer agreements include provisions for the event in which any portion of either project is completed after 2020. In such an event, according to the terms of the agreements, Ameren Missouri would pay a reduced contract price on the portion of the project completed after 2020, to account for risks associated with qualifying for production tax credits, subject to an obligation to later pay such price differential should Ameren Missouri be entitled to receive production tax credits. Delays in the timely completion of the wind generation facilities may affect Ameren’s ability to realize some or all of the anticipated federal production tax credits. Unless relevant regulations are modified by the IRS or applicable legislation is enacted by Congress to include an extension of the December 31, 2020 in-service date criteria, if any portion of these facilities is completed

after 2020, Ameren Missouri would need to satisfy additional IRS requirements in order to qualify for all of the anticipated federal production tax credits for such portion.

Also, our businesses depend on skilled professional and technical employees. Our operations could be adversely affected if a large portion of our employees contracted COVID-19 or became quarantined at the same time. This could lead to facility shutdowns and disruptions in the delivery of electricity and natural gas to our customers. In addition, 65% of our workforce has transitioned to remote working arrangements, which increases our data security risks, including loss of data related to sensitive customer, employee, financial, and operating system information, through insider or outsider actions.

Ameren cannot predict the extent or duration of the COVID-19 pandemic or its effects on the global, national, or local economy, the capital markets, or its customers, suppliers, business continuity plans, results of operations, financial position, liquidity, planned rate base growth, and sales volumes.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Ameren Corporation, Ameren Missouri, and Ameren Illinois did not purchase equity securities reportable under Item 703 of Regulation S-K during the period from January 1, 2020, to March 31, 2020.

ITEM 6. EXHIBITS.

The documents listed below are being filed or have previously been filed on behalf of the Ameren Companies and are incorporated herein by reference from the documents indicated and made a part hereof. Exhibits not identified as previously filed are filed herewith.



Exhibit Designation	Registrant(s)	Nature of Exhibit	Previously Filed as Exhibit to:
Instruments Defining Rights of Security Holders, Including Indentures
4.1	Ameren	Ameren Indenture Company Order, dated April 3, 2020, establishing the 3.50% Senior Notes due 2031 (including the global notes)	April 3, 2020 Form 8-K, Exhibits 4.3 and 4.4, File No. 1-14756
4.2	Ameren Ameren Missouri	Supplemental Indenture to the Ameren Missouri Mortgage, dated March 1, 2020, for 2.95% First Mortgage Bonds due 2030	March 20, 2020 Form 8-K, Exhibit 4.2, File No. 1-2967
Material Contracts
Rule 13a-14(a) / 15d-14(a) Certifications
31.1	Ameren	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of Ameren
31.2	Ameren	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of Ameren
31.3	Ameren Missouri	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of Ameren Missouri
31.4	Ameren Missouri	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of Ameren Missouri
31.5	Ameren Illinois	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of Ameren Illinois
31.6	Ameren Illinois	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of Ameren Illinois
Section 1350 Certifications
32.1	Ameren	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer of Ameren
32.2	Ameren Missouri	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer of Ameren Missouri
32.3	Ameren Illinois	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer of Ameren Illinois
Interactive Data Files
101.INS	Ameren Companies	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Ameren Companies	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Ameren Companies	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Ameren Companies	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Ameren Companies	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Ameren Companies	Inline XBRL Taxonomy Extension Definition Document
104	Ameren Companies	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

The file number references for the Ameren Companies’ filings with the SEC are: Ameren, 1-14756; Ameren Missouri, 1-2967; and Ameren Illinois, 1-3672.

Each registrant hereby undertakes to furnish to the SEC upon request a copy of any long-term debt instrument not listed above that such registrant has not filed as an exhibit pursuant to the exemption provided by Item 601(b)(4)(iii)(A) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Exchange Act, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.

AMEREN CORPORATION

(Registrant)

/s/ Michael L. Moehn

Michael L. Moehn

Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

UNION ELECTRIC COMPANY

(Registrant)

/s/ Michael L. Moehn

Michael L. Moehn
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

AMEREN ILLINOIS COMPANY

(Registrant)

/s/ Michael L. Moehn

Michael L. Moehn
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

Date: May 11, 2020

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Ameren Illinois (AILIN) 10-Q2020 Q1 Quarterly report

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