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AMEREN: MANAGEMENT REPORT AND ANALYSIS OF THE FINANCIAL POSITION AND OPERATING RESULTS. (form 10-Q)

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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.
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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.
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.
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
Net income attributable to Ameren common shareholders in the three months ended
June 30, 2021, was $207 million, or $0.80 per diluted share, compared with $243
million, or $0.98 per diluted share, in the year-ago period. Net income
attributable to common shareholders in the six months ended June 30, 2021, was
$440 million, or $1.71 per diluted share, compared with $389 million, or $1.57
per diluted share, in the year-ago period. Net income for the three and six
months ended June 30, 2021, compared to the year-ago periods, was favorably
affected by increased infrastructure investments at Ameren Missouri, Ameren
Transmission, and Ameren Illinois Electric Distribution; increased Ameren
Missouri electric retail sales, primarily resulting from colder winter
temperatures experienced in 2021; higher delivery service rates at Ameren
Illinois Natural Gas; and a higher recognized ROE at Ameren Illinois Electric
Distribution. Net income for the six months ended June 30, 2021, compared to the
year-ago period, was also favorably affected by the results of Ameren Missouri's
March 2020 electric rate order, and lower other operations and maintenance
expenses not subject to riders or regulatory tracking mechanisms, primarily due
to disciplined cost management and changes in the value of company-owned life
insurance. Earnings for the three and six months ended June 30, 2021, compared
to the year-ago periods, were unfavorably affected by a change in rate design at
Ameren Missouri, which resulted in less revenues in the second quarter of 2021
due to a change in the timing of transition from winter to summer volumetric
rates; the effect of dilution; and the absence in 2021 of the FERC's May 2020
order addressing the allowed base ROE for FERC regulated transmission rate base
under the MISO tariff, which increased earnings in the year-ago periods. The
earnings comparisons were also unfavorably affected by higher other operations
and maintenance expenses at Ameren Missouri due to the amortization of expenses,
beginning in January 2021, related to the 2020 scheduled refueling and
maintenance outage at the Callaway Energy Center pursuant to the MoPSC's
February 2020 order. Net income for the six months ended June 30, 2021, compared
to the year-ago period, was unfavorably affected by the result of the FERC's
March 2021 order, primarily related to the historical recovery of materials and
supplies inventories.
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, shareholders, and the environment. Ameren remains focused on
disciplined cost management and strategic capital allocation. Ameren invested
$1.8 billion in its rate-regulated businesses in the six months ended June 30,
2021.
The COVID-19 pandemic continues to affect our results of operations, financial
position, and liquidity, but we continue to expect gradual improvement in sales
volumes in 2021, compared to 2020. In the first six months of 2021, our sales
volumes, excluding the estimated effects of weather and customer
energy-efficiency programs, increased compared to the same period in 2020.
However, our accounts receivable balances that were past due or that were a part
of a deferred payment arrangement are higher than normal historical levels, as
customer payments have been affected. The continued effect of the COVID-19
pandemic on our results of operations, financial position, and liquidity in
subsequent periods will depend on its severity and longevity, future regulatory
or legislative actions with respect thereto, and the resulting impact on
business, economic, and capital market conditions. In general, restrictions on
social activities and nonessential businesses implemented in our service
territories in 2020 have been relaxed. However, additional restrictions may be
imposed in the future. We continue to assess the impacts the COVID-19 pandemic
is having on our businesses, including impacts on electric and natural gas sales
volumes, liquidity, bad debt expense, and supply chain operations. For further
discussion of these and other matters discussed below, see Note 2 - Rate and
Regulatory Matters under Part I, Item 1, of this report, and Results of
Operations, Liquidity and Capital Resources, and Outlook sections below. In
addition, for information regarding Ameren Illinois' suspension and subsequent
reinstatement of customer disconnection
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activities and late fee charges for nonpayment, see Note 2 - Rate and Regulatory
Matters under Part I, Item 1, of this report and under Part II, Item 8, of the
Form 10-K.
Due to extremely cold winter weather in mid-February 2021, Ameren Missouri and
Ameren Illinois experienced higher than anticipated commodity costs for
purchased power and natural gas purchased for resale, which contributed to the
acceleration of the timing of planned 2021 debt issuances. Ameren Missouri and
Ameren Illinois have cost recovery mechanisms in place that provide recovery of
the higher purchased power and natural gas costs from customers over periods of
time established under the applicable mechanisms.
In January 2021, Ameren Missouri acquired a 300-MW wind generation project
located in northwestern Missouri. As of June 30, 2021, Ameren Missouri had
placed the project in service as the Atchison Renewable Energy Center. The
purchase price of the energy center was approximately $500 million, including an
immaterial amount of transaction costs. The Atchison Renewable Energy Center
will support Ameren Missouri's compliance with the Missouri renewable energy
standard.
In February 2021, 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 2021. 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 $8.4 billion over the five-year period from 2021
through 2025, with expenditures largely recoverable under the PISA and the
RESRAM. The planned investments in 2024 and 2025 are based on the assumption
that Ameren Missouri requests and receives MoPSC approval of an extension of the
PISA through December 2028.
In March 2021, Ameren Missouri filed requests with the MoPSC seeking approval to
increase its annual revenues for electric service by $299 million and for
natural gas delivery service by $9 million. The electric rate increase request
is based on a 9.9% ROE, a capital structure composed of 51.9% common equity, a
rate base of $10.0 billion and a test year ended December 31, 2020, with certain
pro-forma adjustments expected through a true-up date of September 30, 2021. The
MoPSC proceedings relating to the proposed rate changes will take place over a
period of up to 11 months, with a decision by the MoPSC expected by February
2022 and new rates effective by late February 2022.
In March 2021, the MoPSC issued orders approving nonunanimous stipulation and
agreements related to Ameren Missouri's electric and natural gas service
accounting authority order requests. The orders allowed Ameren Missouri to
accumulate $9 million of certain costs incurred related to the COVID-19
pandemic, net of cost savings, as well as forgone customer late fee and
reconnection fee revenues from March 2020 to March 2021, for potential recovery
in the electric and natural gas service regulatory rate reviews discussed above.
In March 2021, Ameren Missouri deferred $5 million as a regulatory asset related
to the accounting authority orders. If approved for recovery, Ameren Missouri
would recognize the remaining $4 million associated with forgone customer late
fee and reconnection fee revenue when billed to customers.
During its return to full power after the completion of the last refueling and
maintenance outage in late December 2020, the Callaway Energy Center experienced
a non-nuclear operating issue related to its generator. After replacement of
certain key components of the generator, the energy center returned to service
on August 4, 2021. The cost of generator repairs was approximately $60 million,
which was largely capital expenditures. See Note 10 - Callaway Energy Center
under Part I, Item 1, of this report for additional information.
In March 2021, the ICC issued an order approving Ameren Illinois' requested
tariff to reconcile its electric distribution service revenue requirement once
Ameren Illinois ceases to update customer rates under performance-based formula
ratemaking. The tariff would allow Ameren Illinois to reconcile its revenue
requirement for up to two annual periods in which customer rates had been
established, but not yet reconciled, under the performance-based formula
ratemaking framework. To utilize the reconciliation, Ameren Illinois is required
to file a request to update its electric distribution service rates through a
traditional regulatory rate review, which may be based on a future test year and
would reflect a proposed ROE subject to ICC approval. That request would need to
be filed by the end of March in the year following the last year in which Ameren
Illinois opted to set annual rates via the performance-based formula ratemaking
framework. Ameren Illinois would be required to file that request no later than
March 2023. Pursuant to the order, and without legislative change or Ameren
Illinois' election to opt out of performance-based formula ratemaking, Ameren
Illinois' 2022 and 2023 revenues would reflect each year's actual recoverable
costs, year-end rate base, and a return at the applicable WACC, with the ROE
component based on the annual average of the monthly yields of the 30-year
United States Treasury bonds plus 580 basis points. The revenue requirement
reconciliation adjustment would be collected from, or refunded to, customers
within two years from the end of the reconciled year.
In April 2021, Ameren Illinois filed its annual electric distribution service
performance-based formula rate update to be used for 2022 rates with the ICC. In
June 2021, the ICC staff submitted its calculation of the revenue requirement
included in Ameren Illinois' update filing, recommending a $54 million increase.
In July 2021, Ameren Illinois filed a revised request seeking to increase its
annual revenues for electric distribution service by $60 million. An ICC
decision in this proceeding is expected by December 2021, with new rates
effective January 2022.
In May 2021, Ameren Illinois filed its annual electric customer
energy-efficiency formula rate update to increase its rates by $11 million with
the ICC. An ICC decision in this proceeding is expected by December 2021, with
new rates effective January 2022.
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In July 2021, the ICC issued an order approving Ameren Illinois'
energy-efficiency plan that includes annual investments in electric
energy-efficiency programs up to approximately $100 million per year from 2022
through 2025. 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 recovered through the
electric distribution service performance-based formula ratemaking framework.
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 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. Our results of operations, financial position, and liquidity are
affected by our ability to align our overall spending, both operating and
capital, with the frameworks established by our regulators. 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 for additional
information regarding Ameren Missouri's, Ameren Illinois', and ATXI's regulatory
mechanisms.
We continue to assess the impacts of the COVID-19 pandemic on our businesses,
including impacts on electric and natural gas sales volumes, supply chain
operations, and bad debt expense. Regarding uncollectible accounts receivable,
Ameren Illinois' electric distribution and natural gas distribution businesses
have bad debt riders, which provide for recovery of bad debt write-offs, net of
any subsequent recoveries. Ameren Missouri does not have a bad debt rider or
tracker, and thus its earnings are exposed to increases in bad debt expense,
absent regulatory relief. However, Ameren Missouri does not expect a material
impact to earnings from increases in bad debt expense. As of June 30, 2021,
accounts receivable balances that were 30 days or greater past due or that were
a part of a deferred payment arrangement represented 26%, 17%, and 35%, or
$116 million, $32 million, and $84 million, of Ameren's, Ameren Missouri's, and
Ameren Illinois' customer trade receivables before allowance for doubtful
accounts, respectively. In comparison, as of June 30, 2019, these percentages
were 17%, 11%, and 25%, or $83 million, $24 million, and $59 million, for
Ameren, Ameren Missouri, and Ameren Illinois, respectively. Ameren Missouri's
electric sales volumes have been, and continue to be, affected by the COVID-19
pandemic. In the three and six months ended June 30, 2021, compared to the same
periods in 2020, Ameren Missouri experienced an increase in commercial and
industrial electric sales volumes, partially offset by decreased electric sales
volumes to higher margin residential customers, excluding the estimated effects
of weather and customer energy-efficiency programs. The following table provides
the increases and (decreases) in Ameren Missouri electric sales volumes by
customer class for the three and six months ended June 30, 2021, compared to the
same periods in 2020, excluding the estimated effects of weather and customer
energy-efficiency programs:
                                                                                Three months ended          Six months ended
                                                                                  June 30, 2021,             June 30, 2021,
                                                                                versus same period         versus same period
Ameren Missouri Customer Class                                                       in 2020                    in 2020
Residential                                                                                 (4.2) %                    (0.4) %
Commercial                                                                                   8.5  %                     2.5  %
Industrial                                                                                   7.0  %                     2.9  %
Total                                                                                        2.9  %                     1.2  %


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.
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Earnings Summary
The following table presents a summary of Ameren's earnings for the three and
six months ended June 30, 2021 and 2020:
                                                             Three Months   

Six months

                                                           2021        2020       2021       2020
Net income attributable to Ameren common shareholders    $   207      $ 243      $ 440      $ 389
Earnings per common share - diluted                         0.80       0.98 

1.71 1.57


Net income attributable to Ameren common shareholders decreased $36 million, or
18 cents per diluted share, in the three months ended June 30, 2021, compared
with the year-ago period. The decrease was due to net income decreases of
$41 million, $4 million, and $1 million at Ameren Missouri, Ameren Transmission,
and Ameren Illinois Natural Gas, respectively. These decreases were partially
offset by a $5 million increase in net income at Ameren Illinois Electric
Distribution and a $5 million decrease in the net loss for activity not reported
as part of a segment, primarily at Ameren (parent).
Net income attributable to Ameren common shareholders increased $51 million, or
14 cents per diluted share, in the six months ended June 30, 2021, compared with
the year-ago period. The increase was due to net income increases of $19
million, $16 million, $14 million, and $6 million at Ameren Illinois Natural
Gas, Ameren Missouri, Ameren Illinois Electric Distribution, and activity not
reported as part of a segment, primarily at Ameren (parent), respectively. These
increases were partially offset by a $4 million decrease in net income at Ameren
Transmission.
Earnings per diluted share were favorably affected in the three and six months
ended June 30, 2021, compared to the year-ago periods (except where a specific
period is referenced), by:
•the results of the MoPSC's March 2020 electric rate order, as discussed in Note
2 - Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K, which
reduced the base level of expenses at Ameren Missouri, partially offset by lower
base rates, net of recovery for amounts associated with the reduction in sales
volumes resulting from MEEIA programs and recoverable depreciation under the
PISA (10 cents per share for the six months ended June 30, 2021);
•increased rate base investments at Ameren Transmission and Ameren Illinois
Electric Distribution and a higher recognized ROE at Ameren Illinois Electric
Distribution, which increased revenues at the respective segments (4 cents and 9
cents per share, respectively);
•investments in infrastructure and wind generation pursuant to the PISA and the
RESRAM, which resulted in increased deferral of interest expense (5 cents and 7
cents per share, respectively);
•decreased other operations and maintenance expense not subject to riders and
trackers, primarily due to disciplined cost management and changes in the cash
surrender value of company-owned life insurance (5 cents per share for the six
months ended June 30, 2021);
•the impact of weather on electric retail sales at Ameren Missouri, primarily
resulting from colder winter temperatures experienced in 2021 (estimated at 1
cent and 5 cents per share, respectively);
•higher base rates pursuant to the ICC's January 2021 natural gas rate order,
which increased margins at Ameren Illinois Natural Gas (1 cent and 4 cents per
share, respectively);
•a change in rate design pursuant to the ICC's January 2021 natural gas rate
order that concentrates more revenues in the winter heating season due to an
increase in volumetric rates, which increased margins at Ameren Illinois Natural
Gas, but is not expected to materially impact full year results (3 cents per
share for the six months ended June 30, 2021);
•increased income tax benefit, primarily at Ameren (parent), due to increased
interim period income tax benefits in 2021, largely related to wind generation
facilities, which is not expected to materially impact full year results
(3 cents per share for the six months ended June 30, 2021);
•increased electric retail sales, excluding the estimated effects of weather, at
Ameren Missouri, largely due to improving economic conditions, which resulted in
increased sales volumes to commercial and industrial customers, partially offset
by decreased sales volumes to residential customers (3 cents and 2 cents per
share, respectively); and
•the absence of charitable donations made in 2020 pursuant to the MoPSC's March
2020 electric rate order (2 cents per share for the six months ended June 30,
2021).
Earnings per diluted share were unfavorably affected in the three and six months
ended June 30, 2021, compared to the year-ago periods (except where a specific
period is referenced), by:
•a change in rate design pursuant to the MoPSC's March 2020 electric rate order
that resulted in less revenues in the second quarter of 2021 due to a change in
the timing of transition from winter to summer volumetric rates, which decreased
margins at Ameren Missouri for the three and six months ended June 30, 2021, but
is not expected to materially impact full year results (19 cents per share for
both periods);
•the result of the FERC's March 2021 order, primarily related to the historical
recovery of materials and supplies inventories, which decreased Ameren
Transmission earnings in 2021; and the absence in 2021 of the FERC's May 2020
order addressing the allowed
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base ROE for FERC regulated transmission rate base under the MISO tariff, which
increased earnings in the year-ago periods (4 cents and 7 cents per share,
respectively);
•increased weighted-average basic common shares outstanding resulting from
issuances of common shares as detailed in Note 4 - Long-term Debt and Equity
Financings under Part I, Item 1, of this report, and Note 5 - Long Term Debt and
Equity Financings under Part II, Item 8, of the Form 10-K (3 cents and 6 cents
per share, respectively);
•increased other operations and maintenance expenses at Ameren Missouri due to
the amortization of expenses, beginning in January 2021, related to the 2020
scheduled refueling and maintenance outage at the Callaway Energy Center
pursuant to the MoPSC's February 2020 order, and increased energy center
maintenance costs for the three months ended June 30, 2021, due to the deferral
of projects in the year-ago period (4 cents per share for both periods);
•increased financing costs primarily at Ameren Missouri and Ameren (parent),
largely due to higher long-term debt balances (2 cents and 4 cents per share,
respectively); and
•increased depreciation and amortization expenses not recoverable under riders
or trackers at Ameren Missouri and Ameren Illinois Natural Gas, primarily due to
additional property, plant, and equipment investments (1 cent and 2 cents per
share, respectively).
The cents per share variances above are presented based on the weighted-average
basic common shares outstanding in the three and six months ended June 30, 2020,
and do not reflect the impact of dilution on earnings per share, unless
otherwise noted. Amounts other than variances related to income taxes have been
presented net of income taxes using Ameren's 2021 blended federal and state
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 Expenses, Taxes Other Than Income Taxes, Other Income, Net,
Interest Charges, and Income Taxes, see the major headings below.
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Below is Ameren table of income statement items by segment for the three and six months ended June 30, 2021 and 2020:

                                                              Ameren
                                                             Illinois               Ameren                                        Other /
                                         Ameren              Electric              Illinois                Ameren               Intersegment
                                        Missouri           Distribution           Natural Gas           Transmission            Eliminations           Ameren
Three Months 2021:
Electric margins                       $    566          $         289          $          -          $          136          $          (9)         $   982
Natural gas margins                          15                      -                   108                       -                      -              123
Other operations and maintenance
expenses                                   (218)                  (129)                  (53)                    (14)                     2             

(412)

Depreciation and amortization expenses     (157)                   (77)                  (22)                    (27)                    (2)            

(285)

Taxes other than income taxes               (85)                   (18)                  (15)                     (2)                    (2)            (122)
Other income, net                            24                     11                     3                       2                      9               49
Interest charges                            (36)                   (19)                  (10)                    (20)                   (11)             (96)
Income (taxes) benefit                        3                    (16)                   (3)                    (20)                     5              (31)
Net income (loss)                           112                     41                     8                      55                     (8)             208
Noncontrolling interests - preferred
stock dividends                              (1)                     -                     -                       -                      -             

(1)

Net income (loss) attributable to
Ameren common shareholders             $    111          $          41          $          8          $           55          $          (8)         $   207
Three Months 2020:
Electric margins                       $    615          $         264          $          -          $          136          $          (6)         $ 1,009
Natural gas margins                          15                      -                   104                       -                      -              119
Other operations and maintenance
expenses                                   (202)                  (118)                  (52)                    (15)                     3             

(384)

Depreciation and amortization expenses     (155)                   (71)                  (20)                    (23)                    (2)            

(271)

Taxes other than income taxes               (83)                   (19)                  (13)                     (2)                    (2)            (119)
Other income, net                            25                      9                     5                       3                      6               48
Interest charges                            (50)                   (18)                  (10)                    (18)                   (12)            (108)
Income taxes                                (12)                   (11)                   (4)                    (22)                    (1)             (50)
Net income (loss)                           153                     36                    10                      59                    (14)             244
Noncontrolling interests - preferred
stock dividends                              (1)                     -                    (1)                      -                      1             

(1)

Net income (loss) attributable to
Ameren common shareholders             $    152          $          36          $          9          $           59          $         (13)         $   243
Six Months 2021:
Electric margins                       $  1,054          $         578          $          -          $          266          $         (16)         $ 1,882
Natural gas margins                          47                      -                   321                       -                      -              368
Other operations and maintenance
expenses                                   (443)                  (254)                 (109)                    (30)                     4             

(832)

Depreciation and amortization expenses     (313)                  (152)                  (44)                    (55)                    (2)            

(566)

Taxes other than income taxes              (162)                   (38)                  (40)                     (4)                    (6)            (250)
Other income, net                            47                     19                     6                       5                     18               95
Interest charges                            (75)                   (37)                  (20)                    (43)                   (21)            (196)
Income (taxes) benefit                        5                    (28)                  (31)                    (37)                    33              (58)
Net income                                  160                     88                    83                     102                     10              443
Noncontrolling interests - preferred
stock dividends                              (2)                    (1)                    -                       -                      -             

(3)

Net income attributable to Ameren
common shareholders                    $    158          $          87          $         83          $          102          $          10          $   440
Six Months 2020:
Electric margins                       $  1,067          $         544          $          -          $          259          $         (15)         $ 1,855
Natural gas margins                          46                      -                   286                       -                      -              332
Other operations and maintenance
expenses                                   (441)                  (248)                 (109)                    (29)                     5             

(822)

Depreciation and amortization expenses     (294)                  (142)                  (41)                    (47)                    (2)            

(526)

Taxes other than income taxes              (162)                   (38)                  (35)                     (4)                    (5)            (244)
Other income, net                            29                     16                     7                       5                     12               69
Interest charges                            (90)                   (36)                  (20)                    (39)                   (16)            (201)
Income (taxes) benefit                      (11)                   (22)                  (23)                    (39)                    24              (71)
Net income                                  144                     74                    65                     106                      3              392
Noncontrolling interests - preferred
stock dividends                              (2)                    (1)                   (1)                      -                      1             

(3)

Net income attributable to Ameren
common shareholders                    $    142          $          73          $         64          $          106          $           4          $   389


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Below is Ameren Illinois’ table of income statement items by segment for the three and six months ended June 30, 2021 and 2020:

                                                     Ameren
                                                    Illinois                Ameren                  Ameren
                                                    Electric               Illinois                Illinois                     Ameren
                                                  Distribution            Natural Gas            Transmission                  Illinois
Three Months 2021:
Electric and natural gas margins                $         289          $         108          $            88                $     485
Other operations and maintenance expenses                (129)                   (53)                     (11)                    (193)
Depreciation and amortization expenses                    (77)                   (22)                     (18)                    (117)
Taxes other than income taxes                             (18)                   (15)                      (1)                     (34)
Other income, net                                          11                      3                        2                       16
Interest charges                                          (19)                   (10)                     (11)                     (40)
Income taxes                                              (16)                    (3)                     (12)                     (31)

Net income attributable to common shareholders $ 41 $

        8          $            37                $      86
Three Months 2020:
Electric and natural gas margins                $         264          $         104          $            87                $     455
Other operations and maintenance expenses                (118)                   (52)                     (12)                    (182)
Depreciation and amortization expenses                    (71)                   (20)                     (16)                    (107)
Taxes other than income taxes                             (19)                   (13)                       -                      (32)
Other income, net                                           9                      5                        3                       17
Interest charges                                          (18)                   (10)                     (10)                     (38)
Income taxes                                              (11)                    (4)                     (14)                     (29)
Net income                                                 36                     10                       38                       84
Preferred stock dividends                                   -                     (1)                       -                       (1)

Net income attributable to common shareholders $ 36

        9          $            38                $      83
Six Months 2021:
Electric and natural gas margins                $         578          $         321          $           169                $   1,068
Other operations and maintenance expenses                (254)                  (109)                     (24)                    (387)
Depreciation and amortization expenses                   (152)                   (44)                     (36)                    (232)
Taxes other than income taxes                             (38)                   (40)                      (2)                     (80)
Other income, net                                          19                      6                        5                       30
Interest charges                                          (37)                   (20)                     (25)                     (82)
Income taxes                                              (28)                   (31)                     (22)                     (81)
Net income                                                 88                     83                       65                      236
Preferred stock dividends                                  (1)                     -                        -                       (1)

Net income attributable to common shareholders $ 87 $

       83          $            65                $     235
Six Months 2020:
Electric and natural gas margins                $         544          $         286          $           161                $     991
Other operations and maintenance expenses                (248)                  (109)                     (24)                    (381)
Depreciation and amortization expenses                   (142)                   (41)                     (31)                    (214)
Taxes other than income taxes                             (38)                   (35)                      (1)                     (74)
Other income, net                                          16                      7                        5                       28
Interest charges                                          (36)                   (20)                     (21)                     (77)
Income taxes                                              (22)                   (23)                     (23)                     (68)
Net income                                                 74                     65                       66                      205
Preferred stock dividends                                  (1)                    (1)                       -                       (2)

Net income attributable to common shareholders $ 73

       64          $            66                $     203


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.
                                       46
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Electric Margins
                                                Increase (Decrease) by Segment
                                                                        Overall Ameren Increase
                                Overall Ameren Decrease                   of $27 Million (YTD
                               of $27 Million (QTD YoY)                          YoY)
      Total by Segment(a)


[[Image Removed: aee-20210630_g4.jpg]][[Image Removed: aee-20210630_g5.jpg]][[Image Removed: aee-20210630_g6.jpg]]
(a)Includes other/intersegment eliminations of $(9) million and $(6) million in
the three months ended June 30, 2021 and 2020. Also includes other/intersegment
eliminations of $(16) million and $(15) million in the six months ended June 30,
2021 and 2020, respectively.
      Ameren Missouri         Ameren Illinois Electric Distribution              Ameren Transmission           Other/Intersegment Eliminations


Natural Gas Margins
                                               Increase (Decrease) by Segment
                             Overall Ameren Increase                 Overall Ameren Increase of
      Total by Segment       of $4 Million (QTD YoY)                    $36 Million (YTD YoY)

[[Image Removed: aee-20210630_g7.jpg]][[Image Removed: aee-20210630_g8.jpg]][[Image Removed: aee-20210630_g9.jpg]]

                         Ameren Missouri         Ameren Illinois Natural Gas


                                       47
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The following tables present the favorable (unfavorable) variations by Ameren
segment for electric and natural gas margins for the six months ended June 30,
2021, compared with the year-ago periods:
                                                                            

Electricity and natural gas margins

Ameren Illinois

                                                                          Electric             Ameren Illinois                                        

Other / Intersegment

               Three Months                  Ameren Missouri            Distribution             Natural Gas             Ameren Transmission(a)             Eliminations             Ameren
Electric revenue change:
Effect of weather (estimate)(b)             $             5          $             -          $             -          $                     -          $                -          $    5
Base rates (estimate)(c)                                  -                       19                        -                                -                           -              19

Sales volumes and changes in customer usage
patterns (excluding the estimated effects
of weather and MEEIA)                                    11                        -                        -                                -                           -              11
Change in rate design                                   (63)                       -                        -                                -                           -             (63)
Customer demand charges                                   2                        -                        -                                -                           -               2

Off-system sales, capacity, and FAC
revenues, net                                            54                        -                        -                                -                           -              54
Energy-efficiency program investment
revenues                                                  -                        2                        -                                -                           -               2
Other                                                     5                        3                        -                                -                          (7)              1
Cost recovery mechanisms - offset in fuel
and purchased power(d)                                   11                       11                        -                                -                           -              22
Other cost recovery mechanisms(e)                        (7)                       1                        -                                -                           -              (6)
Total electric revenue change               $            18          $            36          $             -          $                     -          $               (7)         $   47
Fuel and purchased power change:
Energy costs (excluding the estimated
effect of weather)                          $           (53)         $             -          $             -          $                     -          $                -          $  (53)
Effect of weather (estimate)(b)                          (1)                       -                        -                                -                           -              (1)

Other                                                    (2)                       -                        -                                -                           4               2
Cost recovery mechanisms - offset in
electric revenue(d)                                     (11)                     (11)                       -                                -                           -             (22)
Total fuel and purchased power change       $           (67)         $           (11)         $             -          $                     -          $                4          $  (74)
Net change in electric margins              $           (49)         $            25          $             -          $                     -          $               (3)         $  (27)
Natural gas revenue change:
Effect of weather (estimate)(b)             $            (1)         $             -          $             -          $                     -          $                -          $   (1)
Base rates (estimate)                                     -                        -                        4                                -                           -               4
Change in rate design                                     -                        -                       (4)                               -                           -              (4)

Other                                                     -                        -                        2                                -                           -               2
Cost recovery mechanisms - offset in
natural gas purchased for resale(d)                       -                        -                       24                                -                           -              24
Other cost recovery mechanisms(e)                         -                        -                        2                                -                           -               2
Total natural gas revenue change            $            (1)         $             -          $            28          $                     -          $                -          $   27
Natural gas purchased for resale change:
Effect of weather (estimate)(b)             $             1          $             -          $             -          $                     -                           -          $    1

Cost recovery mechanisms - offset in
natural gas revenue(d)                                    -                        -                      (24)                               -                           -             (24)
Total natural gas purchased for resale
change                                      $             1          $             -          $           (24)         $                     -          $                -          $  (23)
Net change in natural gas margins           $             -          $             -          $             4          $                     -          $                -          $    4


                                       48
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Ameren Illinois

                                                                          Electric             Ameren Illinois                                        

Other / Intersegment

                Six Months                   Ameren Missouri            Distribution             Natural Gas             Ameren Transmission(a)             Eliminations             Ameren
Electric revenue change:
Effect of weather (estimate)(b)             $            23          $             -          $             -          $                     -          $                -          $   23
Base rates (estimate)(c)                                 (6)                      22                        -                                7                           -              23
Sales volumes and changes in customer usage
patterns (excluding the estimated effects
of weather and MEEIA)                                     8                        -                        -                                -                           -               8
Change in rate design                                   (63)                       -                        -                                -                           -             (63)

Off-system sales, capacity, and FAC
revenues, net                                            49                        -                        -                                -                           -              49
Energy-efficiency program investment
revenues                                                  -                        5                        -                                -                           -               5
Other                                                     4                        6                        -                                -                          (9)              1
Cost recovery mechanisms - offset in fuel
and purchased power(d)                                   14                       24                        -                                -                           -              38
Other cost recovery mechanisms(e)                        (1)                       -                        -                                -                           -              (1)
Total electric revenue change               $            28          $            57          $             -          $                     7          $               (9)         $   83
Fuel and purchased power change:
Energy costs (excluding the estimated
effect of weather)                          $           (53)         $             -          $             -          $                     -          $                -          $  (53)
Effect of weather (estimate)(b)                          (6)                       -                        -                                -                           -              (6)
Effect of lower net energy costs included
in base rates                                            36                        -                        -                                -                           -              36

Other                                                    (4)                       1                        -                                -                           8               5
Cost recovery mechanisms - offset in
electric revenue(d)                                     (14)                     (24)                       -                                -                           -             (38)
Total fuel and purchased power change       $           (41)         $           (23)         $             -          $                     -          $                8          $  (56)
Net change in electric margins              $           (13)         $            34          $             -          $                     7          $               (1)         $   27
Natural gas revenue change:
Effect of weather (estimate)(b)             $             3          $             -          $             -          $                     -          $                -          $    3
Base rates (estimate)                                     -                        -                       16                                -                           -              16
Change in rate design                                     -                        -                        8                                -                           -               8

Other                                                     -                        -                        5                                -                           -               5
Cost recovery mechanisms - offset in
natural gas purchased for resale(d)                      10                        -                       68                                -                           -              78
Other cost recovery mechanisms(e)                         -                        -                        7                                -                           -               7
Total natural gas revenue change            $            13          $             -          $           104          $                     -          $                -          $  117
Natural gas purchased for resale change:
Effect of weather (estimate)(b)             $            (2)         $             -          $             -          $                     -                           -          $   (2)
Other                                                     -                        -                       (1)                               -                           -              (1)
Cost recovery mechanisms - offset in
natural gas revenue(d)                                  (10)                       -                      (68)                               -                           -             (78)
Total natural gas purchased for resale
change                                      $           (12)         $             -          $           (69)         $                     -          $                -          $  (81)
Net change in natural gas margins           $             1          $             -          $            35          $                     -          $                -          $   36


(a)Includes an increase in transmission margins of $1 million and $8 million at
Ameren Illinois for the three and six months ended June 30, 2021, compared with
the year-ago periods.
(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 periods; 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. For Ameren Missouri,
base rates exclude an increase of $7 million for the recovery of lost electric
margins for the six months ended June 30, 2021, compared with the year-ago
period, resulting from the MEEIA 2016 and 2019 customer energy-efficiency
programs. This amount is included in the "sales volumes and changes in customer
usage patterns (excluding the estimated effects of weather and MEEIA)" line
item.
(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 and "Income Taxes" in the
statement of income. These items have no overall impact on earnings.
                                       49
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Ameren

Ameren's electric margins decreased $27 million, or 3%, for the three months
ended June 30, 2021, compared with the year-ago period, primarily because of
decreased margins at Ameren Missouri, partially offset by increased margins at
Ameren Illinois Electric Distribution, as discussed below. Ameren's electric
margins increased $27 million, or 1%, for the six months ended June 30, 2021,
compared with the year-ago periods, primarily because of increased margins at
Ameren Illinois Electric Distribution and Ameren Transmission, partially offset
by decreased margins at Ameren Missouri, as discussed below. Ameren's natural
gas margins increased $4 million, or 3%, and $36 million, or 11%, for the three
and six months ended June 30, 2021, respectively, compared with the year-ago
periods, primarily because of increased margins at Ameren Illinois Natural Gas,
as discussed below.
Ameren Transmission
Ameren Transmission's margins were comparable between the three months ended
June 30, 2021 and 2020. Ameren Transmission's margins increased $7 million, or
3%, for the six months ended June 30, 2021, compared with the year-ago period.
Base rate revenues were favorably affected by increased capital investment, as
evidenced by a 12% increase in rate base used to calculate the revenue
requirement, partially offset by the absence in 2021 of the FERC's May 2020
order addressing the allowed base ROE, and the effect of the FERC's March 2021
order, which required refunds related to historical recovery of materials and
supplies inventories. See Transmission Formula Rate Revisions in Note 2 - Rate
and Regulatory Matters under Part I, Item 1, of this report for additional
information regarding the May 2020 and March 2021 FERC orders.
Ameren Missouri
Ameren Missouri's electric margins decreased $49 million, or 8%, and $13
million, or 1%, for the three and six months ended June 30, 2021, respectively,
compared with the year-ago periods. Fuel and purchased power costs increased $11
million and $14 million for the three and six months ended June 30, 2021,
respectively, primarily resulting from higher electric prices, the Callaway
Energy Center maintenance outage, and, for the six month comparison, a
significant increase in customer demand for electricity in mid-February 2021 due
to extremely cold weather. The increased fuel and purchased power costs were
fully offset by an increase in electric revenues, resulting in no impact to
margin. The increase in purchased power cost is reflected in "Cost recovery
mechanisms - offset in electric revenue" and the associated recoverability from
customers is reflected in "Cost recovery mechanisms - offset in fuel and
purchased power" in the table above.
The following items had an unfavorable effect on Ameren Missouri's electric
margins for three and six months ended June 30, 2021, compared with the year-ago
periods (except when a specific period is referenced):
•The implementation of a change in rate design pursuant to the March 2020 MoPSC
electric rate order decreased margins $63 million in both periods. The change in
rate design applies lower winter rates to May sales volumes and higher summer
rates to September sales volumes beginning in 2021. Previously, blended rates
were applied in both months' sales volumes. As the decrease in margins
associated with May sales volumes is expected to be offset by increases
associated with September sales volumes, the change is not expected to
materially affect annual earnings comparisons.
•The absence of the Callaway Energy Center generation and extremely cold weather
in mid-February 2021, partially offset by insurance recoveries related to the
Callaway Energy Center maintenance outage, drove net energy costs higher than
those reflected in base rates, which reduced margins by $4 million, resulting
from Ameren Missouri's 5% exposure to net energy cost variances under the FAC
for the six months ended June 30, 2021. The change in net energy costs is the
sum of the revenue change in "Off-system sales, capacity and FAC revenues, net"
(+$49 million) and the change in "Energy costs (excluding the estimated effect
of weather)" (-$53 million) in the table above. See Note 10 - Callaway Energy
Center under Part I, Item 1, of this report for additional information on
insurance recoveries related to the outage.
The following items had a favorable effect on Ameren Missouri's electric margins
for three and six months ended June 30, 2021, compared with the year-ago periods
(except when a specific period is referenced):
•The March 2020 MoPSC electric rate order that resulted in lower net energy
costs included in base rates, partially offset by lower electric base rates,
increased margins $30 million for the six months ended June 30, 2021. The change
in electric base rates is the sum of the change in "Base rates (estimate)" (-$6
million) and the "Effect of lower net energy costs included in base rates" (+$36
million) in the table above.
•Excluding the estimated effects of weather and the MEEIA customer
energy-efficiency programs, electric revenues increased an estimated $11 million
and $8 million, respectively. The increase was primarily due to an increase in
sales volumes, which were unfavorably affected by the COVID-19 pandemic in 2020,
and an increase in the average retail price per kilowatthour due to changes in
customer usage patterns. While the MEEIA customer energy-efficiency programs
reduced retail sales volumes, the recovery of lost electric margins under the
MEEIA ensured that electric margins were not affected.
•Summer temperatures were warmer as cooling degree days increased 7% for the
three months ended June 30, 2021, and winter temperatures were colder as heating
degree days increased 7% for the six months ended June 30, 2021. The aggregate
effect of
                                       50
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weather increased margins an estimated $4 million and $17 million, respectively.
The change in margins due to weather is the sum of the "Effect of weather
(estimate)" on electric revenues (+$5 million and +$23 million, respectively)
and the "Effect of weather (estimate) on fuel and purchased power" (-$1 million
and -$6 million, respectively) in the table above.
•Lower net energy costs increased margins $1 million for the three months ended
June 30, 2021. The change in net energy costs is the sum of "Off-system sales,
capacity and FAC revenues, net" (+$54 million) and "Energy costs (excluding the
estimated effect of weather)" (-$53 million) in the table above.
Ameren Missouri's natural gas margins were comparable between periods. Purchased
gas costs increased $10 million for the six months ended June 30, 2021,
primarily resulting from the significant increase in customer demand and prices
for natural gas in mid-February 2021 due to extremely cold weather. The
increased purchased gas costs are fully offset by an increase in natural gas
revenues under the PGA rider, resulting in no impact to margin. The increase in
purchased gas cost is reflected in "Cost recovery mechanisms - offset in natural
gas revenue" and the associated recoverability from customers is reflected in
"Cost recovery mechanisms - offset in natural gas purchased for resale" in the
table above.
Ameren Illinois
Ameren Illinois' electric margins increased $26 million, or 7%, and $42 million,
or 6%, for the three and six months ended June 30, 2021, respectively, compared
with the year-ago periods, driven by increased margins at Ameren Illinois
Electric Distribution and Ameren Illinois Transmission. Ameren Illinois Natural
Gas' margins increased $4 million, or 4%, and $35 million, or 12%, for the three
and six months ended June 30, 2021, respectively, compared with the year-ago
periods.
Ameren Illinois Electric Distribution
Ameren Illinois Electric Distribution's margins increased $25 million, or 9%,
and $34 million, or 6%, for the three and six months ended June 30, 2021,
respectively, compared with the year-ago periods. Purchased power costs
increased $11 million and $24 million for the three and six months ended
June 30, 2021, respectively, primarily resulting from higher electric prices
and, for the six month comparison, the significant increase in customer demand
for electricity in mid-February 2021 due to extremely cold weather. The
increased purchased power costs are fully offset by an increase in electric
revenues under the cost recovery mechanisms for purchased power, resulting in no
impact to margin. The increase in purchased power cost is reflected in "Cost
recovery mechanisms - offset in electric revenue" and the associated
recoverability from customers is reflected in "Cost recovery mechanisms - offset
in fuel and purchased power" in the table above. The following items had a
favorable effect on Ameren Illinois Electric Distribution's margins for the
three and six months ended June 30, 2021, compared with the year-ago periods:
•Margins increased due to a higher recognized ROE (+$4 million and +$7 million,
respectively), as evidenced by an increase of 74 basis points in the estimated
annual average of the monthly yields of the 30-year United States Treasury
bonds, increased capital investment (+$2 million and +$4 million, respectively),
as evidenced by a 7% increase in rate base used to calculate the revenue
requirement, and higher recoverable non-purchased power expenses (+$13 million
and +$11 million, respectively). The sum of these changes collectively increased
margins $19 million and $22 million, respectively.
•Revenues increased $2 million and $5 million, respectively, due to recovery of
increased energy-efficiency program investments under performance-based formula
ratemaking.
Ameren Illinois Natural Gas
Ameren Illinois Natural Gas' margins increased $4 million, or 4%, and $35
million, or 12%, for the three and six months ended June 30, 2021, respectively,
compared with the year-ago periods. Purchased gas costs increased $24 million
and $68 million for the three and six months ended June 30, 2021, primarily
resulting from higher natural gas prices and, for the six month comparison, the
significant increase in customer demand for natural gas in mid-February 2021 due
to extremely cold weather. The increased purchased gas costs are fully offset by
an increase in natural gas revenues under the PGA rider, resulting in no impact
to margin. The increase in purchased gas cost is reflected in "Cost recovery
mechanisms - offset in natural gas revenue" and the associated recoverability
from customers is reflected in "Cost recovery mechanisms - offset in natural gas
purchased for resale" in the table above. The following items had a favorable
effect on Ameren Illinois Natural Gas' margins for the three and six months
ended June 30, 2021, compared with the year-ago periods (except when a specific
period is referenced):
•Revenues increased $4 million and $16 million, respectively, due to higher
natural gas base rates as a result of the January 2021 natural gas rate order.
•The implementation of a change in rate design pursuant to the January 2021
natural gas rate order, which increased margins $8 million for the six months
ended June 30, 2021. This change in rate design concentrates more revenues in
the winter heating season due to an increase in volumetric rates and a decrease
in fixed customer rates. As such, the change is not expected to materially
affect annual earnings comparisons.
                                       51
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Ameren Illinois Natural Gas' margins decreased due to the implementation of a
change in rate design pursuant to the January 2021 natural gas rate order, which
decreased margins $4 million for the three months ended June 30, 2021. As noted
above, the change is not expected to materially affect annual earnings
comparisons.
Ameren Illinois Transmission
Ameren Illinois Transmission's margins increased $1 million, or 1%, and $8
million, or 5%, for the three and six months ended June 30, 2021, respectively,
compared with the year-ago periods. Margins were favorably affected by increased
capital investment, as evidenced by a 18% increase in rate base used to
calculate the revenue requirement, partially offset by the absence in 2021 of
the FERC's May 2020 order addressing the allowed base ROE, and the effect of the
FERC's March 2021 order, which required refunds related to historical recovery
of materials and supplies inventories. See Transmission Formula Rate Revisions
in Note 2 - Rate and Regulatory Matters under Part I, Item 1, of this report for
additional information regarding the May 2020 and March 2021 FERC orders.
Other Operations and Maintenance Expenses
                                                Increase (Decrease) by Segment
                                                                        Overall Ameren Increase
                                Overall Ameren Increase                   of $10 Million (YTD
      Total by Segment(a)      of $28 Million (QTD YoY)                          YoY)



[[Image Removed: aee-20210630_g10.jpg]][[Image Removed: aee-20210630_g11.jpg]][[Image Removed: aee-20210630_g12.jpg]]
(a)Includes $14 million and $15 million at Ameren Transmission in the three
months ended June 30, 2021 and 2020, respectively. Includes other/intersegment
eliminations of $(2) million and $(3) million in the three months ended June 30,
2021 and 2020, respectively. Also includes other/intersegment eliminations of
$(4) million and $(5) million in the six months ended June 30, 2021 and 2020,
respectively.

Ameren Missouri Ameren Illinois Natural Gas Other / intersegment eliminations

       Ameren Illinois
       Electric                Ameren Transmission
       Distribution


Ameren
Other operations and maintenance expenses increased $28 million and $10 million
in the three and six months ended June 30, 2021, compared with the year-ago
periods, due to changes discussed below.
Ameren Transmission
Other operations and maintenance expenses were comparable between periods.
Ameren Missouri
Other operations and maintenance expenses increased $16 million in the three
months ended June 30, 2021, compared with the year-ago period. Other operations
and maintenance expenses were comparable between the six months ended June 30,
2021 and 2020. The
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following items increased other operations and maintenance expenses in the three
and six months ended June 30, 2021, compared with the year-ago periods (except
where a specific period is referenced):
•Callaway Energy Center refueling operations and maintenance costs increased $7
million and $14 million, respectively, because of the amortization of those
costs, beginning in January 2021, which were previously deferred as a regulatory
asset, pursuant to the MoPSC's February 2020 order.
•Energy center maintenance costs, other than Callaway refueling and maintenance
costs, increased $6 million and $7 million, respectively, primarily due to the
deferral of projects in the year-ago period.
•Customer energy-efficiency program costs increased $8 million in the six months
ended June 30, 2021, because of increased participation in the MEEIA programs in
the current-year period.
•The cash surrender value of company-owned life insurance decreased $5 million
because of less favorable market returns in the three months ended June 30,
2021, compared with the year-ago period.
The following items partially offset the above increases in other operations and
maintenance expenses in the six months ended June 30, 2021, compared with the
year-ago period:
•Amortization of costs, primarily solar rebate costs pursuant to the MoPSC's
March 2020 electric rate order, decreased $8 million.
•Transmission and distribution expenditures decreased $6 million, primarily
resulting from less maintenance and meter reading costs, because of recent
capital improvements related to the Smart Energy Plan.
•Deferral to a regulatory asset of $5 million of certain prior period costs
incurred related to the COVID-19 pandemic, pursuant to the MoPSC's March 2021
orders.
•The cash surrender value of company-owned life insurance increased $4 million
because of more favorable market returns in the six months ended June 30, 2021,
compared with the year-ago period.
Ameren Illinois
Other operations and maintenance expenses increased $11 million and $6 million
in the three and six months ended June 30, 2021, compared with the year-ago
periods, as discussed below. Other operations and maintenance expenses were
comparable between periods at Ameren Illinois Natural Gas and Ameren Illinois
Transmission.
Ameren Illinois Electric Distribution
Other operations and maintenance expenses increased $11 million and $6 million
in the three and six months ended June 30, 2021, compared with the year-ago
periods. The following items increased other operations and maintenance expenses
in the three and six months ended June 30, 2021, compared with the year-ago
periods (except where a specific period is referenced):
•Employee benefit costs increased $3 million and $4 million, respectively,
primarily because of higher medical and pension costs.
•Amortization of regulatory assets associated with energy-efficiency program
investments under performance-based formula ratemaking increased $2 million and
$4 million, respectively.
•Distribution expenditures increased $3 million in the three months ended
June 30, 2021, primarily because of increased storm costs.
•The cash surrender value of company-owned life insurance decreased $2 million
because of less favorable market returns in the three months ended June 30,
2021, compared with the year-ago period.
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Depreciation charges

                                                 Increase (Decrease) by Segment
                                Overall Ameren Increase             Overall Ameren Increase
                                  of $14 Million (QTD                 of $40 Million (YTD
       Total by Segment(a)               YoY)                                YoY)



[[Image Removed: aee-20210630_g13.jpg]][[Image Removed: aee-20210630_g14.jpg]][[Image Removed: aee-20210630_g15.jpg]]
(a)Includes other/intersegment eliminations of $2 million and $2 million in the
three months ended June 30, 2021 and 2020, respectively. Also includes
other/intersegment eliminations of $2 million and $2 million in the six months
ended June 30, 2021 and 2020, respectively.

Ameren Missouri Ameren Illinois Natural Gas Other / intersegment eliminations

       Ameren Illinois
       Electric                Ameren Transmission
       Distribution


Depreciation and amortization expenses increased $14 million and $10 million in
the three months ended June 30, 2021, and $40 million and $18 million in the six
months ended June 30, 2021, compared with the year-ago periods, at Ameren and
Ameren Illinois, respectively, primarily because of additional property, plant,
and equipment investments across their respective segments. Depreciation and
amortization expenses were comparable at Ameren Missouri between the three
months ended June 30, 2021 and 2020. Depreciation and amortization expenses
increased $19 million at Ameren Missouri in the six months ended June 30, 2021,
compared with the year-ago period, primarily because of additional property,
plant, and equipment investments. Ameren's and Ameren Missouri's depreciation
and amortization expenses reflected a deferral to a regulatory asset of
depreciation and amortization expenses pursuant to the PISA and the RESRAM. The
PISA and RESRAM deferrals of depreciation and amortization expenses were $22
million and $1 million for the three months ended June 30, 2021 and 2020,
respectively, and $41 million and $14 million for the six months ended June 30,
2021 and 2020, respectively.
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Taxes Other Than Income Taxes
                                                Increase (Decrease) by Segment
                                Overall Ameren Increase                 Overall Ameren Increase
      Total by Segment(a)       of $3 Million (QTD YoY)                 of $6 Million (YTD YoY)

                    [[Image Removed: aee-20210630_g16.jpg]]
 [[Image Removed: aee-20210630_g17.jpg]][[Image Removed: aee-20210630_g18.jpg]]
(a)Includes $2 million, $2 million, $4 million, and $4 million at Ameren
Transmission in the three months ended June 30, 2021 and 2020, and in the six
months ended June 30, 2021 and 2020, respectively. Also includes
other/intersegment eliminations of $2 million, $2 million, $6 million, and
$5 million in the three months ended June 30, 2021 and 2020, and in the six
months ended June 30, 2021 and 2020, respectively.

Ameren Missouri Ameren Illinois Natural Gas Other / intersegment eliminations

       Ameren Illinois
       Electric                Ameren Transmission
       Distribution


Taxes other than income taxes increased $3 million at Ameren in the three months
ended June 30, 2021, compared with the year-ago period, primarily because of
increased property taxes across Ameren segments. Taxes other than income taxes
were comparable at Ameren Missouri and Ameren Illinois between the three months
ended June 30, 2021 and 2020. Taxes other than income taxes increased $6 million
at Ameren and Ameren Illinois in the six months ended June 30, 2021, compared
with the year-ago period, primarily because of a $4 million increase in excise
taxes at Ameren Illinois Natural Gas, as a result of increased sales. Taxes
other than income taxes were comparable at Ameren Missouri between the six
months ended June 30, 2021 and 2020.
                                       55
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Other Income, Net
                                                Increase (Decrease) by Segment
                                                                        Overall Ameren Increase
                                Overall Ameren Increase                   of $26 Million (YTD
      Total by Segment(a)       of $1 Million (QTD YoY)                          YoY)


[[Image Removed: aee-20210630_g19.jpg]][[Image Removed: aee-20210630_g20.jpg]][[Image Removed: aee-20210630_g21.jpg]](a) Includes $ 2 million and $ 3 million To Ameren Transmission during the three months ended June 30, 2021 and 2020, respectively.

Ameren Missouri Ameren Illinois Natural Gas Other / intersegment eliminations

       Ameren Illinois
       Electric                Ameren Transmission
       Distribution


Other income, net, was comparable at Ameren, Ameren Missouri, and Ameren
Illinois between the three months ended June 30, 2021 and 2020. Other income,
net, increased $26 million and $18 million at Ameren and Ameren Missouri,
respectively, in the six months ended June 30, 2021, compared with the year-ago
period, primarily because of a $9 million increase in the non-service cost
components of net periodic benefit income at Ameren Missouri and an $8 million
decrease in charitable donations at Ameren Missouri due to the absence of
charitable donations made in the year-ago period pursuant to the MoPSC's March
2020 electric rate order. Other income, net, also increased $6 million at Ameren
in the six months ended June 30, 2021, compared with the year-ago period for
activity not reported as part of a segment, primarily because of increased
income from equity method investments. Other income, net was comparable at
Ameren Illinois between the six months ended June 30, 2021 and 2020.
See Note 5 - Other Income, Net, under Part I, Item 1, of this report for
additional information.
                                       56
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Interest Charges
                                               Increase (Decrease) by Segment
                             Overall Ameren Decrease                 Overall Ameren Decrease of
      Total by Segment      of $12 Million (QTD YoY)                    $5 Million (YTD YoY)

[[Image Removed: aee-20210630_g22.jpg]][[Image Removed: aee-20210630_g23.jpg]][[Image Removed: aee-20210630_g24.jpg]]

Ameren Missouri Ameren Illinois Natural Gas Other / intersegment eliminations

       Ameren Illinois
       Electric                Ameren Transmission
       Distribution


Interest charges decreased $12 million and $14 million in the three months ended
June 30, 2021, and $5 million and $15 million in the six months ended June 30,
2021, at Ameren and Ameren Missouri, respectively, compared with the year-ago
periods, primarily because of increased deferrals to a regulatory asset of
interest charges pursuant to the PISA and the RESRAM. The PISA and RESRAM
deferrals of interest charges were $19 million and $1 million in the three
months ended June 30, 2021 and 2020, respectively, and $34 million and $9
million in the six months ended June 30, 2021 and 2020, respectively. Interest
charges were comparable at Ameren Illinois between the three months ended
June 30, 2021 and 2020. Interest charges increased $5 million at Ameren Illinois
in the six months ended June 30, 2021, compared with the year-ago period.
The following items partially offset the decreases in interest charges in the
three and six months ended June 30, 2021, compared with the year-ago periods
(except where a specific period is referenced):
•Issuance of long-term debt at Ameren Missouri in October 2020 increased
interest charges by $4 million and $7 million, respectively.
•Issuance of long-term debt at Ameren (parent) in April 2020 increased interest
charges by $7 million in the six months ended June 30, 2021, compared with the
year-ago period.
•Interest charges increased by $4 million in the six months ended June 30, 2021,
compared with the year-ago period, at Ameren Illinois Transmission as a result
of the FERC's March 2021 order and the Ameren Illinois issuance of long-term
debt in November 2020.
                                       57
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Income Taxes
The following table presents effective income tax rates for the three and six
months ended June 30, 2021 and 2020:
                                                        Three Months(a)               Six Months(a)
                                                                        2021          2020          2021      2020
Ameren                                                                  13  %             17  %     12  %     15  %
Ameren Missouri                                                         (3) %              7  %     (3) %      7  %
Ameren Illinois                                                         26  %             26  %     25  %     25  %
Ameren Illinois Electric Distribution                                   25  %             25  %     24  %     24  %
Ameren Illinois Natural Gas                                             29  %             29  %     27  %     26  %
Ameren Illinois Transmission                                            25  %             27  %     25  %     26  %
Ameren Transmission                                                     26  %             27  %     26  %     27  %


(a)Estimate of the annual effective income tax rate adjusted to reflect the tax
effect of items discrete to the three and six months ended June 30, 2021 and
2020.
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 Transmission in the
three months ended June 30, 2021, 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 and higher amortization of excess deferred taxes,
compared with the year-ago period.
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, supported by a
combination of long-term debt and equity, as we invest in our electric and
natural gas utility infrastructure to support overall system reliability, grid
modernization, renewable energy target requirements, environmental compliance,
and other improvements. As part of its funding plan for capital expenditures,
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 2025. Ameren
expects these issuances to provide equity of about $100 million annually. In
addition, Ameren established an ATM program under which Ameren may offer and
sell from time to time up to $750 million of its common stock, subject to market
conditions and other factors. For the six months ended June 30, 2021, Ameren
issued a total of 3.0 million shares of common stock and received aggregate
proceeds of $234 million under the ATM program and the settlement of the
remaining portion of the forward sale agreement. Ameren plans to issue
approximately $30 million of equity in the second half of 2021 and approximately
$300 million each year from 2022 to 2025 in addition to issuances under the
DRPlus and employee benefit plans. Ameren expects its equity to total
capitalization ratio to be approximately 45% through December 31, 2025, with the
long-term intent to support solid investment-grade credit ratings. See Long-term
Debt and Equity below and Note 4 - Long-term Debt and Equity Financings under
Part I, Item 1, of this report for additional information on the 2021 settlement
of the remaining portion of the forward sale agreement and the ATM program.
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 June 30, 2021, for
Ameren. With the credit capacity available under the Credit Agreements, and cash
and cash equivalents, Ameren (parent), Ameren Missouri, and Ameren Illinois,
collectively, had net available liquidity of $2.0 billion at June 30, 2021. See
Credit Facility Borrowings and Liquidity for additional information.
The following table presents net cash provided by (used in) operating,
investing, and financing activities for the six months ended June 30, 2021 and
2020:
                                       Net Cash Provided By                                     Net Cash Used In                                    Net Cash Provided By
                                       Operating Activities                                   Investing Activities                                 

Fundraising activities

                              2021              2020           Variance            2021              2020             Variance             2021              2020           Variance
Ameren                    $   436             $ 694          $    (258)         $ (1,760)         $ (1,315)         $    (445)         $    1,290          $ 608          $     682

Ameren Missouri               224               292                (68)           (1,053)             (604)              (449)                701            284                417
Ameren Illinois               286               340                (54)             (668)             (659)                (9)                477            336                141


                                       58
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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 seasonal customer rates and
changes in customer demand due to weather, such as increased demand resulting
from the extremely cold weather in mid-February 2021, significantly affects the
amount and timing of our cash provided by operating activities.
Ameren
Ameren's cash provided by operating activities decreased $258 million in the
first six months of 2021, compared with the year-ago period. The following items
contributed to the decrease:
•A $185 million decrease resulting from increased purchases for natural gas for
resale and purchased power costs as a result of the significant increase in
customer demand and prices for natural gas and electricity experienced in
mid-February 2021 due to extremely cold weather, which are recovered under the
PGA, the FAC, and Ameren Illinois' purchased power rider; a net decrease
attributable to other regulatory recovery mechanisms; and a decrease related to
a change in Ameren Missouri's electric rate design. These items were partially
offset by increased customer collections resulting from base rate increases
pursuant to Ameren Illinois' January 2021 natural gas rate order and due to
Ameren Illinois' electric transmission rate base growth, and state funding
received by Ameren Illinois for customer billing assistance. These decreases
were also partially offset by increased retail sales at Ameren Missouri and
Ameren Illinois and the effect of customer disconnection activity at Ameren
Illinois that resumed in April 2021, which had been suspended for most of 2020.
•A $25 million increase in interest payments, primarily due to an increase in
the average outstanding debt.
•A $23 million decrease in net collateral activity with counterparties,
primarily resulting from changes in the market prices of power, natural gas, and
other fuels.
•A $21 million increase in the cost of natural gas held in storage at Ameren
Illinois because of higher prices.
•A $16 million increase in major storm restoration costs at Ameren Illinois due
to a January 2021 storm.
•A $13 million increase in payroll tax payments primarily due to the employer
portion of Social Security taxes as a result of a payment deferral allowed in
2020 under the Coronavirus Aid, Relief, and Economic Security Act. Half of this
deferral will be paid at the end of 2021 and the remaining half will be paid at
the end of 2022.
•A $10 million increase in property tax payments at Ameren Missouri primarily
due to higher assessed property tax values.
The following items partially offset the decrease in Ameren's cash from
operating activities between periods:
•A $24 million increase, primarily resulting from reduced purchases of materials
and supplies to support operations in 2021 as levels were increased in 2020 to
mitigate against any potential supply disruptions associated with the COVID-19
pandemic.
•A $17 million decrease in payments to settle ARO liabilities, primarily related
to the closure of Ameren Missouri's CCR storage facilities.
•A $16 million increase resulting from a decrease in coal inventory levels at
Ameren Missouri primarily due to weather-related delivery disruptions.
Ameren Missouri
Ameren Missouri's cash provided by operating activities decreased $68 million in
the first six months of 2021, compared with the year-ago period. The following
items contributed to the decrease:
•A $74 million decrease resulting from increased purchases for natural gas for
resale and purchased power costs as a result of the significant increase in
customer demand and prices for natural gas and electricity experienced in
mid-February 2021 due to extremely cold weather, which are recovered under the
PGA and the FAC; a net decrease attributable to other regulatory recovery
mechanisms; and a decrease related to a change in electric rate design. These
items were partially offset by increased retail sales.
•A $25 million decrease in net collateral activity with counterparties,
primarily resulting from changes in the market prices of power, natural gas, and
other fuels.
•A $10 million increase in interest payments, primarily due to an increase in
the average outstanding debt.
•A $10 million increase in property tax payments primarily due to higher
assessed property tax values.
•A $6 million increase in payroll tax payments primarily due to the employer
portion of Social Security taxes as a result of a payment deferral allowed in
2020 under the Coronavirus Aid, Relief, and Economic Security Act. Half of this
deferral will be paid at the end of 2021 and the remaining half will be paid at
the end of 2022.
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The following items partially offset the decrease in Ameren Missouri's cash from
operating activities between periods:
•A $23 million increase in income tax refunds from Ameren (parent) pursuant to
the tax allocation agreement, primarily due to the timing of payments and lower
taxable income in 2021.
•A $17 million decrease in payments to settle ARO liabilities, primarily related
to the closure of CCR storage facilities.
•A $16 million increase resulting from a decrease in coal inventory levels
primarily due to weather-related delivery disruptions.
•A $13 million increase, primarily resulting from reduced purchases of materials
and supplies to support operations in 2021 as levels were increased in 2020 to
mitigate against any potential supply disruptions associated with the COVID-19
pandemic.
Ameren Illinois
Ameren Illinois' cash provided by operating activities decreased $54 million in
the first six months of 2021, compared with the year-ago period. The following
items contributed to the decrease:
•A $118 million decrease resulting from increased purchases for natural gas for
resale and purchased power costs as a result of the significant increase in
customer demand and prices for natural gas and electricity experienced in
mid-February 2021 due to extremely cold weather, which are recovered under the
PGA and a purchased power rider, and a net decrease attributable to other
regulatory recovery mechanisms. These items were partially offset by increased
customer collections resulting from base rate increases pursuant to the January
2021 natural gas rate order and due to electric transmission rate base growth,
state funding received for customer billing assistance, increased retail sales,
and the effect of customer disconnection activity that resumed in April 2021,
which had been suspended for most of 2020.
•A $21 million increase in the cost of natural gas held in storage because of
higher prices.
•A $16 million increase in major storm restoration costs due to a January 2021
storm.
•A $6 million increase in interest payments, primarily due to an increase in the
average outstanding debt.
•A $4 million increase in payroll tax payments primarily due to the employer
portion of Social Security taxes as a result of a payment deferral allowed in
2020 under the Coronavirus Aid, Relief, and Economic Security Act. Half of this
deferral will be paid at the end of 2021 and the remaining half will be paid at
the end of 2022.
The following items partially offset the decrease in Ameren Illinois' cash from
operating activities between periods:
•A $98 million increase resulting from income tax refunds of $37 million,
compared with income tax payments of $61 million in 2020, from Ameren (parent)
pursuant to the tax allocation agreement, primarily due to lower taxable income
in 2021.
•An $11 million increase, primarily resulting from reduced purchases of
materials and supplies to support operations in 2021 as levels were increased in
2020 to mitigate against any potential supply disruptions associated with the
COVID-19 pandemic.
Cash Flows from Investing Activities
Ameren's cash used in investing activities increased $445 million during the
first six months of 2021, compared with the year-ago period, primarily as a
result of a $417 million increase in cash paid for the acquisition of wind
generation assets at Ameren Missouri and a $118 million increase in capital
expenditures, which were driven by an increase at Ameren Missouri, partially
offset by a decrease at Ameren Illinois and a $26 million decrease at ATXI,
primarily as a result of decreased Illinois Rivers transmission line
expenditures as it was placed in service in December 2020. The increase in
Ameren's cash used in investing activities was partially offset by a $52 million
decrease due to the timing of nuclear fuel expenditures and a $37 million
decrease due to net investment activity in the nuclear decommissioning trust
fund at Ameren Missouri.
Ameren Missouri's cash used in investing activities increased $449 million
during the first six months of 2021, compared with the year-ago period,
primarily as a result of a $417 million increase in cash paid for the
acquisition of wind generation assets and a $168 million increase in capital
expenditures, primarily related to electric delivery infrastructure upgrades,
electric distribution system reliability projects, and generator repairs at the
Callaway Energy Center. The increase in Ameren Missouri's cash used in investing
activities was partially offset by a $47 million return of net money pool
advances, a $52 million decrease due to the timing of nuclear fuel expenditures,
and a $37 million decrease due to net investment activity in the nuclear
decommissioning trust fund.
Ameren Illinois' cash used in investing activities increased $9 million during
the first six months of 2021, compared with the year-ago period, primarily as a
result of a $20 million increase in Ameren Illinois' net money pool advances,
partially offset by a $15 million decrease in capital expenditures, primarily
related to natural gas infrastructure and electric transmission 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.
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Due to extremely cold winter weather in mid-February 2021, Ameren Missouri and
Ameren Illinois experienced higher than anticipated commodity costs for
purchased power and natural gas purchased for resale, which contributed to the
acceleration of the timing of planned 2021 debt issuances.
Ameren's cash provided by consolidated financing activities increased
$682 million during the first six months of 2021, compared with the year-ago
period. During the first six months of 2021, Ameren utilized proceeds from the
issuance of $1,423 million of long-term debt for general corporate purposes,
including to repay then-outstanding short-term debt, including short-term debt
incurred in connection with the increased purchases for natural gas for resale
and purchased power costs as a result of the significant increase in customer
demand and prices for natural gas and electricity experienced in mid-February
2021 due to extremely cold weather, and to fund, in part, investing activities.
During the first six months of 2021, Ameren repaid net short-term debt of
$59 million. In addition, Ameren received aggregate cash proceeds of $258
million from the issuance of common stock under the ATM program, the DRPlus, and
the 401(k) plan and the settlement of the remaining portion of the forward sale
agreement. These proceeds were used to fund a portion of Ameren Missouri's wind
generation investments and to fund, in part, other investing activities. In
comparison, during the first six months of 2020, Ameren utilized proceeds from
the issuance of $1,263 million of long-term debt for general corporate purposes,
including to repay then-outstanding short-term debt, including short-term debt
incurred in connection with the repayment at maturity of long-term debt of
$85 million and to fund, in part, investing activities. During the first six
months of 2020, Ameren repaid net short-term debt of $320 million. During the
first six months of 2021, Ameren paid common stock dividends of $282 million,
compared with $244 million in the year-ago period, as a result of an increase in
both the dividend rate and the number of common shares outstanding.
Ameren Missouri's cash provided by financing activities increased $417 million
during the first six months of 2021, compared with the year-ago period. During
the first six months of 2021, Ameren Missouri utilized net proceeds from the
issuance of long-term debt of $524 million to repay then-outstanding short-term
debt, including short-term debt incurred in connection with the increased
purchases for natural gas for resale and purchased power costs as a result of
the significant increase in customer demand and prices for natural gas and
electricity experienced in mid-February 2021 due to extremely cold weather.
Additionally, proceeds from the issuance of long-term debt and capital
contributions of $183 million from Ameren (parent) were used to fund, in part,
investing activities. In comparison, during the first six months of 2020, Ameren
Missouri utilized net proceeds from the issuance of $465 million of long-term
debt to repay then-outstanding short-term debt, including short-term debt
incurred in connection with the repayment at maturity of long-term debt of
$85 million. During the first six months of 2020, Ameren Missouri repaid net
short-term debt of $155 million, borrowed $65 million from the money pool, and
used cash provided by financing activities to fund, in part, investing
activities.
Ameren Illinois' cash provided by financing activities increased $141 million
during the first six months of 2021, compared with the year-ago period. During
the first six months of 2021, Ameren Illinois utilized net proceeds from the
issuance of long-term debt of $449 million to repay then-outstanding short-term
debt, including short-term debt incurred in connection with the increased
purchases for natural gas for resale and purchased power costs as a result of
the significant increase in customer demand and prices for natural gas and
electricity experienced in mid-February 2021 due to extremely cold weather, and
to fund, in part, investing activities. In the first six months of 2021, Ameren
Illinois received capital contributions of $70 million from Ameren (parent),
compared with $350 million in the year-ago period. In addition, Ameren Illinois
repaid $19 million of money pool borrowings and redeemed $13 million of
preferred stock in the current year period. During the first six months of 2020,
Ameren Illinois repaid net short-term debt of $12 million.
See Long-term Debt and Equity in this section for additional information on
maturities and issuances of long-term debt, issuances of common stock, and
redemptions of preferred stock.
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Borrowings and liquidity of the credit facility The following table presents Ameren consolidated liquidity at June 30, 2021:

                                                                  Available at June 30, 2021
Ameren (parent) and Ameren Missouri:
Missouri Credit Agreement - borrowing capacity                   $                     1,200

Less: Ameren (parent) commercial paper outstanding                                       277

Less: Ameren Missouri letters of credit                                                    2
Missouri Credit Agreement - subtotal                                                     921
Ameren (parent) and Ameren Illinois:
Illinois Credit Agreement - borrowing capacity                                         1,100

Less: Ameren (parent) commercial paper outstanding                                       154

Less: Ameren Illinois letters of credit                                                    1
Illinois Credit Agreement - subtotal                                                     945
Subtotal                                                         $                     1,866
Add: Cash and cash equivalents                                                            99
Net Available Liquidity                                          $                     1,965


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 the Credit
Agreements. During the six months ended June 30, 2021, Ameren (parent), Ameren
Missouri, and Ameren Illinois each issued commercial paper. Borrowings under the
Credit Agreements and commercial paper issuances are based upon available
interest rates at that time of the borrowing or issuance.
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.
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 issuance of short-term debt securities by Ameren's utility subsidiaries is
subject to FERC approval under the Federal Power Act. In 2020, the FERC issued
orders authorizing Ameren Missouri and Ameren Illinois to each issue up to
$1 billion of short-term debt securities through March 2022 and September 2022,
respectively. In July 2021, the FERC issued an order authorizing ATXI to issue
up to $300 million of short-term debt securities, which expires in July 2023.
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.
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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 maturities of long-term debt
and redemptions of preferred stock for the six months ended June 30, 2021 and
2020:
                                                     Month Issued,
                                                  Redeemed, or Matured           2021              2020
Issuances of Long-term Debt
Ameren:
1.75% Senior unsecured notes due 2028                    March                $   450           $     -
3.50% Senior unsecured notes due 2031                    April                      -               798
Ameren Missouri:
2.95% First mortgage bonds due 2030                      March                      -               465
2.15% First mortgage bonds due 2032 (green
bonds)                                                    June                    524                 -
Ameren Illinois:
2.90% First mortgage bonds due 2051 (green
bonds)                                                    June              

349

0.375% First mortgage bonds due 2023                      June                    100                 -
Total Ameren long-term debt issuances                                         $ 1,423           $ 1,263
Issuances of Common Stock
Ameren:
DRPlus and 401(k) (a)                                   Various               $    24           $    27
Forward sale agreement (b)                              February                  113                 -
ATM program (c)                                         Various                   121                 -
Total Ameren common stock issuances (d)                                       $   258           $    27

Maturities of Long-term Debt
Ameren Missouri:
5.00% Senior secured notes due 2020                     February              $     -           $    85

Total Ameren long-term debt maturities                                        $     -           $    85
Redemptions of Preferred Stock
Ameren Illinois:
6.625% Series                                            March                $    12           $     -
7.75% Series                                             March                      1                 -
Total Ameren Illinois preferred stock
redemptions                                                                   $    13           $     -


(a)Ameren issued a total of 0.3 million and 0.4 million shares of common stock
under its DRPlus and 401(k) plan in the six months ended June 30, 2021 and 2020,
respectively.
(b)Ameren issued 1.6 million shares of common stock to settle the remainder of
the forward sale agreement.
(c)Ameren issued 1.4 million shares of common stock under the ATM program.
(d)Excludes 0.5 million and 0.5 million shares of common stock valued at $33
million and $38 million issued for no cash consideration in connection with
stock-based compensation for the six months ended June 30, 2021 and 2020,
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, Ameren's forward equity sale
agreement, and the ATM program, as well as information on capital contributions
received by Ameren Missouri and Ameren Illinois from Ameren (parent).
Indebtedness Provisions and Other Covenants
At June 30, 2021, 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. 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, 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.
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.
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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.
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
June 30, 2021, 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 six months ended June 30, 2021 and 2020:
             Six Months
          2021       2020
Ameren   $ 282      $ 244

ATXI        32          -


Commitments
As of June 30, 2021, there have been no material changes other than in the
ordinary course of business related to cash requirements arising from
contractual obligations provided in Item 7 of the Form 10-K for the year ended
December 31, 2020. See Long-term Debt and Equity section above for Ameren
(parent), Ameren Missouri, and Ameren Illinois for debt issuances during the
period ended June 30, 2021.
Off-balance-sheet Arrangements
At June 30, 2021, none of the Ameren Companies had any significant
off-balance-sheet financing arrangements, other than variable interest entities.
See Note 1 - Summary of Significant Accounting Policies under Part I, Item 1, of
this report for further detail concerning variable interest entities.
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


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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, were $41 million for Ameren and
Ameren Missouri and cash collateral posted by external parties were $24 million
for Ameren and Ameren Illinois at June 30, 2021. A sub-investment-grade issuer
or senior unsecured debt rating (below "Baa3" from Moody's or below "BBB-" from
S&P) at June 30, 2021, 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 $139 million, $116 million, and $23
million, respectively.
Changes in commodity prices could trigger additional collateral postings and
prepayments. Based on credit ratings at June 30, 2021, if market prices were 15%
higher or lower than June 30, 2021 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 2021 and beyond. The
continued effect of the COVID-19 pandemic on our results of operations,
financial position, and liquidity in subsequent periods will depend on its
severity and longevity, future regulatory or legislative actions with respect
thereto, and the resulting impact on business, economic, and capital market
conditions. We continue to assess the impacts the COVID-19 pandemic is having on
our businesses, including but not limited to impacts on our liquidity; demand
for residential, commercial, and industrial electric and natural gas services;
changes in deferred payment arrangements for customers; the timing and extent to
which recovery of incremental costs incurred, net of savings, and forgone
customer late fee revenues at Ameren Missouri is allowed by the MoPSC; changes
in our ability to disconnect customers for nonpayment; bad debt expense; supply
chain operations; the availability of our employees and contractors;
counterparty credit; capital construction; infrastructure operations and
maintenance; energy-efficiency programs; and pension valuations. For additional
information regarding recent rate orders, lawsuits, and pending requests filed
with state and federal regulatory commissions, including those discussed below,
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.
Operations
•In the first half of 2021, our sales volumes, which have been, and continue to
be, affected by the COVID-19 pandemic, among other things, increased compared to
the same period in 2020, excluding the estimated effects of weather and customer
energy-efficiency programs. We continue to expect a gradual improvement in sales
volumes in 2021, compared to 2020. Our customers' payment for services has been
adversely affected by the COVID-19 pandemic, which has caused our accounts
receivable balances that are past due or that are a part of a deferred payment
arrangement to be higher than normal historical levels. Because of their
regulatory frameworks, Ameren Illinois' and ATXI's revenues are largely
decoupled from changes in sales volumes. See the Results of Operations section
above for additional information on our accounts receivable balances, Ameren
Illinois' electric and natural gas bad debt riders, and changes in Ameren
Missouri's sales volumes in the second quarter and first half of 2021, compared
to the same periods in 2020. Additionally, 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 for information on Ameren
Missouri's and Ameren Illinois' reinstatement of customer disconnection and late
fee charges for non-payment, accounting authority orders issued by the MoPSC
related to Ameren Missouri's electric and natural gas services to allow Ameren
Missouri to accumulate certain costs incurred, net of savings, and forgone
customer late fee revenues related to the COVID-19 pandemic for consideration of
recovery in the current electric and natural gas service regulatory rate
reviews, and orders issued by the ICC in a service disconnection moratorium
proceeding, which required Ameren Illinois to implement more flexible credit and
collection practices and allowed for recovery of costs incurred related to the
COVID-19 pandemic and forgone late fees.
•The PISA permits Ameren Missouri to defer and recover 85% of the depreciation
expense and earn a return at the applicable WACC on investments in certain
property, plant, and equipment placed in service, 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 not recovered under the PISA, and earn a
return at the applicable WACC for investments in renewable generation plant
placed in service to comply with Missouri's renewable energy standard.
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
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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 as an offset to interest charges,
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. Ameren Missouri does
not expect to exceed these rate increase limitations in 2021. Both the rate
increase limitation and the PISA are effective through December 2023, unless
Ameren Missouri requests and the MoPSC approves an extension through December
2028.
•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 2022 and low-income customer energy-efficiency programs through
December 2024, along with a rider. Ameren Missouri intends to invest $290
million over the life of the plan, including $90 million in 2021 and $70 million
in 2022. 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 were
achieved for 2020, additional revenues of $10 million would be recognized in
2021, and, if target goals are achieved for 2021 and 2022, additional revenues
of $24 million would be recognized in 2022. Ameren Missouri's ability to achieve
targeted goals could be affected by the COVID-19 pandemic. For the year ended
December 31, 2020, Ameren Missouri recognized $6 million in revenues related to
MEEIA performance incentives.
•In March 2021, Ameren Missouri filed a request with the MoPSC seeking approval
to increase its annual revenues for electric service by $299 million. The MoPSC
proceeding relating to the proposed electric service rate changes will take
place over a period of up to 11 months, with a decision by the MoPSC expected by
February 2022 and new rates effective by late February 2022. Ameren Missouri
cannot predict the level of any electric service rate change the MoPSC may
approve, or whether any rate change that may eventually be approved will be
sufficient for Ameren Missouri to recover its costs and earn a reasonable return
on its investments when the rate change goes into effect.
•In March 2020, the MoPSC issued an order in Ameren Missouri's July 2019
electric service regulatory rate review, resulting in a decrease of $32 million
to Ameren Missouri's annual revenue requirement for electric retail service. The
order also approved a change in rate design, which resulted in lower winter
rates applied to May sales volumes and will result in higher summer rates
applied to September sales volumes beginning in 2021. Previously, blended rates
were applied to both months' sales volumes. The year-over-year decrease to
second quarter 2021 earnings, compared to the same period in 2020, from the
effect of the change in rate design is estimated at approximately $45 million
and is expected to largely reverse in the third quarter.
•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 10.52%
ROE, which includes a 50 basis point incentive adder for participation in an
RTO, the revenue requirements included in 2021 rates for Ameren Illinois' and
ATXI's electric transmission businesses are $380 million and $200 million,
respectively. These revenue requirements represent an increase in Ameren
Illinois' and ATXI's revenue requirements of $67 million and $8 million,
respectively, from the revenue requirements reflected in 2020 rates, primarily
due to expected rate base growth. These rates will affect Ameren Illinois' and
ATXI's cash receipts during 2021, but will not determine their respective
electric transmission service operating revenues, which will instead be based on
2021 actual recoverable costs, rate base, and a return on rate base at the
applicable WACC as calculated under the FERC formula ratemaking framework.
•The allowed base ROE for FERC-regulated transmission rates previously charged
under the MISO tariff is the subject of an appeal filed with the United States
Court of Appeals for the District of Columbia Circuit. Depending on the outcome
of the appeal, the transmission rates charged during previous periods and the
currently effective rates may be subject to change. Additionally, in March 2019,
the FERC issued a Notice of Inquiry regarding its transmission incentives
policy. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its
transmission incentives policy, which addressed many of the issues in the Notice
of Inquiry on transmission incentives. The Notice of Proposed Rulemaking
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 revised the
parameters for awarding incentives, while limiting the overall incentives to a
cap of 250 basis points, among other things. In April 2021, the FERC issued a
Supplemental Notice of Proposed Rulemaking, which proposes to modify the Notice
of Proposed Rulemaking's incentive for participation in an RTO by limiting this
incentive for utilities that join an RTO to 50 basis points and only allowing
them to earn the incentive for three years, among other things. If this proposal
is included in a final rule, Ameren Illinois and ATXI would no longer be
eligible for the 50 basis point RTO incentive adder, prospectively. The FERC is
under no deadline to issue a final rule on this matter. Ameren is unable to
predict the ultimate impact of any changes to the FERC's incentives policy, or
any further order on base ROE. A 50 basis point change in the FERC-allowed base
ROE would affect Ameren's and Ameren Illinois' annual net income by an estimated
$11 million and $7 million, respectively, based on each company's 2021 projected
rate base.
•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 to reflect
actual recoverable costs incurred and a return at
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the applicable WACC on year-end rate base. 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. By law, Ameren Illinois may
opt in to the existing formula framework to establish annual customer rates
effective through 2023. Pursuant to a March 2021 ICC order, once Ameren Illinois
ceases to update customer rates under performance-based formula ratemaking,
Ameren Illinois would be allowed to reconcile its revenue requirement for up to
two annual periods in which customer rates had been established, but not yet
reconciled, under the performance-based formula ratemaking framework. To utilize
the reconciliation, Ameren Illinois is required to file a request to update its
electric distribution service rates through a traditional regulatory rate
review, which may be based on a future test year and would reflect a proposed
ROE subject to ICC approval. That request would need to be filed by the end of
March in the year following the last year in which Ameren Illinois opted to set
annual rates via the performance-based formula ratemaking framework. Ameren
Illinois would be required to file that request no later than March 2023.
Pursuant to the order, and without legislative change or Ameren Illinois'
election to opt out of performance-based formula ratemaking, Ameren Illinois'
2022 and 2023 revenues would reflect each year's actual recoverable costs,
year-end rate base, and a return at the applicable WACC, with the ROE component
based on the annual average of the monthly yields of the 30-year United States
Treasury bonds plus 580 basis points. The revenue requirement reconciliation
adjustment would be collected from, or refunded to, customers within two years
from the end of the reconciled year. By law, the decoupling provisions extend
beyond the end of existing performance-based formula ratemaking, which ensures
that Ameren Illinois' electric distribution revenues authorized in a regulatory
rate review are not affected by changes in sales volumes. Ameren Illinois is
actively pursuing improvements to ratemaking applicable to rates established
after the performance-based formula ratemaking is no longer utilized.
•In 2020, the ICC issued an order in Ameren Illinois' annual update filing that
approved a $49 million decrease in Ameren Illinois' electric distribution
service rates beginning in January 2021. Ameren Illinois' 2021 electric
distribution service revenues will be based on its 2021 actual recoverable
costs, 2021 year-end rate base, and a return at the applicable WACC, with the
ROE component based on the annual average of the monthly yields of the 30-year
United States Treasury bonds plus 580 basis points. As of June 30, 2021, Ameren
Illinois expects its 2021 electric distribution year-end rate base to be
$3.7 billion. With or without extension of the formula ratemaking framework, the
2021 revenue requirement reconciliation adjustment will be collected from, or
refunded to, customers in 2023. 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 $10 million change in Ameren's and Ameren Illinois' annual net
income, based on Ameren Illinois' 2021 projected year-end rate base, including
electric energy-efficiency investments. Ameren Illinois' allowed ROE for the
first half of 2021 was based on an estimated annual average of the monthly
yields of the 30-year United States Treasury bonds of 2.31%.
•In July 2021, Ameren Illinois filed a revised request seeking to increase its
annual revenues for electric distribution service by $60 million. An ICC
decision in this proceeding is expected by December 2021, with new rates
effective January 2022. These rates will affect Ameren Illinois' cash receipts
during 2022, but will not affect electric distribution service revenues, which
will be based on 2022 actual recoverable costs, 2022 year-end rate base, and a
return at the applicable WACC as calculated under the Illinois performance-based
formula ratemaking framework.
•In January 2021, the ICC issued an order in Ameren Illinois' February 2020
natural gas delivery service regulatory rate review, which resulted in an
increase to its annual revenues for natural gas delivery service of $76 million.
The new rates became effective in January 2021. As a result of this order, the
rate base under the QIP was reset to zero. Ameren Illinois used a 2021 future
test year in this proceeding. The order also approved the implementation of a
change in rate design, which concentrates more revenues in the winter heating
season due to an increase in volumetric rates and a decrease in fixed customer
rates. As such, the change in rate design will have an impact on interim period
2021 earnings, compared to 2020, but is not expected to materially affect annual
earnings comparisons. The quarterly year-over-year increases/(decreases) to 2021
earnings, compared to the same periods in 2020, from the combined effect of the
rate increase and the change in rate design are estimated at $17 million, $(7)
million, and $7 million for the first quarter, third quarter, and fourth quarter
comparisons, respectively.
•Pursuant to Illinois law, Ameren Illinois' electric energy-efficiency
investments are deferred as a regulatory asset and earn a return at the
applicable WACC, with the ROE component 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. Ameren Illinois plans to invest up to
approximately $100 million per year in electric energy-efficiency programs
through 2025. 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 recovered through the
electric distribution service performance-based formula ratemaking framework. In
July 2021, the ICC issued an order approving Ameren Illinois' energy-efficiency
plan that includes annual investments in electric energy-efficiency programs up
to approximately $100 million per year from 2022 through 2025.
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•During its return to full power after the completion of the last refueling and
maintenance outage in late December 2020, the Callaway Energy Center experienced
a non-nuclear operating issue related to its generator. After replacement of
certain key components of the generator, the energy center returned to service
on August 4, 2021. The cost of generator repairs was approximately $60 million,
which was largely capital expenditures. In April 2021, Ameren Missouri's
insurance claims were accepted by NEIL, which are expected to cover a
significant portion of the capital expenditures and covered lost sales of up to
$4.5 million weekly after March 17, 2021. Insurance recoveries related to lost
sales were included in net energy costs under the FAC. Pursuant to a MoPSC
February 2020 order, Ameren Missouri deferred, as a regulatory asset, a total of
$39 million in maintenance expenses related to its scheduled fall 2020 outage,
which it began to amortize in January 2021. The regulatory asset will be
amortized until the completion of the next refueling and maintenance outage,
which is scheduled for the spring of 2022. During an 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.
•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 the COVID-19 pandemic, 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 economy-wide CO2 emission
concerns. We expect that increased investments, including expected future
investments for environmental compliance, system reliability improvements, and
new generation sources, will result in rate base and revenue growth but also
higher depreciation and financing costs.
Liquidity and Capital Resources
•Our customers' payment for our services has been adversely affected by the
COVID-19 pandemic. See the Results of Operations section above for additional
information on our accounts receivable balances. Further, our liquidity and our
capital expenditure plans could be adversely affected by other impacts resulting
from the COVID-19 pandemic, including but not limited to potential impacts on
our ability to access the capital markets on reasonable terms when needed and
the timing of tax payments and the utilization of tax credits. 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, see below.
•In February 2021, 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 2021. 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 $8.4 billion over the five-year period from 2021
through 2025, with expenditures largely recoverable under the PISA and the
RESRAM. The planned investments in 2024 and 2025 are based on the assumption
that Ameren Missouri requests and receives MoPSC approval of an extension of the
PISA through December 2028.
•In connection with Ameren Missouri's 2020 IRP, Ameren established a goal of
achieving net-zero carbon emissions by 2050. Ameren is also targeting a 50% CO2
emission reduction by 2030 and an 85% reduction by 2040 from the 2005 level. The
plan, which is subject to review by the MoPSC for compliance with Missouri law,
targets cleaner and more diverse sources of energy generation, including solar,
wind, hydro, and nuclear power, and supports increased investment in new energy
technologies. It also includes expanding renewable sources by adding 3,100 MWs
of renewable generation by the end of 2030 and a total of 5,400 MWs of renewable
generation by 2040. These amounts include 700 MWs related to the High Prairie
and Atchison renewable energy centers, which will support Ameren Missouri's
compliance with the state of Missouri's requirement of achieving 15% of native
load sales from renewable energy sources beginning in 2021. The plan also
includes advancing the retirement dates of the Sioux and Rush Island coal-fired
energy centers to 2028 and 2039, respectively, which are subject to the approval
of a change in the assets' depreciable lives by the MoPSC in Ameren Missouri's
current electric service regulatory rate review, the continued implementation of
customer energy-efficiency programs, and the expectation that Ameren Missouri
will seek NRC approval for an extension of the operating license for the
Callaway Energy Center beyond its current 2044 expiration date. Additionally,
the plan includes retiring the Meramec and Labadie coal-fired energy centers at
the end of their useful lives (by 2022 and 2042, respectively). Ameren
Missouri's plan could be affected by, among other factors: Ameren Missouri's
ability to obtain certificates of convenience and necessity from the MoPSC, and
any other required approvals for the addition of renewable resources, retirement
of energy centers, and new or continued customer energy-efficiency programs; 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
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Missouri's ability to use such credits; the cost of wind, solar, and other
renewable generation and storage technologies; changes in environmental
regulations, including those related to carbon emissions; energy prices and
demand; and Ameren Missouri's ability to obtain timely interconnection
agreements with the MISO or other RTOs at an acceptable cost. The next
integrated resource plan is expected to be filed in September 2023.
•In July 2021, Missouri House Bill 734 was enacted, which will become effective
in August 2021. The law allows Missouri electric utility companies to petition
the MoPSC for a financing order to authorize the issuance of securitized utility
tariff bonds to finance the cost of retiring coal-fired energy centers,
including the repayment of existing debt.
•Through 2025, 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 $17.8 billion (Ameren Missouri - up to $9.3 billion; Ameren Illinois - up to
$8.2 billion; ATXI - up to $0.2 billion) of capital expenditures during the
period from 2021 through 2025. Ameren's and Ameren Missouri's estimates include
300 MWs of wind generation at the Atchison Renewable Energy Center, but exclude
incremental renewable generation investment opportunities of 1,200 MWs by 2025,
which are included in Ameren Missouri's 2020 IRP. As of the date of this filing,
no regulatory approvals have been requested related to these opportunities.
These planned investments are based on the assumption of continued constructive
regulatory frameworks, including an assumption that Ameren Missouri requests and
receives MoPSC approval of an extension of the PISA through December 2028.
•Environmental regulations, including those related to CO2 emissions, or other
actions taken by the EPA or state regulators, or requirements that may result
from the NSR and Clean Air Act Litigation discussed in Note 9 - Commitments and
Contingencies under Part I, Item 1, of this report, could result in significant
increases in capital expenditures and operating costs. Regulations enacted by a
prior federal administration can be reviewed and repealed, and replacement or
alternative regulations can be proposed or adopted by the current federal
administration including the EPA. 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.
•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 and Note 4 - Short-term Debt and Liquidity under Part II, Item 8,
in the Form 10-K for additional information regarding the Credit Agreements. The
Ameren Companies have no material maturities of long-term debt until 2022. With
the recently completed Ameren (parent), Ameren Missouri, and Ameren Illinois
debt issuances and availability under the Credit Agreements, as well as the
proceeds from the recent settlement of the forward sale agreement and the ATM
program sales, Ameren, Ameren Missouri, and Ameren Illinois believe that their
liquidity is adequate given their expected operating cash flows, capital
expenditures, and financing plans. The Ameren Companies continue to monitor the
effect of the COVID-19 pandemic on their liquidity. 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.
•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 funding plan for capital expenditures, 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 2025. Ameren expects these issuances to
provide equity of about $100 million annually. In addition, Ameren established
an ATM program under which Ameren may offer and sell from time to time up to
$750 million of its common stock, subject to market conditions and other
factors. Ameren plans to issue approximately $30 million of equity in the second
half of 2021 and approximately $300 million each year from 2022 to 2025 in
addition to issuances under the DRPlus and employee benefit plans. Ameren
expects its equity to total capitalization ratio to be approximately 45% through
December 31, 2025, 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).
•As of June 30, 2021, Ameren had $105 million in tax benefits from federal and
state income tax credit carryforwards and $85 million in tax benefits from
federal and state net operating loss carryforwards, which will be utilized in
future periods. Ameren expects federal income tax payments at the required
minimum levels from 2021 to 2025 resulting from the anticipated use of
production tax credits that
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will be generated by Ameren Missouri's High Prairie and Atchison renewable
energy centers, existing tax net operating losses, tax credit carryforwards, tax
overpayments, and outstanding refunds.
•As a result of the significant increase in customer demand and prices for
natural gas and electricity experienced in mid-February 2021 due to extremely
cold weather, for the month of February 2021, Ameren Missouri and Ameren
Illinois had under-recovered commodity costs (Ameren Missouri - PGA $53 million,
FAC $50 million; Ameren Illinois - PGA $221 million). Ameren Missouri's PGA and
FAC under-recoveries are designed to be collected from customers over 12 months
beginning November 2021 and eight months beginning October 2021, respectively.
Longer recovery periods may be sought by Ameren Missouri or imposed by the MoPSC
to lessen the impact on customer rates. Ameren Illinois' PGA under-recovery is
being collected from customers over 12 months beginning April 2021, but the
collection of the remaining balance may be extended to a new 12-month period at
Ameren Illinois' election to lessen the impact on customer rates.
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.

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