Edgar Filing: AMEREN CORP

Ameren 10-Q 9-30-2004

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(X) Quarterly report pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

for the Quarterly Period Ended September 30, 2004

( ) Transition report pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

for the transition period from to .

	Exact Name of Registrant as specified in its charter;
Commission	State of Incorporation;	IRS Employer
File Number	Address and Telephone Number	Identification No.

1-14756	Ameren Corporation	43-1723446
	(Missouri Corporation)
	1901 Chouteau Avenue
	St. Louis, Missouri 63103
	(314) 621-3222

1-2967	Union Electric Company	43-0559760
	(Missouri Corporation)
	1901 Chouteau Avenue
	St. Louis, Missouri 63103
	(314) 621-3222

1-3672	Central Illinois Public Service Company	37-0211380
	(Illinois Corporation)
	607 East Adams Street
	Springfield, Illinois 62739
	(217) 523-3600

333-56594	Ameren Energy Generating Company	37-1395586
	(Illinois Corporation)
	1901 Chouteau Avenue
	St. Louis, Missouri 63103
	(314) 621-3222

2-95569	CILCORP Inc.	37-1169387
	(Illinois Corporation)
	300 Liberty Street
	Peoria, Illinois 61602
	(309) 677-5230

1-2732	Central Illinois Light Company	37-0211050
	(Illinois Corporation)
	300 Liberty Street
	Peoria, Illinois 61602
	(309) 677-5230


	1

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Yes

(X)

( )

Indicate by check mark whether each Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Ameren Corporation	Yes	(X)	No	( )
Union Electric Company	Yes	( )	No	(X)
Central Illinois Public Service Company	Yes	( )	No	(X)
Ameren Energy Generating Company	Yes	( )	No	(X)
CILCORP Inc.	Yes	( )	No	(X)
Central Illinois Light Company	Yes	( )	No	(X)

The number of shares outstanding of each Registrant's classes of common stock as of July 30, 2004, was as follows:

Ameren Corporation	Common stock, $.01 par value - 194,796,533

Union Electric Company	Common stock, $5 par value, held by Ameren Corporation (parent company of the Registrant) - 102,123,834

Central Illinois Public Service Company	Common stock, no par value, held by Ameren Corporation (parent company of the Registrant) - 25,452,373

Ameren Energy Generating Company	Common stock, no par value, held by Ameren Energy Development Company (parent company of the Registrant and indirect subsidiary of Ameren Corporation) - 2,000

CILCORP Inc.	Common stock, no par value, held by Ameren Corporation (parent company of the Registrant) - 1,000

Central Illinois Light Company	Common stock, no par value, held by CILCORP Inc. (parent company of the Registrant and subsidiary of Ameren Corporation) - 13,563,871

This combined Form 10-Q is separately filed by Ameren Corporation, Union Electric Company, Central Illinois Public Service Company, Ameren Energy Generating Company, CILCORP Inc. and Central Illinois Light Company. Each Registrant hereto is filing on its own behalf all of the information contained in this quarterly report that relates to such Registrant. Each Registrant hereto is not filing any information that does not relate to such Registrant, and therefore makes no representation as to any such information.

On September 30, 2004, Ameren Corporation completed its acquisition of Illinois Power Company (see Note 2 - Acquisitions to our financial statements under Part I, Item 1 of this report for further information). Illinois Power Company is making a separate filing of its Quarterly Report on Form 10-Q for the period ended September 30, 2004 (see Commission File No. 1-3004). The Registrants hereto are making no representation as to any information in that filing. Commencing with its Annual Report on Form 10-K for the fiscal year ending December 31, 2004, Illinois Power Company is expected to be included in the combined filing of Ameren Corporation and its other subsidiaries.

OMISSION OF CERTAIN INFORMATION

Ameren Energy Generating Company and CILCORP Inc. meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format allowed under that General Instruction.


	2

TABLE OF CONTENTS

		Page
Glossary of Terms and Abbreviations		5

Forward-looking Statements		9

PART I.	Financial Information

ITEM 1.	Financial Statements (Unaudited)

	Ameren Corporation
	Consolidated Statement of Income	10
	Consolidated Balance Sheet	11
	Consolidated Statement of Cash Flows	12

	Union Electric Company
	Consolidated Statement of Income	13
	Consolidated Balance Sheet	14
	Consolidated Statement of Cash Flows	15

	Central Illinois Public Service Company
	Statement of Income	16
	Balance Sheet	17
	Statement of Cash Flows	18

	Ameren Energy Generating Company
	Statement of Income	19
	Balance Sheet	20
	Statement of Cash Flows	21

	CILCORP Inc.
	Consolidated Statement of Income	22
	Consolidated Balance Sheet	23
	Consolidated Statement of Cash Flows	24

	Central Illinois Light Company
	Consolidated Statement of Income	25
	Consolidated Balance Sheet	26
	Consolidated Statement of Cash Flows	27


	3

Combined Notes to Financial Statements


ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	64

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	91

ITEM 4.	Controls and Procedures	96

PART II.	Other Information

ITEM 1.	Legal Proceedings	97

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	97

ITEM 6.	Exhibits	98

SIGNATURES		99

This Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements should be read with the cautionary statements and important factors included in this Form 10-Q under the heading Forward-looking Statements. Forward-looking statements are all statements other than statements of historical fact, including those statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects” and similar expressions.


	4

GLOSSARY OF TERMS AND ABBREVIATIONS

When we use the words our, we or us, with respect to certain information, it indicates that such information relates to all Ameren Companies and IP. When we refer to financing or acquisition activities, we are defining Ameren as the parent holding company. When appropriate, subsidiaries of Ameren are specifically referenced in order to distinguish among their different business activities.

AERG - AmerenEnergy Resources Generating Company, a subsidiary of CILCO, which operates a non rate-regulated electric generation business in Illinois and which was formerly known as Central Illinois Generation, Inc.

AES - The AES Corporation.

AFS - Ameren Energy Fuels and Services Company, a subsidiary of Resources Company, which procures fuel and gas and manages the related risks for the Ameren Companies.

Ameren - Ameren Corporation and its subsidiaries on a consolidated basis. When referring to financing or acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.

Ameren Companies - The individual Registrants within the Ameren consolidated group, except for IP, which is filing separately its Quarterly Report on Form 10-Q for the period ended September 30, 2004.

Ameren Energy - Ameren Energy, Inc., a subsidiary of Ameren Corporation, which serves as a power marketing and risk management agent for UE and Genco for transactions of primarily less than one year.

Ameren Services - Ameren Services Company, a subsidiary of Ameren Corporation, which provides a variety of support services to Ameren and its subsidiaries.

AmerGen - AmerGen Energy Company, which is not affiliated with the Ameren Companies.

Capacity factor - A measure that indicates the percent of an electric power generating unit’s(s’) capacity that was used during a period.

CILCO - Central Illinois Light Company, a subsidiary of CILCORP, which operates a rate-regulated electric transmission and distribution business, a primarily non rate-regulated electric generation business, and a rate-regulated natural gas distribution business, all in Illinois, as AmerenCILCO. CILCO owns all of the common stock of AERG.

CILCORP - CILCORP Inc., a subsidiary of Ameren Corporation, which operates as a holding company for CILCO.

CIPS - Central Illinois Public Service Company, a subsidiary of Ameren Corporation, which operates a rate-regulated electric and natural gas transmission and distribution business in Illinois as AmerenCIPS.

Cooling degree days - The summation of positive differences between the mean daily temperature and a 65° Fahrenheit base. This statistic is useful as an indicator of demand for electricity for summer space cooling for residential and commercial customers.

CT - Combustion turbine electric generation equipment.

Development Company - Ameren Energy Development Company, a subsidiary of Resources Company and parent of Genco, which develops and constructs generating facilities for Genco.

DMG - Dynegy Midwest Generation, Inc., a Dynegy subsidiary.

DOE - Department of Energy, a governmental agency of the United States of America.

DOJ - Department of Justice, a governmental agency of the United States of America.


	5

DRPlus - Ameren Corporation’s dividend reinvestment and direct stock purchase plan.

Dynegy - Dynegy Inc.

EEI - Electric Energy, Inc., an 80%-owned subsidiary of Ameren Corporation, which is 40% owned by UE and 40% owned by Resources Company, and which operates electric generation and transmission facilities in Illinois.

EPA - Environmental Protection Agency, a governmental agency of the United States of America.

Equivalent availability factor - A measure that indicates the percent of time an electric power generating unit(s) was available for service during a period.

ERISA - Employee Retirement Income Security Act of 1974, as amended.

Exchange Act - Securities Exchange Act of 1934, as amended.

FASB - Financial Accounting Standards Board, a rulemaking organization that establishes financial accounting and reporting standards in the United States of America.

FCC - Federal Communications Commission, a governmental agency of the United States of America.

FERC - Federal Energy Regulatory Commission, a governmental agency of the United States of America that, among other things, regulates interstate transmission and wholesale sales of electricity and natural gas and related matters and hydroelectric facilities.

FIN - FASB Interpretation intended to clarify accounting pronouncements previously issued by the FASB.

Fitch - Fitch Ratings, a credit rating agency.

FSP - FASB Staff Position, which provides application guidance on FASB literature.

FTC - Federal Trade Commission, a governmental agency of the United States of America.

GAAP - Generally accepted accounting principles in the United States of America.

Genco - Ameren Energy Generating Company, a subsidiary of Development Company, which operates a non rate-regulated electric generation business in Illinois and Missouri.

GridAmerica Companies - UE, CIPS, American Transmission Systems, Inc., a subsidiary of FirstEnergy Corp., and Northern Indiana Public Service Company, a subsidiary of NiSource, Incorporated.

Hart-Scott-Rodino Act - Hart-Scott-Rodino Antitrust Improvements Act of 1976, which establishes procedures for companies involved in transactions that meet certain criteria to file a premerger notification with the FTC and the DOJ Antitrust Division and establishes prescribed time periods for government review prior to completing their transaction.

Heating degree days - The summation of negative differences between the mean daily temperature and a 65° Fahrenheit base. This statistic is useful as an indicator of demand for electricity and natural gas for winter space heating for residential and commercial customers.

IBEW - International Brotherhood of Electrical Workers.

ICC - Illinois Commerce Commission, a state agency that regulates the Illinois utility businesses and operations of UE, CIPS, CILCO and IP.

Illinois Customer Choice Law - Illinois Electric Service Customer Choice and Rate Relief Law of 1997, which provides for electric utility restructuring and introduces competition into the retail supply of electric energy in Illinois.


	6

IP - Illinois Power Company, which was acquired by, and became a subsidiary of, Ameren Corporation on September 30, 2004. IP operates a rate-regulated electric and natural gas transmission and distribution business in Illinois as AmerenIP.

IP LLC - Illinois Power Securitization Limited Liability Company, which is a special purpose Delaware limited liability company. Under FIN No. 46R guidance, IP LLC was no longer consolidated within IP’s financial statements as of December 31, 2003.

IP SPT - Illinois Power Special Purpose Trust, which was created as a subsidiary of IP LLC to issue TFNs as allowed under Illinois’ deregulation legislation. Pursuant to FIN No. 46R, IP SPT is a variable interest entity, as the equity investment is not sufficient to permit IP SPT to finance its activities without additional subordinated debt. As of December 31, 2003, under FIN No. 46R guidance, IP SPT was no longer consolidated within IP’s financial statements.

IUOE - International Union of Operating Engineers.

Marketing Company - Ameren Energy Marketing Company, a subsidiary of Resources Company, which markets power for periods primarily over one year.

Medina Valley - AmerenEnergy Medina Valley Cogen (No. 4), LLC and its subsidiaries, which are subsidiaries of Resources Company, which indirectly own a 40 megawatt, gas-fired electric generation plant.

MGP - Manufactured gas plant.

Midwest ISO - Midwest Independent Transmission System Operator Inc.

Missouri Environmental Authority - State Environmental Improvement and Energy Resources Authority of the State of Missouri, a governmental instrumentality that is authorized to finance environmental projects through the issuance of tax exempt bonds and notes.

Money pool - Borrowing arrangements with and among the Ameren Companies and IP to coordinate and provide for certain short-term cash and working capital requirements. Separate money pools are maintained between rate-regulated and non rate-regulated businesses referred to as the utility money pool and the non-state regulated subsidiary money pool, respectively.

Moody’s - Moody’s Investors Service, Inc., a credit rating agency.

MoPSC - Missouri Public Service Commission, a state agency that regulates the Missouri utility business and operations of UE.

NRC - Nuclear Regulatory Commission, a governmental agency of the United States of America.

NO_x - Nitrogen oxide.

NOPR - Notice of the Proposed Rulemaking issued by the FERC.

NYMEX - New York Mercantile Exchange.

OATT - Open Access Transmission Tariff.

OCI - Other Comprehensive Income (Loss) as defined by GAAP.

PJM - PJM Interconnection LLC.

PUHCA - Public Utility Holding Company Act of 1935, as amended.

Resources Company - Ameren Energy Resources Company, a subsidiary of Ameren Corporation, which consists of non rate-regulated operations, including Development Company, Genco, Marketing Company, AFS and Medina Valley.


	7

RRO - Regional Reliability Organization.

RTO - Regional Transmission Organization.

S&P - Standard and Poor’s Inc., a credit rating agency.

SEC - Securities and Exchange Commission, a governmental agency of the United States of America.

SFAS - Statement of Financial Accounting Standards, the accounting and financial reporting rules issued by the FASB.

SO₂- Sulfur dioxide.

TFN - Transitional Funding Trust Notes issued by IP SPT as allowed under Illinois’ deregulation legislation. IP must designate a percentage of cash received from customer billings to fund payment of the TFNs. The proceeds received by IP are remitted to IP SPT and are restricted for the sole purpose of making payments of principal and interest on, and paying other fees and expenses related to, the TFNs. Subsequent to the application of FIN No. 46R, IP does not consolidate IP SPT and reflects the obligation to IP SPT on IP’s balance sheet.

UE - Union Electric Company, a subsidiary of Ameren Corporation, which operates a rate-regulated electric generation, transmission and distribution business, and a rate-regulated natural gas distribution business in Missouri and Illinois as AmerenUE.


	8

FORWARD-LOOKING STATEMENTS

Statements made in this report, which are not based on historical facts, are "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such "forward-looking" statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed elsewhere in this report and in past and subsequent filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such "forward-looking" statements:

the effects of the stipulation and agreement relating to the UE Missouri electric excess earnings complaint case and other regulatory actions, including changes in regulatory policies;
changes in laws and other governmental actions, including monetary and fiscal policies;
the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at both the state and federal levels, and the implementation of deregulation, such as in Illinois when current power supply contracts expire in 2006;
the effects of participation in the Midwest ISO;
the availability of fuel for the production of electricity, such as coal and natural gas, and purchased power and natural gas for distribution, and the level and volatility of future market prices for such commodities, including the ability to recover any increased costs;
the use of financial and derivative instruments;
average rates for electricity in the Midwest;
business and economic conditions, including their impact on interest rates;
disruptions of the capital markets or other events making the Ameren Companies’ and IP’s access to necessary capital more difficult or costly;
the impact of the adoption of new accounting standards and the application of appropriate technical accounting rules and guidance;
actions of ratings agencies and the effects of such actions;
weather conditions;
generation plant construction, installation and performance;
operation of our nuclear power facility, including planned and unplanned outages, and decommissioning costs;
the effects of strategic initiatives, including acquisitions and divestitures;
the impact of current environmental regulations on utilities and generating companies and the expectation that more stringent requirements will be introduced over time, which could potentially have a negative financial effect;
labor disputes, future wages and employee benefits costs, including changes in returns on benefit plan assets;
difficulties in integrating CILCO and IP with Ameren’s other businesses;
changes in the energy markets, environmental laws or regulations, interest rates or other factors adversely impacting assumptions in connection with the CILCORP and IP acquisitions;
the impact of conditions imposed by regulators in connection with their approval of Ameren’s acquisition of IP;
cost and availability of transmission capacity for the energy generated by the Ameren Companies’ generating facilities or required to satisfy energy sales made by the Ameren Companies and IP; and
legal and administrative proceedings.

Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


	9

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
Operating Revenues:
Electric	$	1,237		$	1,269		$	3,182		$	3,101
Gas		78			82			498			450
Other		2			2			5			6
Total operating revenues		1,317			1,353			3,685			3,557
Operating Expenses:
Fuel and purchased power		330			336			890			814
Gas purchased for resale		47			51			335			316
Other operations and maintenance		314			302			956			901
Coal contract settlement		-			(51	)		-			(51	)
Depreciation and amortization		136			132			398			388
Taxes other than income taxes		77			83			231			238
Total operating expenses		904			853			2,810			2,606
Operating Income		413			500			875			951
Other Income and (Deductions):
Miscellaneous income		8			4			20			16
Miscellaneous expense		(1	)		(3	)		(6	)		(14	)
Total other income and (deductions)		7			1			14			2
Interest Charges and Preferred Dividends:
Interest		62			69			192			204
Preferred dividends of subsidiaries		3			3			8			8
Net interest charges and preferred dividends		65			72			200			212
Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle		355			429			689			741
Income Taxes		123			154			242			273
Income Before Cumulative Effect of Change in Accounting
Principle		232			275			447			468
Cumulative Effect of Change in Accounting Principle,
Net of Income Taxes of $-, $-, $- and $12		-			-			-			18
Net Income	$	232		$	275		$	447		$	486
Earnings per Common Share - Basic and Diluted:
Income before cumulative effect of change
in accounting principle	$	1.20		$	1.70		$	2.44		$	2.91
Cumulative effect of change in accounting
principle, net of income taxes		-			-			-			0.11
Earnings per Common Share - Basic and Diluted	$	1.20		$	1.70		$	2.44		$	3.02

Dividends per Common Share	$	0.635		$	0.635		$	1.905		$	1.905
Average Common Shares Outstanding		193.5			161.8			183.5			160.7

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


	10

AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)

	September 30,			December 31,
	2004			2003
ASSETS
Current Assets:
Cash and cash equivalents	$	647		$	111
Accounts receivables - trade (less allowance for doubtful
accounts of $14 and $13, respectively)		466			326
Unbilled revenue		265			221
Miscellaneous accounts and notes receivable		51			126
Materials and supplies, at average cost		605			487
Other current assets		108			46
Total current assets		2,142			1,317
Property and Plant, Net		13,052			10,920
Investments and Other Non-Current Assets:
Investments in leveraged leases		140			152
Nuclear decommissioning trust fund		219			212
Goodwill and other intangibles, net		979			574
Other assets		448			332
Total investments and other non-current assets		1,786			1,270
Regulatory Assets		784			729
TOTAL ASSETS	$	17,764		$	14,236


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	263		$	498
Short-term debt		31			161
Accounts and wages payable		320			480
Taxes accrued		357			103
Other current liabilities		403			215
Total current liabilities		1,374			1,457
Long-term Debt, Net		6,164			4,070
Preferred Stock of Subsidiary Subject to Mandatory Redemption		20			21
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net		1,616			1,853
Accumulated deferred investment tax credits		142			151
Regulatory liabilities		945			824
Asset retirement obligations		431			413
Accrued pension and other postretirement benefits		726			699
Other deferred credits and liabilities		305			190
Total deferred credits and other non-current liabilities		4,165			4,130
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption		196			182
Minority Interest in Consolidated Subsidiaries		13			22
Commitments and Contingencies (Note 9)
Stockholders' Equity:
Common stock, $.01 par value, 400.0 shares authorized -
shares outstanding of 194.8 and 162.9, respectively		2			2
Other paid-in capital, principally premium on common stock		3,924			2,552
Retained earnings		1,945			1,853
Accumulated other comprehensive loss		(27	)		(44	)
Other		(12	)		(9	)
Total stockholders’ equity		5,832			4,354
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,764		$	14,236


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


	11

AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)

	Nine Months Ended
	September 30,
	2004			2003


Cash Flows From Operating Activities:
Net income	$	447		$	486
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle		-			(18	)
Depreciation and amortization		398			388
Amortization of nuclear fuel		21			25
Amortization of debt issuance costs and premium/discounts		8			8
Deferred income taxes, net		52			30
Deferred investment tax credits, net		(9	)		(9	)
Coal contract settlement		28			(45	)
Pension contribution		(295	)		(25	)
Other		29			(8	)
Changes in assets and liabilities, excluding the effects of the acquisitions:
Receivables, net		21			17
Materials and supplies		(32	)		(69	)
Accounts and wages payable		(192	)		(171	)
Taxes accrued		257			167
Assets, other		(86)			(8	)
Liabilities, other		89			84
Net cash provided by operating activities		736			852

Cash Flows From Investing Activities:
Construction expenditures		(547	)		(457	)
Acquisitions, net of cash acquired		(451	)		(489	)
Nuclear fuel expenditures		(7	)		(2	)
Other		28			10
Net cash used in investing activities		(977	)		(938	)

Cash Flows From Financing Activities:
Dividends on common stock		(356	)		(308	)
Capital issuance costs		(40	)		(13	)
Redemptions, repurchases, and maturities:
Nuclear fuel lease		(67	)		(38	)
Short-term debt		(130	)		(268	)
Long-term debt		(451	)		(648	)
Preferred stock		(1	)		(1	)
Issuances:
Common stock		1,418			336
Long-term debt		404			498
Net cash provided by (used in) financing activities		777			(442	)

Net change in cash and cash equivalents		536			(528	)
Cash and cash equivalents at beginning of year		111			628
Cash and cash equivalents at end of period	$	647		$	100

Cash Paid During the Periods:
Interest	$	187		$	189
Income taxes, net		20			156


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


	12

UNION ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
Operating Revenues:
Electric	$	776		$	801		$	1,982		$	1,972
Gas		17			15			114			100
Total operating revenues		793			816			2,096			2,072

Operating Expenses:
Fuel and purchased power		156			158			445			431
Gas purchased for resale		11			10			69			62
Other operations and maintenance		186			187			579			551
Coal contract settlement		-			(51	)		-			(51	)
Depreciation and amortization		73			71			219			212
Taxes other than income taxes		61			61			172			168
Total operating expenses		487			436			1,484			1,373

Operating Income		306			380			612			699

Other Income and (Deductions):
Miscellaneous income		5			5			14			14
Miscellaneous expense		(1	)		(2	)		(6	)		(5	)
Total other income and (deductions)		4			3			8			9

Interest Charges		23			23			74			74

Income Before Income Taxes		287			360			546			634

Income Taxes		105			135			197			234

Net Income		182			225			349			400

Preferred Stock Dividends		1			1			4			4

Net Income Available to Common Stockholder	$	181		$	224		$	345		$	396













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


	13

UNION ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)

	September 30,			December 31,
	2004			2003
ASSETS
Current Assets:
Cash and cash equivalents	$	13		$	15
Accounts receivable - trade (less allowance for doubtful
accounts of $4 and $6, respectively)		208			172
Unbilled revenue		116			111
Miscellaneous accounts and notes receivable		36			117
Materials and supplies, at average cost		199			175
Other current assets		23			26
Total current assets		595			616
Property and Plant, Net		6,950			6,758
Investments and Other Non-Current Assets:
Nuclear decommissioning trust fund		220			212
Other assets		264			246
Total investments and other non-current assets		484			458
Regulatory Assets		615			685
TOTAL ASSETS	$	8,644		$	8,517


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	88		$	344
Short-term debt		-			150
Borrowings from money pool		189			-
Accounts and wages payable		132			314
Taxes accrued		284			66
Other current liabilities		97			102
Total current liabilities		790			976
Long-term Debt, Net		2,062			1,758
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net		1,224			1,289
Accumulated deferred investment tax credits		109			114
Regulatory liabilities		689			652
Asset retirement obligations		426			408
Accrued pension and other postretirement benefits		211			317
Other deferred credits and liabilities		77			80
Total deferred credits and other non-current liabilities		2,736			2,860
Commitments and Contingencies (Note 9)
Stockholders' Equity:
Common stock, $5 par value, 150.0 shares authorized - 102.1 shares outstanding		511			511
Preferred stock not subject to mandatory redemption		113			113
Other paid-in capital, principally premium on common stock		715			702
Retained earnings		1,745			1,630
Accumulated other comprehensive loss		(28	)		(33	)
Total stockholders' equity		3,056			2,923
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	8,644		$	8,517


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


	14

UNION ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)

	Nine Months Ended
	September 30,
	2004			2003
Cash Flows From Operating Activities:
Net income	$	349		$	400
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		219			212
Amortization of nuclear fuel		21			25
Amortization of debt issuance costs and premium/discounts		4			3
Deferred income taxes, net		24			16
Deferred investment tax credits, net		(5	)		(5	)
Coal contract settlement		28			(45	)
Pension contribution		(186	)		(18	)
Other		5			(3	)
Changes in assets and liabilities:
Receivables, net		(27	)		(38	)
Materials and supplies		(24	)		(20	)
Accounts and wages payable		(164	)		(147	)
Taxes accrued		231			95
Assets, other		(36	)		(46	)
Liabilities, other		90			57
Net cash provided by operating activities		529			486

Cash Flows From Investing Activities:
Construction expenditures		(374	)		(310	)
Nuclear fuel expenditures		(7	)		(2	)
Other		-			4
Net cash used in investing activities		(381	)		(308	)

Cash Flows From Financing Activities:
Dividends on common stock		(230	)		(224	)
Dividends on preferred stock		(4	)		(4	)
Other		(4	)		(5	)
Redemptions, repurchases, and maturities:
Nuclear fuel lease		(67	)		(38	)
Short-term debt		(150	)		(250	)
Long-term debt		(288	)		(364	)
Issuances:
Long-term debt		404			498
Borrowings from money pool		189			215
Net cash used in financing activities		(150	)		(172	)

Net change in cash and cash equivalents		(2	)		6
Cash and cash equivalents at beginning of year		15			9
Cash and cash equivalents at end of period	$	13		$	15

Cash Paid During the Periods:
Interest	$	72		$	78
Income taxes, net		33			199


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


	15

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
STATEMENT OF INCOME
(Unaudited) (In millions)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2004		2003		2004			2003
Operating Revenues:
Electric	$	166	$	176	$	432		$	445
Gas		21		20		134			127
Total operating revenues		187		196		566			572

Operating Expenses:
Purchased power		85		96		244			264
Gas purchased for resale		10		9		82			80
Other operations and maintenance		37		41		109			121
Depreciation and amortization		13		13		39			39
Taxes other than income taxes		6		6		20			22
Total operating expenses		151		165		494			526

Operating Income		36		31		72			46

Other Income and (Deductions):
Miscellaneous income		6		7		19			21
Miscellaneous expense		-		-		(1	)		(2	)
Total other income and (deductions)		6		7		18			19

Interest Charges		8		8		24			26

Income Before Income Taxes		34		30		66			39

Income Taxes		11		4		25			8

Net Income		23		26		41			31

Preferred Stock Dividends		1		1		2			2

Net Income Available to Common Stockholder	$	22	$	25	$	39		$	29


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


	16

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
BALANCE SHEET
(Unaudited) (In millions)

	September 30,		December 31,
	2004		2003
ASSETS
Current Assets:
Cash and cash equivalents	$	4	$	16
Accounts receivable - trade (less allowance for doubtful
accounts of $1 and $1, respectively)		44		48
Unbilled revenue		65		64
Miscellaneous accounts and notes receivable		11		22
Current portion of intercompany note receivable - Genco		324		49
Current portion of intercompany tax receivable - Genco		11		12
Materials and supplies, at average cost		64		51
Other current assets		16		6
Total current assets		539		268
Property and Plant, Net		951		955
Investments and Other Non-Current Assets:
Intercompany note receivable - Genco		-		324
Intercompany tax receivable - Genco		141		150
Other assets		27		17
Total investments and other non-current assets		168		491
Regulatory Assets		31		28
TOTAL ASSETS	$	1,689	$	1,742


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	20	$	-
Accounts and wages payable		64		71
Borrowings from money pool		61		121
Taxes accrued		40		19
Other current liabilities		34		27
Total current liabilities		219		238
Long-term Debt, Net		465		485
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net		276		269
Accumulated deferred investment tax credits		10		11
Regulatory liabilities		147		145
Other deferred credits and liabilities		40		62
Total deferred credits and other non-current liabilities		473		487
Commitments and Contingencies (Note 9)
Stockholders' Equity:
Common stock, no par value, 45.0 shares authorized - 25.5 shares outstanding		-		-
Other paid-in capital		121		120
Preferred stock not subject to mandatory redemption		50		50
Retained earnings		362		369
Accumulated other comprehensive loss		(1)		(7)
Total stockholders' equity		532		532
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,689	$	1,742


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


	17

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)


	Nine Months Ended
	September 30,
	2004			2003

Cash Flows From Operating Activities:
Net income	$	41		$	31
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		39			39
Amortization of debt issuance costs and premium/discounts		1			1
Deferred income taxes, net		(11	)		(11	)
Deferred investment tax credits, net		(1	)		(1	)
Pension contribution		(33	)		(4	)
Other		6			(3	)
Changes in assets and liabilities:
Receivables, net		14			18
Materials and supplies		(13	)		(16	)
Accounts and wages payable		(7	)		23
Taxes accrued		22			2
Assets, other		(12	)		9
Liabilities, other		33			14
Net cash provided by operating activities		79			102

Cash Flows From Investing Activities:
Construction expenditures		(32	)		(36	)
Intercompany note receivable - Genco		49			62
Net cash provided by investing activities		17			26

Cash Flows From Financing Activities:
Dividends on common stock		(46	)		(54	)
Dividends on preferred stock		(2	)		(2	)
Repayments to money pool		(60	)		-
Redemptions, repurchases, and maturities:
Long-term debt		-			(95	)
Borrowings from money pool		-			23
Net cash used in financing activities		(108	)		(128	)

Net change in cash and cash equivalents		(12	)		-
Cash and cash equivalents at beginning of year		16			17
Cash and cash equivalents at end of period	$	4		$	17

Cash Paid During the Periods:
Interest	$	19		$	23
Income taxes, net		11			18


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


	18

AMEREN ENERGY GENERATING COMPANY
STATEMENT OF INCOME
(Unaudited) (In millions)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2004		2003		2004		2003
Operating Revenues:
Electric	$	233	$	217	$	657	$	596
Total operating revenues		233		217		657		596

Operating Expenses:
Fuel and purchased power		107		104		292		269
Other operations and maintenance		32		36		103		100
Depreciation and amortization		19		19		57		56
Taxes other than income taxes		5		5		16		18
Total operating expenses		163		164		468		443

Operating Income		70		53		189		153

Other Income and (Deductions):
Miscellaneous income		1		-		-		-
Total other income and (deductions)		1		-		-		-

Interest Charges		25		25		72		76

Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle		46		28		117		77

Income Taxes		17		11		42		30

Income Before Cumulative Effect of Change in Accounting
Principle		29		17		75		47

Cumulative Effect of Change in Accounting Principle,
Net of Income Taxes of $-, $-, $- and $12		-		-		-		18

Net Income	$	29	$	17	$	75	$	65


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


	19

AMEREN ENERGY GENERATING COMPANY
BALANCE SHEET
(Unaudited) (In millions, except shares)

	September 30,			December 31,
	2004			2003
ASSETS
Current Assets:
Cash and cash equivalents	$	-		$	2
Accounts receivable		93			88
Materials and supplies, at average cost		90			90
Other current assets		3			4
Total current assets		186			184
Property and Plant, Net		1,743			1,774
Other Non-Current Assets		19			19
TOTAL ASSETS	$	1,948		$	1,977


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts and wages payable	$	45		$	75
Borrowings from money pool		79			124
Current portion of intercompany notes payable - CIPS and Ameren		358			53
Current portion of intercompany tax payable - CIPS		11			12
Taxes accrued		36			30
Other current liabilities		36			23
Total current liabilities		565			317
Long-term Debt, Net		698			698
Intercompany Notes Payable - CIPS and Ameren		-			358
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net		115			99
Accumulated deferred investment tax credits		12			13
Intercompany tax payable - CIPS		141			150
Accrued pension and other postretirement benefits		1			19
Other deferred credits and liabilities		3			2
Total deferred credits and other non-current liabilities		272			283
Commitments and Contingencies (Note 9)
Stockholder's Equity:
Common stock, no par value, 10,000 shares authorized - 2,000 shares outstanding		-			-
Other paid-in capital		225			150
Retained earnings		189			170
Accumulated other comprehensive (loss) income		(1	)		1
Total stockholder's equity		413			321
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	1,948		$	1,977


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


	20

AMEREN ENERGY GENERATING COMPANY
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)


	Nine Months Ended
	September 30,
	2004			2003

Cash Flows From Operating Activities:
Net income	$	75		$	65
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle		-			(18	)
Amortization of debt issuance costs and discounts		1			1
Depreciation and amortization		57			56
Deferred income taxes, net		29			37
Pension contribution		(29	)		(3	)
Other		(2	)		(1	)
Changes in assets and liabilities:
Accounts receivable		(5	)		(63	)
Materials and supplies		-			(18	)
Taxes accrued		6			64
Accounts and wages payable		(20	)		(4	)
Assets, other		1			(1	)
Liabilities, other		2			10
Net cash provided by operating activities		115			125

Cash Flows From Investing Activities:
Construction expenditures		(37	)		(39	)
Net cash used in investing activities		(37	)		(39	)

Cash Flows From Financing Activities:
Dividends on common stock		(57	)		(22	)
Redemptions, repurchases, and maturities:
Repayments to money pool		(45	)		(14	)
Intercompany notes payable - CIPS and Ameren		(53	)		(51	)
Capital contribution from parent		75			-
Net cash used in financing activities		(80	)		(87	)

Net change in cash and cash equivalents		(2	)		(1	)
Cash and cash equivalents at beginning of year		2			3
Cash and cash equivalents at end of period	$	-		$	2

Cash Paid During the Periods:
Interest	$	58		$	60
Income taxes, net paid (refunded)		11			(66	)


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


	21

CILCORP INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions)


	---------------Successor---------------						---------------Successor---------------						-Predecessor-
	Three			Three			Nine			Eight
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			September 30,			January
	2004			2003			2004			2003			2003
Operating Revenues:
Electric	$108			$171			$295			$384			$49
Gas	37			46			228			215			58
Other	1			1			3			3			-
Total operating revenues	146			218			526			602			107

Operating Expenses:
Fuel and purchased power	39			88			117			203			26
Gas purchased for resale	24			32			162			166			44
Other operations and maintenance	53			38			143			95			14
Depreciation and amortization	18			18			51			54			6
Taxes other than income taxes	4			9			18			26			4
Total operating expenses		138			185			491			544			94

Operating Income		8			33			35			58			13

Other Income and (Deductions):
Miscellaneous expense		(2	)		(2	)		(4	)		(3	)		-
Total other income and (deductions)		(2	)		(2	)		(4	)		(3	)