ameren10q06302008.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 June 30, 2008
OR
(   )  Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the transition period from ____ to ____.

 
Commission
File Number
Exact name of registrant as specified in its charter;
State of Incorporation;
Address and Telephone Number
 
IRS Employer
Identification No.
     
1-14756
Ameren Corporation
43-1723446
 
(Missouri Corporation)
  
 
1901 Chouteau Avenue
  
 
St. Louis, Missouri 63103
  
 
(314) 621-3222
  
     
1-2967
Union Electric Company
43-0559760
 
(Missouri Corporation)
  
 
1901 Chouteau Avenue
  
 
St. Louis, Missouri 63103
  
 
(314) 621-3222
  
     
1-3672
Central Illinois Public Service Company
37-0211380
 
(Illinois Corporation)
  
 
607 East Adams Street
  
 
Springfield, Illinois 62739
  
 
(888) 789-2477
  
     
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) 677-5271
  
     
1-2732
Central Illinois Light Company
37-0211050
 
(Illinois Corporation)
  
 
300 Liberty Street
  
 
Peoria, Illinois 61602
  
 
(309) 677-5271
  
     
1-3004
Illinois Power Company
37-0344645
 
(Illinois Corporation)
  
 
370 South Main Street
  
 
Decatur, Illinois 62523
  
 
(217) 424-6600
  
 
 
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) No   (  )
 
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.

 
Large
Accelerated Filer
Accelerated
Filer
Non-Accelerated
Filer
Smaller Reporting
Company
Ameren Corporation
(X)
(   )
(   )
(   )
Union Electric Company
(   )
(   )
(X)
(   )
Central Illinois Public Service Company
(   )
(   )
(X)
(   )
Ameren Energy Generating Company
(   )
(   )
(X)
(   )
CILCORP Inc.
(   )
(   )
(X)
(   )
Central Illinois Light Company
(   )
(   )
(X)
(   )
Illinois Power Company
(   )
(   )
(X)
(   )

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Ameren Corporation
Yes
(   )
No
(X)
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)
Illinois Power Company
Yes
(   )
No
(X)

 
The number of shares outstanding of each registrant’s classes of common stock as of July 31, 2008, was as follows:

Ameren Corporation
Common stock, $.01 par value per share – 210,208,319
   
Union Electric Company
Common stock, $5 par value per share, 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
Resources Company, LLC (parent company of the
registrant and 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
   
Illinois Power Company
Common stock, no par value, held by Ameren
Corporation (parent company of the registrant) – 23,000,000
 
 
 

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 with the reduced disclosure format allowed under that General Instruction.
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., Central Illinois Light Company, and Illinois Power Company. Each registrant hereto is filing on its own behalf all of the information contained in this quarterly report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
 

 
 

TABLE OF CONTENTS
 
Page
GLOSSARY OF TERMS AND ABBREVIATIONS.....................................................................................................................................................................................................
5
   
Forward-looking Statements..........................................................................................................................................................................................................................................
7
   
PART I   Financial Information
  
   
Item 1.     Financial Statements (Unaudited)
  
Ameren Corporation
  
Consolidated Statement of Income...............................................................................................................................................................................................................
8
Consolidated Balance Sheet..........................................................................................................................................................................................................................
9
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
10
Union Electric Company
  
Consolidated Statement of Income...............................................................................................................................................................................................................
11
Consolidated Balance Sheet..........................................................................................................................................................................................................................
12
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
13
Central Illinois Public Service Company
  
Statement of Income.......................................................................................................................................................................................................................................
14
Balance Sheet..................................................................................................................................................................................................................................................
15
Statement of Cash Flows................................................................................................................................................................................................................................
16
Ameren Energy Generating Company
  
Consolidated Statement of Income...............................................................................................................................................................................................................
17
Consolidated Balance Sheet..........................................................................................................................................................................................................................
18
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
19
CILCORP Inc.
  
Consolidated Statement of Income...............................................................................................................................................................................................................
20
Consolidated Balance Sheet..........................................................................................................................................................................................................................
21
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
22
Central Illinois Light Company
  
Consolidated Statement of Income..............................................................................................................................................................................................................
23
Consolidated Balance Sheet.........................................................................................................................................................................................................................
24
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
25
Illinois Power Company
  
Consolidated Statement of Income..............................................................................................................................................................................................................
26
Consolidated Balance Sheet..........................................................................................................................................................................................................................
27
Consolidated Statement of Cash Flows.......................................................................................................................................................................................................
28
   
Combined Notes to Financial Statements....................................................................................................................................................................................................
29
   
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations............................................................................................................
60
Item 3.    Quantitative and Qualitative Disclosures About Market Risk.................................................................................................................................................................
85
Item 4 and
  
Item 4T.  Controls and Procedures...............................................................................................................................................................................................................................
90
   
PART II Other Information
  
   
Item 1.    Legal Proceedings...........................................................................................................................................................................................................................................
90
Item 1A. Risk Factors......................................................................................................................................................................................................................................................
91
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.................................................................................................................................................................
91
Item 4.    Submission of Matters to a Vote of Security Holders...............................................................................................................................................................................
91
Item 6.    Exhibits..............................................................................................................................................................................................................................................................
93
   
Signatures.........................................................................................................................................................................................................................................................................
96
 
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 on page 7 of 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

We use the words “our,” “we” or “us” with respect to certain information that relates to all Ameren Companies, as defined below. When appropriate, subsidiaries of Ameren are named specifically as we discuss their various business activities.

AERG – AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates a non-rate-regulated electric generation business in Illinois.
AFS – Ameren Energy Fuels and Services Company, a Resources Company subsidiary that procures fuel and natural gas and manages the related risks for the Ameren Companies.
Ameren – Ameren Corporation and its subsidiaries on a consolidated basis. In references to financing activities, acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.
Ameren Companies – The individual registrants within the Ameren consolidated group.
Ameren Illinois Utilities – CIPS, IP and the rate-regulated electric and gas utility operations of CILCO.
Ameren Services – Ameren Services Company, an Ameren Corporation subsidiary that provides support services to Ameren and its subsidiaries.
ARO – Asset retirement obligations.
Baseload – The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Capacity factor – A percentage measure that indicates how much of an electric power generating unit’s capacity was used during a specific period.
CILCO – Central Illinois Light Company, a CILCORP subsidiary that operates a rate-regulated electric and natural gas transmission and distribution business and a non-rate-regulated electric generation business through AERG, all in Illinois, as AmerenCILCO. CILCO owns all of the common stock of AERG.
CILCORP – CILCORP Inc., an Ameren Corporation subsidiary that operates as a holding company for CILCO and a non-rate-regulated subsidiary.
CIPS – Central Illinois Public Service Company, an Ameren Corporation subsidiary that operates a rate-regulated electric and natural gas transmission and distribution business in Illinois as AmerenCIPS.
CIPSCO – CIPSCO Inc., the former parent of CIPS.
CO2 – Carbon dioxide.
COLA – Combined construction and operating license application.
CT – Combustion turbine electric generation equipment used primarily for peaking capacity.
Development Company – Ameren Energy Development Company, which was an Ameren Energy Resources Company subsidiary, and parent of Genco, Marketing Company, AFS, and Medina Valley. It was eliminated in an internal reorganization in February 2008.
DOE – Department of Energy, a U.S. government agency.
DRPlus – Ameren Corporation’s dividend reinvestment and direct stock purchase plan.
Dynegy – Dynegy Inc.
EEI – Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary that operates non-rate-regulated electric generation facilities and FERC-regulated transmission facilities in Illinois. Prior to February 29, 2008, EEI was 40% owned by UE and 40% owned by Development Company. On February 29, 2008, UE’s 40% ownership interest and Development Company’s 40% ownership interest were transferred to Resources Company. The remaining 20% is owned by Kentucky Utilities Company.
EPA – Environmental Protection Agency, a U.S. government agency.
Equivalent availability factor – A measure that indicates the percentage of time an electric power generating unit was available for service during a period.
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.
FERC – The Federal Energy Regulatory Commission, a U.S. government agency.
FIN – FASB Interpretation. A FIN statement is an explanation intended to clarify accounting pronouncements previously issued by the FASB.
Fitch – Fitch Ratings, a credit rating agency.
Form 10-K – The combined Annual Report on Form 10-K for the year ended December 31, 2007, filed by the Ameren Companies with the SEC.
FTRs – Financial transmission rights, financial instruments that entitle the holder to pay or receive compensation for certain congestion-related transmission charges between two designated points.
GAAP – Generally accepted accounting principles in the United States of America.
Genco – Ameren Energy Generating Company, a Resources Company subsidiary that operates a non-rate-regulated electric generation business in Illinois and Missouri.
Gigawatthour – One thousand megawatthours.
Heating degree-days – The summation of negative differences between the mean daily temperature and a 65- degree Fahrenheit base. This statistic is useful as an indicator of demand for electricity and natural gas for winter space heating for residential and commercial customers.
ICC – Illinois Commerce Commission, a state agency that regulates Illinois utility businesses, including the rate-regulated operations of CIPS, CILCO and IP.
Illinois Customer Choice Law – Illinois Electric Service Customer Choice and Rate Relief Law of 1997, which provided for electric utility restructuring and introduced competition into the retail supply of electric energy in Illinois.
Illinois electric settlement agreement – A comprehensive settlement of issues in Illinois arising out of the end of ten
 
5
 
years of frozen electric rates, as of January 2, 2007. The Illinois electric settlement agreement, which became effective on August 28, 2007, was designed to avoid new rate rollback and freeze legislation and legislation that would impose a tax on electric generation in Illinois. The settlement addresses the issue of future power procurement, and it includes a comprehensive rate relief and customer assistance program.
Illinois EPA – Illinois Environmental Protection Agency, a state government agency.
Illinois Regulated – A financial reporting segment consisting of the regulated electric and gas transmission and distribution businesses of CIPS, CILCO and IP.
IP – Illinois Power Company, an Ameren Corporation subsidiary. 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.
IP SPT – Illinois Power Special Purpose Trust, which was created as a subsidiary of IP LLC to issue TFNs as allowed under the Illinois Customer Choice Law.
IPA – Illinois Power Agency, a state government agency that has broad authority to assist in the procurement of electric power for residential and nonresidential customers beginning in June 2009.
Kilowatthour – A measure of electricity consumption equivalent to the use of 1,000 watts of power over a period of one hour.
Marketing Company – Ameren Energy Marketing Company, a Resources Company subsidiary that markets power for Genco, AERG and EEI.
Medina Valley – AmerenEnergy Medina Valley Cogen L.L.C., a Resources Company subsidiary, which owns a 40-megawatt gas-fired electric generation plant.
Megawatthour – One thousand kilowatthours.
MGP – Manufactured gas plant.
MISO – Midwest Independent Transmission System Operator, Inc.
MISO Day Two Energy Market – A market that uses market-based pricing, incorporating transmission congestion and line losses, to compensate market participants for power.
Missouri Regulated – A financial reporting segment consisting of UE’s rate-regulated businesses.
Money pool – Borrowing agreements among Ameren and its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. Separate money pools maintained for rate-regulated and non-rate-regulated business are 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 Missouri utility businesses, including the rate-regulated operations of UE.
Non-rate-regulated Generation – A financial reporting segment consisting of the operations or activities of Genco, CILCORP holding company, AERG, EEI, Medina Valley and Marketing Company.
NOx – Nitrogen oxide.
NRC – Nuclear Regulatory Commission, a U.S. government agency.
NYMEX – New York Mercantile Exchange.
OCI – Other comprehensive income (loss) as defined by GAAP.
Off-system revenues – Revenues from nonnative load sales.
PGA – Purchased Gas Adjustment tariffs, which allow the passing through of the actual cost of natural gas to utility customers.
PUHCA 2005 – The Public Utility Holding Company Act of 2005, enacted as part of the Energy Policy Act of 2005, effective February 8, 2006.
Regulatory lag – Adjustments to retail electric and natural gas rates are based on historic cost levels and rate increase requests can take up to 11 months to be granted by the MoPSC and the ICC. As a result, revenue increases authorized by regulators will lag behind changing costs.
Resources Company – Ameren Energy Resources Company, LLC, an Ameren Corporation subsidiary that consists of non-rate-regulated operations, including Genco, Marketing Company, EEI, AFS, and Medina Valley. It is the successor to Ameren Energy Resources Company, which was eliminated in an internal reorganization in February 2008.
RFP – Request for proposal.
S&P – Standard & Poor’s Ratings Services, a credit rating agency that is a division of The McGraw-Hill Companies, Inc.
SEC – Securities and Exchange Commission, a U.S. government agency.
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 the Illinois Customer Choice Law. IP must designate a portion of cash received from customer billings to pay the TFNs. The proceeds received by IP are remitted to IP SPT. The proceeds are restricted for the sole purpose of making payments of principal and interest on, and paying other fees and expenses related to, the TFNs. Since the application of FIN 46R, IP does not consolidate IP SPT. Therefore, the obligation to IP SPT appears on IP’s balance sheet.
UE – Union Electric Company, an Ameren Corporation subsidiary that operates a rate-regulated electric generation, transmission and distribution business, and a rate-regulated natural gas transmission and distribution business in Missouri as AmerenUE.


6

FORWARD-LOOKING STATEMENTS

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

·  
regulatory or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the outcome of pending UE, CIPS, CILCO and IP rate proceedings or future legislative actions that seek to limit or reverse rate increases;
·  
uncertainty as to the effect of implementation of the Illinois electric settlement agreement on Ameren, the Ameren Illinois Utilities, Genco and AERG, including implementation of a new power procurement process in Illinois that began in 2008;
·  
changes in laws and other governmental actions, including monetary and fiscal policies;
·  
changes in laws or regulations that adversely affect the ability of electric distribution companies and other purchasers of wholesale electricity to pay their suppliers, including UE and Marketing Company;
·  
enactment of legislation taxing electric generators, in Illinois or elsewhere;
·  
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 occurred when the electric rate freeze and power supply contracts expired in Illinois at the end of 2006;
·  
the effects of participation in the MISO;
·  
the cost and availability of fuel such as coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including the ability to recover the costs for such commodities;
·  
the effectiveness of our risk management strategies and the use of financial and derivative instruments;
·  
prices for power in the Midwest, including forward prices;
·  
business and economic conditions, including their impact on interest rates;
·  
disruptions of the capital markets or other events that make the Ameren Companies’ 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 credit rating agencies and the effects of such actions;
·  
weather conditions and other natural phenomena;
·  
the impact of system outages caused by severe weather conditions or other events;
·  
generation plant construction, installation and performance, including costs associated with UE’s Taum Sauk pumped-storage hydroelectric plant incident and the plant’s future operation;
·  
recoverability through insurance of costs associated with UE’s Taum Sauk pumped-storage hydroelectric plant incident;
·  
operation of UE’s 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 power generating companies and the expectation that more stringent requirements, including those related to greenhouse gases, will be introduced over time, which could have a negative financial effect;
·  
labor disputes, future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
·  
the inability of our counterparties and affiliates to meet their obligations with respect to contracts and financial instruments;
·  
the cost and availability of transmission capacity for the energy generated by the Ameren Companies’ facilities or required to satisfy energy sales made by the Ameren Companies;
·  
legal and administrative proceedings; and
·  
acts of sabotage, war, terrorism or intentionally disruptive acts.

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

7
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.
 
AMEREN CORPORATION
  
CONSOLIDATED STATEMENT OF INCOME
  
(Unaudited) (In millions, except per share amounts)
  
                       
 
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
2008
    
2007
    
2008
    
2007
  
Operating Revenues:
                      
Electric
 $ 1,545     $ 1,519     $ 3,012     $ 2,982  
Gas
   243       209       855       770  
Total operating revenues
   1,788       1,728       3,867       3,752  
                               
Operating Expenses:
                              
Fuel
   200       263       502       526  
Coal contract settlement
   (60 )     -       (60 )     -  
Purchased power
   306       314       593       687  
Gas purchased for resale
   165       133       624       554  
Other operations and maintenance
   469       420       891       809  
Depreciation and amortization
   178       176       354       359  
Taxes other than income taxes
   89       96       202       198  
Total operating expenses
   1,347       1,402       3,106       3,133  
Operating Income
   441       326       761       619  
Other Income and Expenses:
                              
Miscellaneous income
   21       20       42       34  
Miscellaneous expense
   (8 )     (8 )     (13 )     (13 )
Total other income
   13       12       29       21  
Interest Charges
   118       108       218       206  
Income Before Income Taxes, Minority Interest
                              
and Preferred Dividends of Subsidiaries
   336       230       572       434  
Income Taxes
   119       78       206       149  
Income Before Minority Interest and Preferred
                              
Dividends of Subsidiaries
   217       152       366       285  
Minority Interest and Preferred Dividends of Subsidiaries
   11       9       22       19  
Net Income
 $ 206     $ 143     $ 344     $ 266  
                               
Earnings per Common Share – Basic and Diluted
 $ 0.98     $ 0.69     $ 1.64     $ 1.29  
Dividends per Common Share
 $ 0.635     $ 0.635     $ 1.270     $ 1.270  
Average Common Shares Outstanding
   209.5       207.1       209.1       206.9  
                               
 
The accompanying notes are an integral part of these consolidated financial statements.
 
8
 


AMEREN CORPORATION
  
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
  
           
 
June 30,
    
December 31,
  
 
2008
    
2007
  
ASSETS
          
Current Assets:
          
Cash and cash equivalents
 $ 205     $ 355  
Accounts receivable – trade (less allowance for doubtful
              
accounts of $26 and $22, respectively)
   529       570  
Unbilled revenue
   389       359  
Miscellaneous accounts and notes receivable
   376       280  
Materials and supplies
   719       735  
Mark-to-market derivative assets
   273       35  
Other current assets
   275       146  
Total current assets
   2,766       2,480  
Property and Plant, Net
   15,566       15,069  
Investments and Other Assets:
              
Nuclear decommissioning trust fund
   284       307  
Goodwill
   831       831  
Intangible assets
   177       198  
Regulatory assets
   1,081       1,158  
Other assets
   940       685  
Total investments and other assets
   3,313       3,179  
TOTAL ASSETS
 $ 21,645     $ 20,728  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current Liabilities:
              
Current maturities of long-term debt
 $ 285     $ 221  
Short-term debt
   1,450       1,472  
Accounts and wages payable
   527       687  
Taxes accrued
   111       84  
Mark-to-market derivative liabilities
   236       24  
Other current liabilities
   469       414  
Total current liabilities
   3,078       2,902  
Long-term Debt, Net
   6,146       5,691  
Preferred Stock of Subsidiary Subject to Mandatory Redemption
   16       16  
Deferred Credits and Other Liabilities:
              
Accumulated deferred income taxes, net
   2,104       2,046  
Accumulated deferred investment tax credits
   104       109  
Regulatory liabilities
   1,437       1,240  
Asset retirement obligations
   576       562  
Accrued pension and other postretirement benefits
   758       839  
Other deferred credits and liabilities
   390       354  
Total deferred credits and other liabilities
   5,369       5,150  
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption
   195       195  
Minority Interest in Consolidated Subsidiaries
   24       22  
Commitments and Contingencies (Notes 2, 8, 9 and 10)
              
Stockholders' Equity:
              
Common stock, $.01 par value, 400.0 shares authorized –
              
shares outstanding of 210.1 and 208.3, respectively
   2       2  
Other paid-in capital, principally premium on common stock
   4,693       4,604  
Retained earnings
   2,188       2,110  
Accumulated other comprehensive income (loss)
   (66 )     36  
Total stockholders’ equity
   6,817       6,752  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 $ 21,645     $ 20,728  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
9
 


AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
           
 
Six Months Ended
  
 
June 30,
  
 
2008
    
2007
  
Cash Flows From Operating Activities:
          
Net income
 $ 344     $ 266  
Adjustments to reconcile net income to net cash
              
provided by operating activities:
              
Gain on sales of emission allowances
   (2 )     (2 )
Mark-to-market gain on derivatives
   (94 )     (1 )
Coal contract settlement
   (60 )     -  
Depreciation and amortization
   364       357  
Amortization of nuclear fuel
   20       15  
Amortization of debt issuance costs and premium/discounts
   8       10  
Deferred income taxes and investment tax credits, net
   107       (8 )
Minority interest
   16       13  
Other
   4       7  
Changes in assets and liabilities:
              
Receivables
   15       (131 )
Materials and supplies
   16       35  
Accounts and wages payable
   (64 )     (62 )
Taxes accrued, net
   (58 )     59  
Assets, other
   32       29  
Liabilities, other
   65       19  
Pension and other postretirement benefit obligations
   15       50  
Counterparty collateral asset
   (205 )     (97 )
Counterparty collateral liability
   79       -  
Taum Sauk insurance receivable, net
   (107 )     (16 )
Net cash provided by operating activities
   495       543  
Cash Flows From Investing Activities:
              
Capital expenditures
   (798 )     (715 )
Nuclear fuel expenditures
   (123 )     (24 )
Purchases of securities – nuclear decommissioning trust fund
   (247 )     (75 )
Sales of securities – nuclear decommissioning trust fund
   231       65  
Purchases of emission allowances
   (2 )     (9 )
Sales of emission allowances
   2       3  
Other
   2       1  
Net cash used in investing activities
   (935 )     (754 )
Cash Flows From Financing Activities:
              
Dividends on common stock
   (266 )     (263 )
Capital issuance costs
   (9 )     (3 )
Short-term debt, net
   (22 )     1,007  
Dividends paid to minority interest holder
   (15 )     (10 )
Redemptions, repurchases, and maturities of long-term debt
   (808 )     (443 )
Issuances:
              
Common stock
   75       48  
Long-term debt
   1,335       425  
Net cash provided by financing activities
   290       761  
Net change in cash and cash equivalents
   (150 )     550  
Cash and cash equivalents at beginning of year
   355       137  
Cash and cash equivalents at end of period
 $ 205     $ 687  
               
 
The accompanying notes are an integral part of these consolidated financial statements.
 
10
 



UNION ELECTRIC COMPANY
  
CONSOLIDATED STATEMENT OF INCOME
  
(Unaudited) (In millions)
  
                       
                       
 
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
2008
    
2007
    
2008
    
2007
  
Operating Revenues:
                      
Electric - excluding off-system
 $ 589     $ 579     $ 1,079     $ 1,030  
Electric - off-system
   147       89       298       211  
Gas
   35       29       118       105  
Other
   -       -       -       1  
Total operating revenues
   771       697       1,495       1,347  
Operating Expenses:
                              
Fuel
   104       143       251       268  
Purchased power
   37       29       90       69  
Gas purchased for resale
   18       15       73       64  
Other operations and maintenance
   238       222       455       446  
Depreciation and amortization
   82       84       163       171  
    Taxes other than income taxes
   60       60       120       117  
Total operating expenses
   539       553       1,152       1,135  
Operating Income
   232       144       343       212  
Other Income and Expenses:
                              
Miscellaneous income
   15       12       29       20  
Miscellaneous expense
   (2 )     (6 )     (4 )     (8 )
Total other income
   13       6       25       12  
Interest Charges
   50       51       91       97  
Income Before Income Taxes and Equity
                              
   in Income of Unconsolidated Investment
   195       99       277       127  
Income Taxes
   71       30       100       39  
Income Before Equity in Income
                              
   of Unconsolidated Investment
   124       69       177       88  
Equity in Income of Unconsolidated Investment,
                              
Net of Taxes
   -       12       11       26  
Net Income
   124       81       188       114  
Preferred Stock Dividends
   2       2       3       3  
Net Income Available to Common Stockholder
 $ 122     $ 79     $ 185     $ 111  
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
11
 


UNION ELECTRIC COMPANY
  
 CONSOLIDATED BALANCE SHEET
  
(Unaudited) (In millions, except per share amounts)
  
           
 
June 30,
    
December 31,
  
 
2008
    
2007
  
ASSETS
          
Current Assets:
          
Cash and cash equivalents
 $ -     $ 185  
Accounts receivable – trade (less allowance for doubtful
              
accounts of $7 and $6, respectively)
   176       191  
Unbilled revenue
   165       118  
Miscellaneous accounts and notes receivable
   268       213  
Advances to money pool
   -       15  
Accounts receivable – affiliates
   28       90  
Materials and supplies
   318       301  
Mark-to-market derivative assets
   106       7  
Other current assets
   75       43  
Total current assets
   1,136       1,163  
Property and Plant, Net
   8,477       8,189  
Investments and Other Assets:
              
Nuclear decommissioning trust fund
   284       307  
Intercompany note receivable – affiliate
   30       -  
Intangible assets
   52       56  
Regulatory assets
   677       697  
Other assets
   393       491  
Total investments and other assets
   1,436       1,551  
TOTAL ASSETS
 $ 11,049     $ 10,903  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current Liabilities:
              
Current maturities of long-term debt
 $ 4     $ 152  
Short-term debt
   33       82  
Intercompany note payable – Ameren
   50       -  
Accounts and wages payable
   143       315  
Accounts payable – affiliates
   85       212  
Taxes accrued
   78       78  
Accrued interest
   56       47  
Taum Sauk pumped-storage hydroelectric facility liability
   35       103  
Mark-to-market derivative liabilities
   101       1  
Other current liabilities
   58       58  
Total current liabilities
   643       1,048  
Long-term Debt, Net
   3,677       3,208  
Deferred Credits and Other Liabilities:
              
Accumulated deferred income taxes, net
   1,347       1,273  
Accumulated deferred investment tax credits
   82       85  
Regulatory liabilities
   907       865  
Asset retirement obligations
   489       476  
Accrued pension and other postretirement benefits
   237       297  
Other deferred credits and liabilities
   45       50  
Total deferred credits and other liabilities
   3,107       3,046  
Commitments and Contingencies (Notes 2, 8, 9 and 10)
              
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
   1,119       1,119  
Retained earnings
   1,894       1,855  
Accumulated other comprehensive income (loss)
   (15 )     3  
Total stockholders' equity
   3,622       3,601  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 $ 11,049     $ 10,903  
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
12
 


UNION ELECTRIC COMPANY
  
CONSOLIDATED STATEMENT OF CASH FLOWS
  
(Unaudited) (In millions)
  
           
 
Six Months Ended
  
 
June 30,
  
 
2008
    
2007
  
Cash Flows From Operating Activities:
          
Net income
 $ 188     $ 114  
Adjustments to reconcile net income to net cash
              
provided by operating activities:
              
Gain on sales of emission allowances
   (1 )     -  
Mark-to-market gain on derivatives
   (73 )     -  
Depreciation and amortization
   163       171  
Amortization of nuclear fuel
   20       15  
Amortization of debt issuance costs and premium/discounts
   3       3  
Deferred income taxes and investment tax credits, net
   74       15  
Other
   (9 )     -  
Changes in assets and liabilities:
              
Receivables
   66       (110 )
Materials and supplies
   (17 )     (31 )
Accounts and wages payable
   (253 )     (129 )
Taxes accrued, net
   (31 )     74  
Assets, other
   53       55  
Liabilities, other
   26       (31 )
Pension and other postretirement benefit obligations
   13       15  
Taum Sauk insurance receivable, net
   (107 )     (16 )
Net cash provided by operating activities
   115       145  
Cash Flows From Investing Activities:
              
Capital expenditures
   (377 )     (355 )
Nuclear fuel expenditures
   (123 )     (24 )
Changes in money pool advances
   -       6  
Proceeds from intercompany note receivable
   6       -  
Purchases of securities – nuclear decommissioning trust fund
   (247 )     (75 )
Sales of securities – nuclear decommissioning trust fund
   231       65  
Sales of emission allowances
   1       2  
Net cash used in investing activities
   (509 )     (381 )
Cash Flows From Financing Activities:
              
Dividends on common stock
   (105 )     (127 )
Dividends on preferred stock
   (3 )     (3 )
Capital issuance costs
   (5 )     (3 )
Short-term debt, net
   (49 )     192  
Intercompany note payable – Ameren, net
   50       (40 )
Redemptions, repurchases, and maturities of long-term debt
   (378 )     -  
Issuances of long-term debt
   699       425  
Net cash provided by financing activities
   209       444  
Net change in cash and cash equivalents
   (185 )     208  
Cash and cash equivalents at beginning of year
   185       1  
Cash and cash equivalents at end of period
 $ -     $ 209  
               
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
13
 


CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
  
STATEMENT OF INCOME
  
(Unaudited) (In millions)
  
                       
 
Three Months Ended
    
Six Months Ended
  
 
June 30,
    
June 30,
  
 
2008
    
2007
    
2008
    
2007
  
Operating Revenues:
                      
Electric
 $ 169     $ 193     $ 349     $ 404  
Gas
   38       36       148       137  
Other
   -       -       -       2  
Total operating revenues
   207       229       497       543  
Operating Expenses:
                              
Purchased power
   108       127       231       275  
Gas purchased for resale
   24       21       104       95  
Other operations and maintenance
   48       41       98       84  
Depreciation and amortization
   17       16       34       33  
Taxes other than income taxes
   7       9       19       18  
Total operating expenses
   204       214       486       505  
Operating Income
   3       15       11       38  
Other Income and Expenses:
                              
Miscellaneous income
   3       5       6       8  
Miscellaneous expense
   (2 )     (1 )     (2 )     (1 )
Total other income
   1       4       4       7  
Interest Charges
   8       10       15       18  
Income (Loss) Before Income Taxes
   (4 )     9       -       27  
Income Taxes (Benefit)
   (1 )     4       -       10  
Net Income (Loss)
   (3 )     5       -       17  
Preferred Stock Dividends
   -       -       1       1  
Net Income (Loss) Available to Common Stockholder
 $ (3 )   $ 5     $ (1 )   $ 16  
                               
The accompanying notes as they relate to CIPS are an integral part of these consolidated financial statements.

 
 
14
 


CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
  
 BALANCE SHEET
  
(Unaudited) (In millions)
  
           
 
June 30,
    
December 31,
  
 
2008
    
2007
  
ASSETS
          
Current Assets:
          
Cash and cash equivalents
 $ -     $ 26  
Accounts receivable – trade (less allowance for doubtful
              
accounts of $6 and $5, respectively)
   69       62  
Unbilled revenue
   49       66  
Miscellaneous accounts and notes receivable
   19       19  
Accounts receivable – affiliates
   4       9  
Current portion of intercompany note receivable – Genco
   42       39  
Current portion of intercompany tax receivable – Genco
   9       9  
Materials and supplies
   48       66  
Mark-to-market derivative assets with affiliate
   38       1  
Other current assets
   19       15  
Total current assets
   297       312  
Property and Plant, Net
   1,184       1,174  
Investments and Other Assets:
              
Intercompany note receivable – Genco
   45       87  
Intercompany tax receivable – Genco
   100       105  
Regulatory assets
   83       113  
Other assets
   79       69  
Total investments and other assets
   307       374  
TOTAL ASSETS
 $ 1,788     $ 1,860  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Current Liabilities:
              
Current maturities of long-term debt
 $ 15     $ 15  
Short-term debt
   25       125  
Accounts and wages payable
   59       44  
Accounts payable – affiliates
   19       19  
Borrowings from money pool
   3       -  
Taxes accrued
   4       8  
Customer deposits
   16       16  
Regulatory liabilities
   21       2  
Other current liabilities
   37       29  
Total current liabilities
   199       258  
Long-term Debt, Net
   421       456  
Deferred Credits and Other Liabilities:
              
Accumulated deferred income taxes and investment tax credits, net
   266       269  
Regulatory liabilities
   320       265  
Accrued pension and other postretirement benefits
   38       67  
Other deferred credits and liabilities
   28       28  
Total deferred credits and other liabilities
   652       629  
Commitments and Contingencies (Notes 2, 8, and 9)
              
Stockholders' Equity:
              
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding
   -       -  
Other paid-in capital
   191       191  
Preferred stock not subject to mandatory redemption
   50       50  
Retained earnings
   275       276  
Total stockholders' equity
   516       517  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 $ 1,788     $ 1,860  
               
 
The accompanying notes as they relate to CIPS are an integral part of these consolidated financial statements.
 
15
 


CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
  
STATEMENT OF CASH FLOWS
  
(Unaudited) (In millions)
  
           
 
Six Months Ended
  
 
June 30,
  
 
2008
    
2007
  
Cash Flows From Operating Activities:
          
Net income
 $ -     $ 17  
Adjustments to reconcile net income to net cash
              
provided by operating activities:
              
Depreciation and amortization
   34       33  
Amortization of debt issuance costs and premium/discounts
   1       1  
Deferred income taxes and investment tax credits, net
   (2 )     (10 )
Changes in assets and liabilities:
              
Receivables
   20       11  
Materials and supplies
   18       20  
Accounts and wages payable
   12       (30 )
Taxes accrued, net
   (12 )     (3 )
Assets, other
   29       6  
Liabilities, other
   7       (4 )
Pension and other postretirement benefit obligations
   2       3  
Net cash provided by operating activities
   109       44  
Cash Flows From Investing Activities:
              
Capital expenditures
   (41 )     (39 )
Proceeds from intercompany note receivable – Genco
   39       37  
Changes in money pool advances
   -       1  
Net cash used in investing activities
   (2 )     (1 )
Cash Flows From Financing Activities:
              
Dividends on preferred stock
   (1 )     (1 )
Short-term debt, net
   (100 )     100  
Changes in money pool borrowings
   3       -  
Redemptions, repurchases, and maturities of long-term debt
   (35 )     -  
Net cash provided by (used in) financing activities
   (133 )     99  
Net change in cash and cash equivalents
   (26 )     142  
Cash and cash equivalents at beginning of year
   26       6  
Cash and cash equivalents at end of period
 $ -     $ 148  
               
The accompanying notes as they relate to CIPS are an integral part of these consolidated financial statements.
 
 
16
 


AMEREN ENERGY GENERATING COMPANY
  
CONSOLIDATED STATEMENT OF INCOME
  
(Unaudited) (In millions)
  
                       
                       
 
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
 
2008
    
2007
    
2008
    
2007
  
                       
Operating Revenues
 $ 194     $ 186     $ 425     $ 429  
Operating Expenses:
                              
Fuel
   49       74       137       155  
Coal contract settlement
   (60 )     -       (60 )     -  
Purchased power
   -       -       -       21  
Other operations and maintenance
   53       49       93       83  
Depreciation and amortization
   16       18       32       36  
Taxes other than income taxes
   5       4       11       10  
Total operating expenses
   63       145       213       305  
Operating Income
   131       41       212       124  
Miscellaneous Income
   3       1       5       1  
Interest Charges
   17       14       26       28  
Income Before Income Taxes
   117       28       191       97  
Income Taxes
   43       11       71       37  
Net Income
 $ 74     $ 17     $ 120     $ 60  
                               
 
The accompanying notes as they relate to Genco are an integral part of these consolidated financial statements.
 
17
 


AMEREN ENERGY GENERATING COMPANY
  
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except shares)
  
           
 
June 30,
    
December 31,
  
 
2008
    
2007
  
ASSETS
          
Current Assets:
          
Cash and cash equivalents
 $ 2     $ 2  
Accounts receivable – affiliates
   96       93  
Miscellaneous accounts and notes receivable
   66       12  
Materials and supplies
   109       93  
Other current assets
   11       4  
Total current assets
   284       204  
Property and Plant, Net
   1,753       1,683  
Intangible Assets
   52       63  
Other Assets
   8       18  
TOTAL ASSETS
 $ 2,097     $ 1,968  
               
LIABILITIES AND STOCKHOLDER'S EQUITY
              
Current Liabilities:
              
Short-term debt
 $ -     $ 100  
Current portion of intercompany note payable – CIPS
   42       39  
Borrowings from money pool
   5       54  
Accounts and wages payable
   43       61  
Accounts payable – affiliates
   48       57  
Current portion of intercompany tax payable – CIPS
   9       9  
Taxes accrued
   17       15  
Accrued interest
   12       5  
Deferred taxes - current
   15