Edgar Filing: CENTRAL ILLINOIS LIGHT CO

Form 10-Q

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, 2010

¨	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

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.


Ameren Corporation	Yes	x	No	¨
Union Electric Company	Yes	x	No	¨
Central Illinois Public Service Company	Yes	x	No	¨
Ameren Energy Generating Company	Yes	x	No	¨
Central Illinois Light Company	Yes	x	No	¨
Illinois Power Company	Yes	x	No	¨

Indicate by check mark whether each registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Ameren Corporation	Yes	x	No	¨
Union Electric Company	Yes	¨	No	¨
Central Illinois Public Service Company	Yes	¨	No	¨
Ameren Energy Generating Company	Yes	¨	No	¨
Central Illinois Light Company	Yes	¨	No	¨
Illinois Power Company	Yes	¨	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 “large accelerated filer,” “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	¨
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
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 30, 2010, was as follows:


Ameren Corporation		Common stock, $0.01 par value per share - 239,220,778

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

Central Illinois Light Company		Common stock, no par value, held by Ameren Corporation (parent company of the registrant) - 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 meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is 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, 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	9
	Consolidated Balance Sheet	10
	Consolidated Statement of Cash Flows	11
	Union Electric Company
	Statement of Income	12
	Balance Sheet	13
	Statement of Cash Flows	14
	Central Illinois Public Service Company
	Statement of Income	15
	Balance Sheet	16
	Statement of Cash Flows	17
	Ameren Energy Generating Company
	Consolidated Statement of Income	18
	Consolidated Balance Sheet	19
	Consolidated Statement of Cash Flows	20
	Central Illinois Light Company
	Consolidated Statement of Income	21
	Consolidated Balance Sheet	22
	Consolidated Statement of Cash Flows	23
	Illinois Power Company
	Statement of Income	24
	Balance Sheet	25
	Statement of Cash Flows	26

	Combined Notes to Financial Statements	27

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	73
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	105
Item 4 and
Item 4T.	Controls and Procedures	110

PART II	Other Information

Item 1.	Legal Proceedings	111
Item 1A.	Risk Factors	111
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	111
Item 6.	Exhibits	112

Signatures		114

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.

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 their various business activities are discussed.

2007 Illinois Electric Settlement Agreement - A comprehensive settlement of issues in Illinois arising out of the end of ten years of frozen electric rates, effective January 2, 2007. The settlement, which became effective on August 28, 2007, was designed to avoid new rate rollback and freeze legislation as well as any legislation that would impose a tax on electric generation in Illinois. The settlement addressed the issue of power procurement, and it included a comprehensive rate relief and customer assistance program.

2009 Illinois Credit Agreement - On June 30, 2009, Ameren, CIPS, CILCO and IP entered into an $800 million senior secured credit agreement. This agreement is due to expire in June 2011.

2009 Multiyear Credit Agreement - On June 30, 2009, Ameren, UE, and Genco entered into a $1.15 billion credit agreement. This agreement is due to expire in July 2011. Collectively, this agreement and the 2009 Supplemental Credit Agreement are the “2009 Multiyear Credit Agreements.”

2009 Supplemental Credit Agreement - On June 30, 2009, Ameren, UE and Genco entered into a $150 million supplemental credit agreement to the 2009 Multiyear Credit Agreement. This agreement expired in July 2010.

AERG - AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates a merchant 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.

AITC - Ameren Illinois Transmission Company, an Ameren Corporation subsidiary that is engaged in the construction and operation of transmission assets in Illinois and is regulated by the ICC.

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 natural 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.

Btu - British thermal unit, a standard unit for measuring the quantity of heat energy required to raise the temperature of one pound of water by one degree Fahrenheit.

CAIR - Clean Air Interstate Rule.

Capacity factor - A percentage measure that indicates how much of an electric power generating unit’s capacity was used during a specific period.

CATR - Clean Air Transport Rule.

CILCO - Central Illinois Light Company, an Ameren Corporation subsidiary that operates a rate-regulated electric transmission and distribution business, a merchant electric generation business through AERG, and a rate-regulated natural gas transmission and distribution business, all in Illinois, as AmerenCILCO. CILCO owns all of the common stock of AERG.

CILCORP - CILCORP Inc., a former Ameren Corporation subsidiary that operated as a holding company for CILCO and its merchant generation subsidiary. On March 4, 2010, CILCORP merged with and into Ameren.

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.

CO₂ - Carbon dioxide.

COLA - Combined nuclear plant construction and operating license application.

CT - Combustion turbine electric generation equipment used primarily for peaking capacity.

DOE - Department of Energy, a U.S. government agency.

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

EEI - Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary that operates merchant electric generation facilities and FERC-regulated transmission facilities in Illinois. Effective January 1, 2010, in an internal reorganization, Resources Company contributed its 80% ownership interest in EEI to its subsidiary, Genco. The remaining 20% is owned by Kentucky Utilities Company, a nonaffiliated entity.

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.

FAC - A fuel and purchased power cost recovery mechanism that allows UE to recover, through customer rates, 95% of changes in fuel (coal, coal transportation, natural gas for generation, and nuclear) and purchased power costs, net of off-system revenues, including MISO costs and revenues, greater or less than the amount set in base rates, without a traditional rate proceeding.

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.

Fitch - Fitch Ratings, a credit rating agency.

Form 10-K - The combined Annual Report on Form 10-K for the year ended December 31, 2009, filed by the Ameren Companies with the SEC.

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

Genco - Ameren Energy Generating Company, a Resources Company subsidiary that operates a merchant 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 EPA - Illinois Environmental Protection Agency, a state government agency.

Illinois Regulated - A financial reporting segment consisting of the regulated electric and natural gas transmission and distribution businesses of CIPS, CILCO, IP and AITC.

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.

IPA - Illinois Power Agency, a state agency that has broad authority to assist in the procurement of electric power for residential and nonresidential customers.

Kilowatthour - A measure of electricity consumption equivalent to the use of 1,000 watts of power over a period of one hour.

MACT - Maximum Achievable Control Technology.

Marketing Company - Ameren Energy Marketing Company, a Resources Company subsidiary that markets power for Genco, AERG, EEI and Medina Valley.

Medina Valley - AmerenEnergy Medina Valley Cogen LLC, a Resources Company subsidiary, which owns a 40-megawatt gas-fired electric generation plant.

Megawatthour - One thousand kilowatthours.

Merchant Generation - A financial reporting segment consisting primarily of the operations or activities of Genco, AERG, EEI, Medina Valley, Resources Company and Marketing Company.

MGP - Manufactured gas plant.

MISO - Midwest Independent Transmission System Operator, Inc., an RTO.

MISO Energy and Operating Reserves Market - A market that uses market-based pricing, incorporating transmission congestion and line losses, to compensate market participants for power and ancillary services.

Missouri Regulated - A financial reporting segment consisting of UE’s rate-regulated businesses.

Mmbtu - One million Btus.

Money pool - Borrowing agreements among Ameren and its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. 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.

MPS - Multi-Pollutant Standard, an agreement, as amended, reached in 2006 among Genco, CILCO (AERG), EEI and the Illinois EPA, which was codified in Illinois environmental regulations.

MTM - Mark-to-market.

MW - Megawatt.

Native load - Wholesale customers and end-use retail customers, whom we are obligated to serve by statute, franchise, contract, or other regulatory requirement.

NO_x - Nitrogen oxide.

Noranda - Noranda Aluminum, Inc.

NPNS - Normal purchases and normal sales.

NRC - Nuclear Regulatory Commission, a U.S. government agency.

NSR - New Source Review provisions of the Clean Air Act.

OCI - Other comprehensive income (loss) as defined by GAAP.

Off-system revenues - Revenues from other than native load sales.

OTC - Over-the-counter.

PGA - Purchased Gas Adjustment tariffs, which allow the passing through of the actual cost of natural gas to utility customers.

PJM - PJM Interconnection LLC.

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 and revenue levels. Rate increase requests can take up to 11 months to be acted upon by the MoPSC and the ICC. As a result, revenue increases authorized by regulators will lag behind changing costs and revenue.

Resources Company - Ameren Energy Resources Company, LLC, an Ameren Corporation subsidiary that consists of non-rate-regulated operations, including Genco, Marketing Company, AFS and Medina Valley.

RFP - Request for proposal.

RTO - Regional Transmission Organization.

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.

SO₂ - Sulfur dioxide.

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.

VIE - Variable-interest entity.

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 in the Form 10-K 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 the pending UE natural gas rate proceeding and the rehearings or appeals related to the CIPS, CILCO and IP 2010 rate order and to UE’s 2009 and 2010 electric rate orders, and future rate proceedings or legislative actions that seek to limit or reverse rate increases;

•

the effects of, or changes to, the Illinois power procurement process;

•

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;

•

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 on demand for our services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;

•

increasing capital expenditure and operating expense requirements and our ability to recover these costs in a timely fashion in light of regulatory lag;

•

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, bad debt expense, and demand for our products;

•

disruptions of the capital markets or other events that make the Ameren Companies’ access to necessary capital, including short-term credit and liquidity, impossible, more difficult, or more costly;

•

our assessment of our liquidity;

•

the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;

•

actions of credit rating agencies and the effects of such actions;

•

the impact of weather conditions and other natural phenomena on us and our customers;

•

the impact of system outages;

•

generation, transmission, and distribution asset construction, installation and performance;

•

the recovery of costs associated with UE’s Taum Sauk pumped-storage hydroelectric plant incident and investment in a COLA for a second unit at its Callaway nuclear plant;

•

impairments of long-lived assets or goodwill;

•

operation of UE’s nuclear power facility, including planned and unplanned outages, and decommissioning costs;

•

the effects of strategic initiatives, including mergers, 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 and energy efficiency, will be enacted over time, which could limit or terminate the operation of certain of our generating units, increase our costs, result in an impairment of our assets, reduce our customers’ demand for electricity or natural gas, or otherwise have a negative financial effect;

•

labor disputes, work force reductions, 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, credit facilities 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;

•

acts of sabotage, war, terrorism, or intentionally disruptive acts; and

•

conditions to, and the timetable for, completion of the merger of CILCO and IP with and into CIPS and the other transactions contemplated in connection with the merger, and the associated transaction costs, as well as the distribution of AERG common stock to Ameren and the subsequent contribution by Ameren of the AERG stock to Resources Company.

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

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

AMEREN CORPORATION

CONSOLIDATED STATEMENT OF INCOME

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Operating Revenues:
Electric	$	1,533	$	1,515	$	2,973	$	2,910
Gas		171		169		647		690

Total operating revenues		1,704		1,684		3,620		3,600


Operating Expenses:
Fuel		286		287		579		561
Purchased power		268		219		539		452
Gas purchased for resale		83		83		416		466
Other operations and maintenance		446		451		862		872
Depreciation and amortization		190		182		377		356
Taxes other than income taxes		100		97		218		207

Total operating expenses		1,373		1,319		2,991		2,914

Operating Income		331		365		629		686

Other Income and Expenses:
Miscellaneous income		24		17		46		33
Miscellaneous expense		2		7		9		11

Total other income		22		10		37		22

Interest Charges		115		124		247		242

Income Before Income Taxes		238		251		419		466
Income Taxes		83		83		158		153

Net Income		155		168		261		313
Less: Net Income Attributable to Noncontrolling Interests		3		3		7		7

Net Income Attributable to Ameren Corporation	$	152	$	165	$	254	$	306


Earnings per Common Share – Basic and Diluted	$	0.64	$	0.77	$	1.07	$	1.43

Dividends per Common Share	$	0.385	$	0.385	$	0.770	$	0.770
Average Common Shares Outstanding		238.4		213.6		238.0		213.1

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

AMEREN CORPORATION

CONSOLIDATED BALANCE SHEET

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


	June 30, 2010		December 31, 2009
ASSETS

Current Assets:
Cash and cash equivalents	$	506	$	622
Accounts receivable – trade (less allowance for doubtful accounts of $22 and $24, respectively)		466		424
Unbilled revenue		414		367
Miscellaneous accounts and notes receivable		208		318
Materials and supplies		676		782
Mark-to-market derivative assets		166		121
Current regulatory assets		274		110
Other current assets		120		98

Total current assets		2,830		2,842

Property and Plant, Net		17,747		17,610
Investments and Other Assets:
Nuclear decommissioning trust fund		289		293
Goodwill		831		831
Intangible assets		113		129
Regulatory assets		1,441		1,430
Other assets		664		655

Total investments and other assets		3,338		3,338

TOTAL ASSETS	$	23,915	$	23,790

LIABILITIES AND EQUITY

Current Liabilities:
Current maturities of long-term debt	$	354	$	204
Short-term debt		-		20
Accounts and wages payable		465		694
Taxes accrued		129		54
Interest accrued		123		110
Customer deposits		98		101
Mark-to-market derivative liabilities		196		109
Current regulatory liabilities		97		82
Other current liabilities		298		337

Total current liabilities		1,760		1,711

Credit Facility Borrowings		690		830
Long-term Debt, Net		6,963		7,113
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		2,725		2,554
Accumulated deferred investment tax credits		90		94
Regulatory liabilities		1,370		1,345
Asset retirement obligations		441		429
Pension and other postretirement benefits		1,132		1,165
Other deferred credits and liabilities		544		489

Total deferred credits and other liabilities		6,302		6,076

Commitments and Contingencies (Notes 2, 8, 9 and 10)
Ameren Corporation Stockholders’ Equity:
Common stock, $.01 par value, 400.0 shares authorized –shares outstanding of 239.1 and 237.4, respectively		2		2
Other paid-in capital, principally premium on common stock		5,476		5,412
Retained earnings		2,526		2,455
Accumulated other comprehensive loss		(13)		(16)

Total Ameren Corporation stockholders’ equity		7,991		7,853

Noncontrolling Interests		209		207

Total equity		8,200		8,060

TOTAL LIABILITIES AND EQUITY	$	23,915	$	23,790

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

AMEREN CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009
Cash Flows From Operating Activities:
Net income	$	261	$	313
Adjustments to reconcile net income to net cash provided by operating activities:
Net mark-to-market gain on derivatives		-		(56)
Depreciation and amortization		387		364
Amortization of nuclear fuel		19		25
Amortization of debt issuance costs and premium/discounts		12		7
Deferred income taxes and investment tax credits, net		175		77
Other		(28)		11
Changes in assets and liabilities:
Receivables		(36)		116
Materials and supplies		108		109
Accounts and wages payable		(125)		(204)
Taxes accrued		75		77
Assets, other		(99)		21
Liabilities, other		3		57
Pension and other postretirement benefits		33		23
Counterparty collateral, net		(69)		(21)
Taum Sauk costs, net of insurance recoveries		56		(48)

Net cash provided by operating activities		772		871

Cash Flows From Investing Activities:
Capital expenditures		(540)		(846)
Nuclear fuel expenditures		(29)		(35)
Purchases of securities – nuclear decommissioning trust fund		(118)		(288)
Sales of securities – nuclear decommissioning trust fund		110		291
Purchases of emission allowances		-		(4)
Proceeds from sales of property interests		18		-
Other		(1)		-

Net cash used in investing activities		(560)		(882)

Cash Flows From Financing Activities:
Dividends on common stock		(183)		(164)
Capital issuance costs		-		(47)
Dividends paid to noncontrolling interest holders		(5)		(16)
Short-term and credit facility borrowings, net		(160)		(209)
Redemptions, repurchases, and maturities of long-term debt		-		(250)
Issuances:
Common stock		43		47
Long-term debt		-		772
Generator advances for construction received (refunded), net		(23)		37

Net cash provided by (used in) financing activities		(328)		170


Net change in cash and cash equivalents		(116)		159
Cash and cash equivalents at beginning of year		622		92

Cash and cash equivalents at end of period	$	506	$	251

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

UNION ELECTRIC COMPANY

STATEMENT OF INCOME

(Unaudited) (In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Operating Revenues:
Electric	$	737	$	725	$	1,344	$	1,304
Gas		23		26		98		101
Other		1		1		1		2

Total operating revenues		761		752		1,443		1,407


Operating Expenses:
Fuel		112		163		236		298
Purchased power		42		28		86		61
Gas purchased for resale		10		12		56		60
Other operations and maintenance		240		220		458		436
Depreciation and amortization		92		90		184		176
Taxes other than income taxes		68		66		136		128

Total operating expenses		564		579		1,156		1,159

Operating Income		197		173		287		248

Other Income and Expenses:
Miscellaneous income		20		15		41		28
Miscellaneous expense		1		2		3		4

Total other income		19		13		38		24

Interest Charges		43		57		102		110

Income Before Income Taxes		173		129		223		162
Income Taxes		58		45		80		56

Net Income		115		84		143		106
Preferred Stock Dividends		2		2		3		3

Net Income Available to Common Stockholder	$	113	$	82	$	140	$	103

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

UNION ELECTRIC COMPANY

BALANCE SHEET

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


	June 30, 2010		December 31, 2009
ASSETS

Current Assets:
Cash and cash equivalents	$	91	$	267
Accounts receivable – trade (less allowance for doubtful accounts of $6 and $6, respectively)		177		154
Accounts receivable – affiliates		64		22
Unbilled revenue		213		127
Miscellaneous accounts and notes receivable		85		199
Materials and supplies		326		346
Current regulatory assets		187		63
Other current assets		44		50

Total current assets		1,187		1,228

Property and Plant, Net		9,595		9,585
Investments and Other Assets:
Nuclear decommissioning trust fund		289		293
Intangible assets		29		35
Regulatory assets		818		765
Other assets		377		395

Total investments and other assets		1,513		1,488

TOTAL ASSETS	$	12,295	$	12,301

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Current maturities of long-term debt	$	4	$	4
Accounts and wages payable		154		336
Accounts payable – affiliates		84		132
Taxes accrued		146		21
Interest accrued		77		63
Current accumulated deferred income taxes, net		42		12
Other current liabilities		120		115

Total current liabilities		627		683

Long-term Debt, Net		4,018		4,018
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		1,760		1,660
Accumulated deferred investment tax credits		77		79
Regulatory liabilities		829		947
Asset retirement obligations		338		331
Pension and other postretirement benefits		400		400
Other deferred credits and liabilities		165		126

Total deferred credits and other liabilities		3,569		3,543

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
Other paid-in capital, principally premium on common stock		1,555		1,555
Preferred stock not subject to mandatory redemption		113		113
Retained earnings		1,902		1,878

Total stockholders’ equity		4,081		4,057

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	12,295	$	12,301

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

UNION ELECTRIC COMPANY

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009
Cash Flows From Operating Activities:
Net income	$	143	$	106
Adjustments to reconcile net income to net cash provided by operating activities:
Net mark-to-market gain on derivatives		-		(30)
Depreciation and amortization		184		176
Amortization of nuclear fuel		19		25
Amortization of debt issuance costs and premium/discounts		-		3
Deferred income taxes and investment tax credits, net		106		49
Allowance for equity funds used during construction		(25)		(13)
Other		(4)		8
Changes in assets and liabilities:
Receivables		(97)		(146)
Materials and supplies		22		(4)
Accounts and wages payable		(158)		(162)
Taxes accrued		125		116
Assets, other		(137)		17
Liabilities, other		41		25
Pension and other postretirement benefits		12		10
Taum Sauk costs, net of insurance recoveries		56		(48)

Net cash provided by operating activities		287		132

Cash Flows From Investing Activities:
Capital expenditures		(314)		(421)
Nuclear fuel expenditures		(29)		(35)
Purchases of securities – nuclear decommissioning trust fund		(118)		(288)
Sales of securities – nuclear decommissioning trust fund		110		291

Net cash used in investing activities		(351)		(453)

Cash Flows From Financing Activities:
Dividends on common stock		(116)		(99)
Dividends on preferred stock		(3)		(3)
Capital issuance costs		-		(14)
Short-term debt, net		-		209
Intercompany note payable – Ameren, net		-		(92)
Issuances of long-term debt		-		349
Other		7		1

Net cash provided by (used in) financing activities		(112)		351


Net change in cash and cash equivalents		(176)		30
Cash and cash equivalents at beginning of year		267		-

Cash and cash equivalents at end of period	$	91	$	30

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

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY

STATEMENT OF INCOME

(Unaudited) (In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Operating Revenues:
Electric	$	159	$	163	$	321	$	328
Gas		34		33		123		131
Other		1		-		1		2

Total operating revenues		194		196		445		461


Operating Expenses:
Purchased power		81		94		174		200
Gas purchased for resale		17		16		79		89
Other operations and maintenance		42		55		87		98
Depreciation and amortization		17		17		34		34
Taxes other than income taxes		8		8		19		18

Total operating expenses		165		190		393		439

Operating Income		29		6		52		22

Other Income and Expenses:
Miscellaneous income		1		2		2		5
Miscellaneous expense		1		-		1		1

Total other income		-		2		1		4

Interest Charges		7		7		14		14

Income Before Income Taxes		22		1		39		12
Income Taxes		9		-		16		4

Net Income		13		1		23		8
Preferred Stock Dividends		-		-		1		1

Net Income Available to Common Stockholder	$	13	$	1	$	22	$	7

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

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY

BALANCE SHEET

(Unaudited) (In millions)


	June 30, 2010		December 31, 2009
ASSETS

Current Assets:
Cash and cash equivalents	$	113	$	28
Accounts receivable – trade (less allowance for doubtful accounts of $4 and $5, respectively)		60		53
Accounts receivable – affiliates		2		12
Unbilled revenue		51		52
Miscellaneous accounts and notes receivable		-		14
Current portion of note receivable – Genco		-		45
Current portion of tax receivable – Genco		9		9
Materials and supplies		33		47
Current regulatory assets		79		59
Current accumulated deferred income taxes, net		15		18
Other current assets		8		5

Total current assets		370		342

Property and Plant, Net		1,255		1,268
Investments and Other Assets:
Tax receivable – Genco		76		82
Regulatory assets		228		248
Other assets		33		25

Total investments and other assets		337		355

TOTAL ASSETS	$	1,962	$	1,965

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Current maturities of long-term debt	$	150	$	-
Accounts and wages payable		52		48
Accounts payable – affiliates		36		58
Taxes accrued		10		7
Customer deposits		22		21
Mark-to-market derivative liabilities		18		10
Mark-to-market derivative liabilities – affiliates		55		43
Environmental remediation		20		22
Other current liabilities		41		45

Total current liabilities		404		254

Long-term Debt, Net		271		421
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		277		273
Accumulated deferred investment tax credits		7		7
Regulatory liabilities		234		244
Pension and other postretirement benefits		56		58
Other deferred credits and liabilities		133		134

Total deferred credits and other liabilities		707		716

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		257		257
Preferred stock not subject to mandatory redemption		50		50
Retained earnings		273		267
Total stockholders’ equity		580		574

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,962	$	1,965

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

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009
Cash Flows From Operating Activities:
Net income	$	23	$	8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		34		34
Amortization of debt issuance costs and premium/discounts		1		1
Deferred income taxes and investment tax credits, net		5		(2)
Changes in assets and liabilities:
Receivables		24		40
Materials and supplies		14		32
Accounts and wages payable		(11)		8
Taxes accrued		3		(2)
Assets, other		(2)		9
Liabilities, other		(2)		(5)
Pension and other postretirement benefits		2		2

Net cash provided by operating activities		91		125

Cash Flows From Investing Activities:
Capital expenditures		(37)		(47)
Note receivable – Genco		45		42

Net cash provided by (used in) investing activities		8		(5)

Cash Flows From Financing Activities:
Dividends on common stock		(16)		-
Dividends on preferred stock		(1)		(1)
Capital issuance costs		-		(3)
Short-term debt, net		-		(62)
Money pool borrowings, net		-		(44)
Other		3		-

Net cash used in financing activities		(14)		(110)


Net change in cash and cash equivalents		85		10
Cash and cash equivalents at beginning of year		28		-

Cash and cash equivalents at end of period	$	113	$	10

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

AMEREN ENERGY GENERATING COMPANY

CONSOLIDATED STATEMENT OF INCOME

(Unaudited) (In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009^(a)		2010		2009^(a)
Operating Revenues	$	275	$	287	$	542	$	582

Operating Expenses:
Fuel		136		96		259		208
Purchased power		18		23		20		24
Other operations and maintenance		45		58		94		112
Depreciation and amortization		25		19		49		38
Taxes other than income taxes		6		6		13		12

Total operating expenses		230		202		435		394

Operating Income		45		85		107		188
Other Income and Expenses:
Miscellaneous income		1		-		1		-
Miscellaneous expense		-		-		1		-

Total other income		1		-		-		-

Interest Charges		20		13		39		29

Income Before Income Taxes		26		72		68		159
Income Taxes		12		26		30		58

Net Income		14		46		38		101
Less: Net Income Attributable to Noncontrolling Interest		1		-		2		2

Net Income Attributable to Ameren Energy Generating Company	$	13	$	46	$	36	$	99

^(a)	Prior period has been adjusted to include EEI as discussed in Note 1 - Summary of Significant Accounting Policies.

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

AMEREN ENERGY GENERATING COMPANY

CONSOLIDATED BALANCE SHEET

(Unaudited) (In millions)


	June 30, 2010		December 31, 2009^(a)
ASSETS

Current Assets:
Cash and cash equivalents	$	7	$	6
Accounts receivable – affiliates		126		129
Miscellaneous accounts and notes receivable		25		26
Advances to money pool		94		73
Materials and supplies		153		170
Mark-to-market derivative assets		26		22
Other current assets		2		2

Total current assets		433		428

Property and Plant, Net		2,323		2,337
Investments and Other Assets:
Goodwill		65		65
Intangible assets		55		62
Other assets		21		28

TOTAL ASSETS	$	2,897	$	2,920

LIABILITIES AND EQUITY

Current Liabilities:
Current maturities of long-term debt	$	200	$	200
Current portion of note payable – CIPS		-		45
Note payable – Ameren		92		131
Accounts and wages payable		69		85
Accounts payable – affiliates		30		40
Current portion of tax payable – CIPS		9		9
Taxes accrued		37		17
Other current liabilities		76		71

Total current liabilities		513		598

Long-term Debt, Net		823		823
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		255		216
Accumulated deferred investment tax credits		4		4
Tax payable – CIPS		76		82
Asset retirement obligations		63		60
Pension and other postretirement benefits		84		89
Other deferred credits and liabilities		24		35

Total deferred credits and other liabilities		506		486

Commitments and Contingencies (Notes 2, 8 and 9)
Ameren Energy Generating Company Stockholder’s Equity:
Common stock, no par value, 10,000 shares authorized – 2,000 shares outstanding		-		-
Other paid-in capital		620		620
Retained earnings		468		432
Accumulated other comprehensive loss		(47)		(51)

Total Ameren Energy Generating Company stockholder’s equity		1,041		1,001

Noncontrolling Interest		14		12

Total equity		1,055		1,013

TOTAL LIABILITIES AND EQUITY	$	2,897	$	2,920

^(a)	Prior period has been adjusted to include EEI as discussed in Note 1 - Summary of Significant Accounting Policies.

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

AMEREN ENERGY GENERATING COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009^(a)
Cash Flows From Operating Activities:
Net income	$	38	$	101
Adjustments to reconcile net income to net cash provided by operating activities:
Net mark-to-market (gain) loss on derivatives		4		(13)
Depreciation and amortization		56		49
Amortization of debt issuance costs and discounts		2		-
Deferred income taxes and investment tax credits, net		31		21
Other		(5)		5
Changes in assets and liabilities:
Receivables		4		(21)
Materials and supplies		17		1
Accounts and wages payable		(11)		31
Taxes accrued		20		7
Assets, other		5		3
Liabilities, other		(17)		(14)
Pension and other postretirement benefits		3		5

Net cash provided by operating activities		147		175

Cash Flows From Investing Activities:
Capital expenditures		(59)		(161)
Proceeds from sale of property interests		18		-
Money pool advances, net		(21)		-
Purchases of emission allowances		-		(2)

Net cash used in investing activities		(62)		(163)

Cash Flows From Financing Activities:
Dividends on common stock		-		(43)
Dividends paid to noncontrolling interest holder		-		(11)
Capital issuance costs		-		(4)
Money pool borrowings, net		-		34
Notes payable – affiliates		(84)		12

Net cash used in financing activities		(84)		(12)


Net change in cash and cash equivalents		1		-
Cash and cash equivalents at beginning of year		6		3

Cash and cash equivalents at end of period	$	7	$	3

^(a)	Prior period has been adjusted to include EEI as discussed in Note 1 - Summary of Significant Accounting Policies.

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

CENTRAL ILLINOIS LIGHT COMPANY

CONSOLIDATED STATEMENT OF INCOME

(Unaudited) (In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Operating Revenues:
Electric	$	154	$	178	$	319	$	348
Gas		36		33		148		157
Support services – affiliates		19		18		40		34
Other		-		3		-		4

Total operating revenues		209		232		507		543

Operating Expenses:
Fuel		39		24		78		46
Purchased power		35		40		77		87
Gas purchased for resale		19		19		104		115
Other operations and maintenance		63		66		126		129
Depreciation and amortization		18		18		36		34
Taxes other than income taxes		6		6		15		14

Total operating expenses		180		173		436		425

Operating Income		29		59		71		118
Other Income and Expenses:
Miscellaneous income		2		-		2		-
Miscellaneous expense		-		2		1		3

Total other income (expense)		2		(2)		1		(3)

Interest Charges		11		8		23		15

Income Before Income Taxes		20		49		49		100
Income Taxes		8		18		18		36

Net Income	$	12	$	31	$	31	$	64

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

CENTRAL ILLINOIS LIGHT COMPANY

CONSOLIDATED BALANCE SHEET

(Unaudited) (In millions)


	June 30, 2010		December 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	128	$	88
Accounts receivable – trade (less allowance for doubtful accounts of $2 and $3, respectively)		34		39
Accounts receivable – affiliates		61		68
Unbilled revenue		26		43
Miscellaneous accounts and notes receivable		11		16
Materials and supplies		77		107
Current regulatory assets		49		29
Other current assets		20		18

Total current assets		406		408

Property and Plant, Net		1,771		1,789
Investments and Other Assets:
Intangible assets		1		1
Regulatory assets		163		162
Other assets		28		22

Total investments and other assets		192		185

TOTAL ASSETS	$	2,369	$	2,382

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Note payable – Ameren	$	243	$	288
Accounts and wages payable		51		62
Accounts payable – affiliates		28		50
Taxes accrued		10		5
Mark-to-market derivative liabilities		22		10
Mark-to-market derivative liabilities – affiliates		28		19
Current regulatory liabilities		30		23
Other current liabilities		38		49

Total current liabilities		450		506

Long-term Debt, Net		279		279
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		236		214
Accumulated deferred investment tax credits		3		4
Regulatory liabilities		206		210
Pension and other postretirement benefits		196		193
Asset retirement obligations		35		34
Other deferred credits and liabilities		87		87

Total deferred credits and other liabilities		763		742

Commitments and Contingencies (Notes 2, 8 and 9)
Stockholders’ Equity:
Common stock, no par value, 20.0 shares authorized – 13.6 shares outstanding		-		-
Other paid-in capital		480		480
Preferred stock not subject to mandatory redemption		19		19
Retained earnings		376		354
Accumulated other comprehensive income		2		2

Total stockholders’ equity		877		855

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,369	$	2,382

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

CENTRAL ILLINOIS LIGHT COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009
Cash Flows From Operating Activities:
Net income	$	31	$	64
Adjustments to reconcile net income to net cash provided by operating activities:
Net mark-to-market (gain) loss on derivatives		1		(3)
Depreciation and amortization		36		35
Amortization of debt issuance costs and premium/discounts		2		1
Deferred income taxes and investment tax credits, net		16		5
Changes in assets and liabilities:
Receivables		37		39
Materials and supplies		30		31
Accounts and wages payable		(27)		(46)
Taxes accrued		5		(5)
Assets, other		(6)		1
Liabilities, other		(6)		8
Pension and postretirement benefits		5		14

Net cash provided by operating activities		124		144

Cash Flows From Investing Activities:
Capital expenditures		(29)		(96)
Proceeds from sale of noncore properties		2		-
Purchases of emission allowances		-		(1)

Net cash used in investing activities		(27)		(97)

Cash Flows From Financing Activities:
Dividends on common stock		(9)		-
Capital issuance costs		-		(7)
Short-term debt, net		-		(236)
Note payable – Ameren		(45)		346
Money pool borrowings, net		-		(98)
Capital contribution from parent		-		11
Other		(3)		1

Net cash provided by (used in) financing activities		(57)		17


Net change in cash and cash equivalents		40		64
Cash and cash equivalents at beginning of year		88		-

Cash and cash equivalents at end of period	$	128	$	64

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

ILLINOIS POWER COMPANY

STATEMENT OF INCOME

(Unaudited) (In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Operating Revenues:
Electric	$	250	$	247	$	501	$	499
Gas		78		74		278		290
Other		2		4		4		8

Total operating revenues		330		325		783		797

Operating Expenses:
Purchased power		109		126		244		275
Gas purchased for resale		36		33		176		191
Other operations and maintenance		74		77		146		144
Depreciation and amortization		25		25		50		49
Amortization of regulatory assets		3		4		7		8
Taxes other than income taxes		13		13		34		34

Total operating expenses		260		278		657		701

Operating Income		70		47		126		96
Other Income and Expenses:
Miscellaneous income		-		1		1		2
Miscellaneous expense		-		-		2		1

Total other income (expense)		-		1		(1)		1

Interest Charges		22		26		45		52

Income Before Income Taxes		48		22		80		45
Income Taxes		19		9		32		18

Net Income		29		13		48		27
Preferred Stock Dividends		-		-		1		1

Net Income Available to Common Stockholder	$	29	$	13	$	47	$	26

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

ILLINOIS POWER COMPANY

BALANCE SHEET

(Unaudited) (In millions)


	June 30, 2010		December 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	142	$	190
Accounts receivable – trade (less allowance for doubtful accounts of $9 and $9, respectively)		112		107
Accounts receivable – affiliates		62		49
Unbilled revenue		82		94
Miscellaneous accounts and notes receivable		1		23
Materials and supplies		86		112
Current regulatory assets		119		86
Other current assets		42		26

Total current assets		646		687

Property and Plant, Net		2,478		2,450
Investments and Other Assets:
Goodwill		214		214
Regulatory assets		486		540
Other assets		68		51

Total investments and other assets		768		805

TOTAL ASSETS	$	3,892	$	3,942

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts and wages payable	$	83	$	98
Accounts payable – affiliates		85		117
Taxes accrued		5		6
Customer deposits		43		46
Mark-to-market derivative liabilities		40		20
Mark-to-market derivative liabilities – affiliates		77		65
Environmental remediation		42		59
Current regulatory liabilities		30		24
Other current liabilities		47		70

Total current liabilities		452		505

Long-term Debt, Net		1,147		1,147
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		254		232
Regulatory liabilities		101		92
Pension and other postretirement benefits		223		238
Other deferred credits and liabilities		259		277

Total deferred credits and other liabilities		837		839

Commitments and Contingencies (Notes 2, 8 and 9)
Stockholders’ Equity:
Common stock, no par value, 100.0 shares authorized – 23.0 shares outstanding		-		-
Other paid-in-capital		1,349		1,349
Preferred stock not subject to mandatory redemption		46		46
Retained earnings		58		53
Accumulated other comprehensive income		3		3

Total stockholders’ equity		1,456		1,451

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,892	$	3,942

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

ILLINOIS POWER COMPANY

STATEMENT OF CASH FLOWS

(Unaudited) (In millions)


	Six Months Ended June 30,
	2010		2009
Cash Flows From Operating Activities:
Net income	$	48	$	27
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		57		53
Amortization of debt issuance costs and premium/discounts		4		2
Deferred income taxes		23		13
Other		(1)		(1)
Changes in assets and liabilities:
Receivables		17		65
Materials and supplies		26		50
Accounts and wages payable		(25)		50
Taxes accrued		(1)		(4)
Assets, other		(13)		9
Liabilities, other		(25)		(13)
Pension and other postretirement benefits		9		3

Net cash provided by operating activities		119		254

Cash Flows From Investing Activities:
Capital expenditures		(88)		(91)
Advances to AITC for construction		(6)		(28)
Money pool advances, net		-		44

Net cash used in investing activities		(94)		(75)

Cash Flows From Financing Activities:
Dividends on common stock		(42)		-
Dividends on preferred stock		(1)		(1)
Capital issuance costs		-		(7)
Redemptions, repurchases and maturities of long-term debt		-		(250)
Capital contribution from parent		-		58
Generator advances for construction received (refunded), net		(30)		35

Net cash used in financing activities		(73)		(165)


Net change in cash and cash equivalents		(48)		14
Cash and cash equivalents at beginning of year		190		50

Cash and cash equivalents at end of period	$	142	$	64

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

AMEREN CORPORATION (Consolidated)

UNION ELECTRIC COMPANY

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY

AMEREN ENERGY GENERATING COMPANY (Consolidated)

CENTRAL ILLINOIS LIGHT COMPANY (Consolidated)

ILLINOIS POWER COMPANY

COMBINED NOTES TO FINANCIAL STATEMENTS

(Unaudited)

June 30, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company under PUHCA 2005, administered by FERC. Ameren’s primary assets are the common stock of its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. These subsidiaries operate, as the case may be, rate-regulated electric generation, transmission and distribution businesses, rate-regulated natural gas transmission and distribution businesses, and merchant electric generation businesses in Missouri and Illinois. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Also see the Glossary of Terms and Abbreviations at the front of this report.

•

UE, or Union Electric Company, also known as AmerenUE, operates a rate-regulated electric generation, transmission and distribution business, and a rate-regulated natural gas transmission and distribution business in Missouri.

•

CIPS, or Central Illinois Public Service Company, also known as AmerenCIPS, operates a rate-regulated electric and natural gas transmission and distribution business in Illinois.

•

Genco, or Ameren Energy Generating Company, operates a merchant electric generation business in Illinois and Missouri. Genco has an 80% ownership interest in EEI.

•

CILCO, or Central Illinois Light Company, also known as AmerenCILCO, operates a rate-regulated electric transmission and distribution business, a merchant electric generation business (through its subsidiary, AERG) and a rate-regulated natural gas transmission and distribution business, all in Illinois.

•

IP, or Illinois Power Company, also known as AmerenIP, operates a rate-regulated electric and natural gas transmission and distribution business in Illinois.

Ameren has various other subsidiaries responsible for the marketing of power, procurement of fuel, management of commodity risks, and provision of other shared services.

Ameren, through Genco, has an 80% ownership interest in EEI. Ameren and Genco consolidate EEI for financial reporting purposes. Effective January 1, 2010, as part of an internal reorganization, Resources Company transferred its 80% stock ownership interest in EEI to Genco through a capital contribution. The transfer of EEI to Genco was accounted for as a transaction between entities under common control, whereby Genco accounted for the transfer at the historical carrying value of the parent (Ameren) as if the transfer had occurred at the beginning of the earliest reporting period presented. Ameren’s historical cost basis in EEI included purchase accounting adjustments relating to Ameren’s acquisition of an additional 20% ownership interest in EEI in 2004. This transfer required Genco’s prior-period financial statements to be retrospectively combined for all periods presented. Consequently, Genco’s prior-period consolidated financial statements reflect EEI as if it had been a subsidiary of Genco.

The financial statements of Ameren, Genco and CILCO are prepared on a consolidated basis. UE, CIPS and IP have no subsidiaries, and therefore their financial statements were not prepared on a consolidated basis. All significant intercompany transactions have been eliminated. All tabular dollar amounts are in millions, unless otherwise indicated.

On April 13, 2010, CIPS, CILCO and IP entered into a merger agreement under which CILCO and IP will be merged with and into CIPS as part of a two-step corporate reorganization of Ameren. The second step of the reorganization would involve the distribution of AERG common stock to Ameren and the subsequent contribution by Ameren of the AERG common stock to Resources Company. See Note 14 - Corporate Reorganization for additional information.

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

Earnings Per Share

There were no material differences between Ameren’s basic and diluted earnings per share amounts for the three and six months ended June 30, 2010 and 2009. The number of restricted stock shares and performance share units outstanding had an immaterial impact on earnings per share. All of Ameren’s remaining stock options expired in February 2010.

Long-term Incentive Plan of 1998 and 2006 Omnibus Incentive Compensation Plan

The following table summarizes the changes in nonvested shares for the six months ended June 30, 2010, under the Long-term Incentive Plan of 1998 (1998 Plan), as amended, and the 2006 Omnibus Incentive Compensation Plan (2006 Plan):


	Performance Share Units^(a)				Restricted Shares^(b)
	Share Units		Weighted-average Fair Value Per Unit at Grant Date		Shares		Weighted-average Fair Value Per Share at Grant Date
Nonvested at January 1, 2010	945,337		$	22.07	135,696		$	48.92
Granted^(c)	688,510			32.01	-			-
Dividends	-			-	2,440			25.24
Forfeitures	(20,845	)		25.07	(4,369	)		49.71
Vested^(d)	(100,474	)		31.19	(52,828	)		47.43
Nonvested at June 30, 2010	1,512,528		$	25.95	80,939		$	49.87

(a)	Granted under the 2006 Plan.

(b)	Granted under the 1998 Plan.

(c)	Includes performance share units (share units) granted to certain executive and nonexecutive officers and other eligible employees in January 2010.

(d)	Share units vested due to attainment of retirement eligibility by certain employees. Actual shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.

The fair value of each share unit awarded in January 2010 under the 2006 Plan was determined to be $32.01. That amount was based on Ameren’s closing common share price of $27.95 at December 31, 2009, and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren’s total stockholder return for a three-year performance period relative to the designated peer group beginning January 1, 2010. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 1.70%, volatility of 23% to 39% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during each year of the performance period.

Ameren recorded compensation expense of $2 million and $3 million for the three months ended June 30, 2010, and 2009, respectively, and a related tax benefit of $1 million and $1 million for the three months ended June 30, 2010, and 2009, respectively. Ameren recorded compensation expense of $7 million and $8 million for each of the six-month periods ended June 30, 2010 and 2009, respectively, and a related tax benefit of $3 million and $3 million for the six-month periods ended June 30, 2010 and 2009, respectively. As of June 30, 2010, total compensation expense of $19 million related to nonvested awards not yet recognized was expected to be recognized over a weighted-average period of 27 months.

Accounting Changes and Other Matters

The following is a summary of recently adopted authoritative accounting guidance as well as guidance issued but not yet adopted that could impact the Ameren Companies.

Variable-Interest Entities

In June 2009, the FASB issued amended authoritative guidance that significantly changes the consolidation rules for VIEs. The guidance requires an enterprise to qualitatively assess the determination of the primary beneficiary of a VIE based on whether the entity (1) has the power to direct matters that most significantly affect the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Further, the guidance requires an ongoing reconsideration of the primary beneficiary. It also amends the events that trigger a reassessment of whether an entity is a VIE. The adoption of this guidance, effective for us as of January 1, 2010, did not have a material impact on our results of operations, financial position, or liquidity. See Variable-interest Entities below for additional information.

Disclosures about Fair Value Measurements

In January 2010, the FASB issued amended authoritative guidance regarding fair value measurements. This guidance requires disclosures regarding significant transfers into and out of Level 1 and Level 2 fair value measurements. It also requires information on purchases, sales, issuances, and settlements on a gross basis in the

reconciliation of Level 3 fair value measurements. Further, the FASB clarified guidance regarding the level of disaggregation, inputs, and valuation techniques. This guidance was effective for us as of January 1, 2010, with the exception of guidance applicable to detailed Level 3 reconciliation disclosures, which will be effective for us as of January 1, 2011. The adoption of this guidance did not have a material impact on our results of operations, financial position, or liquidity because it provides enhanced disclosure requirements only. See Note 7 - Fair Value Measurements for additional information.

Goodwill and Intangible Assets

Goodwill. Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired. Ameren’s goodwill relates to its acquisition of IP and an additional 20% EEI ownership interest acquired in 2004 as well as its acquisition of CILCORP and Medina Valley in 2003. IP’s goodwill relates to the acquisition of IP in 2004. Genco’s goodwill relates to the additional 20% EEI ownership interest acquired in 2004. We evaluate goodwill for impairment as of October 31 of each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Based on the results of the annual goodwill impairment test completed as of October 31, 2009, the estimated fair value of Ameren’s Merchant Generation reporting unit exceeded its carrying value by a nominal amount. The failure in the future of this reporting unit, or any reporting unit, to achieve forecasted operating results and cash flows, an unfavorable change in forecasted operating results and cash flows, or a further decline of observable industry market multiples may reduce its estimated fair value below its carrying value and would likely result in the recognition of a goodwill impairment charge.

Intangible Assets. We evaluate intangible assets for impairment if events or changes in circumstances indicate that their carrying amount might be impaired. Ameren’s, UE’s, Genco’s and CILCO’s intangible assets consisted of emission allowances at June 30, 2010. UE, Genco and CILCO (AERG) expect to use their SO₂ and NO_x allowances for ongoing operations. See Note 9 - Commitments and Contingencies for additional information on emission allowances.

The following table presents the SO₂ and NO_x emission allowances held and the related aggregate SO ₂ and NO_x emission allowance book values that were carried as intangible assets as of June 30, 2010. Emission allowances consist of various individual emission allowance certificates and do not expire. Emission allowances are charged to fuel expense as they are used in operations.


SO₂ and NO_x in tons	SO₂^(a)	NO_x^(b)	Book Value^(c)
Ameren	3,158,000	58,357	$	113	^(d)
UE	1,661,000	35,184		29
Genco	1,119,000	21,196		55
CILCO (AERG)	378,000	1,977		1

(a)	Vintages are from 2010 to 2020. Each company possesses additional allowances for use in periods beyond 2020.

(b)	Vintages are from 2010 and the remaining unused prior years’ allowances.

(c)	The book value represents SO₂ and NO_x emission allowances for use in periods through 2039. The book value at December 31, 2009, for Ameren, UE, Genco and CILCO (AERG) was $129 million, $35 million, $62 million, and $1 million, respectively.

(d)	Includes $28 million of fair-market value adjustments recorded in connection with Ameren’s 2003 acquisition of CILCORP.

The following table presents amortization expense based on usage of emission allowances, net of gains from emission allowance sales, for Ameren, UE, Genco and CILCO (AERG) during the three and six months ended June 30, 2010 and 2009:


	Three Months					Six Months
	2010			2009		2010			2009
Ameren^(a)	$	4		$	8	$	7		$	13
UE		(2	)		(b)		(2	)		(b)
Genco^(a)		5			6		8			11
CILCO (AERG)		(b	)		1		(b	)		1

(a)	Includes allowances consumed that were recorded through purchase accounting.

(b)	Less than $1 million.

Excise Taxes

Excise taxes imposed on us are reflected on Missouri electric, Missouri natural gas, and Illinois natural gas customer bills. They are recorded gross in Operating Revenues and Operating Expenses - Taxes Other than Income Taxes on the statement of income. Excise taxes reflected on Illinois electric customer bills are imposed on the consumer and are therefore not included in revenues and expenses. They are recorded as tax collections payable and included in Taxes Accrued on the balance sheet. The following table presents excise taxes recorded in Operating Revenues and Operating Expenses - Taxes Other than Income Taxes for the three and six months ended June 30, 2010 and 2009:


	Three Months				Six Months
	2010		2009		2010		2009
Ameren	$	44	$	42	$	90	$	84
UE		33		30		58		53
CIPS		3		3		8		8
CILCO		2		2		6		6
IP		6		7		18		17

Uncertain Tax Positions

The amount of unrecognized tax benefits as of June 30, 2010, was $163 million, $113 million, $6 million, $18 million, $14 million, and $10 million for Ameren, UE, CIPS, Genco, CILCO and IP, respectively. The amount of unrecognized tax benefits as of June 30, 2010, that would impact the effective tax rate, if recognized, was $6 million, $3 million, less than $1 million, $1 million, $1 million, and less than $1 million for Ameren, UE, CIPS, Genco, CILCO and IP, respectively.

Ameren’s federal income tax returns for the years 2005 through 2008 are before the Appeals Office of the Internal Revenue Service.

State income tax returns are generally subject to examination for a period of three years after filing of the return. The state impact of any federal changes remains subject to examination by various states for a period of up to a year after formal notification to the states. Ameren’s 2007 and 2008 state of Illinois income tax returns are currently under examination by the Illinois Department of Revenue.

It is reasonably possible that events will occur during the next 12 months that would cause the total amount of unrecognized tax benefits for the Ameren Companies to increase or decrease. However, the Ameren Companies do not believe such increases or decreases would be material to their results of operations, financial position or liquidity.

Asset Retirement Obligations

AROs at Ameren, UE, CIPS, Genco, CILCO and IP increased compared to December 31, 2009, to reflect the accretion of obligations to their fair values.

Genco Asset Sale

In June 2010, Genco completed a sale of 25% of its Columbia CT facility to the city of Columbia, Missouri. Genco received cash proceeds of $18 million from the sale. The city of Columbia also holds two options to purchase additional ownership interests in the facility under two existing power purchase agreements. Columbia can exercise one option, as amended, for an additional 25% of the facility at the end of 2011 for a purchase price of $14.9 million, at the end of 2014 for a purchase price of $9.5 million, or at the end of 2020 for a purchase price of $4 million. The other option can be exercised for another 25% of the facility at the end of 2013 for a purchase price of $15.5 million, at the end of 2017 for a purchase price of $9.5 million, or at the end of 2023 for a purchase price of $4 million. The city of Columbia purchases a total of 72 megawatts of capacity and energy generated by the facility under the two existing purchase power agreements. If the city of Columbia exercises one of the purchase options described above, the purchase power agreement associated with that option would be terminated.

Variable-interest Entities

According to the applicable authoritative accounting guidance, an entity is considered a VIE if it does not have sufficient equity to finance its activities without assistance from variable-interest holders, or if its equity investors lack any of the following characteristics of a controlling financial interest: control through voting rights, the obligation to absorb expected losses, or the right to receive expected residual returns. The primary beneficiary of a VIE is the entity that (1) has the power to direct matters that most significantly affect the activities of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE if they are its primary beneficiary. We have determined that the following significant VIEs were held by the Ameren Companies at June 30, 2010:

— Partnership investments. At June 30, 2010, and December 31, 2009, Ameren had investments in multiple affordable housing and low-income real estate development partnerships as well as an investment in a commercial real estate development partnership of $53 million and $64 million in the aggregate, respectively. Ameren has a variable interest in these investments as a limited partner. With the exception of the commercial real estate development partnership, Ameren does not own a majority interest in each partnership. Ameren receives the benefits and accepts the risks consistent with its limited partner interest in each partnership. Ameren is not the primary beneficiary of these investments because Ameren does not have the power to direct matters that most significantly impact the activities of the VIE. These investments are classified as Other Assets on Ameren’s consolidated balance sheet. The maximum exposure to loss as a result of these variable interests is limited to the investments in these partnerships.

See Note 8 - Related Party Transactions for information about IP’s variable interest in AITC.

Noncontrolling Interest

Ameren’s noncontrolling interests comprise the 20% of EEI’s net assets not owned by Ameren and the Ameren subsidiaries’ outstanding preferred stock not subject to mandatory redemption not owned by Ameren. These noncontrolling interests are classified as a component of equity separate from Ameren’s equity in its consolidated balance sheet. Genco’s noncontrolling interest comprises the 20% of EEI’s net assets not owned by Genco. This noncontrolling interest is classified as a component of equity separate from Genco’s equity in its consolidated balance sheet.

A reconciliation of the equity changes attributable to the noncontrolling interest at Ameren and Genco for the three and six months ended June 30, 2010, is shown below:


	Three Months						Six Months
	2010			2009			2010			2009
Ameren:
Noncontrolling interest, beginning of period	$	209		$	212		$	207		$	216
Net income attributable to noncontrolling interest		3			3			7			7
Dividends paid to noncontrolling interest holders		(3	)		(8	)		(5	)		(16	)
Noncontrolling interest, end of period	$	209		$	207		$	209		$	207
Genco:
Noncontrolling interest, beginning of period	$	13		$	17		$	12		$	21
Net income attributable to noncontrolling interest		1			-			2			2
Dividends paid to noncontrolling interest holders		-			(5	)		-			(11	)
Noncontrolling interest, end of period	$	14		$	12		$	14		$	12

NOTE 2 - RATE AND REGULATORY MATTERS

Below is a summary of significant regulatory proceedings and related lawsuits. We are unable to predict the ultimate outcome of these matters, the timing of the final decisions of the various agencies and courts, or the impact on our results of operations, financial position, or liquidity.

Missouri

2009 Electric Rate Order

In January 2009, the MoPSC issued an order approving an increase for UE in annual revenues of approximately $162 million for electric service and the implementation of a FAC and a vegetation management and infrastructure inspection cost tracking mechanism, among other things. The rate changes necessary to implement the provisions of the MoPSC order were effective March 1, 2009. In February 2009, Noranda, UE’s largest electric customer, and the Missouri Office of Public Counsel appealed certain aspects of the MoPSC decision to the Circuit Court of Pemiscot County, Missouri, the Circuit Court of Stoddard County, Missouri, and the Circuit Court of Cole County, Missouri. The Stoddard and Pemiscot County cases were consolidated, and the Cole County case was dismissed. In September 2009, the Circuit Court of Pemiscot County granted Noranda’s request to stay the electric rate increase granted by the January 2009 MoPSC order as it applies specifically to Noranda’s electric service account until the court renders its decision on the appeal. On June 30, 2010, the Circuit Courts of Pemiscot County and Stoddard County (collectively, the Circuit Court) informally indicated that they would reverse parts of the MoPSC’s decision. During the stay, Noranda has paid into the Circuit Court’s registry the contested portion of its monthly billings, including its monthly FAC payments. As of June 30, 2010, the aggregate amount held by the Circuit Court was approximately $6 million. Once the Circuit Court issues its judgment, UE will appeal to the Missouri Court of Appeals.

On July 24, 2010, UE filed with the Circuit Court a motion to suspend its own judgment, upon issuance, and a motion for partial distribution of the funds held in the Circuit Court’s registry. The motion for partial distribution was filed based upon UE’s position that the maximum amount currently held in the Circuit Court’s registry to which Noranda would ultimately be entitled is approximately $2 million (plus the amounts for the third quarter 2010 FAC payments). If the motion to suspend the Circuit Court’s judgment and the motion for partial distribution of funds are both granted, UE expects, in 2010, to receive approximately $4 million currently held in the Circuit Court’s registry. If only the motion to suspend is granted, the entire $6 million currently held in the Circuit Court’s registry, plus the third quarter 2010 FAC payments, will remain in the Circuit Court’s registry pending further appeal.

Upon UE’s appeal, the Court of Appeals will conduct an independent review of the MoPSC’s order. UE believes the Circuit Court’s anticipated judgment reversing parts of the MoPSC decision will be found erroneous by the Court of Appeals; however, there are no assurances that UE’s appeal will be successful. If UE prevails on the appeal and assuming the Circuit Court suspends its anticipated judgment, as requested, UE will receive all of the funds held in the Circuit Court’s registry, plus interest. If UE does not win its appeal, or if the Circuit Court does not suspend its anticipated judgment, its pretax earnings will be reduced by $6 million (plus the sum of Noranda’s third quarter 2010 FAC payments) as UE would reverse the previously recognized revenue.

2010 Electric Rate Order

In July 2009, UE filed a request with the MoPSC to increase its annual revenues for electric service by $402 million. The request, as later amended in April 2010, sought to increase annual revenues from electric service by $287 million in the aggregate and was based on a 10.8% return on equity, a capital structure composed of 51.3% common equity, a rate base of $6 billion, and a test year ended March 31, 2009, with certain pro-forma adjustments through the true-up date of January 31, 2010.

On May 28, 2010, the MoPSC issued an order approving an increase for UE in annual revenues for electric service of approximately $230 million, including $119 million to cover higher fuel costs and lower revenue from sales outside UE’s system. The revenue increase was based on a 10.1% return on equity, a capital structure composed of 51.26% common equity, and a rate base of approximately $6 billion. The rate changes became effective on June 21, 2010. The MoPSC order also included the following provisions, among other things:

•

Approval of the continued use of UE’s existing FAC at the current 95% sharing level.

•

Approval of the continued use of UE’s existing vegetation management and infrastructure cost tracker.

•

Approval of an increase in UE’s annual depreciation rate due largely to the adoption of the life span depreciation methodology for its non-nuclear power plants.

•

Denial of UE’s request to implement a storm restoration cost tracker.

In addition, the order implemented several stipulations previously agreed to by UE, the MoPSC staff, and other parties to the proceedings. One stipulation included UE’s agreement to withdraw its request for an environmental cost recovery mechanism in exchange for the ability to continue recording an allowance for funds used during construction and to defer depreciation costs for pollution control equipment at one of its power plants until the earlier of January 2012 or when the cost of that equipment is placed in customer rates. This treatment will allow UE to defer these costs as a regulatory asset, which will be amortized upon their inclusion in rates. UE will have the ability to request the implementation of an environmental cost recovery mechanism in a future rate case proceeding. Another approved stipulation allows UE to recover its portion of Ameren’s September 2009 common stock issuance costs. The order also implemented the parties’ agreement to prospectively include the margins on certain wholesale contracts in UE’s FAC in exchange for an increase in the jurisdictional cost allocation to retail customers. In addition, the order implements the parties’ agreement to a mechanism that will prospectively address the significant lost revenues UE can incur due to future operational issues at Noranda’s smelter plant in southeast Missouri. The agreement will permit UE, when a loss of service occurs at the Noranda plant, to sell the power not taken by Noranda and use the proceeds of those sales to offset the revenues lost from Noranda. UE would be allowed to keep the amount of revenues necessary to compensate UE for significant Noranda usage reductions but any excess revenues above the level necessary to compensate UE would be refunded to retail customers through the FAC. Approved stipulations also include the continued use of the regulatory tracking mechanism for pension and postretirement benefit costs and the discontinuation of the SO₂ emission allowance sales tracker among other things. The approved stipulations also resulted in the recognition of new regulatory assets. The following table reflects the pretax earnings impact realized in the second quarter of 2010 resulting from the recognition of these new regulatory assets as well as their balance at June 30, 2010. The amortization period on each of these new regulatory assets began on July 1, 2010.


Regulatory Assets	Pretax Earnings Impact		Regulatory Asset Balance at June 30, 2010
Storm costs^(a)	$	4	$	4
Credit facilities fees^(b)		10		16
Low-income assistance pilot program^(c)		-		2
Employee separation costs^(d)		7		7
Total	$	21	$	29

(a)	Storm costs incurred in 2009 that exceeded the MoPSC staff’s normalized storm costs for rate purposes. These 2009 costs will be amortized over five years.

(b)	UE’s costs incurred to enter into the 2009 Multiyear Credit Agreements as well as the quarterly fees associated with those agreements. These costs will be amortized over two years to construction work in progress, which will subsequently be depreciated when assets are placed into service.

(c)	UE established a new pilot program for low-income assistance. These costs will be amortized over two years.

(d)	UE’s costs incurred in 2009 for voluntary and involuntary separation programs. These costs will be amortized over three years.

In June 2010, UE and other parties to the rate case filed for rehearing of certain aspects of the MoPSC order. The MoPSC denied all rate order rehearing requests filed by UE and other parties. UE appealed the return on equity included in the MoPSC decision to the Circuit Court of Cole County, Missouri. A group of industrial customers also appealed certain aspects of the MoPSC decision to the Circuit Court of Cole County, Missouri. A decision is expected to be issued by the Circuit Court in 2011.

Pending Natural Gas Delivery Service Rate Case

UE filed a request with the MoPSC in June 2010 to increase its annual revenues for natural gas delivery service by approximately $12 million. The natural gas delivery service rate increase request was based on a 10.5% return on equity, a capital structure composed of 51.3% equity, a rate base of $245 million, and a test year ended December 31, 2009, with certain pro-forma adjustments through the anticipated true-up date of November 30, 2010.

The MoPSC proceeding relating to the proposed natural gas delivery service rate changes will take place over a period of up to 11 months, and a decision by the MoPSC in such proceeding is required by the end of May 2011. UE cannot predict the level of any natural gas delivery service rate change the MoPSC may approve, when any rate change may go into effect, or whether any rate change that may eventually be approved will be sufficient to enable UE to recover its costs and earn a reasonable return on its investments when the rate change goes into effect.

Renewable Energy Portfolio Requirement

A ballot initiative passed by Missouri voters in November 2008 created a renewable energy portfolio requirement. UE and other Missouri investor-owned utilities will be required to purchase or generate electricity from renewable energy sources equaling at least 2% of native load sales by 2011, with that percentage increasing in subsequent years to at least 15% by 2021, subject to a 1% limit on customer rate impacts. At least 2% of each portfolio requirement must be derived from solar energy. Compliance with the renewable energy portfolio requirement can be achieved through the procurement of renewable energy or renewable energy credits. UE expects that any related costs or investments would ultimately be recovered in rates. In July 2010, the MoPSC issued final rules implementing the state’s renewable energy portfolio requirement, which are scheduled to become effective later this year. In addition to other concerns, UE believes the MoPSC rules are in conflict with statutory authority created by the passed ballot initiative and unnecessarily increase costs to UE’s customers. UE requested a rehearing relating to these rules, which was denied by the MoPSC. In August 2010, UE filed an appeal with the Circuit Court of Cole County, Missouri. UE cannot predict when the court will issue a ruling or the ultimate outcome of its appeal.

Illinois

Electric and Natural Gas Delivery Service Rate Cases

On May 6, 2010, the ICC amended its April 2010 rate order to correct a technical error in the calculation of cash working capital, which resulted in an additional increase in annual revenues totaling $10 million in the aggregate. The ICC consolidated rate order, as amended, approves a net increase in annual revenues for electric delivery service of $35 million in the aggregate (CIPS - $18 million increase, CILCO - $2 million increase, and IP - $15 million increase) and a net decrease in annual revenues for natural gas delivery service of $20 million in the aggregate (CIPS - $2 million decrease, CILCO - $7 million decrease, and IP - $11 million decrease), based on a 9.9% to 10.3% return on equity with respect to electric delivery service and a 9.2% to 9.4% return on equity with respect to natural gas delivery service. The rate changes became effective in May 2010.

The ICC order confirmed the previously approved 80% allocation of fixed non-volumetric residential and commercial natural gas customer charges, and approved a higher percentage of recovery of fixed non-volumetric electric residential and commercial customer charges. The percentage of costs to be recovered through fixed non-volumetric electric residential and commercial customer and meter charges increased from 27% to 40%.

The ICC order also extended the amortization period of the IP integration-related regulatory asset, which was previously set to be fully amortized by December 2010. The new order extended the amortization for two years beginning in May 2010. This change will result in a pretax reduction to amortization expense of $7 million in 2010. The ICC order also created a $3 million regulatory asset, in the aggregate, for the Ameren Illinois Utilities’ costs incurred in 2009 for the voluntary and involuntary separation programs. These costs will be amortized over three years beginning in May 2010.

In response to the ICC consolidated rate order, the Ameren Illinois Utilities took immediate action to mitigate the financial pressures created on the respective companies by the rate order. CIPS, CILCO and IP have taken the following actions:

•

significantly reduced budgets;

•

instituted a hiring freeze;

•

substantially reduced the use of contractors;

•

delayed or canceled certain projects and planned activities; and

•

reduced expenditures for capital projects designed to enhance reliability of their respective delivery systems.

In May 2010, the Ameren Illinois Utilities filed a motion to stay certain decisions in the ICC consolidated rate order. The ICC rejected the stay request. On May 28, 2010, the Ameren Illinois Utilities filed a rehearing request with the ICC relating to six issues of the rate order. On June 14, 2010, the ICC agreed to rehear three issues raised by the Ameren Illinois Utilities and one issue raised by intervenors. The issue raised by intervenors primarily relates to rate design. The issues raised by the Ameren Illinois Utilities could result in an additional increase in annual revenues of $55 million, if approved by the ICC. In July 2010, the ICC staff recommended the Ameren Illinois Utilities should receive an additional increase in annual revenues of $11 million. The ICC has five months to complete the rehearing with a decision due in November 2010. The Ameren Illinois Utilities may subsequently appeal the ICC consolidated rate order. The Ameren Illinois Utilities cannot predict the outcome of the rehearing or whether court appeals will be filed and their ultimate outcome.

Federal

Seams Elimination Cost Adjustment

Pursuant to a series of FERC orders, FERC put Seams Elimination Cost Adjustment (SECA) charges into effect on December 1, 2004, subject to refund and hearing procedures. The SECA charges were a transition mechanism in place for 16 months, from December 1, 2004, to March 31, 2006, to compensate transmission owners in MISO and PJM for revenues lost when FERC eliminated the regional through-and-out rates previously applicable to transactions crossing the border between MISO and PJM. The SECA charge was a nonbypassable surcharge payable by load-serving entities in proportion to the benefit they realized from the elimination of the regional through-and-out rates as of December 1, 2004.

The MISO transmission owners (including UE, CIPS, CILCO and IP) and the PJM transmission owners separately filed their proposed SECA charges in November 2004, as compliance filings pursuant to FERC order. During the transition period of December 1, 2004, to March 31, 2006, Ameren, UE, CIPS and IP received net revenues from the SECA charges of $10 million, $3 million, $1 million, and $6 million, respectively. CILCO’s net SECA charges were less than $1 million.

A FERC administrative law judge issued an initial decision in August 2006, recommending that FERC reject both of the SECA compliance filings (the filing for SECA charges made by the transmission owners in the MISO and the filing for SECA charges made by the transmission owners in PJM). Numerous parties filed briefs on exceptions and briefs opposing exceptions with respect to the initial decision.

In May 2010, FERC issued its Order on Initial Decision, reversing in part and upholding in part the initial decision. With minor exceptions, FERC upheld the analytical approach taken by the MISO transmission owners, including the calculation of lost revenues for Ameren and the other MISO transmission owners. FERC has ordered the MISO transmission owners and the PJM transmission owners to make compliance filings, within 90 days of the Order on Initial Decision, to reflect certain limited adjustments to the SECA lost revenue calculations that FERC found appropriate and necessary. MISO and PJM transmission owners are required to make the compliance filings by late August 2010. Until these filings are made and Ameren can review these filings, Ameren cannot assess the monetary impact on the SECA net revenues previously recorded but, given FERC’s basic affirmation of the SECA methodology used by the MISO and PJM transmission owners, we do not believe the outcome of the proceedings will have a material effect on UE’s, CIPS’, CILCO’s and IP’s results of operations, financial position, or liquidity.

Both before and after the initial decision, various parties (including UE, CIPS, CILCO and IP as part of the group of MISO transmission owners) had filed numerous bilateral or multiparty settlements. FERC has continued to approve settlements and, to date, has not rejected any settlement proposals. The adjustments to Ameren’s SECA revenues associated with these settlements have already been recognized.

MISO and PJM Dispute Resolution

During 2009, MISO and PJM discovered an error in the calculation quantifying certain transactions between the RTOs. The error, which originated in April 2005, at the initiation of the MISO Energy and Operating Reserves Market, was corrected prospectively in June 2009. Since discovering the error, MISO and PJM have worked jointly to estimate its financial impact on the respective markets. MISO and PJM are in agreement about the methodology used to recalculate the market flows occurring from June 2007 to June 2009 for the resettlement due from PJM to MISO estimated at $65 million. MISO and PJM are not in agreement about the methodology used to recalculate the market flows occurring from April 2005 to May 2007, nor are they in agreement about the resettlement amount for that period of time. Attempts to resolve this dispute through FERC’s dispute resolution and settlement process were not successful. In early March 2010, MISO filed complaints with FERC against PJM seeking a $130 million resettlement, plus interest, of the contested transactions. In April 2010, PJM filed a complaint with FERC against MISO alleging MISO violated the market-to-market coordination process for certain transactions between the two RTOs. PJM’s complaint states it is entitled to at least $25 million from MISO for amounts improperly paid in result of MISO’s alleged process violation. Ameren and its subsidiaries may receive or pay a to-be-determined portion of any resettlement amount due between the RTOs. No prospective refund or payment has been recorded related to this matter. Until FERC issues an order or a settlement has been reached, we cannot predict the ultimate impact of these proceedings on Ameren’s, UE’s, CIPS’, Genco’s, CILCO’s and IP’s results of operations, financial position, or liquidity.

Pumped-storage Hydroelectric Facility Relicensing

In June 2008, UE filed a relicensing application with FERC to operate its Taum Sauk pumped-storage hydroelectric facility for another 40 years. The existing FERC license expired on June 30, 2010. On July 2, 2010, UE received a license extension that allows Taum Sauk to continue operations until FERC issues a new license. Approval and relicensure are expected in 2012.

NOTE 3 - CREDIT FACILITY BORROWINGS AND LIQUIDITY

The liquidity needs of the Ameren Companies are typically supported through the use of available cash, short-term intercompany borrowings, or drawings under committed bank credit facilities.

The following table summarizes the borrowing activity and relevant interest rates as of June 30, 2010, under the 2009 Multiyear Credit Agreement, the 2009 Supplemental Credit Agreement, and the 2009 Illinois Credit Agreement (excluding letters of credit issued):


2009 Multiyear Credit Agreement ($1.15 billion)				Ameren (Parent)			UE		Genco		Total
June 30, 2010:
Average daily borrowings outstanding during 2010				$	599		$	-	$	-	$	599
Outstanding short-term debt at period end					593			-		-		593
Weighted-average interest rate during 2010					3.00	%		-		-		3.00	%
Peak short-term borrowings during 2010^(a)				$	712		$	-	$	-	$	712
Peak interest rate during 2010					5.50	%		-		-		5.50	%

2009 Supplemental Credit Agreement ($150 million)^(b)				Ameren (Parent)			UE		Genco		Total
June 30, 2010:
Average daily borrowings outstanding during 2010				$	78		$	-	$	-	$	78
Outstanding short-term debt at period end					77			-		-		77
Weighted-average interest rate during 2010					3.52	%		-		-		3.52	%
Peak short-term borrowings during 2010^(a)				$	93		$	-	$	-	$	93
Peak interest rate during 2010					5.50	%		-		-		5.50	%

2009 Illinois Credit Agreement ($800 million)	Ameren (Parent)			CIPS			CILCO (Parent)		IP		Total
June 30, 2010:
Average daily borrowings outstanding during 2010	$	11		$	-		$	-	$	-	$	11
Outstanding short-term debt at period end		-			-			-		-		-
Weighted-average interest rate during 2010		3.48	%		-			-		-		3.48	%
Peak short-term borrowings during 2010^(a)	$	100		$	-		$	-	$	-	$	100
Peak interest rate during 2010		3.48	%		-			-		-		3.48	%

(a)	The timing of peak short-term borrowings varies by company and therefore the amounts presented by company may not equal the total peak short-term borrowings for the period. The simultaneous peak short-term borrowings under all facilities during the first six months of 2010 were $905 million.

(b)	The 2009 Supplemental Credit Agreement expired on July 14, 2010.

Based on outstanding borrowings under the 2009 Multiyear Credit Agreements and the 2009 Illinois Credit Agreement (including reductions for $15 million of letters of credit issued under the 2009 Multiyear Credit Agreement), the available amounts under the facilities at June 30, 2010, were $615 million and $800 million, respectively. The 2009 Supplemental Credit Agreement expired on July 14, 2010. As a result of the expiration of the 2009 Supplemental Credit Agreement, all commitments and outstanding amounts under the 2009 Supplemental Credit Agreement were consolidated with those under the 2009 Multiyear Credit Agreement, and the combined maximum amount available to all borrowers is $1.0795 billion with the UE and Genco borrowing sublimits remaining the same and Ameren’s changing to $1.0795 billion.

On June 2, 2010, Ameren entered into a $20 million revolving credit facility ($20 million facility) that matures on June 1, 2012. The $20 million facility has been fully-drawn since June 15, 2010. Borrowings under the $20 million facility bear interest at a rate equal to the applicable LIBOR rate plus 2.25% per annum. The obligations of Ameren under the $20 million facility are unsecured. No subsidiary of Ameren is a party to, guarantor of, or borrower under the facility.

Indebtedness Provisions and Other Covenants

The information below presents a summary of the Ameren Companies’ compliance with indebtedness provisions and other covenants. See Note 4 - Credit Facility Borrowings and Liquidity in the Form 10-K for a detailed description of those provisions.

The 2009 Multiyear Credit Agreement requires Ameren, UE and Genco to each maintain consolidated indebtedness of not more than 65% of consolidated total capitalization pursuant to a calculation set forth in the facility. All of the consolidated subsidiaries of Ameren, including the Ameren Illinois Utilities, are included for purposes of determining compliance with this capitalization test with respect to Ameren. Failure to satisfy the capitalization covenant constitutes a default under the 2009 Multiyear Credit Agreement. As of June 30, 2010, the ratios of consolidated indebtedness to total consolidated capitalization, calculated in accordance with the provisions of the 2009 Multiyear Credit Agreement, were 50%, 48% and 52%, for Ameren, UE and Genco, respectively.

The 2009 Illinois Credit Agreement requires Ameren and each Ameren Illinois utility to maintain consolidated indebtedness of not more than 65% of its consolidated total capitalization pursuant to a defined calculation. All of the consolidated subsidiaries of Ameren are included for purposes of determining compliance with this capitalization test with respect to Ameren. As of June 30, 2010, the ratios of consolidated indebtedness to total consolidated capitalization for Ameren, CIPS, CILCO and IP, calculated in accordance with the provisions of the 2009 Illinois Credit Agreement, were 50%, 44%, 38%, and 45%, respectively. In addition, Ameren is required to maintain a ratio of consolidated funds from operations plus interest expense to consolidated interest expense of at least 2.0 to 1, as of the end of the most recent four fiscal quarters and calculated and subject to adjustment in accordance with the 2009 Illinois Credit Agreement. Ameren’s ratio as of June 30, 2010, was 4.7 to 1. Failure to satisfy these covenants constitutes a default under the 2009 Illinois Credit Agreement.

None of Ameren’s credit facilities or financing arrangements contain credit rating triggers that would cause an event of default or acceleration of repayment of outstanding balances. At June 30, 2010, management believes that the Ameren Companies were in compliance with their credit facilities’ provisions and covenants.

Money Pools

Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. Separate money pools are maintained for utility and non-state-regulated entities. Ameren Services is responsible for the operation and administration of the money pool agreements.

Utility

Through the utility money pool, the pool participants may access the committed credit facilities. See discussion above for amounts available under the facilities at June 30, 2010. UE, CIPS, CILCO and IP may borrow from each other through the utility money pool agreement subject to applicable regulatory short-term borrowing authorizations. Ameren and AERG may participate in the utility money pool only as lenders. The primary sources of external funds for the utility money pool are the 2009 Multiyear Credit Agreement and the 2009 Illinois Credit Agreement. The average interest rate for borrowing under the utility money pool for the three and six months ended June 30, 2010, was 0.2% and 0.17%, respectively (2009 - 0.2% and 0.2%, respectively).

Non-state-regulated Subsidiaries

Ameren Services, Resources Company, Genco, AERG, Marketing Company, AFS and other non-state-regulated Ameren subsidiaries have the ability, subject to Ameren parent company authorization and applicable regulatory short-term borrowing authorizations, to access funding from the 2009 Multiyear Credit Agreement through a non-state-regulated subsidiary money pool agreement. In addition, Ameren had available cash balances at June 30, 2010, which can be loaned into this arrangement. The average interest rate for borrowing under the non-state-regulated subsidiary money pool for the three and six months ended June 30, 2010, was 1.0% and 0.81%, respectively (2009 - 1.1% and 1.1%, respectively).

See Note 8 - Related Party Transactions for the amount of interest income and expense from the money pool arrangements recorded by the Ameren Companies for the three and six months ended June 30, 2010.

NOTE 4 - LONG-TERM DEBT AND EQUITY FINANCINGS

Ameren

Under DRPlus, pursuant to an effective SEC Form S-3 registration statement, and under our 401(k) plan, pursuant to an effective SEC Form S-8 registration statement, Ameren issued a total of 0.9 million new shares of common stock valued at $23 million and 1.7 million new shares valued at $43 million in the three and six months ended June 30, 2010, respectively.

In February 2010, CILCORP completed a covenant defeasance of its remaining outstanding 9.375% senior bonds due 2029 by depositing approximately $2.7 million in U.S. government obligations and cash with the indenture trustee. This deposit will be used solely to satisfy the principal and remaining interest obligations on these bonds. In connection with this covenant defeasance, the lien on the capital stock of CILCO securing these bonds was released.

CILCO

In August 2010, CILCO redeemed all of the 111,264 outstanding shares of its 4.50% Series preferred stock at $110 per share and all of the 79,940 shares of its 4.64% Series preferred stock at $102 per share, plus, in each case, accrued and unpaid dividends. This redemption is associated with the corporate reorganization of the Ameren Illinois Utilities. See Note 14 - Corporate Reorganization for additional information.

Indenture Provisions and Other Covenants

The information below presents a summary of the Ameren Companies’ compliance with indenture provisions and other covenants. See Note 5 - Long-term Debt and Equity Financings in the Form 10-K for a detailed description of those provisions.

UE’s, CIPS’, CILCO’s and IP’s indenture provisions and articles of incorporation include covenants and provisions related to the issuances of first mortgage bonds and preferred stock. UE, CIPS, CILCO and IP are required to meet certain ratios to issue first mortgage bonds and preferred stock. The following table includes the required and actual earnings coverage ratios for interest charges and preferred dividends and bonds and preferred stock issuable for the 12 months ended June 30, 2010, at an assumed interest rate of 7% and dividend rate of 8%.


	Required Interest Coverage Ratio^(a)	Actual Interest Coverage Ratio	Bonds Issuable^(b)		Required Dividend Coverage Ratio^(c)	Actual Dividend Coverage Ratio		Preferred Stock Issuable
UE	³2.0	3.1	$	1,637	>2.5	50.9		$	1,437
CIPS	³2.0	5.5		356	>1.5	2.5			215
CILCO	³2.0^(d)	6.6		234	(e)	(e	)		(e	)
IP	³2.0	4.3		1,238	>1.5	2.2			517

(a)	Coverage required on the annual interest charges on first mortgage bonds outstanding and to be issued. Coverage is not required in certain cases when additional first mortgage bonds are issued on the basis of retired bonds.

(b)

Amount of bonds issuable based either on meeting required coverage ratios or unfunded property additions, whichever is more restrictive. These amounts shown also include bonds issuable based on retired bond capacity of $92 million, $18 million, $44 million and $536 million, at UE, CIPS, CILCO and IP, respectively.

(c)	Coverage required on the annual interest charges on all long-term debt (CIPS only) and the annual dividend on preferred stock outstanding and to be issued, as required in the respective company’s articles of incorporation.

(d)

In lieu of meeting the interest coverage ratio requirement, CILCO may attempt to meet an earnings requirement of at least 12% of the principal amount of all mortgage bonds outstanding and to be issued. For the three and six months ended June 30, 2010, CILCO had earnings equivalent to at least 33% of the principal amount of all mortgage bonds outstanding.

(e)	Not applicable.

UE, CIPS, Genco, CILCO and IP as well as certain other nonregistrant Ameren subsidiaries are subject to Section 305(a) of the Federal Power Act, which makes it unlawful for any officer or director of a public utility, as defined in the Federal Power Act, to participate in the making or paying of any dividend from any funds “properly included in capital account.” The meaning of this limitation has never been clarified under the Federal Power Act or FERC regulations; however, FERC has consistently interpreted the provision to allow dividends to be paid as long as (1) the source of the dividends is clearly disclosed, (2) the dividends are not excessive and (3) there is no self-dealing on the part of corporate officials. At a minimum, Ameren believes that dividends can be paid by its subsidiaries that are public utilities from net income and retained earnings. In addition, under Illinois law, CIPS, CILCO and IP may not pay any dividend on their respective stock, unless, among other things, their respective earnings and earned surplus are sufficient to declare and pay a dividend after provision is made for reasonable and proper reserves, or unless CIPS, CILCO or IP has specific authorization from the ICC.

UE’s mortgage indenture contains certain provisions that restrict the amount of common dividends that can be paid by UE. Under this mortgage indenture, $31 million of total retained earnings was restricted against payment of common dividends, except those dividends payable in common stock, which left $1.9 billion of free and unrestricted retained earnings at June 30, 2010.

CIPS’ articles of incorporation and mortgage indenture require its dividend payments on common stock to be based on ratios of common stock to total capitalization and other provisions related to certain operating expenses and accumulations of earned surplus.

CILCO’s articles of incorporation prohibit the payment of dividends on its common stock from either paid-in surplus or any surplus created by a reduction of stated capital or capital stock.

Genco’s indenture includes provisions that require Genco to maintain certain debt service coverage and/or debt-to-capital ratios in order for Genco to pay dividends, to make certain principal or interest payments, to make certain loans to or investments in affiliates, or to incur additional indebtedness. The following table summarizes these ratios for the 12 months ended June 30, 2010:

Required

Interest
Coverage
Ratio

Actual

Interest
Coverage
Ratio

Required

Debt-to-
Capital
Ratio

Actual

Debt-to-
Capital
Ratio

Genco^(a)

³1.75

4.1

£60%

(a)

Interest coverage ratio relates to covenants regarding certain dividend, principal and interest payments on certain subordinated intercompany borrowings. The debt-to-capital ratio relates to a debt incurrence covenant, which also requires an interest coverage ratio of 2.5 for the most recently ended four fiscal quarters.

Genco’s debt incurrence-related ratio restrictions and restricted payment limitations under its indenture may be disregarded if both Moody’s and S&P reaffirm the ratings of Genco in place at the time of the debt incurrence after considering the additional indebtedness.

In order for the Ameren Companies to issue securities in the future, they will have to comply with any applicable tests in effect at the time of any such issuances.

Off-Balance-Sheet Arrangements

At June 30, 2010, none of the Ameren Companies had any off-balance-sheet financing arrangements, other than operating leases entered into in the ordinary course of business. None of the Ameren Companies expect to engage in any significant off-balance-sheet financing arrangements in the near future.

NOTE 5 - OTHER INCOME AND EXPENSES

The following table presents Other Income and Expenses for each of the Ameren Companies for the three and six months ended June 30, 2010 and 2009:


	Three Months				Six Months
	2010		2009		2010		2009
Ameren:^(a)
Miscellaneous income:
Allowance for equity funds used during construction	$	13	$	8	$	26	$	14
Interest income on industrial development revenue bonds		7		7		14		14
Interest and dividend income		1		-		2		1
Other		3		2		4		4
Total miscellaneous income	$	24	$	17	$	46	$	33
Miscellaneous expense:
Donations	$	1	$	1	$	3	$	4
Other		1		6		6		7
Total miscellaneous expense	$	2	$	7	$	9	$	11
UE:
Miscellaneous income:
Allowance for equity funds used during construction	$	12	$	7	$	25	$	13
Interest income on industrial development revenue bonds		7		7		14		14
Interest and dividend income		1		-		1		-
Other		-		1		1		1
Total miscellaneous income	$	20	$	15	$	41	$	28
Miscellaneous expense:
Donations	$	-	$	-	$	1	$	2
Other		1		2		2		2
Total miscellaneous expense	$	1	$	2	$	3	$	4
CIPS:
Miscellaneous income:
Interest and dividend income	$	-	$	1	$	1	$	3
Other		1		1		1		2
Total miscellaneous income	$	1	$	2	$	2	$	5
Miscellaneous expense:
Other	$	1	$	-	$	1	$	1
Total miscellaneous expense	$	1	$	-	$	1	$	1
Genco:
Miscellaneous income:
Other	$	1	$	-	$	1	$	-
Total miscellaneous income	$	1	$	-	$	1	$	-


	Three Months				Six Months
	2010		2009		2010		2009
Miscellaneous expense:
Other	$	-	$	-	$	1	$	-
Total miscellaneous expense	$	-	$	-	$	1	$	-
CILCO:
Miscellaneous income:
Other	$	2	$	-	$	2	$	-
Total miscellaneous income	$	2	$	-	$	2	$	-
Miscellaneous expense:
Donations	$	-	$	1	$	-	$	1
Other		-		1		1		2
Total miscellaneous expense	$	-	$	2	$	1	$	3
IP:
Miscellaneous income:
Allowance for equity funds used during construction	$	-	$	1	$	-	$	1
Other		-		-		1		1
Total miscellaneous income	$	-	$	1	$	1	$	2
Miscellaneous expense:
Other	$	-	$	-	$	2	$	1
Total miscellaneous expense	$	-	$	-	$	2	$	1

(a)	Includes amounts for Ameren registrant and nonregistrant subsidiaries and intercompany eliminations.

NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS

We use derivatives principally to manage the risk of changes in market prices for natural gas, coal, diesel, electricity, uranium, and emission allowances. Such price fluctuations may cause the following:

•

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

•

market values of coal, natural gas, and uranium inventories or emission allowances that differ from the cost of those commodities in inventory; and

•

actual cash outlays for the purchase of these commodities that differ from anticipated cash outlays.

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

The following table presents open gross derivative volumes by commodity type as of June 30, 2010, and December 31, 2009:

Quantity (in millions, except as indicated)

NPNS

Contracts^(a)

Cash Flow

Hedges^(b)

Other

Derivatives^(c)

Derivatives that Qualify for
Regulatory Deferral^(d)

Commodity

2010

2009

2010

2009

2010

2009

2010

2009

Coal (in tons)

Ameren^(e)

115

)

Genco

)

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