**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, 2005**
 OR
 ( 
           )  Transition
          report pursuant to Section 13 or 15(d)
 of
          the
          Securities Exchange Act of 1934
 for
          the
          transition period from ___  to
          ___  .
 
 Commission
                  File
                    Number
                Exact
                    Name of Registrant as Specified in its Charter;
                  State
                    of Incorporation;
                  Address
                    and Telephone Number
                IRS
                    Employer
                  Identification
                    No.1-14756
                **Ameren
                    Corporation**
                43-1723446(Missouri
                    Corporation)1901
                    Chouteau AvenueSt.
                    Louis, Missouri 63103(314)
                    621-32221-2967
                **Union
                    Electric Company**
                43-0559760(Missouri
                    Corporation)1901
                    Chouteau AvenueSt.
                    Louis, Missouri 63103(314)
                    621-32221-3672
                **Central
                    Illinois Public Service Company**
                37-0211380(Illinois
                    Corporation)607
                    East Adams StreetSpringfield,
                    Illinois 62739(217)
                    523-3600333-56594
                **Ameren
                    Energy Generating Company**
                37-1395586(Illinois
                    Corporation)1901
                    Chouteau AvenueSt.
                    Louis, Missouri 63103(314)
                    621-32222-95569
                **CILCORP
                    Inc.**
                37-1169387(Illinois
                    Corporation)300
                    Liberty StreetPeoria,
                    Illinois 61602(309)
                    677-52711-2732
                **Central
                    Illinois Light Company**
                37-0211050(Illinois
                    Corporation)300
                    Liberty StreetPeoria,
                    Illinois 61602(309)
                    677-52711-3004
                **Illinois
                    Power Company**
                37-0344645(Illinois
                    Corporation)500
                    S. 27th StreetDecatur,
                    Illinois 62521(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 require-ments
          for the past 90 days. Yes (X)  No
          (
          )
 
 Indicate
          by check mark whether each Registrant is an accelerated filer (as defined
          in
          Rule 12b-2 of the Securities Exchange Act of 1934).
 
 Ameren
                    Corporation
                Yes
                (X)
                No
                (  
                    )Union
                    Electric Company
                Yes
                ( 
                     )
                No
                (X)Central
                    Illinois Public Service Company
                Yes
                ( 
                     )
                No
                (X)Ameren
                    Energy Generating Company
                Yes
                (  
                    )
                No
                (X)CILCORP
                    Inc.
                Yes
                (  
                    )
                No
                (X)Central
                    Illinois Light Company
                Yes
                (  
                    )
                No
                (X)Illinois
                    Power Company
                Yes
                (  
                    )
                No
                (X)
  The
          number of shares outstanding of each Registrant’s classes of common stock as of
          August 1, 2005, was as follows:
 
 Ameren
                    Corporation
                Common
                    stock, $.01 par value per share -203,766,757Union
                    Electric Company
                Common
                    stock, $5 par value per share, held by Ameren
                  Corporation
                    (parent company of the Registrant) - 102,123,834Central
                    Illinois Public Service Company
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the Registrant) - 25,452,373Ameren
                    Energy Generating Company
                Common
                    stock, no par value, held by Ameren Energy
                  Development
                    Company (parent company of the
                  Registrant
                    and indirect subsidiary of Ameren
                  Corporation)
                    - 2,000CILCORP
                    Inc.
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the Registrant) - 1,000Central
                    Illinois Light Company
                Common
                    stock, no par value, held by CILCORP Inc.
                  (parent
                    company of the Registrant and subsidiary of
                  Ameren
                    Corporation) - 13,563,871Illinois
                    Power Company
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the Registrant) -
                    23,000,000
 
 **OMISSION
          OF CERTAIN INFORMATION**
 
 Ameren
          Energy Generating Company and CILCORP Inc. meet the conditions set forth
          in
          General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing
          this
          form with the reduced disclosure format allowed under that General
          Instruction.
 This
            combined Form 10-Q is separately filed by Ameren Corporation, Union Electric
            Company, Central Illinois Public Service Company, Ameren Energy Generating
            Company, CILCORP Inc., Central Illinois Light Company, and Illinois Power
            Company. Each Registrant hereto is filing on its own behalf all of the
            information contained in this quarterly report that relates to such Registrant.
            Each Registrant hereto is not filing any information that does not relate
            to
            such Registrant, and therefore makes no representation as to any such
            information.
 
 On
          September 30, 2004, Ameren Corporation completed its acquisition of Illinois
          Power Company (see Note 2 - Acquisitions to our financial statements under
          Part
          I, Item 1, of this report for further information). Commencing with the
          Annual
          Report on Form 10-K for the fiscal year ended December 31, 2004, Illinois
          Power
          Company is included in the combined filings of Ameren Corporation and its
          other
          Registrant subsidiaries.
 
  
   
 **TABLE
          OF CONTENTS**
 **Page**Glossary
                    of Terms and Abbreviations
                4Forward-looking
                    Statements
                6**PART
                    I****Financial
                    Information**Item
                    1.Financial
                    Statements (Unaudited)**Ameren
                    Corporation**Consolidated
                    Statement of Income
                7Consolidated
                    Balance Sheet
                8Consolidated
                    Statement of Cash Flows
                9**Union
                    Electric Company**Consolidated
                    Statement of Income
                10Consolidated
                    Balance Sheet
                11Consolidated
                    Statement of Cash Flows
                12**Central
                    Illinois Public Service Company**Statement
                    of Income
                13Balance
                    Sheet
                14Statement
                    of Cash Flows
                15**Ameren
                    Energy Generating Company**Consolidated
                    Statement of Income
                16Consolidated
                    Balance Sheet
                17Consolidated
                    Statement of Cash Flows
                18**CILCORP
                    Inc.**Consolidated
                    Statement of Income
                19Consolidated
                    Balance Sheet
                20Consolidated
                    Statement of Cash Flows
                21**Central
                    Illinois Light Company**Consolidated
                    Statement of Income
                22Consolidated
                    Balance Sheet
                23Consolidated
                    Statement of Cash Flows
                24**Illinois
                    Power Company**Consolidated
                    Statement of Income
                25Consolidated
                    Balance Sheet
                26Consolidated
                    Statement of Cash Flows
                27Combined
                    Notes to Financial Statements
                28Item
                    2.Management’s
                    Discussion and Analysis of Financial Condition and Results of
                    Operations
                50Item
                    3.Quantitative
                    and Qualitative Disclosures About Market Risk
                70Item
                    4.Controls
                    and Procedures
                73**PART
                    II****Other
                    Information**Item
                    1.Legal
                    Proceedings
                73Item
                    2.Unregistered
                    Sales of Equity Securities and Use of Proceeds
                73Item
                    4.Submission
                    of Matters to a Vote of Security Holders
                74Item
                    5.Other
                    Information
                75Item
                    6.Exhibits
                75Signatures
                76
 
 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 6 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.
  3
   **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.
  ***AERG*** -
          AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates
          a
          non-rate-regulated electric generation business in Illinois.
 ***AFS*** -
          Ameren
          Energy Fuels and Services Company, a Resources Company subsidiary that
          procures
          fuel and natural gas and manages the related risks for the Ameren
          Companies.
 ***Ameren*** -
          Ameren
          Corporation and its subsidiaries on a consolidated basis. In references
          to
          financing activities, acquisition activities, or liquidity arrangements,
          Ameren
          is defined as Ameren Corporation, the parent.
 ***Ameren
          Companies*** -
          The
          individual Registrants within the Ameren consolidated group.
 ***Ameren
          Energy*** -
          Ameren
          Energy, Inc., an Ameren Corporation subsidiary that serves as a power marketing
          and risk management agent for UE and Genco for transactions of primarily
          less
          than one year.
 ***Ameren
          Services*** - ****** Ameren
          Services Company, an Ameren Corporation subsidiary that provides support
          services to Ameren and its subsidiaries.
 ***ARB*** -
          Accounting Research Bulletin.
 ***Baseload
          -*** The
          minimum amount of electric power delivered or required over a given period
          of
          time at a steady rate.
 ***Capacity
          factor*** - A
          percentage measure that indicates how much of an electric power generating
          unit’s capacity was used during a specific period.
 ***CILCO*** -
          Central
          Illinois Light Company, a CILCORP subsidiary that operates a rate-regulated
          electric transmission and distribution business, a primarily non-rate-regulated
          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., an Ameren Corporation subsidiary that operates as a holding company
          for
          CILCO and various non-rate regulated subsidiaries.
 ***CIM*** -
          CILCORP Investment Management Inc. ,
          a
          non-rate regulated subsidiary of CILCORP that holds investments in several
          leasing transactions and owns interests in several leasing credit
          partnerships.
 ***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.
 ***CT*** -
          Combustion turbine electric generation equipment used primarily for peaking
          capacity.
 ***Development
          Company*** -
          Ameren
          Energy Development Company, a Resources Company subsidiary and Genco parent,
          which primarily develops and constructs generating facilities for
          Genco.
 ***DMG*** - Dynegy
          Midwest Generation, Inc., a Dynegy subsidiary.
 ***DOE*** -
          Department of Energy, a U.S. government agency.
 ***DRPlus*** -
          Ameren
          Corporation’s dividend reinvestment and direct stock purchase plan.
 ***Dynegy*** -
          Dynegy
          Inc.
 ***DYPM*** -
          Dynegy
          Power Marketing, Inc., a Dynegy subsidiary.
 ***EEI*** -
          Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary (40%
          owned by
          UE and 40% owned by Resources Company) that operates electric generation
          and
          transmission facilities in Illinois. The remaining 20% is owned by Kentucky
          Utilities Company.
 ***EITF*** -
          Emerging Issues Task Force, an organization designed to assist the FASB
          in
          improving financial reporting through the identification, discussion and
          resolution of financial issues within the framework of existing authoritative
          literature.
 ***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.
 ***ERISA*** -
          Employee Retirement Income Security Act of 1974, as amended.
 ***Exchange
          Act*** -
          Securities Exchange Act of 1934, as amended.
 ***FASB*** -
          Financial Accounting Standards Board, a rulemaking organization that establishes
          financial accounting and reporting standards in the United States of
          America.
 ***FERC*** -
          Federal
          Energy Regulatory Commission, a U.S. government agency.
 ***FIN*** -
          A ****** FASB
          Interpretation intended to clarify accounting pronouncements previously
          issued
          by the FASB.
 ***Fitch*** -
          Fitch
          Ratings, a credit rating agency.
 ***FSP*** -
          FASB
          Staff Position, which provides application guidance on FASB
          literature.
 **FTRs** -
          Financial Transmission Rights, financial instruments that entitle the holder
          to
          pay or receive compensation for certain congestion-related transmission
          charges
          between two designated points.
 ***GAAP*** -
          Generally accepted accounting principles in the United States of
          America.
 ***Genco*** -
          Ameren
          Energy Generating Company, a Development Company subsidiary that operates
          a
          non-rate-regulated electric generation business in Illinois and
          Missouri.
 ***Gigawatthour*** -
          One
          thousand megawatthours.
 ***Heating
          degree-days*** -
          The
          summation of negative differences between the mean daily temperature and
          a 65-
          degree Fahrenheit base. This statistic is useful as an indicator of demand
          for
          electricity and natural gas for winter space heating for residential and
          commercial customers.
  4
 ***ICC*** -
          Illinois Commerce Commission, a state agency that regulates the Illinois
          utility
          businesses and operations of CIPS, CILCO, IP and prior to May 2, 2005,
          UE.
 ***Illinois
          Customer Choice Law*** -
          Illinois Electric Service Customer Choice and Rate Relief Law of 1997,
          which
          provides for electric utility restructuring and introduces competition
          into the
          retail supply of electric energy in Illinois.
 ***Illinova*** - ****** Illinova
          Corporation, the former parent company of IP.
 ***IP*** - ****** Illinois
          Power Company, which was acquired from Dynegy by, and became a subsidiary
          of,
          Ameren Corporation on September 30, 2004. IP operates a rate-regulated
          electric
          and natural gas transmission and distribution business in Illinois as
          AmerenIP.
 ***IP
          LLC*** -
          Illinois Power Securitization Limited Liability Company, which is a
          special-purpose Delaware limited liability company. Under FIN No. 46R,
          “Consolidation of Variable-interest Entities,” IP LLC was no longer consolidated
          within IP’s financial statements as of December 31, 2003.
 ***IP
          SPT*** -
          Illinois Power Special Purpose Trust, which was created as a subsidiary
          of IP
          LLC to issue TFNs as allowed under Illinois’ deregulation legislation. Pursuant
          to FIN No. 46R, IP SPT is a variable-interest entity, as the equity investment
          is not sufficient to permit IP SPT to finance its activities without additional
          subordinated debt. As of December 31, 2003, under FIN No. 46R, IP SPT was
          no
          longer consolidated within IP’s financial statements.
 ***IRS*** -
          Internal Revenue Service.
 ***Jobs
          Creation Act*** - ****** The
          American Jobs Creation Act of 2004.
 ***Kilowatthour*** - ****** A
          measure
          of electricity consumption equivalent to the use of 1,000 watts of power
          over a
          period of one hour.
 ***Marketing
          Company*** - ****** Ameren
          Energy Marketing Company, a Resources Company subsidiary that markets power,
          primarily for periods over one year.
 ***Medina
          Valley*** -
          AmerenEnergy ****** Medina
          Valley Cogen (No. 4) LLC and its subsidiaries, which are all Resources
          Company
          subsidiaries, which indirectly own a 40-megawatt gas-fired electric generation
          plant.
 ***Megawatthour*** -
          One
          thousand kilowatthours.
 ***MGP*** - ****** Manufactured
          gas plant.
 ***MISO*** - ****** Midwest
          Independent Transmission System Operator, Inc.
 ***MISO
          Day Two Market*** - ****** A
          market
          that began operating on April 1, 2005, and uses market-based pricing to
          compensate market participants for power, incorporating transmission congestion
          and line losses. The previous system required generators to make advance
          reservations for transmission service.
 ***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
          are maintained between rate-regulated and non-rate-regulated businesses.
          These
          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 the Missouri
          utility business and operations of UE.
 ***NO*** ***x*** ****** - ****** Nitrogen
          oxide.
 ***NRC*** -
          Nuclear
          Regulatory Commission, a U.S. government agency.
 ***NYMEX*** -
          New
          York Mercantile Exchange.
 ***OCI*** - ****** Other
          Comprehensive Income (Loss) as defined by GAAP.
 ***PGA*** -
          Purchased Gas Adjustment tariffs, which allow the passing through of the
          actual
          cost of natural gas to utility customers.
 ***PUHCA*** -
          Public
          Utility Holding Company Act of 1935, as amended.
 ***Resources
          Company*** -
          Ameren
          Energy Resources Company, an Ameren Corporation subsidiary that consists
          of
          non-rate-regulated operations, including Development Company, Genco, Marketing
          Company, AFS, and Medina Valley.
 ***RTO*** -
          Regional Transmission Organization.
 ***S&P*** -
          Standard and Poor’s, a division of The McGraw Hill Companies, Inc., a credit
          rating agency.
 ***SEC*** -
          Securities and Exchange Commission, a U.S. government agency.
 ***SFAS*** - ****** Statement
          of Financial Accounting Standards, the accounting and financial reporting
          rules
          issued by the FASB.
 ***SO*** ***2*** - ****** Sulfur
          dioxide.
 ***TFN*** -
          Transitional Funding Trust Notes issued by IP SPT as allowed under Illinois’
          deregulation legislation. IP must designate a portion of cash received
          from
          customer billings to fund payment of the TFNs. The proceeds received by
          IP are
          remitted to IP SPT and are restricted for the sole purpose of making payments
          of
          principal and interest on, and paying other fees and expenses related to,
          the
          TFNs. Since the application of FIN No. 46R, IP does not consolidate IP
          SPT and
          therefore the obligation to IP SPT appears on IP’s balance sheet.
 ***UE*** - ****** Union
          Electric Company, an Ameren Corporation subsidiary that operates a
          rate-regulated electric generation, transmission and distribution business,
          and
          a rate-regulated natural gas transmission and distribution business in
          Missouri
          and prior to May 2, 2005, in Illinois, as AmerenUE.
 
 
 5
  
 **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” provi-sions of the Private
          Securities Litigation Reform Act of 1995, we are providing this cautionary
          statement to identify important factors that could cause actual results
          to
          differ materially from those anticipated. The following factors, in addition
          to
          those discussed elsewhere in this report and in our other filings with
          the SEC,
          could cause actual results to differ materially from management expectations
          as
          suggested by such forward-looking statements:
  ·
                regulatory
                    actions, including changes in regulatory policies and ratemaking
                    determinations;
 ·
                changes
                    in laws and other governmental actions, including monetary and
                    fiscal
                    policies;
 ·
                the
                    effects of increased competition in the future due to, among
                    other things,
                    deregulation of certain aspects of our business at both the state
                    and
                    federal levels, and the implementation of deregulation, such
                    as when the
                    current electric rate freeze and current power supply contracts
                    expire in
                    Illinois in 2006;
 ·
                the
                    effects of participation in the
                    MISO;
 ·
                the
                    availability of fuel for the production of electricity, such
                    as coal and
                    natural gas, and purchased power and natural gas for distribution,
                    and the
                    level and volatility of future market prices for such commodities,
                    including the ability to recover any increased
                    costs;
 ·
                the
                    effectiveness of our risk management strategies and the use of
                    financial
                    and derivative instruments;
 ·
                prices
                    for power in the Midwest;
 ·
                business
                    and economic conditions, including their impact on interest rates;
 ·
                disruptions
                    of the capital markets or other events that make the Ameren companies’
                    access to necessary capital more difficult or
                    costly;
 ·
                the
                    impact of the adoption of new accounting standards and the application
                    of
                    appropriate technical accounting rules and guidance;
 ·
                actions
                    of credit ratings agencies and the effects of such actions;
 ·
                weather
                    conditions and other natural phenomena;
 ·
                generation
                    plant construction, installation and performance;
 ·
                    operation
                        of UE’s nuclear power facility, including planned and unplanned
                        outages,
                        and decommissioning costs;
 ·
                    the
                        effects of strategic initiatives, including acquisitions
                        and divestitures;
 ·
                    the
                        impact of current environmental regulations on utilities
                        and power
                        generating companies and the expectation that more stringent
                        requirements
                        will be introduced over time, which could have a negative
                        financial
                        effect;
 ·
                    labor
                        disputes, future wages and employee benefits costs, including
                        changes in
                        returns on benefit plan assets;
 ·
                    difficulties
                        in integrating IP with Ameren’s other
                        businesses;
 ·
                    changes
                        in the energy markets, environmental laws or regulations,
                        interest rates,
                        or other factors that could adversely affect assumptions
                        in connection
                        with the CILCORP and IP
                        acquisitions;
 ·
                    the
                        impact of conditions imposed by regulators in connection
                        with their
                        approval of Ameren’s acquisition of
                        IP;
 ·
                    the
                        inability of our counterparties to meet their obligations
                        with respect to
                        our contracts and financial instruments;
 ·
                    the
                        cost and availability of transmission capacity;
 ·
                    legal
                        and administrative proceedings; and
 ·
                    acts
                        of sabotage, war or terrorist activities.
 
 Given
              these uncertainties, undue reliance should not be placed on these
              forward-looking statements. Except to the extent required by the federal
              securities laws, we undertake no obligation to publicly update or revise
              any
              forward-looking statements to reflect new information, future events,
              or
              otherwise.
 
 6





**PART
                    I. FINANCIAL INFORMATION****ITEM
                    1. FINANCIAL STATEMENTS.****AMEREN
                    CORPORATION****CONSOLIDATED
                    STATEMENT OF INCOME****(Unaudited)
                    (In millions, except per share amounts)****Three
                    Months Ended**
                
                
                **Six
                    Months Ended****June
                    30,**
                
                
                **June
                    30,****2005**
                
                
                **2004**
                
                
                **2005**
                
                
                **2004****Operating
                    Revenues:**Electric
                **$**
                **1,413**
                
                $
                1,029
                
                **$**
                **2,542**
                
                $
                1,945Gas
                
                **174**
                
                
                119
                
                
                **670**
                
                
                420Other
                
                **3**
                
                
                1
                
                
                **4**
                
                
                3Total
                    operating revenues
                
                **1,590**
                
                
                1,149
                
                
                **3,216**
                
                
                2,368**Operating
                    Expenses:**Fuel
                    and purchased power
                
                **491**
                
                
                279
                
                
                **907**
                
                
                553Gas
                    purchased for resale
                
                **106**
                
                
                75
                
                
                **460**
                
                
                288Other
                    operations and maintenance
                
                **373**
                
                
                343
                
                
                **718**
                
                
                649Depreciation
                    and amortization
                
                **157**
                
                
                132
                
                
                **314**
                
                
                262Taxes
                    other than income taxes
                
                **95**
                
                
                74
                
                
                **186**
                
                
                154Total
                    operating expenses
                
                **1,222**
                
                
                903
                
                
                **2,585**
                
                
                1,906**Operating
                    Income**
                
                **368**
                
                
                246
                
                
                **631**
                
                
                462**Other
                    Income and (Deductions):**Miscellaneous
                    income
                
                **6**
                
                
                4
                
                
                **13**
                
                
                12Miscellaneous
                    expense
                
                **(9**
                **)**
                
                (4
                )
                
                **(10**
                **)**
                
                (5
                )Total
                    other income and (deductions)
                
                **(3**
                **)**
                
                -
                
                
                **3**
                
                
                7**Interest
                    Charges and Preferred Dividends:**Interest
                
                **77**
                
                
                66
                
                
                **151**
                
                
                130Preferred
                    dividends of subsidiaries
                
                **3**
                
                
                2
                
                
                **6**
                
                
                5Net
                    interest charges and preferred dividends
                
                **80**
                
                
                68
                
                
                **157**
                
                
                135**Income
                    Before Income Taxes**
                
                **285**
                
                
                178
                
                
                **477**
                
                
                334**Income
                    Taxes**
                
                **100**
                
                
                60
                
                
                **171**
                
                
                119**Net
                    Income**
                **$**
                **185**
                
                $
                118
                
                **$**
                **306**
                
                $
                215**Earnings
                    per Common Share – Basic and Diluted**
                **$**
                **0.93**
                
                $
                0.65
                
                **$**
                **1.55**
                
                $
                1.20**Dividends
                    per Common Share**
                **$**
                **0.635**
                
                $
                0.635
                
                **$**
                **1.27**
                
                $
                1.27**Average
                    Common Shares Outstanding**
                
                **199.7**
                
                
                182.7
                
                
                **197.5**
                
                
                178.5




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




7




**AMEREN
                  CORPORATION****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except per share amounts)****June
                  30,**
              
              **December
                  31,****2005**
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **27**
              
              $
              69Accounts
                  receivables – trade (less allowance for doubtfulaccounts
                  of $18 and $14, respectively)
              
              **424**
              
              
              442Unbilled
                  revenue
              
              **378**
              
              
              336Miscellaneous
                  accounts and notes receivable
              
              **17**
              
              
              38Materials
                  and supplies
              
              **649**
              
              
              623Other
                  current assets
              
              **70**
              
              
              74Total
                  current assets
              
              **1,565**
              
              
              1,582**Property
                  and Plant, Net**
              
              **13,397**
              
              
              13,297**Investments
                  and Other Noncurrent Assets:**Investments
                  in leveraged leases
              
              **135**
              
              
              140Nuclear
                  decommissioning trust fund
              
              **238**
              
              
              235Goodwill
                  and other intangibles, net
              
              **934**
              
              
              940Other
                  assets
              
              **411**
              
              
              411Total
                  investments and other noncurrent assets
              
              **1,718**
              
              
              1,726**Regulatory
                  Assets**
              
              **811**
              
              
              829**TOTAL
                  ASSETS**
              **$**
              **17,491**
              
              $
              17,434**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **350**
              
              $
              423Short-term
                  debt
              
              **161**
              
              
              417Accounts
                  and wages payable
              
              **370**
              
              
              567Taxes
                  accrued
              
              **136**
              
              
              26Other
                  current liabilities
              
              **363**
              
              
              374Total
                  current liabilities
              
              **1,380**
              
              
              1,807**Long-term
                  Debt, Net**
              
              **4,929**
              
              
              5,021**Preferred
                  Stock of Subsidiary Subject to Mandatory
                  Redemption**
              
              **20**
              
              
              20**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **1,935**
              
              
              1,886Accumulated
                  deferred investment tax credits
              
              **134**
              
              
              139Regulatory
                  liabilities
              
              **1,067**
              
              
              1,042Asset
                  retirement obligations
              
              **452**
              
              
              439Accrued
                  pension and other postretirement benefits
              
              **810**
              
              
              756Other
                  deferred credits and liabilities
              
              **290**
              
              
              315Total
                  deferred credits and other noncurrent liabilities
              
              **4,688**
              
              
              4,577**Preferred
                  Stock of Subsidiaries Not Subject to Mandatory
                  Redemption**
              
              **195**
              
              
              195**Minority
                  Interest in Consolidated Subsidiaries**
              
              **15**
              
              
              14**Commitments
                  and Contingencies (Notes 3, 9 and 10)****Stockholders'
                  Equity:**Common
                  stock, $.01 par value, 400.0 shares authorized –shares
                  outstanding of 203.8 and 195.2, respectively
              
              **2**
              
              
              2Other
                  paid-in capital, principally premium on common stock
              
              **4,347**
              
              
              3,949Retained
                  earnings
              
              **1,959**
              
              
              1,904Accumulated
                  other comprehensive loss
              
              **(30**
              **)**
              
              (45
              )Other
              
              **(14**
              **)**
              
              (10
              )Total
                  stockholders’ equity
              
              **6,264**
              
              
              5,800**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **17,491**
              
              $
              17,434




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




8




**AMEREN
                  CORPORATION****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended****June
                  30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **306**
              
              $
              215Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **272**
              
              
              262Amortization
                  of nuclear fuel
              
              **17**
              
              
              13Amortization
                  of debt issuance costs and premium/discounts
              
              **7**
              
              
              5Deferred
                  income taxes and investment tax credits, net
              
              **66**
              
              
              (11
              )Coal
                  contract settlement
              
              **-**
              
              
              18Pension
                  and postretirement benefit contributions
              
              **(35**
              **)**
              
              (32
              )Other
              
              **94**
              
              
              78Changes
                  in assets and liabilities, excluding the effects of the
                  acquisitions:Receivables,
                  net
              
              **(8**
              **)**
              
              (23
              )Materials
                  and supplies
              
              **(26**
              **)**
              
              29Accounts
                  and wages payable
              
              **(163**
              **)**
              
              (162
              )Taxes
                  accrued
              
              **112**
              
              
              117Assets,
                  other
              
              **18**
              
              
              (57
              )Liabilities,
                  other
              
              **1**
              
              
              (16
              )Net
                  cash provided by operating activities
              
              **661**
              
              
              436**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(442**
              **)**
              
              (379
              )Nuclear
                  fuel expenditures
              
              **(13**
              **)**
              
              (5
              )Other
              
              **12**
              
              
              17Net
                  cash used in investing activities
              
              **(443**
              **)**
              
              (367
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(253**
              **)**
              
              (232
              )Capital
                  issuance costs
              
              **(1**
              **)**
              
              (23
              )Redemptions,
                  repurchases, and maturities:Nuclear
                  fuel lease
              
              **-**
              
              
              (67
              )Short-term
                  debt
              
              **(256**
              **)**
              
              (126
              )Long-term
                  debt
              
              **(237**
              **)**
              
              (260
              )Issuances:Common
                  stock
              
              **402**
              
              
              935Long-term
                  debt
              
              **85**
              
              
              104Net
                  cash provided by (used in) financing activities
              
              **(260**
              **)**
              
              331Net
                  change in cash and cash equivalents
              
              **(42**
              **)**
              
              400Cash
                  and cash equivalents at beginning of year
              
              **69**
              
              
              111Cash
                  and cash equivalents at end of period
              **$**
              **27**
              
              $
              511




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




9





**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended,**
              
              
              **Six
                  Months Ended,****June
                  30,**
              
              
              **June
                  30,****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004****Operating
                  Revenues:**Electric
              **$**
              **726**
              
              $
              658
              
              **$**
              **1,259**
              
              $
              1,206Gas
              
              **26**
              
              
              25
              
              
              **101**
              
              
              97Total
                  operating revenues
              
              **752**
              
              
              683
              
              
              **1,360**
              
              
              1,303**Operating
                  Expenses:**Fuel
                  and purchased power
              
              **182**
              
              
              142
              
              
              **326**
              
              
              288Gas
                  purchased for resale
              
              **13**
              
              
              14
              
              
              **58**
              
              
              58Other
                  operations and maintenance
              
              **193**
              
              
              204
              
              
              **374**
              
              
              394Depreciation
                  and amortization
              
              **76**
              
              
              74
              
              
              **152**
              
              
              146Taxes
                  other than income taxes
              
              **59**
              
              
              56
              
              
              **114**
              
              
              111Total
                  operating expenses
              
              **523**
              
              
              490
              
              
              **1,024**
              
              
              997**Operating
                  Income**
              
              **229**
              
              
              193
              
              
              **336**
              
              
              306**Other
                  Income and (Deductions):**Miscellaneous
                  income
              
              **3**
              
              
              4
              
              
              **11**
              
              
              9Miscellaneous
                  expense
              
              **(2**
              **)**
              
              (4
              )
              
              **(4**
              **)**
              
              (5
              )Total
                  other income and (deductions)
              
              **1**
              
              
              -
              
              
              **7**
              
              
              4**Interest
                  Charges**
              
              **27**
              
              
              26
              
              
              **52**
              
              
              51**Income
                  Before Income Taxes**
              
              **203**
              
              
              167
              
              
              **291**
              
              
              259**Income
                  Taxes**
              
              **71**
              
              
              58
              
              
              **102**
              
              
              92**Net
                  Income**
              
              **132**
              
              
              109
              
              
              **189**
              
              
              167**Preferred
                  Stock Dividends**
              
              **2**
              
              
              2
              
              
              **3**
              
              
              3**Net
                  Income Available to Common Stockholder**
              **$**
              **130**
              
              $
              107
              
              **$**
              **186**
              
              $
              164




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


10




**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except per share amounts)****June
                  30,**
              
              **December
                  31,****2005**
              
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **1**
              
              $
              48Accounts
                  receivable – trade (less allowance for doubtfulaccounts
                  of $5 and $3, respectively)
              
              **186**
              
              
              175Unbilled
                  revenue
              
              **196**
              
              
              118Miscellaneous
                  accounts and notes receivable
              
              **1**
              
              
              13Accounts
                  receivable – affiliates
              
              **19**
              
              
              8Current
                  portion of intercompany note receivable - CIPS
              
              **6**
              
              
              -Materials
                  and supplies
              
              **194**
              
              
              199Other
                  current assets
              
              **11**
              
              
              18Total
                  current assets
              
              **614**
              
              
              579**Property
                  and Plant, Net**
              
              **7,265**
              
              
              7,075**Investments
                  and Other Noncurrent Assets:**Nuclear
                  decommissioning trust fund
              
              **238**
              
              
              235Intercompany
                  note receivable - CIPS
              
              **61**
              
              
              -Other
                  assets
              
              **266**
              
              
              263Total
                  investments and other noncurrent assets
              
              **565**
              
              
              498**Regulatory
                  Assets**
              
              **575**
              
              
              585**TOTAL
                  ASSETS**
              **$**
              **9,019**
              
              $
              8,737**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **3**
              
              $
              3Short-term
                  debt
              
              **138**
              
              
              375Borrowings
                  from money pool
              
              **382**
              
              
              2Accounts
                  and wages payable
              
              **101**
              
              
              252Accounts
                  and wages payable - affiliates
              
              **150**
              
              
              60Taxes
                  accrued
              
              **162**
              
              
              51Other
                  current liabilities
              
              **103**
              
              
              108Total
                  current liabilities
              
              **1,039**
              
              
              851**Long-term
                  Debt, Net**
              
              **2,143**
              
              
              2,059**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **1,251**
              
              
              1,217Accumulated
                  deferred investment tax credits
              
              **99**
              
              
              108Regulatory
                  liabilities
              
              **740**
              
              
              776Asset
                  retirement obligations
              
              **444**
              
              
              431Accrued
                  pension and other postretirement benefits
              
              **240**
              
              
              219Other
                  deferred credits and liabilities
              
              **77**
              
              
              80Total
                  deferred credits and other noncurrent liabilities
              
              **2,851**
              
              
              2,831**Commitments
                  and Contingencies (Notes 3, 9 and 10)****Stockholders'
                  Equity:**Common
                  stock, $5 par value, 150.0 shares authorized – 102.1 shares
                  outstanding
              
              **511**
              
              
              511Preferred
                  stock not subject to mandatory redemption
              
              **113**
              
              
              113Other
                  paid-in capital, principally premium on common stock
              
              **720**
              
              
              718Retained
                  earnings
              
              **1,674**
              
              
              1,688Accumulated
                  other comprehensive loss
              
              **(32**
              **)**
              
              (34
              )Total
                  stockholders' equity
              
              **2,986**
              
              
              2,996**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **9,019**
              
              $
              8,737




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


11




**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended****June
                  30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **189**
              
              $
              167Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **152**
              
              
              146Amortization
                  of nuclear fuel
              
              **17**
              
              
              13Amortization
                  of debt issuance costs and premium/discounts
              
              **3**
              
              
              2Deferred
                  income taxes and investment tax credits, net
              
              **30**
              
              
              (11
              )Coal
                  contract settlement
              
              **-**
              
              
              18Pension
                  and other postretirement contributions
              
              **(18**
              **)**
              
              (18
              )Other
              
              **33**
              
              
              17Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(114**
              **)**
              
              (58
              )Materials
                  and supplies
              
              **5**
              
              
              (7
              )Accounts
                  and wages payable
              
              **(61**
              **)**
              
              (125
              )Taxes
                  accrued
              
              **111**
              
              
              115Assets,
                  other
              
              **(3**
              **)**
              
              8Liabilities,
                  other
              
              **11**
              
              
              7Net
                  cash provided by operating activities
              
              **355**
              
              
              274**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(489**
              **)**
              
              (253
              )Nuclear
                  fuel expenditures
              
              **(13**
              **)**
              
              (5
              )Other
              
              **8**
              
              
              4Net
                  cash used in investing activities
              
              **(494**
              **)**
              
              (254
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(135**
              **)**
              
              (145
              )Dividends
                  on preferred stock
              
              **(3**
              **)**
              
              (3
              )Capital
                  issuance costs
              
              **-**
              
              
              (1
              )Changes
                  in money pool borrowings
              
              **380**
              
              
              342Redemptions,
                  repurchases, and maturities:Nuclear
                  fuel lease
              
              **-**
              
              
              (67
              )Short-term
                  debt
              
              **(237**
              **)**
              
              (150
              )Long-term
                  debt
              
              **-**
              
              
              (100
              )Issuances:Long
                  term debt
              
              **85**
              
              
              104Capital
                  contribution from parent
              
              **2**
              
              
              -Net
                  cash provided by (used in) financing activities
              
              **92**
              
              
              (20
              )Net
                  change in cash and cash equivalents
              
              **(47**
              **)**
              
              -Cash
                  and cash equivalents at beginning of year
              
              **48**
              
              
              15Cash
                  and cash equivalents at end of period
              **$**
              **1**
              
              $
              15




Non-cash
      Investing Activities


In
      May
      2005, UE sold an interest in assets to CIPS
      in
      exchange for a subordinated promissory note from CIPS, and UE


contributed
      an interest in assets to Ameren Corporation.  See Note 3 for further
      details.




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




12




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****STATEMENT
                  OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended**
              
              **Six
                  Months Ended****June
                  30,**
              
              **June
                  30,****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004****Operating
                  Revenues:**Electric
              **$**
              **171**
              
              $
              139
              
              **$**
              **299**
              
              $
              266Gas
              
              **27**
              
              
              28
              
              
              **111**
              
              
              113Total
                  operating revenues
              
              **198**
              
              
              167
              
              
              **410**
              
              
              379**Operating
                  Expenses:**Purchased
                  power
              
              **105**
              
              
              79
              
              
              **191**
              
              
              159Gas
                  purchased for resale
              
              **15**
              
              
              16
              
              
              **74**
              
              
              72Other
                  operations and maintenance
              
              **34**
              
              
              35
              
              
              **67**
              
              
              72Depreciation
                  and amortization
              
              **18**
              
              
              13
              
              
              **31**
              
              
              26Taxes
                  other than income taxes
              
              **7**
              
              
              5
              
              
              **15**
              
              
              14Total
                  operating expenses
              
              **179**
              
              
              148
              
              
              **378**
              
              
              343**Operating
                  Income**
              
              **19**
              
              
              19
              
              
              **32**
              
              
              36**Other
                  Income and (Deductions):**Miscellaneous
                  income
              
              **4**
              
              
              6
              
              
              **9**
              
              
              13Miscellaneous
                  expense
              
              **(4**
              **)**
              
              (1
              )
              
              **(4**
              **)**
              
              (1
              )Total
                  other income and (deductions)
              
              **-**
              
              
              5
              
              
              **5**
              
              
              12**Interest
                  Charges**
              
              **8**
              
              
              8
              
              
              **15**
              
              
              16**Income
                  Before Income Taxes**
              
              **11**
              
              
              16
              
              
              **22**
              
              
              32**Income
                  Taxes**
              
              **4**
              
              
              8
              
              
              **7**
              
              
              14**Net
                  Income**
              
              **7**
              
              
              8
              
              
              **15**
              
              
              18**Preferred
                  Stock Dividends**
              
              **-**
              
              
              -
              
              
              **1**
              
              
              1**Net
                  Income Available to Common Stockholder**
              **$**
              **7**
              
              $
              8
              
              **$**
              **14**
              
              $
              17




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


13




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****BALANCE
                  SHEET****(Unaudited)
                  (In millions)****June
                  30,**
              
              **December
                  31,****2005**
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **1**
              
              $
              2Accounts
                  receivable – trade (less allowance for doubtfulaccounts
                  of $3 and $1, respectively)
              
              **62**
              
              
              48Unbilled
                  revenue
              
              **72**
              
              
              71Accounts
                  receivable – affiliates
              
              **9**
              
              
              12Current
                  portion of intercompany note receivable – Genco
              
              **34**
              
              
              249Current
                  portion of intercompany tax receivable – Genco
              
              **11**
              
              
              11Advances
                  to money pool
              
              **28**
              
              
              -Materials
                  and supplies
              
              **49**
              
              
              56Other
                  current assets
              
              **11**
              
              
              19Total
                  current assets
              
              **277**
              
              
              468**Property
                  and Plant, Net**
              
              **1,118**
              
              
              953**Investments
                  and Other Noncurrent Assets:**Intercompany
                  note receivable – Genco
              
              **163**
              
              
              -Intercompany
                  tax receivable – Genco
              
              **133**
              
              
              138Other
                  assets
              
              **32**
              
              
              23Total
                  investments and other noncurrent assets
              
              **328**
              
              
              161**Regulatory
                  Assets**
              
              **34**
              
              
              33**TOTAL
                  ASSETS**
              **$**
              **1,757**
              
              $
              1,615**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **20**
              
              $
              20Accounts
                  and wages payable
              
              **28**
              
              
              27Accounts
                  and wages payable - affiliates
              
              **65**
              
              
              49Borrowings
                  from money pool
              
              **-**
              
              
              68Current
                  portion of intercompany note payable - UE
              
              **6**
              
              
              -Taxes
                  accrued
              
              **11**
              
              
              -Other
                  current liabilities
              
              **36**
              
              
              32Total
                  current liabilities
              
              **166**
              
              
              196**Long-term
                  Debt, Net**
              
              **410**
              
              
              430**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **292**
              
              
              298Accumulated
                  deferred investment tax credits
              
              **15**
              
              
              10Intercompany
                  note payable - UE
              
              **61**
              
              
              -Regulatory
                  liabilities
              
              **203**
              
              
              151Other
                  deferred credits and liabilities
              
              **44**
              
              
              40Total
                  deferred credits and other noncurrent liabilities
              
              **615**
              
              
              499**Commitments
                  and Contingencies (Notes 3 and 9)****Stockholders'
                  Equity:**Common
                  stock, no par value, 45.0 shares authorized – 25.5 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **189**
              
              
              121Preferred
                  stock not subject to mandatory redemption
              
              **50**
              
              
              50Retained
                  earnings
              
              **328**
              
              
              323Accumulated
                  other comprehensive loss
              
              **(1**
              **)**
              
              (4
              )Total
                  stockholders' equity
              
              **566**
              
              
              490**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **1,757**
              
              $
              1,615




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


14




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended****June
                  30,****2005**
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **15**
              
              $
              18Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **31**
              
              
              26Deferred
                  income taxes and investment tax credits, net
              
              **(7**
              **)**
              
              (12
              )Pension
                  and other postretirement contributions
              
              **(3**
              **)**
              
              (3
              )Other
              
              **3**
              
              
              6Changes
                  in assets and liabilities:Receivables,
                  net
              
              **10**
              
              
              -Materials
                  and supplies
              
              **7**
              
              
              9Accounts
                  and wages payable
              
              **17**
              
              
              3Taxes
                  accrued
              
              **11**
              
              
              12Assets,
                  other
              
              **7**
              
              
              (7
              )Liabilities,
                  other
              
              **5**
              
              
              10Net
                  cash provided by operating activities
              
              **96**
              
              
              62**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(24**
              **)**
              
              (21
              )Proceeds
                  from intercompany note receivable - Genco
              
              **52**
              
              
              49Changes
                  in money pool advances
              
              **(28**
              **)**
              
              -Net
                  cash provided by investing activities
              
              **-**
              
              
              28**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(9**
              **)**
              
              (28
              )Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Changes
                  in money pool borrowings
              
              **(68**
              **)**
              
              (74
              )Redemptions,
                  repurchases, and maturities:Long-term
                  debt
              
              **(20**
              **)**
              
              -Capital
                  contribution from parent
              
              **1**
              
              
              -Net
                  cash used in financing activities
              
              **(97**
              **)**
              
              (103
              )Net
                  change in cash and cash equivalents
              
              **(1**
              **)**
              
              (13
              )Cash
                  and cash equivalents at beginning of year
              
              **2**
              
              
              16Cash
                  and cash equivalents at end of period
              **$**
              **1**
              
              $
              3




Non-cash
        Investing Activities
 In
        May
        2005, CIPS purchased an interest in assets from UE in
        exchange for a subordinated promissory note to UE, and CIPS
 received
        a contribution of assets from Ameren Corporation.  See Note 3 for
        further
        details.


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


15




**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended**
              
              
              **Six
                  Months Ended****June
                  30,**
              
              
              **June
                  30,****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004****Operating
                  Revenues:**Electric
              **$**
              **266**
              
              $
              208
              
              **$**
              **491**
              
              $
              424Total
                  operating revenues
              
              **266**
              
              
              208
              
              
              **491**
              
              
              424**Operating
                  Expenses:**Fuel
                  and purchased power
              
              **138**
              
              
              91
              
              
              **237**
              
              
              185Other
                  operations and maintenance
              
              **38**
              
              
              43
              
              
              **76**
              
              
              71Depreciation
                  and amortization
              
              **18**
              
              
              19
              
              
              **37**
              
              
              38Taxes
                  other than income taxes
              
              **5**
              
              
              6
              
              
              **3**
              
              
              11Total
                  operating expenses
              
              **199**
              
              
              159
              
              
              **353**
              
              
              305**Operating
                  Income**
              
              **67**
              
              
              49
              
              
              **138**
              
              
              119**Other
                  Income and (Deductions):**Miscellaneous
                  income
              
              **1**
              
              
              -
              
              
              **1**
              
              
              -Miscellaneous
                  expense
              
              **-**
              
              
              -
              
              
              **-**
              
              
              (1
              )Total
                  other income and (deductions)
              
              **1**
              
              
              -
              
              
              **1**
              
              
              (1
              )**Interest
                  Charges**
              
              **19**
              
              
              24
              
              
              **40**
              
              
              47**Income
                  Before Income Taxes**
              
              **49**
              
              
              25
              
              
              **99**
              
              
              71**Income
                  Taxes**
              
              **18**
              
              
              8
              
              
              **37**
              
              
              25**Net
                  Income**
              **$**
              **31**
              
              $
              17
              
              **$**
              **62**
              
              $
              46


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


16






**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except shares)****June
                  30,**
              
              **December
                  31,****2005**
              
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **-**
              
              $
              1Accounts
                  receivable - affiliates
              
              **89**
              
              
              86Accounts
                  receivable
              
              **17**
              
              
              4Advances
                  to money pool
              
              **26**
              
              
              -Materials
                  and supplies
              
              **156**
              
              
              89Other
                  current assets
              
              **2**
              
              
              2Total
                  current assets
              
              **290**
              
              
              182**Property
                  and Plant, Net**
              
              **1,507**
              
              
              1,749**Other
                  Noncurrent Assets**
              
              **12**
              
              
              18**TOTAL
                  ASSETS**
              **$**
              **1,809**
              
              $
              1,949**LIABILITIES
                  AND STOCKHOLDER'S EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **225**
              
              $
              225Current
                  portion of intercompany notes payable – CIPS
              
              **34**
              
              
              283Borrowings
                  from money pool
              
              **-**
              
              
              116Accounts
                  and wages payable
              
              **23**
              
              
              26Accounts
                  and wages payable - affiliates
              
              **59**
              
              
              22Current
                  portion of intercompany tax payable – CIPS
              
              **11**
              
              
              11Taxes
                  accrued
              
              **23**
              
              
              35Other
                  current liabilities
              
              **18**
              
              
              22Total
                  current liabilities
              
              **393**
              
              
              740**Long-term
                  Debt, Net**
              
              **474**
              
              
              473**Intercompany
                  Notes Payable – CIPS**
              
              **163**
              
              
              -**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **161**
              
              
              144Accumulated
                  deferred investment tax credits
              
              **11**
              
              
              12Intercompany
                  tax payable – CIPS
              
              **133**
              
              
              138Accrued
                  pension and other postretirement benefits
              
              **9**
              
              
              5Other
                  deferred credits and liabilities
              
              **2**
              
              
              2Total
                  deferred credits and other noncurrent liabilities
              
              **316**
              
              
              301**Commitments
                  and Contingencies (Notes 3 and 9)****Stockholder's
                  Equity:**Common
                  stock, no par value, 10,000 shares authorized – 2,000 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **226**
              
              
              225Retained
                  earnings
              
              **239**
              
              
              211Accumulated
                  other comprehensive loss
              
              **(2**
              **)**
              
              (1
              )Total
                  stockholder's equity
              
              **463**
              
              
              435**TOTAL
                  LIABILITIES AND STOCKHOLDER'S EQUITY**
              **$**
              **1,809**
              
              $
              1,949




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




17




**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended**
                **June
                  30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **62**
              
              $
              46Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Amortization
                  of debt issuance costs and discounts
              
              **1**
              
              
              -Depreciation
                  and amortization
              
              **37**
              
              
              38Deferred
                  income taxes and investment tax credits, net
              
              **16**
              
              
              18Pensions
                  and other postretirement contributions
              
              **(1**
              **)**
              
              (1
              )Other
              
              **5**
              
              
              (1
              )Changes
                  in assets and liabilities:Accounts
                  receivable
              
              **(16**
              **)**
              
              9Materials
                  and supplies
              
              **(67**
              **)**
              
              1Accounts
                  and wages payable
              
              **40**
              
              
              (10
              )Taxes
                  accrued, net
              
              **(12**
              **)**
              
              (3
              )Assets,
                  other
              
              **6**
              
              
              2Liabilities,
                  other
              
              **(9**
              **)**
              
              (17
              )Net
                  cash provided by operating activities
              
              **62**
              
              
              82**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(43**
              **)**
              
              (28
              )Proceeds
                  from asset sale to UE
              
              **241**
              
              
              -Changes
                  in money pool advances
              
              **(26**
              **)**
              
              -Net
                  cash provided by (used in) investing activities
              
              **172**
              
              
              (28
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(34**
              **)**
              
              (35
              )Changes
                  in money pool borrowings
              
              **(116**
              **)**
              
              32Redemptions,
                  repurchases, and maturities:Intercompany
                  notes payable – CIPS and Ameren
              
              **(86**
              **)**
              
              (53
              )Capital
                  contribution from parent
              
              **1**
              
              
              -Net
                  cash used in financing activities
              
              **(235**
              **)**
              
              (56
              )Net
                  change in cash and cash equivalents
              
              **(1**
              **)**
              
              (2
              )Cash
                  and cash equivalents at beginning of year
              
              **1**
              
              
              2Cash
                  and cash equivalents at end of period
              **$**
              **-**
              
              $
              -




**The
        accompanying notes as they relate to Genco are an integral part of these
        consolidated financial statements.**
  18
  **CILCORP
                    INC.****CONSOLIDATED
                    STATEMENT OF INCOME****(Unaudited)
                    (In millions)****Three
                    Months Ended**
                
                
                **Six
                    Months Ended****June
                    30,**
                
                
                **June
                    30,****2005**
                
                
                **2004**
                
                
                **2005**
                
                
                **2004****Operating
                    Revenues:**Electric
                **$**
                **100**
                
                $
                89
                
                **$**
                **193**
                
                $
                187Gas
                
                **46**
                
                
                50
                
                
                **174**
                
                
                191Other
                
                **1**
                
                
                1
                
                
                **2**
                
                
                2Total
                    operating revenues
                
                **147**
                
                
                140
                
                
                **369**
                
                
                380**Operating
                    Expenses:**Fuel
                    and purchased power
                
                **39**
                
                
                33
                
                
                **72**
                
                
                78Gas
                    purchased for resale
                
                **29**
                
                
                31
                
                
                **123**
                
                
                138Other
                    operations and maintenance
                
                **39**
                
                
                47
                
                
                **81**
                
                
                90Depreciation
                    and amortization
                
                **18**
                
                
                17
                
                
                **36**
                
                
                33Taxes
                    other than income taxes
                
                **4**
                
                
                5
                
                
                **11**
                
                
                14Total
                    operating expenses
                
                **129**
                
                
                133
                
                
                **323**
                
                
                353**Operating
                    Income**
                
                **18**
                
                
                7
                
                
                **46**
                
                
                27**Other
                    Income and (Deductions):**Miscellaneous
                    expense
                
                **(3**
                **)**
                
                (1
                )
                
                **(5**
                **)**
                
                (2
                )Total
                    other income and (deductions)
                
                **(3**
                **)**
                
                (1
                )
                
                **(5**
                **)**
                
                (2
                )**Interest
                    Charges and Preferred Dividends:**Interest
                
                **13**
                
                
                14
                
                
                **25**
                
                
                26Preferred
                    dividends of subsidiaries
                
                **-**
                
                
                1
                
                
                **1**
                
                
                1Net
                    interest charges and preferred dividends
                
                **13**
                
                
                15
                
                
                **26**
                
                
                27**Income
                    (Loss) Before Income Taxes**
                
                **2**
                
                
                (9
                )
                
                **15**
                
                
                (2
                )**Income
                    Tax Expense (Benefit)**
                
                **-**
                
                
                (5
                )
                
                **4**
                
                
                (2
                )**Net
                    Income (Loss)**
                **$**
                **2**
                
                $
                (4
                )
                **$**
                **11**
                
                $
                -




The
      acompanying notes as they relate to CILCORP are an integral part of these
      consolidated financial statements






19




**CILCORP
                  INC.****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except shares)****June
                  30,**
              
              
              **December
                  31,****2005**
              
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **3**
              
              $
              7Accounts
                  receivables – trade (less allowance for doubtfulaccounts
                  of $3 and $3, respectively)
              
              **45**
              
              
              46Unbilled
                  revenue
              
              **30**
              
              
              46Accounts
                  receivables – affiliates
              
              **3**
              
              
              9Materials
                  and supplies
              
              **124**
              
              
              134Other
                  current assets
              
              **22**
              
              
              19Total
                  current assets
              
              **227**
              
              
              261**Property
                  and Plant, Net**
              
              **1,188**
              
              
              1,179**Investments
                  and Other Noncurrent Assets:**Investments
                  in leveraged leases
              
              **110**
              
              
              113Goodwill
                  and other intangibles, net
              
              **559**
              
              
              559Other
                  assets
              
              **51**
              
              
              33Total
                  investments and other noncurrent assets
              
              **720**
              
              
              705**Regulatory
                  Assets**
              
              **10**
              
              
              11**TOTAL
                  ASSETS**
              **$**
              **2,145**
              
              $
              2,156**LIABILITIES
                  AND STOCKHOLDER'S EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **16**
              
              $
              16Borrowings
                  from money pool, net
              
              **84**
              
              
              166Intercompany
                  note payable – Ameren
              
              **94**
              
              
              72Accounts
                  and wages payable
              
              **39**
              
              
              57Accounts
                  and wages payable - affiliates
              
              **21**
              
              
              42Other
                  current liabilities
              
              **63**
              
              
              58Total
                  current liabilities
              
              **317**
              
              
              411**Long-term
                  Debt, Net**
              
              **614**
              
              
              623**Preferred
                  Stock of Subsidiary Subject to Mandatory
                  Redemption**
              
              **20**
              
              
              20**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **204**
              
              
              214Accumulated
                  deferred investment tax credits
              
              **9**
              
              
              10Regulatory
                  liabilities
              
              **50**
              
              
              46Accrued
                  pension and other postretirement benefits
              
              **249**
              
              
              242Other
                  deferred credits and liabilities
              
              **20**
              
              
              23Total
                  deferred credits and other noncurrent liabilities
              
              **532**
              
              
              535**Preferred
                  Stock of Subsidiary Not Subject to Mandatory
                  Redemption**
              
              **19**
              
              
              19**Commitments
                  and Contingencies (Notes 3 and 9)****Stockholder's
                  Equity:**Common
                  stock, no par value, 10,000 shares authorized – 1,000 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **666**
              
              
              565Retained
                  earnings (deficit)
              
              **(40**
              **)**
              
              (21
              )Accumulated
                  other comprehensive income
              
              **17**
              
              
              4Total
                  stockholder's equity
              
              **643**
              
              
              548**TOTAL
                  LIABILITIES AND STOCKHOLDER'S EQUITY**
              **$**
              **2,145**
              
              $
              2,156




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






20




**CILCORP
                  INC.****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended****June
                  30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **11**
              
              $
              -Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **36**
              
              
              33Deferred
                  income taxes and investment tax credits, net
              
              **(13**
              **)**
              
              3Pension
                  and other postretirement benefit contributions
              
              **(2**
              **)**
              
              (3
              )Other
              
              **7**
              
              
              3Changes
                  in assets and liabilities:Receivables,
                  net
              
              **23**
              
              
              66Materials
                  and supplies
              
              **10**
              
              
              25Accounts
                  and wages payable
              
              **(35**
              **)**
              
              (26
              )Taxes
                  accrued
              
              **(4**
              **)**
              
              2Assets,
                  other
              
              **(1**
              **)**
              
              4Liabilities,
                  other
              
              **3**
              
              
              (4
              )Net
                  cash provided by operating activities
              
              **35**
              
              
              103**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(47**
              **)**
              
              (73
              )Other
              
              **3**
              
              
              4Net
                  cash used in investing activities
              
              **(44**
              **)**
              
              (69
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(30**
              **)**
              
              (18
              )Changes
                  in money pool borrowings
              
              **(82**
              **)**
              
              87Proceeds
                  from intercompany notes payable - Ameren
              
              **22**
              
              
              11Redemptions,
                  repurchases, and maturities:Long-term
                  debt
              
              **(6**
              **)**
              
              (120
              )Capital
                  contribution from parent
              
              **101**
              
              
              -Net
                  cash used in financing activities
              
              **5**
              
              
              (40
              )Net
                  change in cash and cash equivalents
              
              **(4**
              **)**
              
              (6
              )Cash
                  and cash equivalents at beginning of year
              
              **7**
              
              
              11Cash
                  and cash equivalents at end of period
              **$**
              **3**
              
              $
              5




The
        acompanying notes as they relate to CILCORP
        are an integral part of these consolidated financial
        statements.
   21




**CENTRAL
                  ILLINOIS LIGHT COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended**
              
              
              **Six
                  Months Ended****June
                  30,**
              
              
              **June
                  30,****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004****Operating
                  Revenues:**Electric
              **$**
              **99**
              
              $
              89
              
              **$**
              **192**
              
              $
              187Gas
              
              **46**
              
              
              45
              
              
              **171**
              
              
              172Total
                  operating revenues
              
              **145**
              
              
              134
              
              
              **363**
              
              
              359**Operating
                  Expenses:**Fuel
                  and purchased power
              
              **37**
              
              
              31
              
              
              **68**
              
              
              76Gas
                  purchased for resale
              
              **28**
              
              
              25
              
              
              **119**
              
              
              119Other
                  operations and maintenance
              
              **40**
              
              
              48
              
              
              **84**
              
              
              95Depreciation
                  and amortization
              
              **16**
              
              
              16
              
              
              **33**
              
              
              32Taxes
                  other than income taxes
              
              **4**
              
              
              6
              
              
              **10**
              
              
              14Total
                  operating expenses
              
              **125**
              
              
              126
              
              
              **314**
              
              
              336**Operating
                  Income**
              
              **20**
              
              
              8
              
              
              **49**
              
              
              23**Other
                  Income and (Deductions):**Miscellaneous
                  expense
              
              **(2**
              **)**
              
              (2
              )
              
              **(3**
              **)**
              
              (3
              )Total
                  other income and (deductions)
              
              **(2**
              **)**
              
              (2
              )
              
              **(3**
              **)**
              
              (3
              )**Interest
                  Charges**
              
              **3**
              
              
              4
              
              
              **7**
              
              
              7**Income
                  Before Income Taxes**
              
              **15**
              
              
              2
              
              
              **39**
              
              
              13**Income
                  Tax Expense (Benefit)**
              
              **5**
              
              
              (1
              )
              
              **13**
              
              
              4**Net
                  Income**
              
              **10**
              
              
              3
              
              
              **26**
              
              
              9**Preferred
                  Stock Dividends**
              
              **-**
              
              
              1
              
              
              **1**
              
              
              1**Net
                  Income Available to Common Stockholder**
              **$**
              **10**
              
              $
              2
              
              **$**
              **25**
              
              $
              8




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




22




**CENTRAL
                  ILLINOIS LIGHT COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions)****June
                  30,**
              
              
              **December
                  31,****2005**
              
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **1**
              
              $
              2Accounts
                  receivable - trade (less allowance for doubtfulaccounts
                  of $3 and $3, respectively)
              
              **44**
              
              
              46Unbilled
                  revenue
              
              **30**
              
              
              43Accounts
                  receivable - affiliates
              
              **4**
              
              
              11Materials
                  and supplies
              
              **63**
              
              
              68Other
                  current assets
              
              **8**
              
              
              6Total
                  current assets
              
              **150**
              
              
              176**Property
                  and Plant, Net**
              
              **1,180**
              
              
              1,165**Other
                  Noncurrent Assets**
              
              **48**
              
              
              29**Regulatory
                  Assets**
              
              **10**
              
              
              11**TOTAL
                  ASSETS**
              **$**
              **1,388**
              
              $
              1,381**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **16**
              
              $
              16Borrowings
                  from money pool
              
              **78**
              
              
              169Accounts
                  and wages payable
              
              **38**
              
              
              53Accounts
                  and wages payable - affiliates
              
              **21**
              
              
              42Other
                  current liabilities
              
              **53**
              
              
              49Total
                  current liabilities
              
              **206**
              
              
              329**Long-term
                  Debt, Net**
              
              **122**
              
              
              122**Preferred
                  Stock Subject to Mandatory Redemption**
              
              **20**
              
              
              20**Deferred
                  Credits and Other Noncurrent Liabilities:**Accumulated
                  deferred income taxes, net
              
              **125**
              
              
              130Accumulated
                  deferred investment tax credits
              
              **9**
              
              
              10Regulatory
                  liabilities
              
              **190**
              
              
              184Accrued
                  pension and other postretirement benefits
              
              **144**
              
              
              131Other
                  deferred credits and liabilities
              
              **17**
              
              
              18Total
                  deferred credits and other noncurrent liabilities
              
              **485**
              
              
              473**Commitments
                  and Contingencies (Notes 3 and 9)****Stockholders'
                  Equity:**Common
                  stock, no par value, 20.0 shares authorized – 13.6 shares
                  outstanding
              
              **-**
              
              
              -Preferred
                  stock not subject to mandatory redemption
              
              **19**
              
              
              19Other
                  paid-in capital
              
              **414**
              
              
              313Retained
                  earnings
              
              **120**
              
              
              115Accumulated
                  other comprehensive income (loss)
              
              **2**
              
              
              (10
              )Total
                  stockholders' equity
              
              **555**
              
              
              437**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **1,388**
              
              $
              1,381




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




23




**CENTRAL
                  ILLINOIS LIGHT COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Six
                  Months Ended**
                **June
                  30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **26**
              
              $
              9Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **33**
              
              
              32Deferred
                  income taxes and investment tax credits, net
              
              **(8**
              **)**
              
              4Pension
                  and other postretirement benefit contributions
              
              **(2**
              **)**
              
              (3
              )Other
              
              **19**
              
              
              19Changes
                  in assets and liabilities:Receivables,
                  net
              
              **22**
              
              
              52Materials
                  and supplies
              
              **5**
              
              
              17Accounts
                  and wages payable
              
              **(32**
              **)**
              
              (28
              )Taxes
                  accrued
              
              **-**
              
              
              (9
              )Assets,
                  other
              
              **(1**
              **)**
              
              -Liabilities,
                  other
              
              **(5**
              **)**
              
              1Net
                  cash provided by operating activities
              
              **57**
              
              
              94**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(47**
              **)**
              
              (73
              )Other
              
              **-**
              
              
              1Net
                  cash used in investing activities
              
              **(47**
              **)**
              
              (72
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(20**
              **)**
              
              (10
              )Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Changes
                  in money pool borrowings
              
              **(91**
              **)**
              
              84Redemptions,
                  repurchases, and maturities:Long-term
                  debt
              
              **-**
              
              
              (100
              )Capital
                  contribution from parent
              
              **101**
              
              
              -Net
                  cash used in financing activities
              
              **(11**
              **)**
              
              (27
              )Net
                  change in cash and cash equivalents
              
              **(1**
              **)**
              
              (5
              )Cash
                  and cash equivalents at beginning of year
              
              **2**
              
              
              8Cash
                  and cash equivalents at end of period
              **$**
              **1**
              
              $
              3




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




24




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****--Successor--**
              
              
              **--Predecessor--**
              
              
              **--Successor--**
              
              
              **--Predecessor--****Three**
              
              
              **Three**
              
              
              **Six**
              
              
              **Six****Months**
              
              
              **Months**
              
              
              **Months**
              
              
              **Months****Ended**
              
              
              **Ended**
              
              
              **Ended**
              
              
              **Ended****June
                  30,**
              
              
              **June
                  30,**
              
              
              **June
                  30,**
              
              
              **June
                  30,****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004****Operating
                  Revenues:**Electric
              **$**
              **268**
              
              $
              258
              
              **$**
              **503**
              
              $
              505Gas
              
              **73**
              
              
              66
              
              
              **270**
              
              
              276Total
                  operating revenues
              
              **341**
              
              
              324
              
              
              **773**
              
              
              781**Operating
                  Expenses:**Purchased
                  power
              
              **165**
              
              
              154
              
              
              **322**
              
              
              305Gas
                  purchased for resale
              
              **44**
              
              
              39
              
              
              **190**
              
              
              193Other
                  operations and maintenance
              
              **60**
              
              
              52
              
              
              **102**
              
              
              99Depreciation
                  and amortization
              
              **19**
              
              
              20
              
              
              **40**
              
              
              40Amortization
                  of regulatory assets
              
              **-**
              
              
              10
              
              
              **-**
              
              
              21Taxes
                  other than income taxes
              
              **18**
              
              
              16
              
              
              **40**
              
              
              37Total
                  operating expenses
              
              **306**
              
              
              291
              
              
              **694**
              
              
              695**Operating
                  Income**
              
              **35**
              
              
              33
              
              
              **79**
              
              
              86**Other
                  Income and (Deductions):**Interest
                  income from former affiliate
              
              **-**
              
              
              42
              
              
              **-**
              
              
              85Miscellaneous
                  income
              
              **2**
              
              
              7
              
              
              **4**
              
              
              12Miscellaneous
                  expense
              
              **(1**
              **)**
              
              (1
              )
              
              **(1**
              **)**
              
              (1
              )Total
                  other income and (deductions)
              
              **1**
              
              
              48
              
              
              **3**
              
              
              96**Interest
                  Charges**
              
              **11**
              
              
              40
              
              
              **21**
              
              
              79**Income
                  Before Income Taxes**
              
              **25**
              
              
              41
              
              
              **61**
              
              
              103**Income
                  Taxes**
              
              **10**
              
              
              17
              
              
              **24**
              
              
              42**Net
                  Income**
              
              **15**
              
              
              24
              
              
              **37**
              
              
              61**Preferred
                  Stock Dividends**
              
              **-**
              
              
              -
              
              
              **1**
              
              
              1**Net
                  Income Available to Common Stockholder**
              **$**
              **15**
              
              $
              24
              
              **$**
              **36**
              
              $
              60


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




25




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions)****June
                  30,**
              
              
              **December
                  31,****2005**
              
              
              **2004****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **5**
              
              $
              5Account
                  receivables (less allowance for doubtfulaccounts
                  of $6 and $6, respectively)
              
              **90**
              
              
              101Unbilled
                  revenue
              
              **80**
              
              
              98Miscellaneous
                  accounts and notes receivable
              
              **1**
              
              
              8Advances
                  to money pool
              
              **71**
              
              
              140Materials
                  and supplies
              
              **65**
              
              
              85Other
                  current assets
              
              **58**
              
              
              69Total
                  current assets
              
              **370**
              
              
              506**Property
                  and Plant, Net**
              
              **2,015**
              
              
              1,984**Investments
                  and Other Noncurrent Assets:**Investment
                  in IP SPT
              
              **7**
              
              
              7Goodwill
              
              **303**
              
              
              320Other
                  assets
              
              **47**
              
              
              37Accumulated
                  deferred income taxes
              
              **43**
              
              
              65Total
                  investments and other noncurrent assets
              
              **400**
              
              
              429**Regulatory
                  Assets**
              
              **190**
              
              
              198**TOTAL
                  ASSETS**
              **$**
              **2,975**
              
              $
              3,117**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****Current
                  Liabilities**:Current
                  maturities of long-term debt
              **$**
              **-**
              
              $
              70Current
                  maturities of long-term debt to IP SPT
              
              **71**
              
              
              74Accounts
                  and wages payable
              
              **97**
              
              
              118Accounts
                  and wages payable - affiliates
              
              **26**
              
              
              4Taxes
                  accrued
              
              **6**
              
              
              5Other
                  current liabilities
              
              **90**
              
              
              102Total
                  current liabilities
              
              **290**
              
              
              373**Long-term
                  Debt, Net**
              
              **708**
              
              
              713**Long-term
                  Debt to IP SPT**
              
              **230**
              
              
              278**Deferred
                  Credits and Other Noncurrent Liabilities:**Regulatory
                  liabilities
              
              **82**
              
              
              76Accrued
                  pension and other postretirement liabilities
              
              **252**
              
              
              248Other
                  deferred credits and other noncurrent liabilities
              
              **137**
              
              
              149Total
                  deferred credits and other noncurrent liabilities
              
              **471**
              
              
              473**Commitments
                  and Contingencies (Notes 3 and 9)****Stockholders’
                  Equity:**Common
                  stock, no par value, 100.0 shares authorized – 23.0 shares outstanding
              
              **-**
              
              
              -Other
                  paid-in-capital
              
              **1,206**
              
              
              1,207Preferred
                  stock not subject to mandatory redemption
              
              **46**
              
              
              46Retained
                  earnings
              
              **24**
              
              
              27Total
                  stockholders’ equity
              
              **1,276**
              
              
              1,280**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              **$**
              **2,975**
              
              $
              3,117




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




26




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****---Successor---**
              
              
              **---Predecessor---****Six**
                **Months**
                **Ended**
                **June
                  30,**
              
              
              **Six**
                **Months**
                **Ended**
                  **June
                    30,****2005**
              
              
              **2004****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **37**
              
              $
              61Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **9**
              
              
              61Amortization
                  of debt issuance costs and premium/discounts
              
              **2**
              
              
              3Deferred
                  income taxes and investment tax credits, net
              
              **39**
              
              
              (10
              )Pension
                  and other postretirement benefit contributions
              
              **(3**
              **)**
              
              -Other
              
              7
              
              
              14Changes
                  in assets and liabilities:Receivables,
                  net
              
              **40**
              
              
              34Materials
                  and supplies
              
              **20**
              
              
              19Accounts
                  and wages payable
              
              **1**
              
              
              1Assets,
                  other
              
              **(19**
              **)**
              
              24Liabilities,
                  other
              
              **16**
              
              
              (30
              )Net
                  cash provided by operating activities
              
              **149**
              
              
              177**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(61**
              **)**
              
              (63
              )Changes
                  in money pool advances
              
              **69**
              
              
              -Other
              
              **-**
              
              
              1Net
                  cash provided by (used in) investing activities
              
              **8**
              
              
              (62
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(40**
              **)**
              
              -Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Prepaid
                  interest on note receivable from former affiliate
              
              **-**
              
              
              (43
              )Redemptions,
                  repurchases, and maturities:Long-term
                  debt
              
              **(113**
              **)**
              
              (43
              )TFN
                  over funding
              
              **(3**
              **)**
              
              (3
              )Net
                  cash used in financing activities
              
              **(157**
              **)**
              
              (90
              )Net
                  change in cash and cash equivalents
              
              **-**
              
              
              25Cash
                  and cash equivalents at beginning of year
              
              **5**
              
              
              17Cash
                  and cash equivalents at end of period
              **$**
              **5**
              
              $
              42




The
        accompanying notes as they relate to IP are an integral part of these
        consolidated financial statements.
   27




**AMEREN
        CORPORATION** **(Consolidated)**
 **UNION
        ELECTRIC COMPANY** **(Consolidated)**
 **CENTRAL
        ILLINOIS PUBLIC SERVICE COMPANY**
 **AMEREN
        ENERGY GENERATING COMPANY** **(Consolidated)**
 **CILCORP
        INC.** **(Consolidated)**
 **CENTRAL
        ILLINOIS LIGHT COMPANY** **(Consolidated)**
 **ILLINOIS
        POWER COMPANY** **(Consolidated)**
 
 **COMBINED
        NOTES TO FINANCIAL STATEMENTS**
 **(Unaudited)**
 **June
        30, 2005**
 
 **NOTE
        1 -** **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES** ****
 
 **General**
 
 Ameren,
        headquartered in St. Louis, Missouri, is a public utility holding company
        registered with the SEC under the PUHCA. Ameren’s primary asset is the common
        stock of its subsidiaries. Ameren’s subsidiaries operate rate-regulated electric
        generation, transmission and distribution businesses, rate-regulated natural
        gas
        transmission and distribution businesses and non-rate-regulated electric
        generation businesses in Missouri and Illinois. Dividends on Ameren’s common
        stock are dependent on distributions made to it by its subsidiaries. Ameren’s
        principal subsidiaries are listed below.
 
 ·
              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 and prior to May 2, 2005, in Illinois. See
                  Note 3 -
                  Rate and Regulatory Matters for information regarding the May 2005
                  transfer of UE’s Illinois electric and natural gas transmission and
                  distribution businesses to CIPS and the addition of a large new
                  electric
                  customer in June 2005.
 ·
              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 non-rate-regulated
                  electric generation business in Illinois and Missouri. See Note
                  3 - Rate
                  and Regulatory Matters for information regarding the May 2005 transfer
                  of
                  Genco’s 10 CTs located in Pinckneyville and Kinmundy, Illinois to
                  UE.
 ·
              CILCO,
                  or Central Illinois Light Company, also known as AmerenCILCO, is
                  a
                  subsidiary of CILCORP (a holding company) and operates a rate-regulated
                  electric transmission and distribution business, a primarily
                  non-rate-regulated electric generation business, and a rate-regulated
                  natural gas transmission and distribution business 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 acquired IP on September 30, 2004,
                  from
                  Dynegy. See Note 2 - Acquisitions and Note 8 - Related Party Transactions
                  for further information.
 
 Ameren
        has various other subsidiaries responsible for the short- and long-term
        marketing of power, procurement of fuel, management of commodity risks and
        provision of other shared services. Ameren has an 80% ownership interest
        in EEI
        through UE and Resources Company, which each own 40% of EEI. Ameren consolidates
        EEI for financial reporting purposes, while UE reports EEI under the equity
        method.
  The
        financial statements of Ameren are prepared on a consolidated basis and
        therefore include the accounts of its majority-owned subsidiaries. As the
        acquisition of IP occurred on September 30, 2004, Ameren’s Consolidated
        Statements of Income and Cash Flows for the period ended June 30, 2004, do
        not
        reflect IP’s results of operations or financial position. See Note 2 -
        Acquisitions for further information on the accounting for the IP acquisition.
        All significant intercompany transactions have been eliminated. All tabular
        dollar amounts are in millions, unless otherwise indicated.
 
 In
        addition to presenting results of operations and earnings amounts in total,
        certain information in this report is expressed in cents per share. These
        amounts reflect factors that directly impact Ameren’s earnings. We believe this
        per share information is useful because it better enables readers to understand
        the impact of these factors on Ameren’s earnings per share. All references in
        this report to earnings per share are based on diluted shares.
 
 Our
        accounting policies conform to GAAP. Our financial statements reflect all
        adjustments (which include normal, recurring adjustments) 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 for a full year. Certain
        reclassifications have been made to prior year’s financial statements to conform
        to 2005 reporting. These statements should be read in conjunction with the
        financial statements and the notes thereto included in the Ameren Companies’
        combined 2004 Annual Report on Form 10-K.
 
 As
        part
        of the acquisition of IP on September 30, 2004, Ameren “pushed down” the effects
        of purchase accounting to
   28
  the
        financial statements of IP. Accordingly, IP’s postacquistion financial
        statements reflect a new basis of accounting, and separate financial statement
        amounts are presented for preacquisition (predecessor) and postacquisition
        (successor) periods, separated by a bold black line. As a result of the
        acquisition of IP, certain reclassifications have been made to make IP
        prior-year financial statements conform to our current presentation.
 
 **Earnings
        Per Share**
 
 There
        were no material differences between Ameren’s basic and diluted earnings per
        share for the three months and six months ended June 30, 2005 and 2004, due
        to
        an immaterial number of stock options outstanding.
 
 **Asset
        Retirement Obligations**
 
 Asset
        retirement obligations at Ameren and UE increased by $6 million for the quarter
        ended June 30, 2005, to reflect the accretion of obligations to their present
        value. Additionally, Ameren and Genco’s asset retirement obligations increased
        by $1.5 million during the quarter ended June 30, 2005, due to revisions
        in
        estimated future cash flows to retire a Genco ash pond. Increases to CILCORP’s
        and CILCO’s asset retirement obligations due to accretion were immaterial during
        this period. Substantially all of this accretion was recorded as an increase
        to
        regulatory assets.
 
 **Accounting
        Changes and Other Matters**
 
 *FIN
        No. 47, “Accounting for Conditional Asset Retirement
        Obligations"*
 
 In
        February 2005, the FASB issued FIN No. 47, “Accounting for Conditional Asset
        Retirement Obligations,” which clarifies that a legal obligation
        to perform an asset retirement activity that is conditional on a future event
        is
        within the scope o f
        SFAS
        No. 143*.*Accordingly, an entity would be required to recognize a liability for the
        fair
        value of an asset retirement obligation that is conditional on a future event
        if
        the liability's fair value can be estimated reasonably. An exhibit to the
        interpretation provides examples of when to recognize conditional asset
        retirement obligations, including asbestos removal and chemically-treated
        utility poles. We are in the process of evaluating the impact of this new
        interpretation. It could require accrual of additional liabilities by the
        Ameren
        Companies and their subsidiaries and could result in increased expense, which,
        while not yet quantified, could be material. This interpretation is effective
        for us no later than December 31, 2005.
  *FSP
        SFAS No. 106-2 - “Accounting and Disclosure Requirements Related to the Medicare
        Prescription Drug, Improvement and Modernization Act of 2003”*
  In
        May
        2004, the FASB issued FSP SFAS 106-2, which provides guidance on accounting
        for
        the effects of the Medicare Prescription Drug, Improvement and Modernization
        Act
        of 2003 for employers whose prescription drug benefits are actuarially
        equivalent to the drug benefit under Medicare Part D. Ameren, UE, CIPS, Genco,
        CILCORP and CILCO elected to adopt FSP SFAS 106-2 during the second quarter
        ended June 30, 2004, retroactive to January 1, 2004. The effect of the federal
        subsidy provided by this Medicare Prescription Drug Act was a reduction of
        various components of Ameren’s and principally UE’s net periodic postretirement
        benefit costs.
 
 Predecessor
        IP’s adoption of FSP SFAS 106-2 on July 1, 2004, had no impact on IP’s results
        of operations, financial position, or liquidity because its drug benefit
        was not
        actuarially equivalent to the drug benefit under Medicare Part D.
  **Interchange
        Revenues**
 
 The
        following table presents the interchange revenues included in Operating Revenues
        - Electric for the three months and six months ended June 30, 2005 and 2004:
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Ameren(a)
              **$**
              **154**
              
              $
              87
              
              **$**
              **267**
              
              $
              187UE
              
              **129**
              
              
              71
              
              
              **226**
              
              
              155CIPS
              
              **8**
              
              
              10
              
              
              **17**
              
              
              19Genco
              
              **67**
              
              
              36
              
              
              **109**
              
              
              75CILCORP
              
              **11**
              
              
              9
              
              
              **26**
              
              
              20CILCO
              
              **11**
              
              
              9
              
              
              **26**
              
              
              20IP(b)
              
              **(c**
              **)**
              
              (c
              )
              
              **(c**
              **)**
              
              (c
              )
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for IP. Includes
                  interchange revenues for EEI of $8 million and $15 million for
                  the three
                  months and six months ended June 30, 2005, respectively (2004 -
                  $16
                  million and $30 million, respectively).
 (b)
              2004
                  amount represents predecessor
                  information.
 (c)
              Less
                  than $1 million.
 
 **Purchased
        Power**
 
 The
        following table presents the purchased power expenses included in Operating
        Expenses - Fuel and Purchased Power for the three months and six months ended
        June 30, 2005 and 2004. See Note 8 - Related Party Transactions for further
        information on affiliate purchased power transactions.
   29
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004**Ameren(a)
              **$**
              **250**
              
              $
              77
              
              **$**
              **455**
              
              $
              152UE
              
              **66**
              
              
              49
              
              
              **104**
              
              
              102CIPS
              
              **105**
              
              
              79
              
              
              **191**
              
              
              159Genco
              
              **68**
              
              
              34
              
              
              **117**
              
              
              74CILCORP
              
              **12**
              
              
              8
              
              
              **22**
              
              
              30CILCO
              
              **12**
              
              
              8
              
              
              **22**
              
              
              30IP(b)
              
              **165**
              
              
              154
              
              
              **322**
              
              
              305
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 (b)
              2004
                  amount represents predecessor information.
 
 **Excise
        Taxes**
 
 Excise
        taxes reflected on Missouri electric, Missouri gas, and Illinois gas customer
        bills are imposed on us. They are recorded
        gross in Operating Revenues and Taxes Other than Income Taxes on each company’s
        statements of income. Excise taxes reflected on Illinois electric customer
        bills
        are imposed on the consumer. They are recorded as tax collections payable
        and
        included in Taxes Accrued. The following table presents excise taxes recorded
        in
        Operating Revenues and Taxes Other than Income Taxes for the three months
        and
        six months ended June 30, 2005 and 2004:
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Ameren(a)
              **$**
              **41**
              
              $
              31
              
              **$**
              **81**
              
              $
              65UE
              
              **28**
              
              
              27
              
              
              **50**
              
              
              51CIPS
              
              **2**
              
              
              2
              
              
              **7**
              
              
              7CILCORP
              
              **3**
              
              
              2
              
              
              **5**
              
              
              7CILCO
              
              **3**
              
              
              2
              
              
              **5**
              
              
              7IP(b)
              
              **8**
              
              
              5
              
              
              **19**
              
              
              17
  (a)
              Excludes
                  2004 amounts for IP.
 (b)
              2004
                  amount represents predecessor
                  information.
 
 **NOTE
        2 -** **ACQUISITIONS**
 
 **IP
        and EEI**
 
 On
        September 30, 2004, Ameren completed the acquisition of all the common stock
        and
        662,924 shares of preferred stock of IP and an additional 20% ownership interest
        in EEI from subsidiaries of Dynegy. Ameren acquired IP to complement its
        existing Illinois gas and electric operations. The purchase included IP’s
        rate-regulated electric and natural gas transmission and distribution business
        serving 600,000 electric and 415,000 gas customers in areas contiguous to
        our
        existing Illinois utility service territories. With the acquisition, IP became
        an Ameren subsidiary operating as AmerenIP.
 
 The
        total
        transaction value was $2.3 billion, including the assumption of $1.8 billion
        of
        IP debt and preferred stock and consideration, including transaction costs,
        of
        $440 million in cash, net of $51 million cash acquired and a working capital
        adjustment of $5 million received from Dynegy in February 2005 pursuant to
        the
        terms of the stock purchase agreement. Ameren placed $100 million of the
        cash
        portion of the purchase price in a six-year escrow account pending resolution
        of
        certain contingent environmental obligations of IP and other Dynegy affiliates
        for which Ameren was provided indemnification by Dynegy. On July 27, 2005,
        the
        conditions for release of the escrow account were satisfied and Dynegy was
        remitted the $100 million. In addition, this transaction included a fixed-price
        capacity power supply agreement for IP’s annual purchase in 2005 and 2006 of
        2,800 megawatts of electricity from DYPM. This agreement is expected to supply
        about 70% of IP’s electric customer requirements during those two years. The
        remaining 30% of IP’s power needs in 2005 and 2006 will be supplied by other
        companies through contracts and open market purchases. In the event that
        suppliers are unable to supply the electricity required by existing agreements,
        IP would be forced to find alternative suppliers to meet its load requirements,
        thus exposing itself to market price risk, which could have a material impact
        on
        Ameren’s and IP’s results of operations, financial position, or liquidity.
  Ameren
        funded this acquisition with the issuance of new Ameren common stock. Ameren
        issued an aggregate of 30 million common shares in February 2004 and July
        2004,
        which generated net proceeds of $1.3 billion. Proceeds from these issuances
        were
        used to finance the cash portion of the purchase price and to reduce IP debt
        assumed as part of this transaction and to pay related premiums.
 
 In
        December 2004, 230 IP employees accepted a voluntary separation opportunity,
        which provides
        an enhanced separation benefit and extended medical and dental benefits.
        Employees who accepted the voluntary separation opportunity will leave IP
        throughout 2005 as business needs warrant. These voluntary separations are
        consistent with Ameren’s plan for the integration of IP and conditions in the
        ICC order approving the acquisition, which relate to the realization of
        administrative synergies from the acquisition. As of June 30, 2005, estimated
        separation costs of $25 million were deferred as a regulatory asset for future
        recovery from customers, which is also consistent with the ICC
        order.
 
 Ameren
        is
        completing its valuations of the acquired net assets and liabilities of IP
        and
        EEI, including third-party valuations of property and plant, intangible assets,
        pension and other postretirement benefit obligations, and contingent
        obligations. As a result, the allocation of the purchase price is subject
        to
        further adjustment. The fair
        value of IP’s power supply agreements, including the fixed-price capacity power
        supply agreement with DYPM, recorded at the acquisition date resulted in
        a net
        liability of $109 million (June 30, 2005 - $67 million). This amount is being
        amortized through December 31, 2006. In addition, IP recorded a fair value
        adjustment, resulting in a net asset of $20 million (June 30, 2005 - $12
        million), for IP’s power supply agreement with EEI that expires at the end of
        2005. T he
        excess
        of the purchase price for IP’s common stock and preferred stock over net
   30
 assets
        acquired was allocated preliminarily to goodwill in the amount of $303 million,
        net of future tax benefits. No specifically identifiable intangible assets
        have
        been identified. For income tax purposes, we expect that a portion of the
        purchase price will be allocated to goodwill and that such portion will be
        deducted ratably over a 15-year period. Goodwill decreased by $17 million
        since
        December 31, 2004, primarily because of adjustments to property and plant,
        income tax accounts and accrued severance and relocation expenses, partially
        offset by adjustments to regulatory assets and net assets for IP’s power supply
        agreement with EEI. The following table presents the estimated fair values
        of
        the assets acquired and liabilities assumed at the date of Ameren’s acquisition
        of IP.
 
 Current
                  assets
              $
              370Property
                  and plant
              
              1,974Investments
                  and other noncurrent assets
              
              394Goodwill
              
              303Total
                  assets acquired
              
              3,041Current
                  liabilities
              
              228Long-term
                  debt, including current maturities
              
              1,982Accrued
                  pension and other postretirement liabilities
              
              244Other
                  non-current liabilities
              
              208Total
                  liabilities assumed
              
              2,662Preferred
                  stock assumed
              
              13Net
                  assets acquired
              $
              366
  The
        following unaudited pro forma financial information presents a summary of
        Ameren’s consolidated results of operations for the three months and six months
        ended June 30, 2004, as if the acquisition of IP had been completed at the
        beginning of 2004, including pro forma adjustments, which are based upon
        preliminary estimates, to reflect the allocation of the purchase price to
        the
        acquired net assets. The pro forma financial information does not include
        cost
        savings that may result from the combination of Ameren with IP.
 
 **2004**
              
              **Three**
                **Months**
              
              
              **Six**
                **Months**Operating
                  revenues
              $
              1,473
              
              $
              3,149Net
                  income
              
              149
              
              
              290Earnings
                  per share - basic
              
              0.77
              
              
              1.50-
                  diluted
              
              0.77
              
              
              1.50
 
 This
        pro
        forma information is not necessarily indicative of the results of operations
        as
        they would have been had the transaction been effected on the assumed date,
        nor
        is it an indication of trends for future results.
 
 IP’s
        Note
        Receivable from Former Affiliate of $2.3 billion was eliminated as of September
        30, 2004, and prior to Ameren’s acquisition of IP to meet the conditions of the
        closing.
 
 The
        portion of the total transaction value attributable to Ameren’s acquisition of
        Dynegy’s 20% ownership interest in EEI now held by Resources Company was $125
        million. This transaction was accounted for as a step acquisition. T he
        excess
        of the purchase price for this ownership interest over 20% of the fair value
        of
        EEI’s net assets acquired has been preliminarily allocated to property and plant
        ($55 million) and emission allowances ($48 million), partially offset by
        a net
        liability for power supply agreements ($25 million) and a reduction to net
        deferred tax assets ($31 million). The remaining excess was allocated to
        goodwill in the amount of $65 million, subject to change based on our final
        valuation. Goodwill increased by $11 million since December 31, 2004, due
        to
        adjustments to property and plant and the net liability for power supply
        agreements, partially offset by adjustments to both emission allowances and
        income tax accounts, resulting from the refinement of the third-party valuation
        of EEI’s net assets, which is in the process of being finalized.
 
 **NOTE
        3 -** **RATE
        AND REGULATORY MATTERS** ****
 
 Below
        is
        a summary of significant regulatory proceedings. With respect to pending
        matters, we are unable to predict the ultimate outcome of these regulatory
        proceedings, the timing of the final decisions of the various agencies or
        the
        impact on our results of operations, financial position, or
        liquidity.
 
 **Intercompany
        Transfer of Illinois Service Territory and Electric Generating
        Facilities**
 
 *Illinois
        Service Territory Transfer*
  On
        May 2,
        2005, following the receipt of all required regulatory approvals, UE completed
        the transfer of its Illinois-based electric and natural gas utility businesses,
        including its Illinois-based distribution assets and certain of its transmission
        assets, at a net book value of $133 million to CIPS. UE’s electric generating
        facilities and a certain insignificant amount of its electric transmission
        and
        communication facilities in Illinois were not part of the transfer. Pursuant
        to
        the asset transfer agreement, UE transferred 50 percent of the assets directly
        to CIPS in consideration for a CIPS subordinated promissory note in the
        principal amount of approximately $67 million and 50 percent of the assets
        by
        means of a dividend in kind to Ameren, followed by a capital contribution
        by
        Ameren to CIPS. With the completion of this transfer, UE no longer operates
        as a
        public utility subject to ICC regulation.
  In
          February 2005, the MoPSC issued an order approving the transfer and clarified
          its order in March 2005. The MoPSC’s order, as clarified, included the following
          principal conditions:
 
 ·
                The
                    order allows UE to recover in rates up to 6% of unknown UE
                    generation-related liabilities associated with the generation
                    that was
                    formerly allocated to UE’s Illinois service territory if UE can show that
                    the benefits of the transfer of the Illinois service territory
                    outweigh
                    these costs in future rate cases.
 ·
                The
                    order requires an amendment to the joint dispatch agreement among
                    UE,
                    Genco and CIPS to declare that margins on short-term power sales
                    will be
                    divided based
   31
  on generation output as opposed to load. In
                  testimony
                  filed by UE with the MoPSC to support the transfer, UE indicated
                  this
                  amendment would have provided UE with additional annual margins
                  and Genco
                  with reduced annual margins of $7 million to $24 million based on
                  certain assumptions and historical results. The ultimate impact
                  of any
                  modifications to the joint dispatch agreement will be determined
                  by future
                  native load demand, the availability of electric generation from
                  UE and
                  Genco and market prices, among other things, but such impact could
                  be
                  material. This reduction to Genco’s margins is expected to be mitigated by
                  margins received from additional power sales by Genco (through
                  Marketing
                  Company) to CIPS to serve the transferred UE Illinois-based electric
                  utility business through the end of 2006 under the current power
                  supply
                  contracts. The increased allocation of short-term power sales margins
                  to
                  UE would have the effect of lowering the revenue required to be
                  collected
                  through rates the next time electric rates are
                  adjusted.
 ·
                The
                    MoPSC also ordered that UE may complete the transfer prior to
                    receipt of
                    all regulatory approvals necessary to effectuate the required
                    amendment
                    to the joint dispatch agreement based on UE’s commitment that for
                    ratemaking purposes the joint dispatch agreement amendment should
                    be
                    deemed to be made by UE as of the date the transfer is closed.
                     In
                    the event that the regulatory approvals for the amendment are
                    not
                    obtained, this commitment would result in just the allocation
                    of these
                    additional margins to UE for determining the revenue requirements
                    in the
                    ratemaking process, with no impact on Genco’s
                    margins.
 ·
                The
                    order requires that, in a future rate case, revenues UE could
                    have
                    received for incremental energy transfers under the joint dispatch
                    agreement resulting from the service territory transfer be imputed
                    based
                    on market prices unless UE can show the benefits of the transfer
                    of the
                    Illinois service territory outweigh the difference between the
                    market
                    prices and the actual cost-based charges for such incremental
                    energy
                    transfers.
 
 *Electric
        Generating Facilities Transfer*
 
 On
        May 2,
        2005, following the receipt of all required regulatory approvals, Genco
        completed the transfer to UE of its 550 megawatts of CTs at Pinckneyville
        and
        Kinmundy, Illinois, at a net book value of $241 million. This transfer completed
        the remainder of UE’s commitment under the 2002 Missouri electric rate case
        settlement, which required the addition of 700 megawatts of generation capacity
        by June 30, 2006.
 
 The
        Illinois service territory transfer and the electric generating facilities
        transfer, discussed above, were accounted for at book value with no gain
        or loss
        recognition. Genco
        used the proceeds from the transfer to reduce borrowings.
  **Missouri**
 
 *Noranda
        Aluminum, Inc. (Noranda)*
 
 Following
        the receipt of all regulatory approvals and satisfaction of all regulatory
        and
        other conditions, the tariff by which UE serves Noranda became effective
        June 1,
        2005. UE will serve Noranda under a 15-year agreement to supply approximately
        470 megawatts (peak load) electric service (or approximately 5% of UE’s
        generating capability, including currently committed purchases) to Noranda’s
        primary aluminum smelter in southeast Missouri.
 
 **Illinois**
 
 *Electric*
 
 By
        2002,
        all of the Illinois residential, commercial and industrial customers of UE,
        CIPS, CILCO and IP had a choice in electric suppliers under the provisions
        of
        the Illinois Customer Choice Law. Under
        the
        Illinois Customer Choice Law, UE, CIPS, CILCO and IP rates initially were
        frozen
        through January 1, 2005. Due
        to an
        amendment to the Illinois Customer Choice Law, the rate freeze was extended
        through January 1, 2007. As a result of this extension, and pursuant to orders
        of the ICC, CIPS and Marketing Company, and CILCO and AERG, extended their
        respective power supply agreements through December 31, 2006. See Note
        8 - Related Party Transactions for a discussion of these affiliate power
        supply
        agreements.
 
 During
        2004, the ICC conducted workshops to seek input from interested parties on
        the
        framework for retail electric rate determination and generation procurement
        after the current Illinois electric rate freeze expires on January 1, 2007,
        and
        supply contracts expire on December 31, 2006. A report issued by the ICC
        in late
        2004, which outlined a process, among others, that would have CIPS, CILCO
        and IP
        procure power through an auction monitored by the ICC, received strong support
        in the ICC workshops. The form of power supply would meet the full requirements
        of the utility and the risk of fluctuations in power requirements would be
        borne
        by the supplier. In addition, the report noted that many stakeholders, including
        Ameren, supported a process whereby the price of power resulting from the
        auction would be the price used to determine the generation component of
        customer rates. This purchased power would be charged to customers through
        a
        direct pass-through mechanism. With regard to the delivery service component
        of
        customer rates, it is expected that all Illinois delivery service companies
        will
        file rate cases, at which time the delivery service component of customer
        rates
        will be updated. Genco and AERG would probably participate in the auction
        through Marketing
   32
 Company,
        but there is expected to be a limit imposed by the ICC on the maximum amount
        of
        power they could supply CIPS, CILCO and IP.
 
 In
        February 2005, CIPS, CILCO and IP filed with the ICC a proposed process for
        the
        generation procurement auction and a rate mechanism to pass generation costs
        through to customers, among other things, which was consistent with the auction
        process described above. These proposals are subject to review and approval
        by
        the ICC by January 2006. In May 2005, the Illinois Attorney General, the
        Citizens Utility Board (CUB) and the Environmental Law and Policy Center
        filed a
        Motion to Dismiss the proposed procurement auction in the CIPS, CILCO and
        IP
        filings. Subsequently, in June 2005, the Administrative Law Judge denied
        the
        Motion to Dismiss. The Illinois Attorney General and CUB subsequently appealed
        the Administrative Law Judge’s ruling to the ICC and this appeal was also denied
        by the ICC in July 2005.
 
 The
        ICC
        Staff and interveners filed testimony regarding our proposed process for
        the
        generation procurement auction in June 2005. In its testimony, the ICC Staff
        continued to support the generation auction process, but sought modifications
        to
        aspects of the CIPS, CILCO and IP proposed process for the procurement of
        power
        and the passing of these costs through to customers. The Illinois Attorney
        General and CUB in their testimonies recommended that the ICC initiate a
        new
        docket to investigate alternatives to an auction, among other things. CIPS,
        CILCO and IP filed supplemental testimony in early July.  That testimony
        modified certain aspects of the February proposal and CIPS, CILCO and IP
        believe
        the modifications will substantially address issues raised by the ICC staff
        and
        certain other interveners.  The modifications included changes to
        the
        timing of the auction, a limition of 35% on the amount of power any single
        supplier can provide of any distribution company's expected annual load and
        allowing suppliers to switch their bids between auctions for similar products.
 
 In
        early
        2005, the Illinois legislature held hearings regarding the framework for
        retail
        rate determination and generation procurement. We cannot predict what actions,
        if any, the Illinois legislature will take, or whether the ICC will approve
        our
        proposals for generation procurement or electric rate
        determination.
 
 *Gas*
 
 In
        May
        2005, the ICC issued an order awarding IP increases in annual natural gas
        delivery rates of $11 million. In the order approving Ameren’s acquisition of
        IP, the ICC prohibited IP from filing for any proposed increase in gas delivery
        rates to be effective prior to January 1, 2007, beyond this recently authorized
        gas delivery rate increase. IP filed an appeal in the appellate court for
        the
        Third District in Illinois regarding certain immaterial disallowances issued
        by
        the ICC in its May 2005 order. Ameren sought indemnification from Dynegy
        with
        regard to the disallowances under the stock purchase
        agreement covering Ameren’s acquisition of IP from Dynegy, and in July 2005
        Dynegy paid to Ameren $8.3 million in full settlement of this indemnification
        claim. Under the terms of the settlement, IP will retain the benefits of
        any
        successful appeal of the May 2005 ICC order with no refund obligation to
        Dynegy.
  **Federal**
 
 *Hydroelectric
        License Renewal*
 
 In
        May
        2005, UE, the U.S. Department of the Interior and various state agencies
        reached
        a settlement agreement which is expected to lead to the FERC’s relicensing of
        the Osage hydroelectric plant for another 40 years. The settlement must be
        approved by the FERC, which, together with the relicense, is expected by
        year-end 2005. The current FERC license expires on February 28, 2006.
  **NOTE
        4 - SHORT-TERM BORROWINGS AND LIQUIDITY**
 
 Short-term
        borrowings have typically consisted of commercial paper issuances and drawings
        under committed bank credit facilities with maturities generally within 1
        to 45
        days.
 
 The
        following table summarizes the short-term borrowing activity and relevant
        interest rates as of June 30, 2005 and December 31, 2004,
        respectively:
  **Ameren**(a)
                  **UE****June
                      30, 2005:**Short-term
                      borrowings at June 30, 25
                  **$****161**
                  **$****138**Average
                      daily borrowings outstanding during 2005
                  **274**
                  **239**Weighted
                      average interest rate during 2005
                  **1.15%**
                  **2.55%**Peak
                      short-term borrowings during 2005
                  **468**
                  **424**Peak
                      interest rate during 2005
                  **3.52%**
                  **3.45%**
   33
  
 **Ameren**(a)
                  **UE****December
                      31, 2004:**Short-term
                      borrowings at December 31, 2004
                  $417
                  $375Average
                      daily borrowings outstanding during 2004
                  47
                  33Weighted
                      average interest rate during 2004
                  2.19%
                  1.56%Peak
                      short-term borrowings during 2004
                  419
                  375Peak
                      interest rate during 2004
                  2.97%
                  2.40%
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes amounts for IP prior to
                  September
                  30, 2004.
 
 In
        July
        2005, Ameren, UE, CIPS, CILCO, Genco and IP entered into a five-year revolving
        credit agreement, maturing on July 14, 2010, with various lenders which provides
        for loans to, and letters of credit issued for, the accounts of Ameren, UE,
        CIPS, CILCO, Genco and IP in an amount up to $1.15 billion. The entire amount
        of
        the facility is available to Ameren; UE may directly borrow under this facility
        up to $500 million on a short-term 364-day basis; and CIPS, Genco, CILCO
        and IP
        may also directly borrow under this facility each up to $150 million and
        also on
        a short-term 364-day basis. The interest rates applicable under the
        facility are based on a Eurodollar rate plus a margin applicable to the
        particular borrowing company, a competitive rate bid by the lenders, or a
        rate
        equal to the higher of JPMorgan Chase Bank, N.A.’s prime rate and the sum of the
        federal funds effective rate plus 1/2 percent per annum, plus the margin
        applicable to the particular borrowing company. The credit agreement contains
        customary terms and conditions (see Indebtedness Provisions and Other Covenants
        below for financial covenant provisions). The obligations of Ameren, UE,
        CIPS,
        Genco, CILCO and IP under this facility are several and not joint. The
        obligations of UE, CIPS, Genco, CILCO and IP are not guaranteed by any other
        subsidiary. See Exhibit 10.1 to the Current Report on Form 8-K dated July
        15,
        2005, for the full agreement.
 
 Also
        in
        July 2005, Ameren, as sole borrower, entered into an amended and restated
        credit
        agreement which revised its $350 million five-year revolving credit agreement
        dated as of July 14, 2004. The changes to this facility make the entire amount
        of commitments available in the form of letters of credit as well as loans,
        extend the maturity date to July 2010 and conform, as applicable, the
        affirmative and negative covenants, events of default and representations
        and
        warranties to the July 2005 $1.15 billion revolving credit agreement discussed
        above. See Exhibit 10.2 to the Current Report on Form 8-K, dated July 15,
        2005,
        for the full amended and restated credit agreement.
 
 Upon
        execution of the new $1.15 billion credit agreement, Ameren terminated its
        $235
        million amended and restated three-year revolving credit agreement, dated
        as of
        September 21, 2004, and its $350 million three-year revolving credit agreement
        dated as of July 14, 2004. In addition, this agreement replaced UE’s bilateral
        credit agreements in an aggregate amount of $153.5 million, CIPS’ bilateral
        credit agreements
        in an aggregate amount of $15 million, CILCO’s bilateral credit agreements in an
        aggregate amount of $60 million and a bilateral credit agreement of EEI in
        the
        amount of $25 million. The Ameren Companies will use the proceeds of any
        borrowings under this facility to repay any amounts outstanding under these
        terminated or replaced credit agreements and for general corporate purposes,
        including for working capital, commercial paper liquidity support and to
        fund
        loans under the money pool arrangements. After giving effect to these changes,
        Ameren currently has $1.5 billion of committed credit facilities consisting
        of
        two facilities each maturing in July 2010.
 
 At
        June
        30, 2005, certain of the Ameren Companies had committed bank credit facilities
        totaling $1 billion, $868 million of which was available for use, subject
        to
        applicable regulatory short-term borrowing authorizations, by UE, CIPS, CILCO,
        IP and Ameren Services through a utility money pool arrangement. All of the
        $868
        million was available for use, subject to applicable regulatory short-term
        borrowing authorizations, by Ameren directly, by CILCORP through direct
        short-term borrowings from Ameren, and by most of the non-rate-regulated
        subsidiaries including, but not limited to, Resources Company, Genco, Marketing
        Company, AFS, AERG and Ameren Energy, through a non-state-regulated subsidiary
        money pool agreement. The committed bank credit facilities are used to support
        our commercial paper programs under which $139 million was outstanding for
        Ameren and UE at June 30, 2005 (December 31, 2004 - $375 million). Access
        to
        credit facilities for the Ameren Companies is subject to reduction based
        on use
        by affiliates.
 
 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 between rate-regulated and non-rate-regulated
        entities. Ameren Services is responsible for operation and administration
        of the
        money pool agreements. See Note 8 - Related Party Transactions for a detailed
        explanation of these money pool arrangements.
 
 In
        July
        2005, CILCO redeemed 11,000 shares of its 5.85% Class A preferred stock at
        a
        redemption price of $100 per share plus accrued and unpaid dividends. The
        redemption satisfied CILCO’s mandatory sinking fund redemption requirement for
        this series of preferred stock for 2005.
  34
 In
        April
        2005, EEI renewed a $20 million bank credit facility, which was scheduled
        to
        mature in the second quarter of 2005. The credit facility will now expire
        in the
        second quarter of 2006.
 
 Ameren
        and UE are authorized by the SEC under the PUHCA to have an aggregate of
        up to
        $1.5 billion and $1 billion, respectively, of short-term unsecured debt
        instruments outstanding at any time. The aggregate amount of short-term
        borrowings outstanding at any time at IP may not exceed $500 million pursuant
        to
        authorizations from the ICC and the SEC under the PUHCA. In addition, CIPS,
        CILCORP and CILCO have the PUHCA authority to have an aggregate of up to
        $250
        million each of short-term unsecured debt instruments outstanding at any
        time.
        Genco is authorized by the FERC to have up to $300 million of short-term
        debt
        outstanding at any time.
 
 Borrowings
        under Ameren’s non-state-regulated subsidiary money pool agreement by Genco,
        Development Company and Medina Valley, each an exempt wholesale generator,
        are
        considered investments for purposes of the SEC’s 50% aggregate investment
        limitation under the PUHCA. Based on Ameren’s aggregate investment in these
        exempt wholesale generators as of June 30, 2005, the maximum permissible
        borrowings under Ameren’s non-state-regulated subsidiary money pool pursuant to
        this limitation for these entities totaled $525 million.
 
 **Indebtedness
        Provisions and Other Covenants**
 
 Certain
        of the Ameren Companies’ bank credit agreements contain provisions which, among
        other things, place restrictions on the ability to incur liens, sell assets,
        and
        merge with other entities. The $1.15 billion July 2005 revolving credit
        agreement discussed above also contains a provision that limits Ameren’s, UE’s,
        CIPS’, Genco’s and IP’s total indebtedness to 65% of total capitalization and
        CILCO’s total indebtedness to 60% of total capitalization pursuant to a
        calculation set forth in the agreement. The $350 million July 2005 amended
        and
        restated credit agreement contains a similar provision only with respect
        to
        Ameren. Exceeding these debt levels would result in a default under the credit
        agreements. As of June 30, 2005, the ratio of total indebtedness to total
        capitalization (calculated in accordance with this provision) for Ameren,
        UE,
        CIPS, Genco, CILCO and IP was 46%, 47%, 42%, 52%, 29% and 44%, respectively
        (December 31, 2004 - Ameren 50%, UE 44%, CIPS 53%, CILCO ---43%, not applicable
        for Genco or IP). In addition, these credit agreements contain indebtedness
        cross-default provisions that could trigger a default under these facilities
        in
        the event that any of Ameren’s subsidiaries (subject to the definition in the
        underlying credit agreements), other than certain project finance subsidiaries,
        defaults in indebtedness in excess of $50 million. The credit agreements
        also
        require us to meet minimum ERISA funding rules.
 
 None
        of
        the Ameren Companies’ credit agreements or financing arrangements contains
        credit rating triggers. One of EEI’s credit agreements contains a credit rating
        trigger under which a default can occur in the event any of the credit ratings
        of EEI’s sponsors (UE, CIPS and Kentucky Utilities Company) fall below Baa3 or
        BBB- by Moody’s and S&P, respectively, and the sponsors do not cover a
        payment default. At June 30, 2005, the
        Ameren Companies and EEI were in compliance with their credit agreement
        provisions and covenants *.*
 
 **NOTE
        5 -** **LONG-TERM
        DEBT AND EQUITY FINANCINGS**
 
 **Ameren**
 
 Under
        DRPlus, pursuant to an effective SEC Form S-3 registration statement, and
        under
        our 401(k) plans, pursuant to effective SEC Form S-8 registration statements,
        Ameren issued a total of 1.2 million new shares of common stock in the first
        six
        months of 2005 valued at $57 million.
 
 In
        March
        2002, Ameren issued $345 million of adjustable conversion-rate equity security
        units consisting of $345 million of senior unsecured notes due 2007 and stock
        purchase contracts. In February 2005, the annual interest rate on these senior
        unsecured notes was reset to 4.263% through a remarketing process in accordance
        with and as required by the original terms of the related financing agreements.
        The proceeds from remarketing the senior unsecured notes were used by the
        holders of the equity security units to purchase treasury securities to secure
        their obligations to purchase Ameren common stock on May 15, 2005, pursuant
        to
        the stock purchase contracts. Ameren did not receive any proceeds as part
        of the
        remarketing. In the remarketing, Ameren purchased $95 million in principal
        amount of the senior unsecured notes, which were subsequently retired. In
        May
        2005, settlement of the stock purchase contracts resulted in Ameren issuing
        7.4
        million shares of common stock in exchange for $345 million of proceeds.
        The
        adjustable conversion-rate equity security units ceased trading on the New
        York
        Stock Exchange before the opening of the market on May 16, 2005.
 
 **UE**
 
 In
        July
        2005, UE issued, pursuant to its effective September 2003 SEC Form S-3 shelf
        registration statement, $300 million of 5.30% senior secured notes due August
        1,
        2037, with interest payable semi-annually on February 1 and August 1 of each
        year beginning in February 2006. UE received net proceeds of $296 million
        which
        were used to repay short-term debt.
 
 In
        January 2005, UE issued, pursuant to its effective September 2003 SEC Form
        S-3
        shelf registration statement, $85 million of 5.00% senior secured notes due
        February 1, 2020, with interest payable semi-annually on February 1 and
   35
 August
        1
        of each year beginning in August 2005. UE received net proceeds of $83 million,
        which were used to repay short-term debt incurred to fund the December 2004
        maturity of UE’s $85 million 7.375% first mortgage bonds.
 
 **CIPS**
 
 In
        June
        2005, $20 million of CIPS’ 6.49% first mortgage bonds matured and were
        retired.
 
 **CILCORP**
 
 In
        May
        2005, CILCORP repurchased $5 million in principal amount of its 8.70% senior
        notes due 2009.
  In
        conjunction with Ameren’s acquisition of CILCORP in January 2003, CILCORP’s
        long-term debt was recorded at fair value. Amortization related to these
        fair
        value adjustments was $2 million (2004 - $2 million) and $4 million (2004
        - $4
        million) for the three months and six months ended June 30, 2005, respectively,
        and was included as a reduction to Interest Charges.
 
 **IP**
 
 In
        conjunction with Ameren’s acquisition of IP in September 2004, IP’s long-term
        debt was recorded at fair value. Amortization related to fair value adjustments
        was $4 million (2004 - less than $1 million) and $9 million (2004 - less
        than $1
        million) for the three months and six months ended June 30, 2005, respectively,
        and was included as a reduction to Interest Charges.
 
 **Indenture
        Provisions and Other Covenants**
 
 The
        information below represents a summary of the Ameren Companies compliance
        with
        indenture provisions and other covenants. See Note 6 - Long-term Debt and
        Equity
        Financings in the Ameren Companies combined Annual Report on Form 10-K for
        the
        year ended December 31, 2004, for a detailed description of these
        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. The following table includes the earnings coverage
        ratio for interest charges and preferred dividends and bonds and preferred
        stock
        issuable for the 12 months ended June 30, 2005, at an assumed interest and
        dividend rate of 7%.
  **Interest**
                  **Coverage**
                  **Ratio**
                **Bonds**
                  **Issuable****(a)**
                **Dividend**
                  **Coverage**
                  **Ratio**
                **Preferred**
                  **Stock**
                  **Issuable**UE
                7.8
                $3,781
                66.4
                $   
                    2,169CIPS
                3.2
                161
                2.0
                148CILCO
                10.1
                635
                24.3
                252IP
                4.4
                885
                2.07
                406
  (a)
              Amount
                  of bonds issuable based on meeting required coverable
                  ratios.
 
 In
        addition, as of June 30, 2005, UE had $31 million of total retained earnings
        restricted against payment of common dividends, except those dividends payable
        in common stock.
  Genco’s
        and CILCORP’s indentures include provisions which require the companies maintain
        certain debt service coverage and debt to capital ratios in order for the
        companies to pay dividends, make certain principal or interest payments,
        make
        certain loans to affiliates, or to incur additional indebtedness. The following
        table summarizes these ratios for the 12 months ended June 30,
        2005:
 
 **Required**
                **Interest**
                **Coverage**
                **Ratio**
              **Actual**
                **Interest**
                **Coverage**
                **Ratio**
              **Required**
                **Debt
                  to**
                **Capital**
                **Ratio**
              **Actual**
                **Debt
                  to**
                **Capital**
                **Ratio**Genco
                  (a)
              1.75
              5.5
              60%
              51%CILCORP(b)
              2.2
              2.7
              67%
              52%
 
 (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.
 (b)
                CILCORP must
                  maintain the required interest coverage ratio and debt to capital
                  ratio in
                  order to make any payment of dividends or intercompany loans to
                  affiliates
                  other than to its direct or indirect subsidiaries.
 
 The
        ability for the Ameren Companies to issue securities in the future will depend
        on such tests at that time.
 
 **Off-Balance
        Sheet Arrangements**
 
 At
        June
        30, 2005, 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.
  36
 **NOTE
        6** **-
        OTHER INCOME AND DEDUCTIONS**
 
 The
        following table presents Other Income and Deductions for each of the Ameren
        Companies for the three months and six months ended June 30, 2005 and 2004,
        respectively:
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004****Ameren:**(a)Miscellaneous
                  income:Interest
                  and dividend income
              **$**
              **1**
              
              $
              3
              
              **$**
              **2**
              
              $
              5Allowance
                  for equity funds used during construction
              
              **3**
              
              
              1
              
              
              **7**
              
              
              4Other
              
              **2**
              
              
              -
              
              
              **4**
              
              
              3Total
                  miscellaneous income
              **$**
              **6**
              
              $
              4
              
              **$**
              **13**
              
              $
              12Miscellaneous
                  expense:Minority
                  interest in subsidiary
              **$**
              **-**
              
              $
              (2
              )
              **$**
              **(1**
              **)**
              $
              (3
              )Loss
                  on disposition of property
              
              **(2**
              **)**
              
              -
              
              
              **(2**
              **)**
              
              -Other
              
              **(7**
              **)**
              
              (2
              )
              
              **(7**
              **)**
              
              (2
              )Total
                  miscellaneous expense
              **$**
              **(9**
              **)**
              $
              (4
              )
              **$**
              **(10**
              **)**
              $
              (5
              )**UE:**Miscellaneous
                  income:Interest
                  and dividend income
              **$**
              **-**
              
              $
              1
              
              **$**
              **-**
              
              $
              2Equity
                  in earnings of subsidiary
              
              **1**
              
              
              2
              
              
              **2**
              
              
              3Allowance
                  for equity funds used during construction
              
              **1**
              
              
              1
              
              
              **6**
              
              
              4Other
              
              **1**
              
              
              -
              
              
              **3**
              
              
              -Total
                  miscellaneous income
              **$**
              **3**
              
              $
              4
              
              **$**
              **11**
              
              $
              9Miscellaneous
                  expense:Other
              **$**
              **(2**
              **)**
              $
              (4
              )
              **$**
              **(4**
              **)**
              $
              (5
              )Total
                  miscellaneous expense
              **$**
              **(2**
              **)**
              $
              (4
              )
              **$**
              **(4**
              **)**
              $
              (5
              )**CIPS:**Miscellaneous
                  income:Interest
                  and dividend income
              **$**
              **4**
              
              $
              6
              
              **$**
              **9**
              
              $
              13Total
                  miscellaneous income
              **$**
              **4**
              
              $
              6
              
              **$**
              **9**
              
              $
              13Miscellaneous
                  expense:Other
              **$**
              **(4**
              **)**
              $
              (1
              )
              **$**
              **(4**
              **)**
              $
              (1
              )Total
                  miscellaneous expense
              **$**
              **(4**
              **)**
              $
              (1
              )
              **$**
              **(4**
              **)**
              $
              (1
              )**Genco:**Miscellaneous
                  income:Other
              **$**
              **1**
              
              $
              -
              
              **$**
              **1**
              
              $
              -Total
                  miscellaneous income
              **$**
              **1**
              
              $
              -
              
              **$**
              **1**
              
              $
              -Miscellaneous
                  expense:Other
              **$**
              **-**
              
              $
              -
              
              **$**
              **-**
              
              $
              (1
              )Total
                  miscellaneous expense
              **$**
              **-**
              
              $
              -
              
              **$**
              **-**
              
              $
              (1
              )**CILCORP:**Miscellaneous
                  expense:Other
              **$**
              **(3**
              **)**
              $
              (1
              )
              **$**
              **(5**
              **)**
              $
              (2
              )Total
                  miscellaneous expense
              **$**
              **(3**
              **)**
              $
              (1
              )
              **$**
              **(5**
              **)**
              $
              (2
              )**CILCO:**Miscellaneous
                  expense:Other
              **$**
              **(2**
              **)**
              $
              (2
              )
              **$**
              **(3**
              **)**
              $
              (3
              )Total
                  miscellaneous expense
              **$**
              **(2**
              **)**
              $
              (2
              )
              **$**
              **(3**
              **)**
              $
              (3
              )**IP:**(b)Miscellaneous
                  income:Interest
                  and dividend income
              **$**
              **1**
              
              $
              2
              
              **$**
              **2**
              
              $
              2Tilton
                  Lease
              
              **-**
              
              
              3
              
              
              **-**
              
              
              7Allowance
                  for equity funds used during construction
              
              **1**
              
              
              -
              
              
              **1**
              
              
              -Gain
                  on disposition of property
              
              **-**
              
              
              1
              
              
              **-**
              
              
              1Other
              
              **-**
              
              
              1
              
              
              **1**
              
              
              2Total
                  miscellaneous income
              **$**
              **2**
              
              $
              7
              
              **$**
              **4**
              
              $
              12Miscellaneous
                  expense:Other
              **$**
              **(1**
              **)**
              $
              (1
              )
              **$**
              **(1**
              **)**
              $
              (1
              )Total
                  miscellaneous expense
              **$**
              **(1**
              **)**
              $
              (1
              )
              **$**
              **(1**
              **)**
              $
              (1
              )
  (a)  Includes
        amounts for Ameren Registrant and non-Registrant subsidiaries and intercompany
        eliminations, but excludes 2004 amounts for IP.
 (b)  2004
        amounts represent predecessor information.
 37
 
 **NOTE
        7 - DERIVATIVE FINANCIAL INSTRUMENTS**
 
 The
        following table presents balances in certain accounts for cash flow hedges
        as of
        June 30, 2005:
 
 **Ameren**(a)
              
              **UE**
              
              **CIPS**
              
              **Genco**
              
              **CILCORP**
              
              **CILCO**
              
              **IP****2005:**Balance
                  Sheet:Other
                  assets
              **$**
              **66**
              
              **$**
              **9**
              
              **$**
              **16**
              
              **$**
              **-**
              
              **$**
              **33**
              
              **$**
              **33**
              
              **$**
              **5**Other
                  deferred credits and liabilities
              
              **25**
              
              
              **15**
              
              
              **4**
              
              
              **1**
              
              
              **2**
              
              
              **2**
              
              
              **2**Accumulated
                  OCI:Power
                  forwards(b)
              
              **(1**
              **)**
              
              **-**
              
              
              **-**
              
              
              **(1**
              **)**
              
              **-**
              
              
              **-**
              
              
              **-**Interest
                  rate swaps(c)
              
              **4**
              
              
              **-**
              
              
              **-**
              
              
              **4**
              
              
              **-**
              
              
              **-**
              
              
              **-**Gas
                  swaps and futures contracts(d)
              
              **50**
              
              
              **8**
              
              
              **11**
              
              
              **-**
              
              
              **29**
              
              
              **29**
              
              
              **3**
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
 (b)
              Represents
                  the mark-to-market value for the hedged portion of electricity
                  price
                  exposure for periods generally less than one year. Certain contracts
                  designated as hedges of electricity price exposure have terms up
                  to three
                  years.
 (c)
              Represents
                  a gain associated with interest rate swaps at Genco that were a
                  partial
                  hedge of the interest rate on debt issued in June 2002. The swaps
                  cover
                  the first 10 years of debt that has a 30-year maturity and the
                  gain in OCI
                  is amortized over a 10-year period that began in June
                  2002.
 (d)
              Represents
                  a gain associated with natural gas swaps and futures contracts.
                  The swaps
                  are a partial hedge of our natural gas requirements through March
                  2008.
 
 The
        pretax net gain or loss on power forward derivative instruments is
        included
        in Operating Revenues - Electric or Operating Expenses - Fuel and
        Purchased
        Power at Ameren, UE and Genco. This represents the impact of
        discontinued cash flow hedges, the ineffective portion of cash flow hedges,
        and
        the reversal of amounts previously recorded in OCI due to transactions going
        to
        delivery or settlement, resulting in a less than $1 million loss for Ameren
        and
        Genco for the three months ended June 30, 2005 (2004 - $2 million gain for
        Ameren and a $1 million gain for UE and Genco) and a less than $1 million
        gain
        for Ameren and Genco and a less than $1 million loss for UE for the six months
        ended June 30, 2005 (2004 - $2 million gain for Ameren and a $1 million gain
        for
        UE and Genco).
 
 **Other
        Derivatives**
 
 The
        following table represents the net change in market value of option
        transactions, which are used to manage our positions in SO 2 emission
        allowances and coal. Certain of these transactions are treated as nonhedge
        transactions under SFAS No. 133, “Accounting for Derivative Instruments and
        Hedging Activities,” as amended. The net change in the market value of
        SO 2 options
        is recorded in Operating Revenues - Electric, while the net change in the
        market
        value
 of
        coal
        options is recorded as Operating Expenses - Fuel and Purchased
        Power.
 
 **Three
                  Months**
              **Six
                  Months**Gains
                  (Losses)(a)
              **2005**
              **2004**
              **2005**
              **2004****SO****2****options:**Ameren(b)
              **$ (c)**
              $
                  (1)
              **$
                  (6)**
              $ (2)UE
              **$ (c)**
              $
                  (4)
              **$
                  (1)**
              $ (7)Genco
              **$ -**
              $ 3
              **$
                  (5)**
              $ 5
 
 (a)
              Coal
                  option gains and losses were less than $1 million for all periods
                  shown
                  above.
 (b)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 (c)
              Less
                  than $1 million.
  **NOTE
        8 -** **RELATED
        PARTY TRANSACTIONS**
 
 The
        Ameren Companies have engaged in, and may in the future engage in, affiliate
        transactions in the normal course of business. These transactions primarily
        consist of gas and power purchases and sales, services received or rendered,
        and
        borrowings and lendings. Transactions between affiliates are reported as
        intercompany transactions on their financial statements, but are eliminated
        in
        consolidation for Ameren’s financial statements. For a discussion of our material related party agreements,
        see Note 14 - Related Party Transactions under Part II, Item 8 of the Ameren
        Companies’ combined Form 10-K for the fiscal year ended December 31, 2004. Below
        are updates to several of these related party transactions as well as additional
        related party transactions.
 
 **Electric
        Power Supply Agreements**
 
 The
        following table presents the amount of gigawatthour sales under related party
        electric power supply agreements.
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Genco
                  sales to
                Marketing
                  Company
              
              **5,196**
              
              
              4,544
              
              
              **10,096**
              
              
              9,465Marketing
                  Company
                sales
                  to CIPS
              
              **2,497**
              
              
              1,794
              
              
              **4,553**
              
              
              3,737EEI
                  sales to UE
              
              **744**
              
              
              830
              
              
              **1,441**
              
              
              1,646EEI
                  sales to CIPS
              
              **371**
              
              
              414
              
              
              **943**
              
              
              822EEI
                  sales to IP
              
              **381**
              
              
              438
              
              
              **794**
              
              
              868
 
 **Joint
        Dispatch Agreement**
 
 UE
        and
        Genco jointly dispatch electric generation under an agreement among UE, Genco
        and CIPS. Each affiliate has the option to serve its load requirements from
        its
        own generation first and then each allows access to any available remaining
        generation to its affiliate at incremental cost. Any excess generation not
        used
        by UE or Genco to serve load requirements is sold to third parties through
        Ameren Energy,
  38
  serving
        as each affiliate’s agent. These third party sales margins are allocated between
        UE and Genco using the ratio of each company’s load requirements to the
        companies’ combined load regardless of which company sourced the power. To
        allocate power costs between UE and Genco, an intercompany sale is recorded,
        at
        cost, by the company sourcing the power to the other company. Ameren Energy
        also
        acts as agent on behalf of UE and Genco to purchase power when they require
        it. The joint dispatch agreement can be terminated by either party
        upon one
        year’s notice.
 
 Due
          to
          the MoPSC order approving the Illinois service territory transfer or future
          regulatory proceedings, there could be changes to the agreement between
          UE and
          Genco to jointly dispatch electric generation or changes to the effect
          of that
          agreement on revenues and/or electric margins. Such changes could affect
          the
          pricing or availability of power transferred between Genco and UE. Based
          on
          operating performance for the past year, such changes would likely result
          in a
          transfer of electric margins from Genco to UE. The ultimate impact of any
          modifications to the joint dispatch agreement will be determined by future
          native load demand, the availability of electric generation from UE and
          Genco
          and market prices, among other things, but such impact could be material.
          Ameren’s earnings could be affected if electric rates for UE are adjusted by the
          MoPSC to reflect the provisions of the MoPSC order approving the service
          territory transfer and/or other changes to the joint dispatch agreement.
          See
          Note 3 - Rate and Regulatory Matters to our financial statements in Part
          1, Item
          1 of this report for a discussion of modifications to the joint dispatch
          agreement ordered by the MoPSC.
 The
        following table presents the amount of gigawatthour sales under the joint
        dispatch agreement.
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004****Joint
                  Dispatch Agreement**UE
                  sales to Genco
              
              **3,814**
              
              
              1,799
              
              
              **6,763**
              
              
              3,983Genco
                  sales to UE
              
              **1,219**
              
              
              625
              
              
              **1,816**
              
              
              1,293
 
 **Money
        Pools**
 
 *Utility*
 
 Through
        the utility money pool, the pool participants can access any committed credit
        facilities at Ameren and excess cash at Ameren, UE, CIPS, CILCO and IP. See
        Note
        4 - Short-term Borrowings and Liquidity for amounts available under credit
        facilities. The total amount available to the pool participants from the
        utility
        money pool at any given time is reduced by the amount of borrowings by their
        affiliates, but increased to the extent the pool participants have surplus
        funds
        or other external sources are used to increase the available amounts. The
        average interest rate for borrowing under the utility money pool for the
        three
        months ended June 30, 2005 was 3.0% (2004 - 1.0%) and for the six months
        ended
        June 30, 2005 was 2.7% (2004 - 1.0%) .
 
 *Non-state-regulated
        subsidiaries*
 
 Through
        the non-state-regulated subsidiary money pool, pool participants can access
        committed credit facilities at Ameren and excess cash at Ameren, Genco and
        other
        pool participants. See Note 4 - Short-term Borrowings and Liquidity for amounts
        available under credit facilities. The
        average interest rate for borrowing under the non-state-regulated subsidiary
        money pool for the three months ended June 30, 2005 was 5.5% (2004 - 8.8%)
        and
        for the six months ended June 30, 2005 was 6.9% (2004 - 8.8%).
 
 CILCORP
        has been granted authority by the SEC under the PUHCA to borrow up to $250
        million directly from Ameren in a separate arrangement unrelated to the money
        pools. At June 30, 2005, CILCORP had notes payable under this agreement of
        $94
        million. The interest rate under this agreement is the same as the
        non-state-regulated subsidiary money pool.
 
 **Intercompany
        Promissory Notes**
  On
        May 1,
        2005, Genco and CIPS amended certain terms of its subordinated note payable
        to
        CIPS by issuing to CIPS an amended and restated subordinated promissory note
        in
        the principal amount of approximately $249 million with an interest rate
        of
        7.125% per annum, a 5-year amortization schedule and a maturity date of May
        1,
        2010. As of June 30, 2005, $197 million was outstanding under this
        note.
 
 Also
        on
        May 1, 2005, the remaining principal balance under Genco’s note payable to
        Ameren of $34 million was repaid.
 
 On
        May 2,
        2005, CIPS issued to UE a subordinated promissory note in the principal amount
        of approximately $67 million as consideration for 50% of UE’s Illinois-based
        utility assets transferred to CIPS on that date. The note bears interest
        at
        4.70% per annum and has a 10-year amortization schedule and a maturity date
        of
        May 2, 2010. See Note 3 - Rate and Regulatory Matters for a discussion of
        this
        intercompany transfer.
 
 **Intercompany
        Transfer of Illinois Service Territory and Electric Generating
        Facilities**
 
 See
        Note
        3 - Rate and Regulatory Matters for a discussion of the related party
        transactions engaged in with respect to the intercompany transfer of UE’s
        Illinois service territory and Genco’s electric generating
        facilities.
 
 On
        June
        22, 2005, UE purchased an uninstalled 117 megawatt CT and related vendor
        contract rights from
   39
 Development
        Company for an estimated market price of approximately $25 million. Also
        on that
        date, UE purchased wet compression upgrade equipment for this CT and related
        vendor contract rights from Resources Company for an estimated market price
        of
        approximately $1.5 million. UE is constructing these facilities at Venice,
        Illinois.
  **Summary
        of Related Party Transactions**
 
 The
        following tables present the impact of related party transactions on the
        Ameren
        Companies’ statements of income based primarily on the transactions discussed
        above and in Note 14 - Related Party Transactions under Part II, Item 8 of
        the
        Ameren Companies’ combined Form 10-K for the fiscal year ended December 31,
        2004.
 
 **UE**
 
 **Three
                  Months**
              
              **Six
                  Months****Consolidated
                  Statement of Income**
              **2005**
              
              **2004**
              
              **2005**
              
              **2004**Operating
                  revenues from affiliates:Power
                  supply agreement with EEI
              **$**
              **(a**
              **)**
              $
              2
              
              **$**
              **(a**
              **)**
              $
              2Joint
                  dispatch agreement with Genco
              
              **56**
              
              
              28
              
              
              **97**
              
              
              58Share
                  of joint dispatch agreement interchange sales
              
              **74**
              
              
              42
              
              
              **129**
              
              
              95Gas
                  transportation agreement with Genco
              
              **(a**
              **)**
              
              (a
              )
              
              **(a**
              **)**
              
              (a
              )Total
                  operating revenues
              **$**
              **130**
              
              $
              72
              
              **$**
              **226**
              
              $
              155Fuel
                  and purchased power expenses from affiliates:Power
                  supply agreements:EEI
              **$**
              **16**
              
              $
              17
              
              **$**
              **30**
              
              $
              33Marketing
                  Company
              
              **2**
              
              
              3
              
              
              **4**
              
              
              5Joint
                  dispatch agreement with Genco
              
              **21**
              
              
              12
              
              
              **31**
              
              
              24Total
                  fuel and purchased power expenses
              **$**
              **39**
              
              $
              32
              
              **$**
              **65**
              
              $
              62Other
                  operating expenses:Support
                  service agreements:Ameren
                  Services
              **$**
              **40**
              
              $
              38
              
              **$**
              **81**
              
              $
              76Ameren
                  Energy
              
              **1**
              
              
              4
              
              
              **2**
              
              
              7AFS
              
              **1**
              
              
              1
              
              
              **2**
              
              
              2Total
                  other operating expenses
              **$**
              **42**
              
              $
              43
              
              **$**
              **85**
              
              $
              85Interest
                  expense:Borrowings
                  from money pool
              **$**
              **2**
              
              $
              1
              
              **$**
              **2**
              
              $
              1
 
 (a)
              Less
                  than $1 million.
  **CIPS**
 
 **Three
                  Months**
              
              **Six
                  Months****Statement
                  of Income**
              
              **2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004**Operating
                  revenues from affiliates:Power
                  supply agreements:Marketing
                  Company
              **$**
              **8**
              
              $
              8
              
              **$**
              **17**
              
              $
              16Total
                  operating revenues
              **$**
              **8**
              
              $
              8
              
              **$**
              **17**
              
              $
              16Fuel
                  and purchased power expenses from affiliates:Power
                  supply agreements:Marketing
                  Company
              **$**
              **94**
              
              $
              71
              
              **$**
              **170**
              
              $
              143EEI
              
              **8**
              
              
              8
              
              
              **17**
              
              
              16Total
                  fuel and purchased power expenses
              **$**
              **102**
              
              $
              79
              
              **$**
              **187**
              
              $
              159Other
                  operating expenses:Support
                  service agreements:Ameren
                  Services
              **$**
              **11**
              
              $
              12
              
              **$**
              **22**
              
              $
              24AFS
              
              **1**
              
              
              -
              
              
              **1**
              
              
              -Total
                  other operating expenses
              **$**
              **12**
              
              $
              12
              
              **$**
              **23**
              
              $
              24Interest
                  income:Note
                  receivable from Genco
              **$**
              **4**
              
              $
              6
              
              **$**
              **8**
              
              $
              13Borrowings
                  (advances) related to money pool
              
              **(a**
              **)**
              
              (a
              )
              
              **(a**
              **)**
              
              (a
              )
 
 (a)
              Less
                  than $1 million.
  40
 **Genco**
 
 **Three
                  Months**
              
              **Six
                  Months****Consolidated
                  Statement of Income**
              **2005**
              
              **2004**
              
              **2005**
              
              **2004**Operating
                  revenues from affiliates:Power
                  supply agreements:Marketing
                  Company
              **$**
              **195**
              
              $
              168
              
              **$**
              **374**
              
              $
              341EEI
              
              **(a**
              **)**
              
              1
              
              
              **(a**
              **)**
              
              1Joint
                  dispatch agreement with UE
              
              **21**
              
              
              12
              
              
              **31**
              
              
              24Share
                  of joint dispatch agreement interchange sales
              
              **46**
              
              
              22
              
              
              **78**
              
              
              49Operating
                  lease with Development Company
              
              **3**
              
              
              2
              
              
              **5**
              
              
              5Total
                  operating revenues
              **$**
              **265**
              
              $
              205
              
              **$**
              **488**
              
              $
              420Fuel
                  and purchased power expenses from affiliates:Joint
                  dispatch agreement with UE
              **$**
              **56**
              
              $
              28
              
              **$**
              **97**
              
              $
              58Power
                  purchase agreement with Marketing Company
              
              **(a**
              **)**
              
              (a
              )
              
              **2**
              
              
              (a
              )Gas
                  transportation agreement with UE
              
              **(a**
              **)**
              
              (a
              )
              
              **(a**
              **)**
              
              (a
              )Total
                  fuel and purchased power expenses
              **$**
              **56**
              
              $
              28
              
              **$**
              **99**
              
              $
              58Other
                  operating expenses:Support
                  service agreements:Ameren
                  Services
              **$**
              **5**
              
              $
              4
              
              **$**
              **10**
              
              $
              8Ameren
                  Energy
              
              **(a**
              **)**
              
              3
              
              
              **1**
              
              
              4AFS
              
              **(a**
              **)**
              
              1
              
              
              **1**
              
              
              1Total
                  other operating expenses
              **$**
              **5**
              
              $
              8
              
              **$**
              **12**
              
              $
              13Interest
                  expense:Borrowings
                  from money pool
              **$**
              **1**
              
              $
              3
              
              **$**
              **3**
              
              $
              6Note
                  payable to CIPS
              
              **4**
              
              
              6
              
              
              **8**
              
              
              13Note
                  payable to Ameren
              
              **(a**
              **)**
              
              (a
              )
              
              **1**
              
              
              1
 
 (a)
              Less
                  than $1 million.
 
 **CILCORP**
 
 **Three
                  Months**
              
              **Six
                  Months****Consolidated
                  Statement of Income**
              **2005**
              
              **2004**
              
              **2005**
              
              **2004**Operating
                  revenues from affiliates:Power
                  supply agreements:Bilateral
                  supply agreement with Marketing Company
              **$**
              **6**
              
              $
              9
              
              **$**
              **21**
              
              $
              19Total
                  operating revenues
              **$**
              **6**
              
              $
              9
              
              **$**
              **21**
              
              $
              19Fuel
                  and purchased power expenses from affiliates:Executory
                  tolling agreement with Medina Valley
              **$**
              **8**
              
              $
              7
              
              **$**
              **18**
              
              $
              17Bilateral
                  supply agreement with Marketing Company
              
              **4**
              
              
              5
              
              
              **7**
              
              
              9Total
                  fuel and purchased power expenses
              **$**
              **12**
              
              $
              12
              
              **$**
              **25**
              
              $
              26Other
                  operating expenses:Support
                  services agreements:Ameren
                  Services
              **$**
              **9**
              
              $
              12
              
              **$**
              **21**
              
              $
              25AFS
              
              **(a**
              **)**
              
              1
              
              
              **1**
              
              
              1Total
                  other operating expenses
              **$**
              **9**
              
              $
              13
              
              **$**
              **22**
              
              $
              26Interest
                  expense:Note
                  payable to Ameren
              **$**
              **1**
              
              $
              1
              
              **$**
              **3**
              
              $
              2Borrowings
                  from money pool
              
              **1**
              
              
              1
              
              
              **2**
              
              
              2
 
 (a)
              Less
                  than $1 million.
 **CILCO**
 
 **Three
                    Months**
                
                **Six
                    Months****Consolidated
                    Statement of Income**
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**Operating
                    revenues from affiliates:Power
                    supply agreements:Bilateral
                    supply agreement with Marketing Company
                **$**
                **6**
                
                $
                9
                
                **$**
                **21**
                
                $
                19Total
                    operating revenues
                **$**
                **6**
                
                $
                9
                
                **$**
                **21**
                
                $
                19Fuel
                    and purchased power expenses from affiliates:Executory
                    tolling agreement with Medina Valley
                **$**
                **8**
                
                $
                7
                
                **$**
                **18**
                
                $
                17Bilateral
                    supply agreement with Marketing Company
                
                **4**
                
                
                5
                
                
                **7**
                
                
                9Total
                    fuel and purchased power expenses
                **$**
                **12**
                
                $
                12
                
                **$**
                **25**
                
                $
                26
  41
  **Three
                      Months**
                  
                  **Six
                      Months****Consolidated
                      Statement of Income**
                  **2005**
                  
                  **2004**
                  
                  **2005**
                  
                  **2004**Other
                      operating expenses:Support
                      services agreements:Ameren
                      Services
                  **$**
                  **9**
                  
                  $
                  12
                  
                  **$**
                  **21**
                  
                  $
                  24AFS
                  
                  **(a**
                  **)**
                  
                  (a
                  )
                  
                  **1**
                  
                  
                  (a
                  )Total
                      other operating expenses
                  **$**
                  **9**
                  
                  $
                  12
                  
                  **$**
                  **22**
                  
                  $
                  24Interest
                      expense:Borrowings
                      from money pool
                  **$**
                  **1**
                  
                  $
                  1
                  
                  **$**
                  **2**
                  
                  $
                  2
 (a)
              Less
                  than $1 million.
 
 **IP**
 **Three
                            Months**
                        
                        **Six
                            Months****Consolidated
                            Statement of Income**
                        
                        **2005**
                        
                        **2004**(a)
                        
                        **2005**
                        
                        **2004**(a)Operating
                            revenues from affiliates and former affiliates:Retail
                            electricity sales to DMG
                        
                        **$**
                        **-**
                        
                        $
                        1
                        
                        **$**
                        **-**
                        
                        $
                        1Retail
                            natural gas sales to DMG
                        
                        
                        **-**
                        
                        
                        1
                        
                        
                        **-**
                        
                        
                        3Transmission
                            sales to DYPM
                        
                        
                        **-**
                        
                        
                        3
                        
                        
                        **-**
                        
                        
                        7Interconnection
                            transmission with DYPM
                        
                        
                        **-**
                        
                        
                        1
                        
                        
                        **-**
                        
                        
                        1Interest
                            income from former affiliates
                        
                        
                        **-**
                        
                        
                        43
                        
                        
                        **-**
                        
                        
                        85Total
                            operating revenues
                        
                        **$**
                        **-**
                        
                        $
                        49
                        
                        **$**
                        **-**
                        
                        $
                        97Fuel
                            and purchased power expenses from affiliates and former
                            affiliates:Power
                            supply agreements:DMG
                        
                        **$**
                        **-**
                        
                        $
                        108
                        
                        **$**
                        **-**
                        
                        $
                        232EEI
                        
                        
                        **13**
                        
                        
                        7
                        
                        
                        **27**
                        
                        
                        15Gas
                            purchased from Dynegy
                        
                        
                        **-**
                        
                        
                        (b
                        )
                        
                        **-**
                        
                        
                        6Total
                            fuel and purchased power expenses
                        
                        **$**
                        **13**
                        
                        $
                        115
                        
                        **$**
                        **27**
                        
                        $
                        253Other
                            operating expenses:Support
                            services agreements:Ameren
                            Services
                        
                        **$**
                        **22**
                        
                        $
                        -
                        
                        **$**
                        **22**
                        
                        $
                        -AFS
                        
                        
                        **1**
                        
                        
                        -
                        
                        
                        **1**
                        
                        
                        -Services
                            and facilities agreement - Dynegy
                        
                        
                        **-**
                        
                        
                        5
                        
                        
                        **-**
                        
                        
                        8Total
                            other operating expenses
                        
                        **$**
                        **23**
                        
                        $
                        5
                        
                        **$**
                        **23**
                        
                        $
                        8Interest
                            expense (income):Interest
                            expense for IP SPT
                        
                        **$**
                        **3**
                        
                        $
                        6
                        
                        **$**
                        **6**
                        
                        $
                        12Interest
                            expense on Tilton lease
                        
                        
                        **-**
                        
                        
                        4
                        
                        
                        **-**
                        
                        
                        8Interest
                            income on Tilton lease
                        
                        
                        **-**
                        
                        
                        (4
                        )
                        
                        **-**
                        
                        
                        (8
                        )Advances
                            to money pool
                        
                        
                        **(1**
                        **)**
                        
                        -
                        
                        
                        **(2**
                        **)**
                        
                        -
 (a)
                      Represents
                          predecessor information.
 (b)
                      Less
                          than $1 million
 **NOTE
        9 -** **COMMITMENTS
        AND CONTINGENCIES**
 
 Reference
        is made to Note 1 - Summary of Significant Accounting Policies, Note 3 -
        Rate
        and Regulatory Matters, Note 14 - Related Party Transactions and Note 15
        -
        Commitments and Contingencies under Part II, Item 8 of the Ameren Companies’
        combined Form 10-K for the fiscal year ended December 31, 2004.
 
 **Callaway
        Nuclear Plant**
 
 The
        following table presents insurance coverage at UE’s Callaway nuclear plant at
        June 30, 2005:
 
 The
        following table presents insurance coverage at UE’s Callaway nuclear plant at
        June 30, 2005:
 
 
 **Type
                  and Source of Coverage**
              **Maximum
                  Coverages**
              
              **Maximum
                  Assessments for Single Incidents**Public
                  liability:American
                  Nuclear Insurers
              $
              300
              
              $
              -Pool
                  participation
              
              10,461
              
              
              101
              (a)$
              10,761
              (b)
              $
              101Nuclear
                  worker liability:American
                  Nuclear Insurers
              $
              300
              (c)
              $
              4Property
                  damage:Nuclear
                  Electric Insurance Ltd.
              $
              2,750
              (d)
              $
              21Replacement
                  power:Nuclear
                  Electric Insurance Ltd.
              $
              490
              (e)
              $
              7


42
  (a)
              Retrospective
                  premium under the Price-Anderson liability provisions of the Atomic
                  Energy
                  Act of 1954, as amended (Price-Anderson). Thisis
                  subject to retrospective assessment with respect to loss from an
                  incident
                  at any U.S. reactor, payable at $10 million per year. Renewal of
                  Price-Anderson was part of the Energy Policy Act of 2005, which
                  was signed
                  by President Bush in August 2005. Under the 2005 Act, the retrospective
                  assessment with respect to loss from a nuclear incident at any
                  U.S.
                  reactor was increased to $15 million per
                  year.
 (b)
              Limit
                  of liability for each incident under
                  Price-Anderson.
 (c)
              Industry
                  limit for potential liability from workers claiming exposure to
                  the
                  hazards of nuclear radiation.
 (d)
              Includes
                  premature decommissioning costs.
 (e)
              Weekly
                  indemnity of $4.5 million for 52 weeks, which commences after the
                  first
                  eight weeks of an outage, plus $3.6 million per week for 71.1 weeks
                  thereafter.
 
 Price-Anderson
        limits the liability for claims from an incident involving any licensed U.S.
        nuclear facility. The limit is based on the number of licensed reactors and
        is
        adjusted at least every five years to reflect changes in the  Consumer
        Price Index. Utilities owning a nuclear reactor cover this exposure through
        a
        combination of private insurance and mandatory participation in a financial
        protection pool, as established by Price-Anderson.
 
 If
        losses
        from a nuclear incident at the Callaway nuclear plant exceed the limits of,
        or
        are not subject to, insurance, or if coverage is unavailable, UE self-insures
        the risk. If a serious nuclear incident occurred, it could have a material
        but
        indeterminable adverse effect on our results of operations, financial position,
        or liquidity.
 
 **Other
        Obligations**
 
 To
        supply
        a portion of the fuel requirements of our generating plants, we have entered
        into various long-term commitments for the procurement of coal, natural gas
        and
        nuclear fuel. In addition, we have entered into various long-term commitments
        for the purchase of electricity. For a complete listing of our obligations
        and
        commitments, see Contractual Obligations under Part II, Item 7 and Note 15
        -
        Commitments and Contingencies under Part II, Item 8 of the Ameren Companies’
        combined Form 10-K for the fiscal year ended December 31, 2004.
 
 As
        of
        June 30, 2005, the commitments for the procurement of coal have increased
        from
        amounts previously disclosed as of December 31, 2004. The following table
        presents the total estimated coal purchase commitments at June 30, 2005:
 
 **2005**
                
                
                **2006**
                
                
                **2007**
                
                
                **2008**
                
                
                **2009**
                
                
                **Thereafter**(a)Ameren(b)
                $
                760
                
                $
                747
                
                $
                699
                
                $
                636
                
                $
                382
                
                $
                114UE
                
                389
                
                
                372
                
                
                368
                
                
                293
                
                
                155
                
                
                57Genco
                
                206
                
                
                206
                
                
                182
                
                
                222
                
                
                160
                
                
                31CILCORP
                
                81
                
                
                84
                
                
                65
                
                
                53
                
                
                29
                
                
                11CILCO
                
                81
                
                
                84
                
                
                65
                
                
                53
                
                
                29
                
                
                11
 
 (a)
              Commitments
                  for coal are until 2010.
 (b)
              Includes
                  amounts for Registrant and non-Registrant Ameren subsidiaries and
                  intercompany eliminations.
 
 As
        of
        June 30, 2005, the commitments for the procurement of natural gas have increased
        from amounts previously disclosed as of December 31, 2004. The following
        table
        presents the total estimated natural gas purchase commitments at June 30,
        2005:
 
 **2005**
              
              
              **2006**
              
              
              **2007**
              
              
              **2008**
              
              
              **2009**
              
              
              **Thereafter**(a)Ameren(b)
              $
              478
              
              $
              403
              
              $
              218
              
              $
              129
              
              $
              51
              
              $
              22UE
              
              77
              
              
              56
              
              
              21
              
              
              12
              
              
              4
              
              
              8CIPS
              
              81
              
              
              79
              
              
              53
              
              
              40
              
              
              25
              
              
              -Genco
              
              18
              
              
              19
              
              
              19
              
              
              14
              
              
              2
              
              
              3CILCORP
              
              156
              
              
              136
              
              
              64
              
              
              50
              
              
              16
              
              
              -CILCO
              
              156
              
              
              136
              
              
              64
              
              
              50
              
              
              16
              
              
              -IP
              
              126
              
              
              103
              
              
              60
              
              
              12
              
              
              4
              
              
              11
 
 (a)
              Commitments
                  for natural gas are until 2014.
 (b)
              Includes
                  amounts for Registrant and non-Registrant Ameren subsidiaries and
                  intercompany eliminations.
 
 **Environmental
        Matters**
 
 We
        are
        subject to various environmental regulations by federal, state and local
        authorities. From the beginning phases of siting and development to the ongoing
        operation of existing or new electric generating, transmission and distribution
        facilities, and natural gas storage plants, transmission and distribution
        facilities, our activities involve compliance with diverse laws and regulations.
        These address noise, emissions, and impacts to air and water, protected and
        cultural resources (such as wetlands, endangered species, and
        archeological/historical resources), and chemical and waste handling. Our
        activities often require complex and often lengthy processes as we obtain
        approvals, permits or licenses
  43
 for
        new,
        existing or modified facilities. Additionally, the use and handling of various
        chemicals or hazardous materials (including wastes) requires preparation
        of
        release prevention plans and emergency response procedures. As new laws or
        regulations are promulgated, we assess their applicability and implement
        the
        necessary modifications to our facilities or their operations, as required.
        The
        more significant matters are discussed below.
 
 *Clean
        Air Act*
 
 In
        March
        2005, the EPA issued its final regulations with respect to SO 2 and
        NO x emissions (the Clean Air Interstate Rule) and mercury emissions from coal-fired
        power plants. The new regulations will require significant additional reductions
        in these emissions from UE, Genco and CILCO power plants in phases, beginning
        in
        2010. The following table presents preliminary estimated capital costs based
        on
        current available
        technology to comply with the  Clean
        Air
        Interstate Rule and mercury  rules:
 
 **2005**
              **2006
                  - 2009**
              **2010
                  - 2015**
              **Total**Ameren
              $50
              $510 - $1,360
              $355
                  -$1,130
              $1,400
                  - $1,900UE
              20
              160 -880
              175 -880
              840
                  -1,140Genco
              10
              250
                  -340
              140 -200
              400
                  -550CILCO
              20
              100
                  -140
              40
                  -50
              160
                  -210
 
 Each
        state has 18 months, or until the fall of 2006, to develop state regulation
        implementing the Clean Air Interstate Rule and mercury rules. While the federal
        rules mandate a specific emissions cap for SO 2 ,
        NO x and
        mercury emissions by state from utility boilers, the states have considerable
        flexibility in allocating emission allowances to individual utility boilers.
        In
        addition, a state may choose to hold back certain emission allowances for
        growth
        or other reasons, and may implement a more stringent program than required
        by
        the federal rule. The costs reflected in the above table assume each Ameren
        generating unit will be allocated allowances based on the model “cap and trade”
        rule guidelines issued by the EPA. Should either Missouri or Illinois decide
        to
        develop alternative allowance allocations for utility units, the cost impact
        could be material. At this time, we are unable to determine the impact such
        a
        state decision would have on our results of operations, financial position,
        or
        liquidity.
 
 *Emission
        Credits*
 
 As
        of
        June 30, 2005, UE, Genco, CILCO, and EEI held 1.57 million, 0.52 million,
        0.27
        million, and 0.29 million tons, respectively, of SO 2 emission
        allowances with vintages from 2005 to 2012. Each company possesses additional
        allowances for use in periods beyond 2012. As of June 30, 2005, UE, Genco,
        CILCO
        and EEI Illinois facilities held 289, 17,446, 4,266 and 5,490 tons,
        respectively, of NO X emission
        allowances with vintages from 2004 to 2007. The Illinois Environmental
        Protection Agency (the Illinois EPA) is still determining some NO x emission
        allowance allocations for this period and 2008. UE, Genco, CILCO and EEI
        expect
        to use a substantial portion of the SO 2 and
        NO x allowances for ongoing operations. Allocations of NO x emission
        allowances for Missouri facilities are pending the finalization of rules
        by
        Missouri regulators. New environmental regulations, including the Clean Air
        Interstate Rule, the timing of the installation of pollution control equipment,
        and level of operations will have a significant impact on the amount of
        allowances actually required for ongoing operations.
 
 *New
        Source Review*
 
 The
        EPA
        has been conducting an enforcement initiative in an effort to determine whether
        modifications at a number of coal-fired power plants owned by electric utilities
        in the U.S. are subject to New Source Review requirements or New Source
        Performance Standards under the Clean Air Act. The EPA’s inquiries focus on
        whether the best available emission control technology was or should have
        been
        used at such power plants when major maintenance or capital improvements
        were
        made.
 
 IP
        and
        DMG had been the subject of a Notice of Violation from the EPA and a complaint
        filed in 1999 by the United States in the U.S. District Court for the Southern
        District of Illinois alleging violations of the Clean Air Act and certain
        related federal and Illinois regulations in connection with certain equipment
        repairs, replacements, and maintenance activities at the three Baldwin Power
        Station generating units, currently owned by DMG and formerly owned by IP.
 
 In
        May
        2005, the court approved a comprehensive settlement among DMG, the EPA, the
        U.S.
        and other intervening parties that resolved this litigation. The settlement
        agreement is set forth in a consent decree and resolves all claims in the
        litigation as well as similar claims that may have been brought with respect
        to
        other generation facilities owned by DMG and formerly owned by IP. This consent
        decree relieves IP of any civil liability under the Clean Air Act and related
        federal and Illinois regulations with respect to IP’s former ownership of the
        Baldwin Power Station and other generation assets now owned by DMG.
 
 In
        April
        2005, Genco received a request from the EPA for information pursuant to Section
        114(a) of the Clean Air Act seeking detailed operating and maintenance history
        data with respect to its Meredosia, Hutsonville, Coffeen and Newton facilities,
        EEI’s Joppa facility and AERG’s E.D. Edwards and Duck Creek facilities. All of
        these facilities are coal-fired power plants. The information request requires
        Genco to provide responses to specific EPA questions regarding certain projects
        and maintenance activities in order to determine compliance with certain
        Illinois air pollution and emissions rules and with the New Source Performance
        Standard requirements of the Clean Air Act. Genco is complying with this
        information request, but cannot predict the outcome of this matter at this
        time.
  44
 *Remediation*
 
 We
        are
        involved in a number of remediation actions to clean up hazardous waste sites
        as
        required by federal and state law. Such statutes require that responsible
        parties fund remediation actions regardless of fault, legality of original
        disposal, or ownership of a disposal site. UE, CIPS, CILCO and IP have each
        been
        identified by the federal or state governments as a potentially responsible
        party at several contaminated sites. Several of these sites involve facilities
        that were transferred by CIPS to Genco in May 2000 and were transferred by
        CILCO
        to AERG in October 2003. As part of each transfer, CIPS or CILCO has
        contractually agreed to indemnify Genco or AERG for remediation costs associated
        with pre-existing environmental contamination at the transferred sites.
 
 As
        of
        June 30, 2005, CIPS, CILCO, and IP owned or were otherwise responsible for
        14,
        four, and 25 former MGP sites, respectively, in Illinois. All of these sites
        are
        in various stages of investigation, evaluation and remediation. Under its
        current schedule, Ameren anticipates that remediation at these sites should
        be
        completed by 2015. The ICC permits each company to recover remediation and
        litigation costs associated with their former MGP sites located in Illinois
        from
        their Illinois electric and natural gas utility customers through environmental
        adjustment rate riders. To be recoverable, such costs must be prudently and
        properly incurred; costs are subject to annual reconciliation review by the
        ICC.
        As of June 30, 2005, CIPS, CILCO, and IP had recorded liabilities of $24
        million, $4 million, and $64 million, respectively, to represent estimated
        minimum obligations, which are expected to be recovered through the riders.
        On
        May 2, 2005, as a part of its Illinois utility service territory transfer,
        UE
        transferred its one Illinois-based former MGP site to CIPS. In connection
        with
        the transfer, CIPS succeeded to UE’s ICC-approved environmental adjustment rate
        rider, which permits CIPS to recover remediation and litigation costs associated
        with UE’s former MGP site from UE’s transferred Illinois electric and natural
        gas utility customers. For a discussion of the Illinois service territory
        transfer, see Note 3 - Rate and Regulatory Matters in this report.
 
 In
        addition, UE owns or is otherwise responsible for 10 MGP sites in Missouri
        and
        one in Iowa. UE does not have in effect in Missouri a rate rider mechanism,
        which permits remediation costs associated with MGP sites to be recovered
        from
        utility customers. UE does not have any retail utility operations in Iowa.
        Because of the unknown and unique characteristics of each site (such as amount
        and type of residues present, physical characteristics of the site and the
        environmental risk), and uncertain regulatory requirements, we are not able
        to
        determine the maximum liability for the remediation of these sites. As of
        June
        30, 2005, UE had recorded $16 million to represent its estimated minimum
        obligation. At this time, we are unable to determine what portion of these
        costs, if any, will be eligible for recovery from insurance
        carriers.
 
 In
        June
        2000, the EPA notified UE and numerous other companies that former landfills
        and
        lagoons in Sauget, Illinois, may contain soil and groundwater contamination.
        These sites are known as Sauget Area 2. From approximately 1926 until 1976,
        UE
        operated a power generating facility adjacent to Sauget Area 2 and currently
        owns a parcel of property that is used as a landfill. Under the terms of
        an
        Administrative Order and Consent, UE has joined with other potentially
        responsible parties to evaluate the extent of potential contamination with
        respect to Sauget Area 2.
 
 In
        October 2002, UE was included in a Unilateral Administrative Order list of
        potentially liable parties for groundwater contamination for a portion of
        the
        Sauget Area 2 site. The Unilateral Administrative Order encompasses the
        groundwater contamination releasing to the Mississippi River adjacent to
        Monsanto Chemical Company’s (now known as Solutia) former chemical waste
        landfill and the resulting impact area in the Mississippi River. UE was asked
        to
        participate in response activities that involve the installation of a barrier
        wall around a chemical waste site with three recovery wells to divert
        groundwater flow. The projected cost for this remedy method is $26 million.
        In
        November 2002, UE sent a letter to the EPA asserting its defenses to the
        Unilateral Administrative Order and requested its removal from the list of
        potentially responsible parties under the Unilateral Administrative Order.
        Solutia agreed to comply with the Unilateral Administrative Order. However,
        in
        December 2003, Solutia filed for bankruptcy protection and is now seeking
        to
        discharge its environmental liabilities. In March 2004, Pharmacia Corporation,
        the former parent company of Solutia, confirmed its intent to comply with
        the
        EPA’s Unilateral Administrative Order.
 
 As
        the
        status of future remediation at Sauget Area 2 or compliance with the Unilateral
        Administrative Order is uncertain, we are unable to predict the ultimate
        impact
        of the Sauget Area 2 site on our results of operations, financial position,
        or
        liquidity. In December 2004, the U.S. Supreme Court, in Cooper Industries,
        Inc.
        vs. Aviall Services, Inc., limited the circumstances under which potentially
        responsible parties could assert cost-recovery claims against other potentially
        responsible parties. As a result of this ruling, UE may not be able to recover
        from other potentially responsible parties the costs it incurs in complying
        with
        EPA orders. Any liability or responsibility that may be imposed on UE as
        a
        result of this Sauget, Illinois environmental matter was not transferred
        to CIPS
        as a part of UE’s May 2005 Illinois utility service territory transfer discussed
        above and in Note 3 - Rate and Regulatory Matters.
 
 In
        December of 2004, AERG submitted a comprehensive package to the Illinois
        EPA to
        address groundwater and
  45
 surface
        water issues associated with the recycle pond, ash ponds and reservoir at
        the
        Duck Creek power plant facility. Information submitted by AERG is currently
        under review by the Illinois EPA. CILCORP and CILCO both have a liability
        of $4
        million at June 30, 2005, included on their Consolidated Balance Sheets for
        the
        estimated cost of the remediation effort to treat and discharge the recycle
        system water in order to address these groundwater and surface water issues.
 
 In
        addition, our operations or those of our predecessor companies, involve the
        use,
        disposal and, in appropriate circumstances, the cleanup of substances regulated
        under environmental protection laws. We are unable to determine the impact
        these
        actions may have on our results of operations, financial position, or
        liquidity.
 
 **Sustainable
        Energy Plan**
 
 In
        July
        2005, the ICC entered a resolution affirming Governor Blagojevich’s Sustainable
        Energy Plan as well as an ICC Staff Report dated July 7, 2005. Within 30
        days of
        the resolution, CIPS, CILCO and IP are expected to file documentation explaining
        how they intend to implement the plan. The plan calls for, among other things,
        a
        renewable portfolio standard whereby 2% of the bundled retail load should
        be
        obtained from renewable energy resources in 2007, 3% in 2008, 4% in 2009,
        5% in
        2010, 6% in 2011, 7% in 2012 and 8% in 2013; and an energy efficiency portfolio
        standard whereby there is a 10% reduction in load growth in 2007-2008; 15%
        in
        2009-2011; 20% in 2012-2014; and 25% in 2015-2017.
 
 **Asbestos-related
        Litigation**
 
 Ameren,
        UE, CIPS, Genco, CILCO and IP have been named, along with numerous other
        parties, in a number of lawsuits that have been filed by certain plaintiffs
        claiming varying degrees of injury from asbestos exposure. Most have been
        filed
        in the Circuit Court of Madison County, Illinois. The number of total defendants
        named in each case is significant; as many as 166 parties are named in some
        pending cases and as few as five in others. However, the average number of
        parties is 56 in the cases that were pending as of June 30, 2005.
 
 The
        claims filed against Ameren, UE, CIPS, Genco, CILCO and IP allege injury
        from
        asbestos exposure during the plaintiffs’ activities at our present or former
        electric generating plants. Former CIPS plants are now owned by Genco, and
        most
        former CILCO plants are now owned by AERG. Most of IP’s plants were transferred
        to a Dynegy subsidiary prior to Ameren’s acquisition of IP. As a part of the
        transfer of ownership of the CIPS and CILCO generating plants, CIPS or CILCO
        has
        contractually agreed to indemnify Genco or AERG for liabilities associated
        with
        asbestos-related claims arising from activities prior to the transfer. Each
        lawsuit seeks unspecified damages in excess of $50,000, which, if proved,
        typically would be shared among the named defendants.
 
 From
        April 1, 2005 through June 30, 2005, four additional asbestos-related lawsuits
        were filed against UE, CIPS, CILCO and IP, mostly in the Circuit Court of
        Madison County, Illinois; one lawsuit was dismissed and 13 were settled.
        The
        following table presents the status as of June 30, 2005, of the asbestos-related
        lawsuits that have been filed against the Ameren Companies:
 
 **Specifically
                  Named as Defendant****Total**(a)
              
              **Ameren**
              
              
              **UE**
              
              
              **CIPS**
              
              
              **Genco**
              
              
              **CILCO**
              
              
              **IP**Filed
              280
              
              26
              
              
              151
              
              
              105
              
              
              2
              
              
              24
              
              
              125Settled
              71
              
              -
              
              
              44
              
              
              29
              
              
              -
              
              
              3
              
              
              33Dismissed
              117
              
              12
              
              
              73
              
              
              33
              
              
              1
              
              
              4
              
              
              52Pending
              92
              
              14
              
              
              34
              
              
              43
              
              
              1
              
              
              17
              
              
              40
 
 (a)
              Addition
                  of the numbers in the individual columns does not equal the total
                  column
                  because some of the lawsuits name multiple Ameren entities as defendants.
  As
        of
        June 30, 2005, four asbestos-related lawsuits were pending against EEI. The
        general liability insurance maintained by EEI provides coverage with respect
        to
        liabilities arising from asbestos-related claims.
 
 The
        Ameren Companies believe that the final disposition of these proceedings
        will
        not have a material adverse effect on their results of operations, financial
        position, or liquidity.
 
 See
        Note
        3 - Rate and Regulatory Matters - IP and EEI Acquisition under Part II, Item
        8
        of the Ameren Companies’ combined Form 10-K for the fiscal year ended December
        31,
 2004,
        for
        information on the ICC’s approval of a tariff rider through which
        asbestos-related litigation claims will be allowed to be recovered from IP’s
        electric customers, subject to certain terms, commencing in 2007.
 
 **Other
        Matters**
 
 *Leveraged
        Leases*
 
 Ameren
        owns interests in assets that have been financed as leveraged leases. One
        of
        these leveraged leases is a $10 million investment at June 30, 2005, in an
        aircraft leased to Delta Air Lines. Delta Air Lines reported significant
        operating
  46
  losses
        and disclosed in its Form 10-Q filing for the quarter ended March 31, 2005,
        that
        it has a transformation plan in place to achieve long-term success by aligning
        its cost structure with revenues. However, if Delta Air Lines continues to
        experience significant losses, it would need to seek to restructure under
        Chapter 11 of the U.S. Bankruptcy Code. Ameren could lose all or a portion
        of
        its investment in the Delta Air Lines lease in the event of a bankruptcy
        or
        default by Delta Air Lines or any voluntary restructuring of the lease. As
        of
        June 30, 2005, Delta Air Lines was current on its payments on this
        lease.
 
 By
        order
        dated April 15, 2004, the SEC determined that certain non-utility interests
        and
        investments of CILCORP, including investments in several leveraged lease
        transactions held by CILCORP’s subsidiary, CIM, or CIM’s subsidiaries, are not
        retainable by Ameren under PUHCA standards. The non-retainable interests
        primarily consist of lease interests in commercial real estate properties
        and
        equipment. The April 2004 SEC Order requires that Ameren cause CIM or any
        subsidiary to sell or otherwise dispose of the non-retainable interests.
        CILCORP
        is actively pursuing the sale of its interest in these leverage lease
        transactions.
 
 **NOTE
        10 - CALLAWAY NUCLEAR PLANT**
 
 Under
        the
        Nuclear Waste Policy Act of 1982, the DOE is responsible for the permanent
        storage and disposal of spent nuclear fuel. The DOE currently charges one
        mill,
        or 1 / 10 of one
        cent, per nuclear-generated kilowatthour sold for future disposal of spent
        fuel.
        Pursuant to this act, UE collects one mill from its electric customers for
        each
        kilowatthour of electricity that it generates and sells from its Callaway
        nuclear plant. Electric utility rates charged to customers provide for recovery
        of such costs. The DOE is not expected to have its permanent storage facility
        for spent fuel available until at least 2012. UE has sufficient installed
        storage capacity at its Callaway nuclear plant until 2020. It has the capability
        for additional storage capacity through the licensed life of the plant. The
        delayed availability of the DOE’s disposal facility is not expected to adversely
        affect the continued operation of the Callaway nuclear plant through its
        currently licensed life.
  Electric
        utility rates charged to customers provide for the recovery of the Callaway
        nuclear plant’s decommissioning costs, which include decontamination,
        dismantling, and site restoration costs, over an assumed 40-year life of
        the
        plant, ending with the expiration of the plant’s operating license in 2024. The
        Callaway nuclear plant site is assumed to be decommissioned based on immediate
        dismantlement method and removal from service. Ameren and UE have recorded
        an
        asset retirement obligation for the Callaway nuclear plant decommissioning
        costs
        at fair value, which represents the present value of estimated future cash
        outflows. See the discussion of asset retirement obligations in Note 1 -
        Summary
        of Significant Accounting Policies. Decommissioning costs are charged to
        cost of
        services used to establish electric rates for UE’s customers. These costs
        amounted to $7 million in each of the years 2004, 2003 and 2002. Every three
        years, the MoPSC requires UE to file an updated cost study for decommissioning
        its Callaway nuclear plant. Electric rates may be adjusted at such times
        to
        reflect changed estimates. An
        updated cost study is expected to be filed in September 2005. Costs
        collected from customers are deposited in an external trust fund to provide
        for
        the Callaway nuclear plant’s decommissioning. If the assumed return on trust
        assets is not earned, we believe that it is probable that any such earnings
        deficiency will be recovered in rates. The fair value of the nuclear
        decommissioning trust fund for UE’s Callaway nuclear plant is reported in
        Nuclear Decommissioning Trust Fund in Ameren’s and UE’s Consolidated Balance
        Sheets. This amount is legally restricted. It may be used only to fund the
        costs
        of nuclear decommissioning. Changes in the fair value of the trust fund are
        recorded as an increase or decrease to the nuclear decommissioning trust
        fund
        and to the regulatory asset recorded in connection with the adoption of SFAS
        No.
        143. In connection with UE’s transfer of its Illinois electric and gas utility
        businesses to CIPS on May 2, 2005, the assets and liabilities related to
        the
        Illinois portion of the decommissioning trust fund are being transferred
        to the
        Missouri and the FERC jurisdictions. See Note 3 - Rate and Regulatory Matters
        for further information about this intercompany transfer.
 
 **NOTE
        11** **-** **** **STOCKHOLDERS’
        EQUITY**
 
 **Outstanding
        Shares of Common Stock**
 
 The
        following table reconciles the outstanding shares of Ameren common stock
        for the
        three months and six months ended June 30, 2005 and 2004:
 
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Shares
                  outstanding at beginning of period
              
              **195.8**
              
              
              182.5
              
              
              **195.2**
              
              
              162.9Shares
                  issued
              
              **8.0**
              
              
              0.8
              
              
              **8.6**
              
              
              20.4Shares
                  outstanding at end of period
              
              **203.8**
              
              
              183.3
              
              
              **203.8**
              
              
              183.3
 
 
 47
 **Paid-In
        Capital**
 
 During
        the six months ended June 30, 2005, Ameren issued 1.2 million shares of common
        stock valued at $57 million under DRPlus and Ameren’s 401(k) plans and 7.4
        million shares of common stock in exchange for proceeds of $345 million to
        holders of the adjustable conversion-rate equity security units offset by
        $5
        million related to open market purchases for employee stock options and
        restricted stock awards. See Note 5 - Long-term Debt and Equity Financings
        for
        further information.
 
 **Other
        Comprehensive Income**
 
 Comprehensive
        income includes net income as reported on the statements of income and all
        other
        changes in common stockholders’ equity, except those resulting from transactions
        with common shareholders. A reconciliation of net income to comprehensive
        income for the three months and six months ended June 30, 2005 and 2004 is
        shown
        below for the Ameren Companies:
 **Three
                    Months**
                **Six
                    Months****2005**
                
                
                **2004**
                
                
                **2005**
                
                
                **2004****Ameren:**(a)Net
                    income
                **$**
                **185**
                
                $
                118
                
                **$**
                **306**
                
                $
                215Unrealized
                    gain on derivative hedging instruments, net of taxes (benefit)
                    of $4,
                  $3,
                    $10, and $3, respectively
                
                **1**
                
                
                6
                
                
                **18**
                
                
                6Reclassification
                    adjustments for (gains) included in net income, net of taxes
                  (benefit)
                    of $1, $1, $1, and $(1), respectively
                
                **(2**
                **)**
                
                (3
                )
                
                **(2**
                **)**
                
                (3
                )Total
                    comprehensive income, net of taxes
                **$**
                **184**
                
                $
                121
                
                **$**
                **322**
                
                $
                218**UE:**Net
                    income
                **$**
                **132**
                
                $
                109
                
                **$**
                **189**
                
                $
                167Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes of
                    $-,
                    $-,
                  $2,
                    and $1, respectively
                
                **(1**
                **)**
                
                1
                
                
                **3**
                
                
                3Total
                    comprehensive income, net of taxes$
                **$**
                **131**
                
                $
                110
                
                **$**
                **192**
                
                $
                170**CIPS:**Net
                    income
                **$**
                **7**
                
                $
                8
                
                **$**
                **15**
                
                $
                18Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes
                    (benefit)
                  of
                    $(1), $1, $3, and $2, respectively
                
                **(2**
                **)**
                
                1
                
                
                **4**
                
                
                4Reclassification
                    adjustments for (gains) included in net income, net of taxes
                  (benefit)
                    of $(1), $-, $- and $-, respectively
                
                **(1**
                **)**
                
                -
                
                
                **(1**
                **)**
                
                (1
                )Total
                    comprehensive income, net of taxes
                **$**
                **4**
                
                $
                9
                
                **$**
                **18**
                
                $
                21**Genco:**Net
                    income
                **$**
                **31**
                
                $
                17
                
                **$**
                **62**
                
                $
                46Unrealized
                    (loss) on derivative hedging instruments, net of taxes (benefit)
                    of
                    $-,
                  $-,
                    $-, and $(1), respectively
                
                **-**
                
                
                -
                
                
                **(1**
                **)**
                
                (1
                )Reclassification
                    adjustments for (gains) included in net income, net of taxes
                    of
                  $-,
                    $-, $-, and $-, respectively
                
                **-**
                
                
                (1
                )
                
                **-**
                
                
                (1
                )Total
                    comprehensive income, net of taxes
                **$**
                **31**
                
                $
                16
                
                **$**
                **61**
                
                $
                44**CILCORP:**Net
                    income (loss)
                **$**
                **2**
                
                $
                (4
                )
                $
                11
                
                $
                -Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes
                    (benefit)
                  of
                    $(1), $1, $7, and $2, respectively
                
                **(1**
                **)**
                
                3
                
                
                12
                
                
                6Reclassification
                    adjustments for (gains) losses included in net income, net of
                  taxes
                    (benefit) of $-, $(1), $-, and $(1), respectively
                
                **(1**
                **)**
                
                (2
                )
                
                1
                
                
                (2
                )Total
                    comprehensive income (loss), net of taxes
                **$**
                **-**
                
                $
                (3
                )
                $
                24
                
                $
                4**CILCO:**Net
                    income
                **$**
                **10**
                
                $
                3
                
                $
                26
                
                $
                9Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes
                    (benefit)
                  of
                    $(1), $1, $7, and $2, respectively
                
                **(1**
                **)**
                
                3
                
                
                11
                
                
                6Reclassification
                    adjustments for (gains) included in net income, net of taxes
                  (benefit)
                    of $-, $(1), $-, and $(1), respectively
                
                **(1**
                **)**
                
                (2
                )
                
                -
                
                
                (2
                )Total
                    comprehensive income, net of taxes
                **$**
                **8**
                
                $
                4
                
                $
                37
                
                $
                13**IP:**(b)Net
                    income
                **$**
                **15**
                
                $
                24
                
                $
                37
                
                $
                61Minimum
                    pension liability adjustment, net of taxes of $-, $-, $- and
                    $-,
                    respectively
                
                **-**
                
                
                -
                
                
                -
                
                
                1Total
                    comprehensive income, net of taxes
                **$**
                **15**
                
                $
                24
                
                $
                37
                
                $
                62
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes 2004 amounts for
                    IP.
 (b)
                Includes
                    predecessor information for 2004.
 48
 **NOTE
          12 - RETIREMENT BENEFITS**
 
 Ameren’s
        pension plans are funded in compliance with income tax regulations and federal
        funding requirements. Based on our assumptions at December 31, 2004, in order
        to
        maintain minimum funding levels for Ameren’s pension plans, we expect future
        required contributions to aggregate $400 million for the period of 2005 to
        2009,
        with no minimum
 contribution
        required until 2008 assuming continuation of the current federal interest
        rate
        relief beyond 2005. These amounts are estimates and may change based on actual
        stock market performance, changes in interest rates and any changes in
        government regulations.
 
 Ameren
        made a contribution to its post-retirement plan of $35 million in the second
        quarter of 2005 as compared to $32 million in the second quarter of the prior
        year.
 
 The
        following table presents Ameren’s net periodic benefit costs (and the components
        of those costs) for pension and other postretirement benefits for the three
        months and six months ended June 30, 2005 and 2004:
 
 **Pension
                  Benefits(a)****Three
                  Months**
              **Six
                  Months****2005**
              
              
              **2004**
              
              
              **2005**
              
              
              **2004**Service
                  cost
              **$**
              **14**
              
              $
              10
              
              **$**
              **29**
              
              $
              21Interest
                  cost
              
              **41**
              
              
              32
              
              
              **83**
              
              
              65Expected
                  return on plan assets
              
              **(45**
              **)**
              
              (30
              )
              
              **(91**
              **)**
              
              (60
              )Amortization
                  cost:Prior
                  service cost
              
              **3**
              
              
              3
              
              
              **5**
              
              
              5Losses
              
              **9**
              
              
              5
              
              
              **19**
              
              
              12Net
                  periodic benefit cost
              **$**
              **22**
              
              $
              20
              
              **$**
              **45**
              
              $
              43
  **Postretirement
                  Benefits(a)****Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Service
                  cost
              **$**
              **5**
              
              $
              3
              
              **$**
              **11**
              
              $
              7Interest
                  cost
              
              **17**
              
              
              10
              
              
              **36**
              
              
              27Expected
                  return on plan assets
              
              **(11**
              **)**
              
              (7
              )
              
              **(23**
              **)**
              
              (16
              )Amortization
                  cost:Transition
                  obligation
              
              **1**
              
              
              -
              
              
              **1**
              
              
              -Prior
                  service cost
              
              **(1**
              **)**
              
              (1
              )
              
              **(2**
              **)**
              
              (2
              )Losses
              
              **9**
              
              
              4
              
              
              **19**
              
              
              14Net
                  periodic benefit cost
              **$**
              **20**
              
              $
              9
              
              **$**
              **42**
              
              $
              30
  (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 
 UE,
        CIPS,
        Genco, CILCORP, CILCO and IP are participants in Ameren’s plans and are
        responsible for their proportional share of the pension and other postretirement
        costs. The following table presents the pension and other postretirement
        costs
        incurred for the three months and six months ended June 30, 2005 and
        2004:
  
 **Pension
                  Benefits****Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Ameren(a)
              **$**
              **22**
              
              $
              20
              
              **$**
              **45**
              
              $
              43UE
              
              **13**
              
              
              12
              
              
              **26**
              
              
              26CIPS
              
              **3**
              
              
              3
              
              
              **6**
              
              
              6Genco
              
              **2**
              
              
              2
              
              
              **4**
              
              
              4CILCORP
              
              **3**
              
              
              3
              
              
              **6**
              
              
              7CILCO
              
              **5**
              
              
              4
              
              
              **9**
              
              
              10IP(b)
              
              **1**
              
              
              -
              
              
              **3**
              
              
              -
  **Postretirement
                  Benefits****Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Ameren(a)
              **$**
              **20**
              
              $
              9
              
              **$**
              **42**
              
              $
              30UE
              
              **11**
              
              
              4
              
              
              **22**
              
              
              17CIPS
              
              **3**
              
              
              2
              
              
              **6**
              
              
              5Genco
              
              **1**
              
              
              -
              
              
              **2**
              
              
              1CILCORP
              
              **2**
              
              
              3
              
              
              **6**
              
              
              7CILCO
              
              **3**
              
              
              5
              
              
              **9**
              
              
              11IP(b)
              
              **3**
              
              
              -
              
              
              **6**
              
              
              -
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 (b)
              Includes
                  predecessor information for 2004.
 
 **NOTE
        13 -** **SEGMENT
        INFORMATION** ****
 
 As
        discussed in the Ameren Companies combined Form 10-K for the fiscal year
        ended
        December 31, 2004, Ameren’s two reportable segments are: (1) Utility Operations,
        which generates electricity and transmits and distributes natural gas and
        electricity and (2) Other, which is comprised of the parent holding company,
        Ameren Corporation.
 
 Ameren’s
        reportable segment Utility Operations includes the operations of UE, CIPS,
        Genco, CILCORP and CILCO. The operations of IP are included in Ameren’s Utility
        Operations segment from September 30, 2004.
 
 The
        accounting policies for segment data are the same as those described in Note
        1 -
        Summary of Significant Accounting Policies. Segment data include intersegment
        revenues, as well as a charge for allocating costs of administrative support
        services to each of the operating companies, which, in each case, is eliminated
        upon consolidation. Ameren Services allocates administrative support services
        based on various factors, such as headcount, number of customers, and total
        assets. The following table presents information about the reported revenues
        and
        net income of Ameren for the three months and six months ended June 30, 2005
        and
        2004:
  49
 
 
 **Utility
                  Operations**
              
              **Other**
              
              **Reconciling
                  Items**(a)
              
              **Total****Three
                  Months 2005:**Operating
                  revenues
              $
              **1,956**
              
              **$**
              **-**
              
              $
              **(366**
              **)**
              $
              **1,590**Net
                  income
              
              **186**
              
              
              **(1**
              **)**
              
              **-**
              
              
              **185****Three
                  Months 2004:**(**b**)Operating
                  revenues
              $
              1,432
              
              $
              -
              
              $
              (283
              )
              $
              1,149Net
                  income
              
              115
              
              
              3
              
              
              -
              
              
              118**Six
                  Months 2005:**Operating
                  revenues
              $
              **3,900**
              
              $
              **-**
              
              $
              **(684**
              **)**
              $
              **3,216**Net
                  income
              
              **311**
              
              
              **(5**
              **)**
              
              **-**
              
              
              **306****Six
                  Months 2004:**(**b**)Operating
                  revenues
              $
              2,948
              
              $
              -
              
              $
              (580
              )
              $
              2,368Net
                  income
              
              212
              
              
              3
              
              
              -
              
              
              215
 
 (a)
              Elimination
                  of intercompany revenues.
 (b)
              Excludes
                  2004 amounts for IP.
 **ITEM
        2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS.**
  **OVERVIEW** **
 
 **Ameren
        Executive Summary**
 
 Ameren’s
        earnings per share in the second quarter and first six months of 2005 benefited
        from stronger interchange power sales margins, earnings from IP,
        hotter-than-normal summer weather, and the lack of a refueling and maintenance
        outage at UE’s Callaway nuclear plant in the current year.
  Increased power plant availability and the MISO Day Two Market provided the
        opportunity for increased interchange sales versus the year-ago period while
        power prices were also higher.
  This
        year, CIPS, CILCO and IP have made filings with the ICC outling a proposed
        method for procuring power in 2007 and beyond. Hearings on this proposal
        are
        scheduled for September 2005. By the end of 2005, CIPS, CILCO and IP are
        expected to make filings with the ICC that will serve as a basis for adjusting
        electric distribution rates. By January 1, 2006, UE will provide an updated
        cost
        of service study to the MoPSC staff and others. These are milestone events
        for
        Ameren.
 
 **General**
 
 Ameren,
        headquartered in St. Louis, Missouri, is a public utility holding company
        registered with the SEC under the PUHCA. Ameren’s primary asset is the common
        stock of its subsidiaries. Ameren’s subsidiaries operate rate-regulated electric
        generation, transmission and distribution businesses, rate-regulated natural
        gas
        transmission and distribution businesses and non-rate-regulated electric
        generation businesses in Missouri and Illinois as discussed below. Dividends
        on
        Ameren’s common stock are dependent on distributions
        made to it by its subsidiaries. Ameren’s principal subsidiaries are listed
        below. See Note 1 - Summary of Significant
        Accounting Policies to our financial statements under Part I, Item 1, of
        this
        report for a detailed description of Ameren’s principal subsidiaries.
 
 ·
              UE
                  operates a rate-regulated electric generation, transmission and
                  distribution business, and a rate-regulated natural gas transmission
                  and
                  distribution business in Missouri and prior to May 2, 2005, in
                  Illinois.
 ·
              CIPS
                  operates a rate-regulated electric and natural gas transmission
                  and
                  distribution business in Illinois.
 ·
              Genco
                  operates a non-rate-regulated electric generation business in Illinois
                  and
                  Missouri.
 ·
              CILCO
                  is a subsidiary of CILCORP (a holding company) and operates a
                  rate-regulated electric transmission and distribution business,
                  a
                  primarily non-rate-regulated electric generation business through
                  its
                  subsidiary, AERG, and a rate-regulated natural gas transmission
                  and
                  distribution business in Illinois.
 ·
              IP
                  operates a rate-regulated electric and natural gas transmission
                  and
                  distribution business in Illinois. See Note 2 - Acquisitions to
                  our
                  financial statements under Part I, Item 1, of this report for further
                  information.
 
 The
        financial statements of Ameren are prepared on a consolidated basis and
        therefore include the accounts of its majority-owned subsidiaries. As the
        acquisition of IP occurred on September 30, 2004, Ameren’s Consolidated
        Statements of Income and Cash Flows for the three months and six months ended
        June 30, 2004, do not reflect IP’s results of operations or financial position.
        See Note 2 - Acquisitions for further information on the accounting for the
        IP
        acquisition. All significant intercompany transactions have been eliminated.
        All
        tabular dollar amounts are in millions, unless otherwise indicated.
  50
 In
        addition to presenting results of operations and earnings amounts in total,
        certain information in this report is expressed in cents per share. These
        amounts reflect factors that directly affect Ameren’s earnings. We believe this
        per share information is useful because it enables readers to understand
        the
        impact of these factors on Ameren’s earnings per share. All references in this
        report to earnings per share are based on weighted-average diluted common
        shares
        outstanding during the applicable period.
 
 **IP
        Acquisition**
 
 On
        September 30, 2004, Ameren completed the acquisition of all the common stock
        and
        662,924 shares of preferred stock of IP and an additional 20% ownership interest
        in EEI from subsidiaries of Dynegy. Ameren acquired IP to complement its
        existing Illinois gas and electric operations. The purchase included IP’s
        rate-regulated electric and natural gas transmission and distribution business
        serving 600,000 electric and 415,000 gas customers in areas contiguous to
        our
        existing Illinois utility service territories. With the acquisition, IP became
        an Ameren subsidiary operating as AmerenIP.
 
 The
        total
        transaction value was $2.3 billion, including the assumption of $1.8 billion
        of
        IP debt and preferred stock and consideration, including transaction costs,
        of
        $440 million in cash, net of $51 million cash acquired and a working capital
        adjustment of $5 million received from Dynegy in February 2005 pursuant to
        the
        terms of the stock purchase agreement. Ameren placed $100 million of the
        cash
        portion of the purchase price in a six-year escrow account pending resolution
        of
        certain contingent environmental obligations of IP and other Dynegy affiliates
        for which Ameren was provided indemnification by Dynegy. On July 27, 2005,
        the
        conditions for release of the escrow account were satisfied and Dynegy was
        remitted the $100 million. In addition, this transaction included a fixed-price
        capacity power supply agreement for IP’s annual purchase in 2005 and 2006 of
        2,800 megawatts of electricity from DYPM. This agreement is expected to supply
        about 70% of IP’s electric customer requirements during those two years. The
        remaining 30% of IP’s power needs in 2005 and 2006 will be supplied by other
        companies through contracts and open market purchases. In the event that
        suppliers are unable to supply the electricity required by existing agreements,
        IP would be forced to find alternative suppliers to meet its load requirements,
        thus exposing itself to market price risk, which could have a material impact
        on
        Ameren’s and IP’s results of operations, financial position, or liquidity.
  Ameren
        funded this acquisition with the issuance of new Ameren common stock. Ameren
        issued an aggregate of 30 million common shares in February 2004 and July
        2004,
        which generated net proceeds of $1.3 billion. Proceeds from these issuances
        were
        used to finance the cash portion of the purchase price and to reduce IP debt
        assumed as part of this transaction and to pay related premiums.
 
 Ameren
        expects the acquisition of IP to be accretive to earnings in the first two
        years
        of ownership. That belief is based on a variety of assumptions related to
        power
        prices, interest rates, and synergies, among other things.
 
 For
        income tax purposes, Ameren and Dynegy have elected to treat Ameren’s
        acquisition of IP stock as an asset acquisition under Section 338(h)(10)
        of the
        Internal Revenue Code of 1986, as amended.
 
 **RESULTS
        OF OPERATIONS**
 
 **Earnings
        Summary**
 
 Our
        results of operations and financial position are affected by many factors.
        Weather, economic conditions, and the actions of key customers or competitors
        can significantly affect the demand for our services. Our results are also
        affected by seasonal fluctuations caused by winter heating and summer cooling
        demand. With approximately 85% of Ameren’s revenues directly subject to
        regulation by various state and federal agencies, decisions by regulators
        can
        have a material impact on the prices we charge for our services. Our
        non-rate-regulated sales are subject to market conditions for power. We
        principally use coal, nuclear fuel, natural gas, and oil in our operations.
        The
        prices for these commodities can fluctuate significantly due to the world
        economic and political environment, weather, supply and demand levels and
        many
        other factors. We do not currently have
        fuel
        or purchased power cost recovery mechanisms in Missouri or Illinois for our
        electric utility businesses, but we do
        have gas cost recovery mechanisms (PGAs) in each state for our gas delivery
        businesses. The electric and gas rates for UE in Missouri are set through
        June
        2006, and electric rates are set for CIPS, CILCO and IP in Illinois through
        the
        end of 2006, so that cost decreases or increases will not be immediately
        reflected in rates. Fluctuations in interest rates affect our cost of borrowing
        and pension and postretirement benefits. We employ various risk management
        strategies in order to try to reduce our exposure to commodity risks and
        other
        risks inherent in our business. The reliability of our power plants and
        transmission and distribution systems and the level of purchased power costs,
        operating and administrative costs, and capital investment are key factors
        that
        we seek to control in order to optimize our results of operations ,
        financial position, and
        liquidity.
 
 Ameren’s
        net income increased $67 million to $185 million, or 93 cents per share,
        in the
        second quarter of 2005 from $118 million, or 65 cents per share, in the second
        quarter of 2004. Ameren’s net income increased $91 million to $306 million, or
        $1.55 per share, for the six months ended June 30, 2005, compared to year-ago
        earnings of $215 million, or $1.20
  51
  per
        share
        in the first six months of 2004. The change in net income for the three months
        and six months ended June 30, 2005 was primarily due to the inclusion of
        IP
        results in the current year, increased margins on interchange power sales,
        hotter-than-normal weather conditions in the second quarter of 2005, and
        the
        lack of a refueling and maintenance outage at UE’s Callaway nuclear plant in the
        second quarter of 2005. The Callaway nuclear plant had a 64-day maintenance
        and
        refueling outage in the second quarter of 2004. The lack of a refueling outage
        in the current year also contributed to improved power plant availability,
        which
        provided the opportunity for increased interchange sales. Partially offsetting
        these increases to net income were decreased emission allowance sales and
        higher
        fuel prices, labor and employee benefit cost and depreciation expenses in
        the
        current year periods. In addition, second quarter 2004 net income benefited
        from
        a FERC-ordered refund of $18 million in exit fees, which had been previously
        paid by UE and CIPS to the MISO, upon their re-entry into the MISO.
 
 As
        a
        holding company, Ameren’s net income and cash flows are primarily generated by
        its principal subsidiaries: UE, CIPS, Genco, CILCORP and IP. The following
        table
        presents the contribution by Ameren’s principal subsidiaries to Ameren’s
        consolidated net income for the three months and six months ended June 30,
        2005
        and 2004:
 
 **Three
                  Months**
              
              **Six
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                  income:UE(a)
              **$**
              **130**
              
              $
              107
              
              **$**
              **186**
              
              $
              164CIPS
              
              **7**
              
              
              8
              
              
              **14**
              
              
              17Genco(a)
              
              **31**
              
              
              17
              
              
              **62**
              
              
              46CILCORP(a)
              
              **2**
              
              
              (4
              )
              
              **11**
              
              
              -IP(b)
              
              **15**
              
              
              -
              
              
              **36**
              
              
              -Other(c)
              
              **-**
              
              
              (10
              )
              
              **(3**
              **)**
              
              (12
              )Ameren
                  net income
              **$**
              **185**
              
              $
              118
              
              **$**
              **306**
              
              $
              215
 
 (a)
              Includes
                  earnings from unregulated interchange power sales that provided
                  $30
                  million and $52 million of UE’s net income in the three months and six
                  months ended June 30, 2005, respectively, (2004 - second quarter
                  - $15
                  million; year-to-date - $32 million), $18 million and $30 million
                  of
                  Genco’s net income in the three months and six months ended June 30,
                  2005,
                  respectively, (2004 - second quarter - $7 million; year-to-date
                  - $17
                  million) and $4 million and $9 million of CILCORP’s net income in the
                  three months and six months ended June 30, 2005,
                  respectively.
 (b)
              Ameren
                  acquired IP on September 30, 2004.
 (c)
              Includes
                  corporate general and administrative expenses, transition costs
                  associated
                  with the IP acquisition and other non-rate-regulated
                  operations.
 
 **Acquisition
        Accounting**
 
 The
        amortization of noncash purchase accounting fair value adjustments at IP
        and
        Resources Company increased Ameren’s and IP’s net income by $13 million and $9
        million, respectively, for the three months, and $26 million and $19 million,
        respectively, for the six months ended June 30, 2005, as compared with the
        same
        prior-year periods. The amortization of the fair value adjustments at IP
        that
        increased net income were related to pension and postretirement liabilities,
        long-term debt, and a power supply contract with Dynegy to supply IP 2,800
        megawatts for 2005 and 2006. Partially offsetting these items at IP was the
        amortization of the fair value adjustment related to a power supply contract
        with EEI that expires in 2005. The following table presents the favorable
        (unfavorable) impact on Ameren’s and IP’s net income related to the amortization
        of purchase accounting fair value adjustments associated with the IP acquisition
        during the three months and six months ended June 30, 2005:
 
 **Three
                  Months**
              
              **Six
                  Months****Ameren**
              
              **IP**
              
              **Ameren**
              
              **IP**Statement
                  of Income line item:Other
                  operations and
                maintenance(a)
              **$**
              7
              
              **$**
              7
              
              **$**
              13
              
              **$**
              13Interest(b)
              
              4
              
              
              4
              
              
              10
              
              
              10Purchased
                  power(c)
              
              10
              
              
              4
              
              
              20
              
              
              8Income
                  taxes(d)
              
              (8
              )
              
              (6
              )
              
              (17
              )
              
              (12
              )Impact
                  on net income
              **$**
              13
              
              **$**
              9
              
              **$**
              26
              
              **$**
              19
 
 (a)
              Related
                  to the adjustment to fair value of the pension plan and postretirement
                  plans.
 (b)
              Related
                  to the adjustment to fair value of all the IP debt assumed at acquisition
                  on September 30, 2004, and the unamortized gain or loss on reacquired
                  debt. The net write-up to fair value of all the IP debt assumed,
                  excluding
                  early redemption premiums, is being amortized over the anticipated
                  remaining life of the debt.
 (c)
              Related
                  to the amortization of fair value adjustments to power supply contracts.
 (d)
              Tax
                  effect of the above amortization adjustments.
 
 The
        amortization of fair value adjustments at EEI as a result of the additional
        20%
        interest acquired by Ameren on September 30, 2004, were related to plant
        in
        service, emission credits and a power supply agreement with IP that expires
        in
        2005. The following table presents the favorable (unfavorable) impact on
        Ameren’s net income related to the amortization of purchase accounting fair
        value adjustments associated with the EEI acquisition during the three months
        and six months ended June 30, 2005:
 
 **Three
                  Months**
              
              **Six
                  Months**Statement
                  of Income line item:Interchange
                  revenues(a)
              **$**
              1
              
              **$**
              2Fuel
                  and purchased power(b)
              
              (1
              )
              
              (2
              )Depreciation
                  and amortization(c)
              
              **-**
              
              
              (1
              )Income
                  taxes(d)
              
              **-**
              
              
              **-**Impact
                  on net income
              **$**
              **-**
              
              **$**
              (1
              )
 
 (a)
              Related
                  to the amortization of a power supply
                  contract.
 (b)
              Related
                  to the amortization of emission credits.
 (c)
              Includes
                  the amortization of the fair value adjustment related to plant
                  assets.
 (d)
              Tax
                  effect of the above amortization adjustments.
 
 52
 **Electric
        Operations**
 
 The
        following table presents the favorable (unfavorable) variations in electric
        margins, defined as electric revenues less fuel and purchased power costs,
        for
        the three months and six months ended June 30, 2005, from the comparable
        periods
        in 2004. We consider electric and interchange margins useful measures to
        analyze
        the change in profitability of our electric operations between periods. We
        have
        included the analysis below as a complement to our financial information
        provided in accordance with GAAP. However, electric and interchange margins
        may
        not be a presentation defined under GAAP and may not be comparable to other
        companies’ presentations or more useful than the GAAP information we are
        providing elsewhere in this report.
 
 The
        variation for Ameren shows the contribution from IP for the three months
        and six
        months ended June 30, 2005, as a separate line item, which facilitates
        comparison of other margin components. IP’s electric margins in 2005 include
        purchase accounting adjustments and are compared with the same periods in
        2004
        when Ameren did not own IP and it did not contribute to Ameren’s electric
        margins.
 
 **Ameren**(a)
              
              **UE**
              
              **CIPS**
              
              **Genco**
              
              **CILCORP**
              
              **CILCO**
              
              **IP**(b)**Three
                  Months**Electric
                  revenue change:IP
              $
              268
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Effect
                  of weather (estimate)
              
              13
              
              
              7
              
              
              3
              
              
              -
              
              
              3
              
              
              3
              
              
              9Growth
                  and other (estimate)
              
              41
              
              
              8
              
              
              31
              
              
              27
              
              
              6
              
              
              5
              
              
              1Emission
                  credits
              
              (5
              )
              
              (5
              )
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Interchange
                  revenues
              
              67
              
              
              58
              
              
              (2
              )
              
              31
              
              
              2
              
              
              2
              
              
              -Total
              $
              384
              
              $
              68
              
              $
              32
              
              $
              58
              
              $
              11
              
              $
              10
              
              $
              10Fuel
                  and purchased power change:IP
              $
              (165
              )
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Fuel:Generation
                  and other
              
              (26
              )
              
              (19
              )
              
              -
              
              
              (4
              )
              
              (2
              )
              
              (2
              )
              
              -Price
              
              (13
              )
              
              (4
              )
              
              -
              
              
              (9
              )
              
              -
              
              
              -
              
              
              -Purchased
                  power
              
              (8
              )
              
              (17
              )
              
              (26
              )
              
              (34
              )
              
              (4
              )
              
              (4
              )
              
              (11
              )Total
              $
              (212
              )
              $
              (40
              )
              $
              (26
              )
              $
              (47
              )
              $
              (6
              )
              $
              (6
              )
              $
              (11
              )Net
                  change in electric margins
              $
              172
              
              $
              28
              
              $
              6
              
              $
              11
              
              $
              5
              
              $
              4
              
              $
              (1
              )**Six
                  Months**Electric
                  revenue change:IP
              $
              503
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Effect
                  of weather (estimate)
              
              8
              
              
              5
              
              
              2
              
              
              -
              
              
              1
              
              
              1
              
              
              7Growth
                  and other (estimate)
              
              33
              
              
              4
              
              
              33
              
              
              33
              
              
              (1
              )
              
              (2
              )
              
              (9
              )Emission
                  credits
              
              (20
              )
              
              (20
              )
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Rate
                  reductions
              
              (7
              )
              
              (7
              )
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Interchange
                  revenues
              
              80
              
              
              71
              
              
              (2
              )
              
              34
              
              
              6
              
              
              6
              
              
              -Total
              $
              597
              
              $
              53
              
              $
              33
              
              $
              67
              
              $
              6
              
              $
              5
              
              $
              (2
              )Fuel
                  and purchased power change:IP
              $
              (322
              )
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Fuel:Generation
                  and other
              
              (28
              )
              
              (28
              )
              
              -
              
              
              10
              
              
              (6
              )
              
              (3
              )
              
              -Price
              
              (23
              )
              
              (8
              )
              
              -
              
              
              (19
              )
              
              4
              
              
              3
              
              
              -Purchased
                  power
              
              19
              
              
              (2
              )
              
              (32
              )
              
              (43
              )
              
              8
              
              
              8
              
              
              (17
              )Total
              $
              (354
              )
              $
              (38
              )
              $
              (32
              )
              $
              (52
              )
              $
              6
              
              $
              8
              
              $
              (17
              )Net
                  change in electric margins
              $
              243
              
              $
              15
              
              $
              1
              
              $
              15
              
              $
              12
              
              $
              13
              
              $
              (19
              )
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
 (b)
              Compared
                  to predecessor information for the three months and six months
                  ended June
                  30, 2004.
 
 *Ameren*
 
 Ameren’s
        electric margin increased $172 million for the three months and $243 million
        for
        the six months ended June 30, 2005, compared with the same periods in 2004.
        The
        acquisition of IP added electric margins of $103 million and $181 million
        in the
        three months and six months, respectively. Electric margin also increased
        due to
        increased interchange margins as discussed below. Favorable weather conditions
        contributed to increased margins in the second quarter of the current year,
        offsetting the effect of mild weather in our service territory in the first
        quarter of 2005. Partially offsetting these increases to margin were reduced
        industrial sales, higher fuel prices, and lower sales of emission allowances
        in
        the current year. Revenues from emission credit sales at UE decreased $5
        million
        and $20 million for the second quarter and first six months of 2005,
        respectively, as compared with the same periods in 2004, as UE continues
        to
        evaluate options for complying with the Clean Air Interstate Rule, which
        includes the possibility of using emission credits for compliance purposes.
        Electric rate reductions resulting from the 2002 UE electric rate case
        settlement in Missouri negatively affected
  53
  electric
        revenues by $7 million during the first quarter of 2005. These were the final
        rate reductions under the rate case settlement.
 
 Margins
        on interchange sales increased $42 million for the three months and $62 million
        for the six months ended June 30, 2005, compared with the same periods in
        2004.
        Interchange margins increased principally because of increased availability
        of
        low-cost generation resulting from improved power plant availability, including
        the lack of a Callaway nuclear plant refueling outage in the current year
        period. Ameren’s baseload electric generating plants’ average capacity factors
        were approximately 78% and 77% for the second quarter and first six months
        of
        2005 compared with 72% and 73% for the same periods in 2004. Equivalent
        availability factors were 86% and 85% for the second quarter and first six
        months of 2005 compared with 80% and 81% for the prior-year periods. High
        natural gas, emission allowance and coal prices in 2005 contributed to higher
        power prices. Average realized power prices on interchange sales increased
        to
        approximately $38 per megawatthour in both the second quarter and first six
        months of 2005, from approximately $30 per megawatthour in the comparable
        periods of 2004.
 
 We
        experienced mild winter weather conditions during the first quarter of 2005
        compared with the same period in 2004. Heating degree-days during that period
        in
        our service territory were down 4% from the prior year and down 8% from normal
        conditions. Cooling degree-days increased 6% in the second quarter of 2005
        compared to the prior year period and increased over 20% from normal conditions,
        more than offsetting the effect of the mild weather in the first quarter
        of
        2005. Excluding IP sales, weather-sensitive residential and commercial sales
        were up 6% and 2%, for the three months and six months ended June 30, 2005,
        respectively, compared with the same periods in the prior year.
 
 Industrial
        sales, excluding IP sales in the current year, declined 5% in the second
        quarter
        and first six months of 2005, primarily as a result of the expiration and
        non-renewal of low-margin power sales contracts outside of our core service
        territory along with the decreased resale of power to the DOE by EEI. Partially
        offsetting these decreases were sales to Noranda - a significant new customer
        at
        UE as discussed below. Excluding these items, industrial sales were comparable
        to the same period in the prior year.
 
 Ameren’s
        fuel and purchased power costs, excluding the IP results, increased $47 million
        in the three months and $32 million in the six months ended June 30, 2005,
        compared with the same periods of 2004, as increased purchased power prices,
        higher fuel costs, MISO administrative fees and increased generation at UE
        in
        the current year offset higher purchased power volume in the prior year caused
        by the Callaway plant refueling and maintenance outage.
  *UE*
 
 UE’s
        electric margin increased $28 million over the second quarter of 2004 and
        $15
        million for the six months ended June 30, 2005, compared with the same period
        in
        2004. Electric margin for the periods benefited from increased interchange
        sales margins. Margins on interchange sales with non-affiliates increased
        $25 million in the second quarter and $33 million in the first six months
        of
        2005, compared with the same periods of 2004, primarily because of increased
        volume. Margins on sales to affiliates also increased over the same periods
        in
        2004 because of increased sales to Genco under the joint dispatch agreement
        resulting from a major power plant maintenance outage at Genco in 2005.
        Favorable weather conditions in the second quarter more than offset mild
        weather
        in the first quarter resulting in an increase in weather-sensitive residential
        and commercial sales of 3% in the second quarter of 2005. Year-to date sales
        were comparable in the first six months of 2005 compared to the same period
        in
        2004. Rate reductions in the first quarter of the current year negatively
        impacted margin for the six-month period. In addition, emission credit sales
        decreased $5 million and $20 million for the second quarter and first six
        months
        of 2005, respectively, as compared with the same periods in 2004.
 
 On
        May 2,
        2005, following the receipt of all required regulatory approvals, UE completed
        the transfer of its Illinois-based electric and natural gas utility businesses,
        including its Illinois-based distribution assets, and certain of its
        transmission assets, to CIPS. The transfer resulted in an estimated decrease
        in
        electric margin of $23 million in the second quarter of 2005.
  UE
        entered into a 15 year agreement with Noranda to supply approximately 470
        megawatts (peak load) electric service (or approximately 5% of UE’s generating
        capability, including currently committed purchases) to Noranda’s primary
        aluminum smelter in southeast Missouri. The additional sales to Noranda
        increased electric margin by $10 million in the second quarter of 2005. Overall,
        industrial sales were comparable in the second quarter of 2005 compared to
        the
        same period in 2004 as the effect of UE’s Illinois service territory transfer to
        CIPS was offset by the increased sales to Noranda and by economic
        growth.
 
 Fuel
        and
        purchased power increased in the second quarter and first six months of 2005
        compared to the same periods in 2004 as increased purchased power prices,
        MISO
        administrative fees and increased generation in the current year offset higher
        purchased power volume of $24 million in the prior year caused by the Callaway
        refueling and maintenance outage.
 
 
 54
 *CIPS*
 
 CIPS’
        electric margin increased $6 million in the three months, but was comparable
        for
        the six months, ended June 30, 2005 as compared with the same periods in
        2004.
        The increase in the second quarter was primarily due to favorable weather
        conditions and increased industrial sales as a result of the Illinois service
        territory transfer from UE, partially offset by increased purchased power
        costs
        related to the transfer. This increase to margin offset the effect of
        unfavorable weather conditions in the first quarter of 2005.
 
 *Genco*
 
 Genco’s
        electric margin increased $11 million in the three months and $15 million
        in the
        six months ended June 30, 2005, as compared with the same periods of 2004.
        The
        increase in electric margin was primarily attributable to an increase in
        wholesale margins on sales to new customers and increased interchange
        margins. Interchange margins increased $16 million in the three months and
        $20
        million in the six months ended June 30, 2005, compared with the same periods
        of
        2004, primarily because of increased volume. Partially offsetting
        these increases was a loss of $6 million due to the settlement of SO 2 emission
        allowance options in the first quarter of 2005. Increased purchased
        power,
        principally from UE under the joint dispatch agreement, was the result of a
        major power plant maintenance outage, which occurred primarily during the
        first
        quarter of 2005, in addition to higher purchased power prices from outside
        sources.
 
 *CILCORP
        and CILCO*
 
 Electric
        margin at CILCORP and CILCO increased $5 million and $4 million, respectively,
        in the three months and $12 million and $13 million, respectively, in the
        six
        months ended June 30, 2005, compared with the same periods of 2004. Increases
        in
        electric margin were due to increased interchange margins and the use of
        lower
        cost coal at one of AERG’s power plants along with the effect of favorable
        weather conditions in the second quarter of the current year, partially offset
        by transfers of non-rate-regulated customers to Marketing Company. Purchased
        power increased in the second quarter of 2005 over the year-ago period
        principally due to reduced plant availability at AERG and hotter
        weather.
 
 *IP*
 
 IP’s
        electric margin was comparable in the three months ended June 30, 2005 to
        the
        same period in the prior year, but decreased $19 million in the six-month
        period
        of 2005 as compared to the same period in 2004 primarily because of reduced
        industrial revenues due to customers choosing alternative suppliers. In
        addition, purchased power costs increased due to higher net power prices.
        While
        power costs decreased under IP’s power supply agreement with DYPM, costs on
        remaining power purchase contracts were higher than in the same periods of
        the
        prior year. Favorable weather conditions partially offset the above reductions
        to margin for the three months and six months in 2005.
 
 **Gas
        Operations**
 
 The
        following table presents the favorable (unfavorable) variations in gas margins,
        defined as gas revenues less gas purchased for resale, for the three months
        and
        six months ended June 30, 2005, from the comparable periods in 2004. We consider
        gas margin to be a useful measure to analyze the change in profitability
        of our
        gas utility operations between periods. We have included the table below
        as a
        complement to our financial information provided in accordance with GAAP.
        However, gas margin may not be a presentation defined under GAAP and may
        not be
        comparable to other companies’ presentations or more useful than the GAAP
        information we are providing elsewhere in this report.
 
 **Three
                  Months**
              
              **Six
                  Months**Ameren(a)
              $
              24
              
              $
              78UE
              
              2
              
              
              4CIPS
              
              (c
              )
              
              (4
              )CILCORP
              
              (2
              )
              
              (2
              )CILCO
              
              (2
              )
              
              (1
              )IP(b)
              
              2
              
              
              (3
              )
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
 (b)
              Compared
                  to predecessor information for the three months and six months
                  ended June
                  30, 2004.
 (c)
              Less
                  than $1 million.
 
 Ameren’s
        gas margin increased $24 million for the quarter and $78 million for the
        six
        months ended June 30, 2005, as compared to the same prior year periods, due
        to
        the inclusion of IP results in the current year. Excluding the IP results,
        gas
        margin decreased $5 million in the second quarter of 2005 compared to the
        year
        ago period because of hotter weather conditions. Excluding IP, Ameren’s gas
        margin was comparable for the first six months of 2005 to the first six months
        of 2004. For the current six-month period, rate increases at UE along with
        increased transportation revenues offset the negative effect of mild winter
        weather. Gas sales in the first six months of 2005 increased almost 39%,
        due to
        the IP acquisition, while gas sales in Ameren’s preacquisition service territory
        were down 20% in the same period due to the mild weather primarily in the
        first
        quarter of the current year. UE’s gas margin increased for the six months ended
        June 30, 2005, as compared with the same period in the prior year, primarily
        due
        to the effect of rate increases of $3 million in the first quarter of 2005.
        CILCORP’s and CILCO’s gas margins decreased for the three months and six months
        of 2005 primarily due to unfavorable weather conditions. CIPS’ gas margin
        decreased for the first six months of the current year due to the mild weather,
        but was comparable for the second quarter to the same period in the prior
        year.
        IP’s gas margin
   55
  decreased
        for the first six months of the current year due to unfavorable weather in
        the
        first quarter of 2005, partially offset by a rate increase effective in May
        2005.
  **Operating
        Expenses and Other Statement of Income Items**
 
 *Other
        Operations and Maintenance*
 
 Ameren’s
        other operations and maintenance expenses increased $30 million for the three
        months and $69 million for the six months ended June 30, 2005, compared with
        the
        same periods in 2004. The IP results in the current year accounted for other
        operations and maintenance expenses of $60 million in the second quarter
        and
        $102 million in the first six months. Excluding the IP results in the current
        year, other operations and maintenance expenses decreased in both periods
        primarily due to decreased power plant maintenance and labor costs of $39
        million, which was primarily a result of the refueling and maintenance outage
        at
        UE’s Callaway nuclear plant during the second quarter of 2004. However, Ameren,
        UE and CIPS, received a refund of previously paid exit fees of $18 million
        upon
        their re-entry into the MISO during the second quarter of 2004. This refund
        did
        not recur in 2005 and therefore other operations and maintenance expenses
        increased relative to 2004 for this item.
 
 Other
        operations and maintenance expenses at UE decreased $11 million in the three
        months and $20 million in the six months ended June 30, 2005, compared with
        the
        same periods of 2004, primarily as a result of decreased power plant maintenance
        and labor costs at Callaway as a result of the refueling and maintenance
        outage
        in the second quarter of 2004 and an unscheduled outage at Callaway in the
        first
        quarter of the prior year. The timing of planned outages at other UE plants
        resulted in increased maintenance expenses in the second quarter of 2005
        compared to the same period in the prior year. Additionally, other operations
        and maintenance expenses increased for the second quarter and first six months
        of 2005, compared to the same period in 2004, because of the receipt of the
        MISO
        refund during the second quarter of the prior year of which UE’s portion was $12
        million.
  Other
        operations and maintenance expenses at CIPS were comparable in the three
        months
        ended June 30, 2005, but decreased $5 million for the first six months of
        2005,
        as compared with the same periods in 2004. CIPS’ portion of the MISO refund in
        the prior year of $5 million was offset by decreases in various other operations
        and maintenance expenses in the current year.
 
 Genco’s
        other operations and maintenance expenses decreased $5 million in the three
        months ended June 30, 2005, as compared with the same period in 2004, because
        of
        decreases in various other operations and maintenance expenses in the current
        year quarter. Other operations and maintenance expenses increased $5 million
        in
        the six months ended June 30, 2005, compared with the same period of 2004,
        primarily as a result of increased power plant maintenance costs due to a
        major
        power plant maintenance outage in the first quarter of 2005.
 
 CILCORP’s
        and CILCO’s other operations and maintenance expenses both decreased $8 million
        in the second quarter of 2005 and decreased $9 million and $11 million,
        respectively, for the six months ended June 30, 2005, as compared with the
        same
        periods in 2004, primarily due to reduced power plant maintenance.
 
 Other
        operations and maintenance expenses at IP increased $8 million in the three
        months ended June 30, 2005, as compared to the prior year period, primarily
        because of higher labor costs and increased overhead costs associated with
        the
        integration of systems and operations with Ameren. Other operations and
        maintenance expenses were comparable for the first six months of 2005 to
        the
        same period in 2004.
  *Depreciation
        and Amortization*
 
 Ameren’s
        depreciation and amortization expenses increased $25 million in the three
        months
        and $52 million in the six months ended June 30, 2005, compared with the
        same
        periods of 2004, because of the acquisition of IP, which added $19 million
        and
        $40 million to each period, respectively. Capital additions also resulted
        in
        increased depreciation expenses in the current year.
 
 Depreciation
        and amortization expenses at UE increased $2 million in the three months
        and $6
        million in the six months of the current year, as compared with the same
        periods
        of 2004, because of capital additions, partially offset by reduced depreciation
        on property transferred to CIPS in the Illinois service territory
        transfer.
 
 CIPS’
        depreciation and amortization expense increased $5 million in the second
        quarter
        and six-month period ended June 30, 2005, compared with the same periods
        of
        2004, because of depreciation on property transferred from UE in the Illinois
        service territory transfer as well as capital additions.
 
 Depreciation
        and amortization expenses at CILCORP increased $1 million in the three months
        and $3 million in the six months ended June 30, 2005, compared with the same
        periods of 2004, because of capital additions.
  Depreciation
        and amortization expenses at Genco and CILCO were comparable for the second
        quarter and first six months of 2005 with the same periods in 2004.
 
 IP’s
        depreciation and amortization expenses, excluding the amortization of regulatory
        assets, were comparable in the
  56
  three
        months and six months ended June 30, 2005, with the same periods of 2004.
        Amortization of regulatory assets at IP decreased $10 million in the three
        months and $21 million for the six months ended June 30, 2005, as compared
        with
        the same periods of 2004. The transition cost regulatory asset was eliminated
        in
        conjunction with Ameren’s acquisition of IP.
 
 *Taxes
        Other Than Income Taxes*
 
 Taxes
        other than income taxes increased $21 million in the second quarter and $32
        million in the six months of the current year, compared with the same periods
        of
        2004, principally because of the acquisition of IP, which added $18 million
        and
        $40 million, respectively. Excluding IP in the current year, taxes other
        than
        income taxes at Ameren increased $3 million for the second quarter primarily
        because of higher property taxes, but decreased $8 million for the first
        six
        months of 2005 because of decreased gross receipts taxes of $4 million and
        decreased property taxes of $4 million as discussed below.
 
 UE’s
        taxes other than income taxes increased in both the three months and six
        months
        ended June 30, 2005, as compared with the same periods in 2004, primarily
        because of increased property taxes due to higher assessments.
 
 Taxes
        other than income taxes at CIPS increased for the second quarter compared
        to the
        same period in the prior year primarily because of increased property taxes,
        but
        were comparable for the six-month period in 2005 to the same period in the
        prior
        year.
 
 Genco’s
        taxes other than income taxes were comparable in the three months, but decreased
        $8 million in the six months ended June 30, 2005, compared with the same
        periods
        of 2004, due to a favorable property tax court decision in the first quarter
        of
        2005.
 
 Both
        CILCORP’s and CILCO’s taxes other than income taxes decreased in the six months
        ended June 30, 2005, compared with the same periods of 2004, primarily because
        of reduced gross receipts taxes, but were comparable for the second quarter
        of
        2005 compared to the same period in 2004.
 
 Taxes
        other than income taxes at IP increased in the three months and six months
        ended
        June 30, 2005, compared with the same periods of 2004, primarily because
        of
        higher gross receipts taxes.
 
 *Other
        Income and Deductions*
 
 Other
        income and deductions decreased $3 million in the second quarter and $4 million
        in the first six months of the current year, compared with the same periods
        of
        2004. Excluding IP in the current year, other income and deductions at Ameren
        decreased $4 million and $7 million in the respective periods. The decreases
        were primarily because of reduced interest income as a result of the investment
        of equity issuance proceeds in the prior year and other items discussed
        below.
 
 Other
        income and deductions at UE was comparable in the three months ended June
        30,
        2005, with the same period in 2004, primarily because of a derivative loss
        in
        the prior year, and increased $3 million in the six months ended June 30,
        2005,
        compared with the same period in 2004, primarily because of an increase in
        allowance for funds used during construction as a result of capital
        additions.
 
 CIPS’
        other income and deductions decreased $5 million in the second quarter and
        $7
        million in the first six months of 2005, compared with the same periods of
        2004,
        primarily because of reduced interest income on the intercompany note receivable
        from Genco.
  Other
        income and deductions at CILCORP decreased $2 million in the three months
        ended
        June 30, 2005, and $3 million in the six months ended June 30, 2005, compared
        with the same periods in 2004, primarily because of the write-off of
        unrecoverable natural gas cost.
 
 Other
        income and deductions at IP decreased $47 million in the quarter and $93
        million
        in the six months ended June 30, 2005, compared with the same periods of
        2004,
        primarily because of reduced interest income after the elimination of IP’s Note
        Receivable from Former Affiliate in conjunction with Ameren’s acquisition of IP.
 
 Other
        income and deductions at Genco and CILCO were comparable in the three months
        and
        six months ended June 30, 2005, with the same periods of 2004.
 
 *Interest*
 
 Interest
        expense increased at Ameren in the three months and six months ended June
        30,
        2005, compared with the same periods of 2004 principally due to the acquisition
        of IP, which added $11 million for the second quarter and $21 million for
        the
        first six months of 2005. Excluding the IP results in the current year, interest
        expense was comparable to the same periods in 2004.
 
 Genco’s
        interest expense decreased $5 million in the three months and $7 million
        in the
        six months ended June 30, 2005, compared with the same periods of 2004,
        primarily because of a reduction in principal amounts outstanding on
        intercompany promissory notes to CIPS and Ameren.
 
 Interest
        expense at IP decreased $29
        million in the three months and $58 million in the six months ended June
        30,
        2005, compared with the same periods of 2004, primarily
        because of redemptions and repurchases of indebtedness of
   57
  $700
        million in the fourth quarter of 2004 and $70 million in 2005 and reductions
        in
        notes payable to IP SPT.
 
 Interest
        expense at UE, CIPS, CILCORP and CILCO in the three months and six months
        ended
        June 30, 2005, was comparable to the same periods of 2004.
  *Income
        Taxes*
 
 Income
        tax expense at Ameren increased $40 million in the second quarter and $52
        million in the first six months of the current year, compared with the same
        periods of 2004, because of higher pretax income primarily due to the inclusion
        of IP results in 2005, partially offset by the recognition in 2005 of a
        deduction allowed under the Jobs Creation Act. The second quarter of 2005
        was
        also higher due to the timing of recording of the nontaxable federal Medicare
        Prescription Drug Subsidy in the prior year. Income tax expense was higher
        at
        UE, Genco, CILCORP and CILCO in the second quarter and first six months of
        2005,
        compared with the same periods in 2004, due to higher pretax income. UE’s income
        tax expense was partially reduced in the current year by the recognition
        of the
        Jobs Creation Act deduction, but was increased in the second quarter of 2005,
        as
        compared to the prior year, by the timing of recording of the Medicare
        Prescription Drug Subsidy. Income tax expense decreased at CIPS and IP in
        the
        three months and six months ended June 30, 2005, compared with the same periods
        of 2004, due to lower pretax income and, in the case of CIPS, a reduction
        in
        estimates for anticipated settlements of uncertain tax positions.
 **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 The
        tariff-based gross margins of Ameren’s rate-regulated utility operating
        companies (UE, CIPS, CILCO and IP) continue to be the principal source of
        cash
        from operating activities for Ameren and its rate-regulated subsidiaries.
        A
        diversified retail customer mix of primarily rate-regulated residential,
        commercial and industrial classes and a commodity mix of gas and electric
        service provide a reasonably predictable source of cash flows. For cash flows
        from operating activities, Genco principally relies on sales to an affiliate
        under a contract expiring at the end of 2006 and sales to other wholesale
        and
        industrial customers under long-term contracts. In addition, we plan to use
        short-term borrowings to support normal operations and other temporary capital
        requirements.
 
 The
          following table presents net cash
          provided by (used in) operating, investing and financing activities for
          the six
          months ended June 30, 2005 and 2004:
  
 **Net
                  Cash Provided By**
                **Operating
                  Activities**
              
              **Net
                  Cash Provided By**
                **(Used
                  In) Investing Activities**
              
              **Net
                  Cash Provided By**
                **(Used
                  In) Financing Activities****2005**
              
              
              **2004**
              
              
              **Variance**
              
              
              **2005**
              
              
              **2004**
              
              
              **Variance**
              
              
              **2005**
              
              
              **2004**
              
              
              **Variance**Ameren(a)
              **$**
              **661**
              
              $
              436
              
              $
              225
              
              **$**
              **(443**
              **)**
              $
              (367
              )
              $
              (76
              )
              **$**
              **(260**
              **)**
              $
              331
              
              $
              (591
              )UE
              
              **355**
              
              
              274
              
              
              81
              
              
              **(494**
              **)**
              
              (254
              )
              
              (240
              )
              
              **92**
              
              
              (20
              )
              
              112CIPS
              
              **96**
              
              
              62
              
              
              34
              
              
              **-**
              
              
              28
              
              
              (28
              )
              
              **(97**
              **)**
              
              (103
              )
              
              6Genco
              
              **62**
              
              
              82
              
              
              (20
              )
              
              **172**
              
              
              (28
              )
              
              200
              
              
              **(235**
              **)**
              
              (56
              )
              
              (179
              )CILCORP
              
              **35**
              
              
              103
              
              
              (68
              )
              
              **(44**
              **)**
              
              (69
              )
              
              25
              
              
              **5**
              
              
              (40
              )
              
              45CILCO
              
              **57**
              
              
              94
              
              
              (37
              )
              
              **(47**
              **)**
              
              (72
              )
              
              25
              
              
              **(11**
              **)**
              
              (27
              )
              
              16IP(b)
              
              **149**
              
              
              177
              
              
              (28
              )
              
              **8**
              
              
              (62
              )
              
              70
              
              
              **(157**
              **)**
              
              (90
              )
              
              (67
              )
 
 (a)  Includes
        amounts for Ameren Registrant and non-Registrant subsidiaries and intercompany
        eliminations, but excludes 2004 amounts for IP.
 (b)  2004
        amounts include predecessor information.
 
 **Cash
        Flows from Operating Activities**
 
 Cash
        flows provided by operating activities increased for Ameren, UE and CIPS
        in the
        six months ended June 30, 2005, compared with the same period of 2004. Ameren’s
        increase of $225 million was primarily attributable to $149 million of cash
        from
        operations of IP, which was acquired on September 30, 2004. Excluding IP,
        Ameren’s cash from operations increased $76 million, which was primarily due to
        additional income of $55 million and deferred income tax expense of $27 million,
        which resulted in lower taxes paid. Significant working capital changes in
        the
        current period included the purchase of SO 2 emission
        allowances of $92 million in 2005 and the absence in 2005 of $18 million
        of cash
        flows in 2004 from a coal contract settlement. Other working capital changes
        were primarily the result of timing differences.
 
 An
        increase in UE’s electric margins and reduced other operations and maintenance
        expenses, as discussed under Results of Operations, contributed to a $28
        million
        increase in net income before depreciation and amortization and cash flow
        from
        operations activities. Tax payments also decreased $24 million compared to
        the
        same period in 2004 principally due to the timing of payments benefiting
        cash
        flows from operating activities. In the six months ended June 30, 2004, UE’s
        cash flows from operating activities were higher due to the receipt of $18
        million related to a coal contract settlement. Timing differences related
        to
        working capital also contributed
   58
  to
        UE’s
        cash flows for the six months ended June 30, 2005 compared to the same period
        last year.
 
 CIPS’
        increase in cash flows from operating activities in the six months ended
        June
        30, 2005, was principally due to timing differences related to working capital
        for the six months ended June 30, 2005 compared to the same period last year.
 
 Cash
        flows provided by operating activities decreased for Genco in the six months
        ended June 30, 2005, compared with the same period of 2004. Purchases of
        SO 2 emission
        allowances and increased coal inventories accounted for a $68 million decrease
        in materials and supplies cash flow for the six months ended June 30, 2005
        compared to the same period in 2004. These decreases in cash flows from
        operating activities were partially offset by differences in the timing and
        amount of accounts and wages payable, along with incremental electric margins
        as
        discussed under Results of Operations.
 
 Cash
        flows from operating activities decreased for CILCORP and CILCO in the six
        months ended June 30, 2005, compared with the same period in 2004. Contributing
        to the reduction in cash flows from operating activities were purchases of
        SO 2 emission
        allowances of $20 million and a decrease in deferred income tax expense of
        $16
        million. Differences in the timing and amount of accounts and wages payable
        and
        accounts receivable also contributed to CILCORP’s and CILCO’s decrease in cash
        flows from operating activities. These decreases were partially offset by
        increased electric margins as discussed under Results of
        Operations.
 
 IP’s
        decrease in cash flows provided by operations is due primarily to increased
        cash
        purchased power costs and the elimination of the Note Receivable from affiliate,
        partially offset by lower cash interest expense as discussed under Results
        of
        Operations.
  **Cash
        Flows from Investing Activities**
 
 Cash
        flows used in investing activities increased for Ameren and UE and
        decreased for CILCORP and CILCO for the six months ended June 30, 2005, compared
        with the same period in 2004. Investing activities were a source of cash
        for IP
        and Genco in the first six months of 2005 as compared to a use of cash in
        the
        first six months of 2004. CIPS’ cash flows from investing activities decreased
        from the year-ago period.
 
 Ameren’s
        increase in cash used in investing activities was primarily due to additional
        capital expenditures of $61 million at IP.
 
 UE’s
        capital expenditures included $241 million for 550 megawatts of CTs purchased
        from Genco. Otherwise, UE’s capital expenditures were flat in the six months
        ended June 30, 2005, compared with the same period in 2004. UE’s 2005 capital
        expenditures also included $25 million for a 117 megawatt CT from Development
        Company and related equipment from Resources Company.
 
 CIPS’
        cash flows from investing activities for the six months ended June
        30, 2005
        decreased compared to the year-ago period to $28 million advanced
        to
        the money pool in 2005.
 
 Genco’s
        cash flows provided by investing activities increased in the
        six
        months ended June 30, 2005, compared
        with the same period in 2004, because of the sale of 550 megawatts of CTs
        at
        Pinckneyville and Kinmundy, Illinois to UE for $241 million. These proceeds
        were
        partially offset by incremental capital, expenditures and net advances to
        the
        money pool. Genco’s
        higher capital expenditures were attributed to upgrades at one of its power
        plants in the first quarter of 2005.
 
 CILCORP’s
        and CILCO’s cash flows used in investing activities decreased in the
        six
        months ended June 30, 2005, compared
        with the same period in 2004 primarily because of reduced capital expenditures.
        In 2004, AERG made capital expenditures for significant power plant upgrades
        to
        increase fuel supply flexibility for power generation.
 
 IP’s
        cash
        flows from investing activities increased in the six months ended June 30,
        2005,
        primarily because of cash received from repayment of money pool advances.
 
 *Intercompany
        Transfer of Illinois Service Territory*
 
 On
        May 2,
        2005, UE completed the transfer of its Illinois-based electric and natural
        gas
        utility businesses to CIPS, at a net book value of $133 million. UE transferred
        50 percent of the assets directly to CIPS in consideration for a CIPS
        subordinated promissory note in the principal amount of approximately $67
        million and 50 percent of the assets by means of a dividend in kind to Ameren,
        followed by a capital contribution by Ameren to CIPS. See Note 3 - Rate and
        Regulatory Matters, under Part I, Item 1 of this report for a discussion
        of the
        asset transfer.
 
 We
        continually review our generation portfolio and expected power needs. As
        a
        result, we could modify our plan for generation capacity, which could include
        changing the times when certain assets will be added to or removed from our
        portfolio, the type of generation asset technology that will be employed,
        and
        whether capacity may be purchased, among other things. Any changes that we
        may
        plan to make for future generating needs could result in significant capital
        expenditures or losses being incurred, which could be material.
   59
  See
        Note
        9 - Commitments and Contingencies to our financial statements under Part
        I, Item
        1, of this report for a discussion of environmental matters.
  **Cash
        Flows from Financing Activities**
 
 Cash
        flows from financing activities decreased for Ameren in the
        six
        months ended June 30, 2005, as
        compared with the same period of 2004, primarily because of the receipt of
        $935
        million related to common stock issuances in the first six months of 2004.
        These
        proceeds were used to fund the acquisition of IP and Dynegy’s 20% interest in
        EEI on September 30, 2004. In 2005, total common stock proceeds of $402 million
        included $345 million from the issuance of 7.4 million shares of common stock
        related to the settlement of a stock purchase obligation in Ameren’s adjustable
        conversion-rate equity security units. Short term debt redemptions increased
        by
        $130 million for the first six months of 2005 compared to the same period
        last
        year. In 2005, the absence of a $67 million UE nuclear fuel lease payment
        partially offset the decreases in cash from financing activities.
 
 UE’s
        cash
        flows from financing activities increased in the
        six
        months ended June 30, 2005, compared
        with the same period of 2004. This increase was caused, in part, by a net
        increase in money pool borrowings, lower redemptions of long-term debt, a
        decrease in the payment of dividends to Ameren and the absence of a nuclear
        fuel
        lease payment that was made in the first three months of 2004. These increases
        were partially offset by higher redemptions of short-term debt, and lower
        issuances of long-term debt.
 
 CIPS’
        cash flows used in financing activities decreased slightly in the
        six
        months ended June 30, 2005, as
        compared with the same period of 2004. A $19 million cash benefit from reduced
        dividends paid to Ameren was offset by increased redemptions of long-term
        debt
        of $20 million.
 
 Genco’s
        cash flows used in financing activities increased in the
        six
        months ended June 30, 2005, as
        compared with the same period of 2004, primarily because of a net change
        in
        money pool borrowings of $148 million, repayment of its $34 million note
        payable
        to Ameren, and payment of $52 million on its note payable to CIPS. The funds
        for
        these note repayments came from the $241 million in proceeds from the May
        2005
        asset sale of 550 megawatts of CTs to UE.
 
 Effective
        May 1, 2005, Genco and CIPS amended certain terms of Genco’s subordinated
        affiliate note payable to CIPS by the issuance to CIPS of an amended and
        restated subordinated promissory note in the principal amount of approximately
        $249 million with an interest rate of 7.125% per annum, a 5-year amortization
        schedule and a maturity of May 1, 2010.
 
 CILCORP’s
        and CILCO’s cash flows used in financing activities decreased in the
        six
        months ended June 30, 2005, compared
        with the same period of 2004. CILCORP’s net increase in the use of cash for
        money pool borrowings of $169 million for the first six months of 2005 compared
        to the same period in 2004 was partially offset by a capital contribution
        from
        Ameren in the amount of $101 million. There were no significant debt redemptions
        in 2005 compared to 2004 debt redemptions of $120 million and $100 million
        at
        CILCORP and CILCO, respectively. Dividend payments to Ameren increased $12
        million and $10 million for CILCORP and CILCO, respectively, for the first
        six
        months of 2005 compared to the same period in 2004.
 
 IP’s
        cash
        flows used in financing activities increased in the
        six
        months ended June 30, 2005, compared
        with the same period of 2004 primarily because of incremental redemptions,
        repurchases and maturities of long-term debt of $70 million and dividend
        payments of $40 million made to Ameren in 2005, partially offset by a decrease
        in prepaid interest on a note receivable from a former affiliate.
  **Short-term
        Borrowings and Liquidity**
 
 For
        information on short-term borrowing activity, relevant interest rates, and
        borrowings under Ameren’s utility money pool arrangement and non-state-regulated
        subsidiary money pool arrangement, see Note 4 - Short-term Borrowings and
        Liquidity to our financial statements under Part I, Item 1, of this report.
  The
        following table presents the various committed bank credit facilities of
        certain
        of the Ameren Companies and EEI subsequent to the changes to the credit
        facilities effective July 14, 2005. See Note 4 - Short-term Borrowings and
        Liquidity to our financial statements under Part I, Item 1, of this report
        for
        additional information concerning the changes to these credit
        facilities.
 
 **Credit
                  Facility**
              **Expiration**
              **Amount
                  Committed**
              **Amount
                  Available****Ameren:**(a)Multiyear
                  revolving(b)
              July
                  2010
              $1,150
              $1,075Multiyear
                  revolving
              July
                  2010
              350
              350**EEI:**One
                  bank credit facility
              April
                  2006
              20
              -Total
              
              $1,520
              $1,425
 
 (a)
              Ameren
                  Companies may access these credit facilities through intercompany
                  borrowing arrangements.
 (b)
              UE,
                  CIPS, CILCO, Genco and IP are direct parties to this
                  agreement.
 
 60
 
 In
        addition to committed credit facilities, a further source of liquidity for
        Ameren from time to time is available cash and cash equivalents. At June
        30,
        2005, Ameren had $27 million of cash and cash equivalents.
 
 Ameren
        and UE are authorized by the SEC under the PUHCA to have an aggregate of
        up to
        of $1.5 billion and $1 billion, respectively, of short-term unsecured debt
        instruments outstanding at any time. The aggregate amount of short-term
        borrowings outstanding at any time at IP may not exceed $500 million pursuant
        to
        authorizations from the ICC and the SEC under the PUHCA. In addition, CIPS,
        CILCORP and CILCO have PUHCA authority to have an aggregate of up to $250
        million each of short-term unsecured debt instruments outstanding at any
        time.
        Genco is authorized by the FERC to have up to $300 million of short-term
        debt
        outstanding at any time.
  **Long-term
          Debt and Equity**
 
 The
          following table presents the issuances of common stock and the issuances,
          redemptions, repurchases and maturities of long-term debt and preferred
          stock
          for the six months ended June 30, 2005 and 2004, for certain of the Ameren
          Companies. For additional information, see Note 5 - Long-term Debt and
          Equity
          Financings to our financial statements under Part I, Item 1, of this
          report.
 
 **Month
                    Issued, Redeemed, Repurchased or Matured**
                **Six
                    Months****2005**
                **2004****Issuances***Long-term
                    debt***UE:**5.00%
                    Senior secured notes due 2020
                January
                **$****85**
                $-5.50%
                    Senior secured notes due 2014
                May
                **-**
                104Total
                    Ameren long-term debt issuances
                
                **$ 
                    85**
                $104*Common
                    stock***Ameren:**7,402,320
                    Shares at $46.61(a)
                May
                **$345**
                $-19,063,181
                    Shares at $45.90
                February
                **-**
                875DRPlus
                    and 401(k)(b)
                Various
                **57**
                60Total
                    common stock issuances
                
                **$****402**
                $935Total
                    Ameren long-term debt and common stock issuances
                
                **$487**
                $1,039**Redemptions,
                    Repurchases and Maturities***Long-term
                    debt***Ameren:**Senior
                    notes due 2007(c)
                February
                **$****95**
                $-**UE:**7.00%
                    First mortgage bonds due 2024
                June
                **-**
                100**CIPS:**6.49%
                    First mortgage bonds due 2005
                June
                **20**
                -**CILCORP:**8.70%
                    Senior notes due 2009
                May
                **6**9.375%
                    Senior bonds due 2029
                May
                **-**
                20**CILCO:**Secured
                    bank term loan
                February
                **-**
                100**EEI:**2000
                    Bank term loan, 7.61% due 2004
                June
                **-**
                40**IP:**6.75%
                    First mortgage bonds due 2005
                March
                **70**
                -Note
                    payable to IP SPT5.38%
                    Series due 2005
                Various
                **46**
                43Less:
                    IP activity prior to acquisition date
                
                **-**
                (43)Total
                    Ameren long-term debt redemptions, repurchases and
                    maturities
                
                **$****237**
                $260
 
 (a)
                Includes
                    issuances of common stock of 1.2 million shares during the six
                    months
                    ended June 30, 2005 under DRPlus and 401(k)
                    plans.
 (b)
                Shares
                    issued upon settlement of the purchase contracts which were a
                    component of
                    the adjustable conversion-rate equity security units. See Note
                    5 -
                    Long-term Debt and Equity Financings to our financial statements
                    under
                    Part I, Item 1, of this report.
 (c)
                Component
                    of the adjustable conversion-rate equity security units. See
                    Note 5 -
                    Long-term Debt and Equity Financings to our financial statements
                    under
                    Part I, Item 1, of this report.
 61
 
  The
        following table presents the authorized amounts under SEC shelf registration
        statements filed and declared effective
        for certain of the Ameren Companies as of June 30, 2005:
  
 **Effective**
                **Date**
              **Authorized**
                **Amount**
              **Issued**
              **Available****Debt:**Ameren
              July
                  2004
              $2,000
              $459
              $1,541UE(a)
              September
                  2003
              1,000
              689
              311CIPS
              May
                  2001
              250
              150
              100
 
 (a)
              UE
                  issued securities totaling $300 million in July 2005 leaving $11
                  million
                  of securities currently available for
                  issuance.
  Ameren
        also has approximately 7 million shares of common stock available for issuance
        under various other SEC effective registration statements applicable to our
        DRPlus and 401(k) plans as of June 30, 2005.
 
 Ameren,
        UE and CIPS may sell all or a portion of the remaining securities registered
        under the registration statements if market conditions and capital requirements
        warrant such a sale. Any such offer and sale will be made only by means of
        a
        prospectus meeting the requirements of the Securities Act of 1933 and the
        rules
        and regulations thereunder.
 
 **Indebtedness
        Provisions, Other Covenants and Off-Balance Sheet
        Arrangements**
 
 See
        Note
        4 - Short-term Borrowings and Liquidity to our financial statements under
        Part
        I, Item 1, of this report for a discussion of the covenants and provisions
        contained in certain of the Ameren Companies’ bank credit facilities. Also see
        Note 5 - Long-term Debt and Equity Financings to our financial statements
        under
        Part I, Item 1, of this report for a discussion of off-balance sheet
        arrangements and of covenants and provisions contained in certain of the
        Ameren
        Companies’ indenture agreements and articles of incorporation.
 
 At
        June
        30, 2005, the Ameren Companies were in compliance with their credit agreement
        indenture and articles of incorporation provisions and covenants.
 
 We
        rely
        on access to short-term and long-term capital markets as a significant source
        of
        funding for capital requirements not satisfied by our operating cash flows.
        Our
        inability to raise capital on favorable terms, particularly during times
        of
        uncertainty in the capital markets, could negatively impact our ability to
        maintain and grow our businesses. After assessing our current operating
        performance, liquidity, and credit ratings (see Credit Ratings below), we
        believe that we will continue to have access to the capital markets. However,
        events beyond our control may create uncertainty in the capital markets.
        Such
        events might cause our cost of capital to increase or our ability to access
        the
        capital markets to be adversely affected.
 
 **Dividends**
 
 The
        amount and timing of dividends payable on Ameren’s common stock are within the
        sole discretion of Ameren’s board of directors. The board of directors has not
        set specific targets or payout parameters when declaring common stock dividends.
        However, the board considers various issues including Ameren’s historic earnings
        and cash flow, projected earnings, cash flow and potential cash flow
        requirements, dividend payout rates at other utilities, return on investments
        with similar risk characteristics and overall business considerations. Dividends
        paid by Ameren to stockholders during the first six months of 2005 totaled
        $253
        million, or $1.27 per share (2004 - $232 million or $1.27 per share).
 
 UE’s
        preferred stock dividends are payable August 15, 2005, to shareholders of
        record
        on July 20, 2005. CIPS’ preferred stock dividends are payable September 30,
        2005, to shareholders of record on September 8, 2005. CILCO paid a preferred
        stock dividend of approximately $1 million on July 1, 2005. IP paid a preferred
        stock dividend of approximately $1 million on August 1, 2005.
  Certain
        of our financial agreements and corporate organizational documents contain
        covenants and conditions that, among other things, restrict the Ameren
        Companies’ payment of dividends. UE would experience restrictions on dividend
        payments if it were to extend or defer interest payments on its subordinated
        debentures. CIPS has provisions in its articles of incorporation restricting
        dividend payments based on ratios of common stock to total capitalization
        and
        other provisions related to certain operating expenses and accumulations
        of
        earned surplus. Genco’s indenture includes restrictions that prohibit making any
        dividend payments if debt service coverage ratios are below a defined threshold.
        CILCORP has restrictions if leverage ratio and interest coverage ratio
        thresholds are not met or if CILCORP’s senior long-term debt does not have
        specified ratings as described in its indenture. CILCO has restrictions on
        dividend payments relative to the ratio of its balance of retained earnings
        to
        the annual dividend requirement on its preferred stock and amounts to be
        set
        aside for any sinking fund retirement of its 5.85% Series preferred stock.
        At
        June 30, 2005, none of the conditions described above that would restrict
        the
        payment of dividends existed. In its approval of the acquisition of IP by
        Ameren, the ICC issued an order that provides for the ability of IP to pay
        dividends on its common stock subject to certain conditions related to credit
        ratings of IP and Ameren and the elimination of IP’s 11.50% mortgage bonds.
        Given the current credit ratings of IP and the amount of IP’s 11.50% mortgage
        bonds that remain outstanding, IP’s payment of dividends on its common stock is
        restricted to $80
  62
  million
        in 2005 and $160 million cumulatively through 2006. In addition, in accordance
        with the order issued by the ICC, IP will establish a dividend policy comparable
        to the dividend policy of Ameren’s other Illinois utilities and consistent with
        achieving and maintaining a common equity to total capitalization
        ratio between 50% and 60%.
  The
        following table presents dividends paid by Ameren Corporation and by Ameren’s
        subsidiaries to their respective parents for the six months ended June 30,
        2005
        and 2004:
 
 **Six
                  Months****2005**
              
              **2004**UE
              **$**
              **135**
              
              $
              145CIPS
              
              **9**
              
              
              28Genco
              
              **34**
              
              
              35CILCORP(a)
              
              **30**
              
              
              18IP(b)
              
              **40**
              
              
              -Non-Registrants
              
              **5**
              
              
              6Dividends
                  paid by Ameren
              **$**
              **253**
              
              $
              232
  (a) CILCO
        paid dividends of $20 million and $10 million for the six months ended June
        30,
        2005 and 2004, respectively
 (b) Prior
            to
            October 2004, the ICC prohibited IP from paying dividends. If permitted
            to be
            paid, IP’s dividends would have been paid directly to Illinova and therefore
            indirectly to
 Dynegy.
 
 **Contractual
        Obligations**
 
 For
        a
        complete listing of our obligations and commitments, see Contractual Obligations
        under Part II, Item 7 and Note 15 - Commitments and Contingencies under Part
        II,
        Item 8 of the Ameren Companies’ combined Form 10-K for the fiscal year ended
        December 31, 2004. See Note 12 - Pension and Other Postretirement Benefits
        to
        our financial statements under Part I, Item 1 of this report for information
        regarding expected minimum funding levels for our pension plan.
 
 Subsequent
        to December 31, 2004, obligations related to the procurement of coal and
        natural
        gas increased at Ameren, UE, CIPS, Genco, CILCORP, CILCO and IP to $4,639
        million, $1,812 million, $278 million, $1,082 million, $745 million, $745
        million and $316 million, respectively, as of June 30, 2005. Total other
        obligations at December 31, 2004, updated for material changes since year-end
        through June 30, 2005, at Ameren, UE, CIPS, Genco, CILCORP, CILCO and IP
        are
        $5,062 million, $1,967 million, $522 million, $1,082 million, $770 million,
        $770
        million and $617 million, respectively.
 
 **Credit
        Ratings**
 
 On
        March
        31, 2005, Moody’s upgraded IP’s credit ratings. IP’s senior secured debt rating
        was upgraded from Baa3 to Baa1, its issuer rating was upgraded from Ba1 to
        Baa2,
        and its preferred stock rating was upgraded from Ba3 to Ba1. This rating
        action
        concluded Moody’s review for possible upgrade that was initiated for these
        ratings on March 18, 2005. The ratings outlook for IP is now stable.
 
 Any
        adverse change in the Ameren Companies’ credit ratings may reduce access to
        capital and/or increase the cost
 of
        borrowings, resulting in a negative impact on earnings. At June 30, 2005,
        if UE,
        CIPS, Genco, CILCORP, CILCO or IP were to receive a sub-investment-grade
        rating
        (less than BBB- or Baa3), Ameren, UE, CIPS, Genco, CILCORP, CILCO and IP
        could
        have been required to post collateral for certain trade obligations amounting
        to
        $98 million, $28 million, $1 million, $12 million, $1 million, $1 million,
        and
        $29 million, respectively. In addition, the cost of borrowing under our credit
        facilities can increase or decrease based on credit ratings. A credit rating
        is
        not a recommendation to buy, sell or hold securities and it should be evaluated
        independently of any other rating. Ratings are subject to revision or withdrawal
        at any time by the assigning rating organization.
  **OUTLOOK**
 
 Below
        are
        some key trends that may impact the Ameren Companies’ financial condition and
        results of operation in 2005 and beyond:
 *Revenues*
  ·
                  Electric
                      rates for Ameren’s operating subsidiaries have been fixed or declining for
                      periods ranging from 12 years to 22 years. In 2006, electric
                      rate
                      adjustment moratoriums and intercompany power supply contracts
                      expire in
                      Ameren’s regulatory jurisdictions. Approximately 8 million megawatthours
                      supplied annually by Genco and 6 million megawatthours supplied
                      annually
                      by AERG have been subject to contracts to provide CIPS and
                      CILCO,
                      respectively, with power. The prices in these power supply
                      contracts of
                      $34.00 per megawatthour for AERG and $38.50 per megawatthour
                      for Genco
                      were below estimated market prices for similar contracts in
                      July 2005.
                      CIPS, CILCO and IP have made filings with the ICC, in 2005,
                      outlining,
                      among other things, a proposed framework for generation procurement
                      after
                      2006. In 2005, Ameren will also begin the process of preparing
                      utility
                      cost-of-service studies to be submitted in Illinois and Missouri
                      in late
                      2005 to
 63
  determine
              rates for UE, CIPS, CILCO and IP. In March 2005 legislative
              hearings, Ameren indicated it expected the average rates for its Illinois
              utilities, on a combined basis, may increase by 10% to 20% in 2007
              over present
              bundled rate levels, with 50% to 70% of this increase resulting from
              higher
              power costs. This estimate was based on a number of assumptions about
              market
              prices for power, which
              were based on 2005 prices at that time,the
              type
              of power supply product to be procured, futureauction results,
              ratemaking outcomes and various other factors. The final results of
              the auction
              process and regulatory proceedings could be significantly different
              from these
              assumptions. Based on the results of a cost of service study that will
              be
              submitted by UE by the end of 2005 and the status of the environmental
              and fuel
              cost recovery rulemaking proceedings, UE will determine what course
              of action it
              believes should be taken in resetting electric rates for Missouri. 
              The
              MoPSC staff and other stakeholders will also review the study and,
              based upon
              their analyses, may also make rate recommendations.See
              Note
              3 - Rate and Regulatory Matters to our financial statements under Part
              I, Item
              1, of this report.
 ·
                    We
                        expect continued economic growth in our service territory
                        to benefit
                        electric demand in 2005.
 ·
                  UE,
                      Genco and CILCO are also seeking to raise the equivalent availability
                      and
                      capacity factors of power plants from 2004
                      levels.
 ·
                  In
                      2005, we expect natural gas and coal prices to support power
                      prices in
                      excess of 2004 levels. Power prices in the Midwest affect the
                      amount of
                      revenues UE, Genco and CILCO (through AERG) can generate by
                      marketing any
                      excess power into the interchange markets and influence the
                      cost of power
                      we purchase in the interchange markets.
 ·
                  On
                      April 1, 2005, the MISO Day Two Markets began operating. The
                      Day Two
                      markets present an opportunity for increased power sales from
                      UE, Genco
                      and CILCO power plants and improved access to power for UE,
                      CIPS, CILCO
                      and IP, but also higher MISO-related costs. During initial
                      MISO Day Two
                      operations, we experienced what we believed was suboptimal
                      dispatching of
                      power plants and some price volatility, which have
                      improved.
 *Fuel
          and Purchased Power*
  ·
                  In
                      2004, 86% of Ameren’s electric generation (UE-80%, Genco-93%,
                      CILCO-99%) was supplied by its coal-fired power plants
                      and
                      approximately 85% of the coal used by these plants (UE-97%,
                      Genco-66%,
                      CILCO-26%) was delivered by railroads from the Powder
                      River Basin
                      (“PRB”) in Wyoming. On May 7 and 8, 2005, the joint Burlington
                      Northern-Union Pacific rail line in the PRB suffered two derailments
                      due
                      to unstable track conditions. As a result, the Federal Rail
                      Administration
                      placed slow orders, or speed restrictions, on sections of the
                      line until
                      the track could be made safe. These actions reduced deliveries
                      of coal
                      from PRB mines. Because of the railroad delivery problems,
                      UE expects to
                      receive about 85 to 90% of scheduled deliveries of PRB coal
                      until track
                      repairs are complete and the slow orders are removed. The railroads
                      are
                      projecting that maintenance of the joint rail line will be
                      completed in
                      November 2005 and normal deliveries should resume at that time.
 
 Ameren,
            UE, Genco and CILCO believe they have sufficient coal inventories to
            maintain
            generation at all coal plants through the maintenance period at the projected
            delivery levels. In order to reduce coal inventory shortage risk should
            other
            variations in deliveries occur, Ameren, UE, Genco and CILCO are implementing
            a
            coal management strategy. This strategy includes reducing sales of power
            during
            low-margin periods and purchasing economically available coal in the
            spot
            market. Actual power plant performance, power market conditions, weather-induced
            demand for power, availability of alternative coal supplies and the actual
            time
            required for the railroads to resume normal deliveries of PRB coal could
            have a
            significant impact on the effectiveness of these strategies.
 ·
                  Ameren’s
                      coal and related transportation costs rose in 2004 and are
                      expected to
                      increase 3% to 5% in 2005, an additional 5% to 10% in 2006,
                      and to
                      increase again by 10% to 15% in 2007. See Item 3 - Quantitative
                      and
                      Qualitative Disclosures about Market Risk for information about
                      the
                      percentage of coal and transportation requirements that are
                      price-hedged
                      for 2005 through 2009.
 ·
                  In
                      July 2005 a new law was enacted that will enable the
                      MoPSC to put in
                      place an environmental cost recovery mechanism for Missouri’s
                      utilities. In addition, it will enable the MoPSC to
                      allow electric
                      utilities to recover fuel and purchased power costs through
                      a similar
                      recovery mechanism. The legislation also includes rate
                      case filing
                      requirements, a 2.5% annual rate increase cap for the environmental
                      recovery mechanism and prudency reviews, among other
                      things.
 
 *Other
          Costs*
 
 ·
                UE’s
                    Callaway nuclear plant will have a refueling and maintenance
                    outage
                    beginning in September 2005, which is expected to last 70 to
                    75 days.
                     During this outage, major capital equipment will be replaced
                    and
                    upgraded providing a 60 megawatt increase in the generating capacity
                    of
                    the plant. As a result, the outage will last longer than a typical
                    refueling outage, which usually lasts 30 to 35 days and occurs
                    approximately every 18 months. During a refueling outage, maintenance
                    and
                    purchased power costs increase, and the amount of excess power
                    available
                    for sale decreases versus non-outage
                    years.
 64
  ·
                  Over
                      the next few years, we expect increased expenses for rising
                      employee
                      benefit costs as well as higher insurance and security costs
                      associated
                      with additional measures we have taken, or may have to take,
                      at UE’s
                      Callaway nuclear plant and our other operating
                      plants.
 ·
                  We
                      are currently undertaking cost reduction or control initiatives
                      associated
                      with the strategic sourcing of purchases and streamlining of
                      administrative functions.
 
 *Capital
          Expenditures*
 
 ·
                The
                    EPA has issued more stringent emission limits on all coal-fired
                    power
                    plants. Between 2005 and 2015, Ameren expects that certain of
                    the Ameren
                    Companies will be required to invest between $1.4 and $1.9 billion
                    to
                    retrofit their power plants with pollution control equipment.
                    These
                    investments will also result in higher ongoing operating expenses.
                    Approximately two-thirds of this investment will be in Ameren’s regulated
                    Missouri operations and therefore is expected to be recoverable
                    over time
                    from ratepayers. The recoverability of amounts expended in
                    non-rate-regulated operations will depend on the adjustment of
                    market
                    prices for power as a result of this increased
                    investment.
 ·
                In
                    June 2005, UE issued a request for proposal for the purchase
                    of 500 to 800
                    megawatts of capacity and associated energy starting in 2006
                    through the
                    acquisition of gas-fired, simple-cycle or combined-cycle electric
                    generating resources currently operating in the MISO. 
                    UE is also
                    evaluating its longer-term needs for new baseload and peaking
                    electric
                    generation capacity.
 
 *Affiliate
          Transactions*
 
 ·
                Due
                      to the MoPSC order approving the Illinois service territory
                      transfer or
                      future regulatory proceedings, there could be changes to the
                      agreement
                      between UE and Genco to jointly dispatch electric generation
                      or changes to
                      the effect of that agreement on revenues and/or electric margins.
                      Such
                      changes could affect the pricing or availability of power transferred
                      between Genco and UE. Based on operating performance for the
                      past year,
                      such changes would likely result in a transfer of electric
                      margins from
                      Genco to UE. The ultimate impact of any modifications to the
                      joint
                      dispatch agreement will be determined by future native load
                      demand, the
                      availability of electric generation from UE and Genco and market
                      prices,
                      among other things, but such impact could be material. Ameren’s earnings
                      could be affected if electric rates for UE are adjusted by
                      the MoPSC to
                      reflect the provisions of the MoPSC order approving the service
                      territory
                      transfer and/or other changes to the joint dispatch agreement.
                      See Note 3
                      - Rate and Regulatory Matters to our financial statements in
                      Part 1, Item
                      1 of this report for a discussion of modifications to the joint
                      dispatch
                      agreement ordered by the
                      MoPSC.
 
 *Recent
          Acquisitions*
 
 ·
                Ameren,
                    CILCORP, CILCO and IP expect to continue to focus on realizing
                    integration
                    synergies associated with these acquisitions, including lower
                    fuel costs
                    at CILCORP and CILCO and reduced administrative and operating
                    expenses at
                    IP.
 
 *Other*
 
 ·
              In
                  August 2005, the president signed into law the Energy Policy Act
                  of
                  2005. This legislation includes several provisions that
                  impact the
                  Ameren Companies, including, among others, the repeal of the PUHCA
                  effective in February 2005, under which Ameren is registered, and
                  tax
                  incentives for investments in pollution control equipment, electric
                  transmission property, clean coal facilities and natural
                  gas
                  distribution lines. The Energy Policy Act of 2005 also extends
                  the
                  Price-Anderson nuclear plant liability provisions under the Atomic
                  Energy
                  Act of 1954.
 
 The
        outcome and developments related to the above items could have a material
        impact
        on our results of operations, financial position, or liquidity. Additionally,
        in
        the ordinary course of business, we evaluate strategies to enhance our results
        of operations, financial position, and liquidity. These strategies may include
        acquisitions, divestitures, opportunities to reduce costs or increase revenues,
        and other strategic initiatives to increase Ameren’s shareholder value. We are
        unable to predict which, if any, of these initiatives will be executed. The
        execution of these initiatives may have a material impact on our future results
        of operations, financial position, or liquidity.
 
 **RISK
        FACTORS**
 
 **Ameren
        may not be able to integrate IP successfully into its other businesses or
        achieve the benefits it anticipates.**
 
 Ameren
        cannot ensure that it will be able to integrate IP successfully with its
        other
        businesses. The integration of IP with its other businesses will present
        significant challenges; Ameren may not be able to operate the combined company
        as effectively as expected. Ameren may also fail to achieve the anticipated
        benefits of the acquisition as quickly or as cost-effectively as anticipated,
        or
        it may not be able to achieve those benefits at all. Ameren expects that
        this
        acquisition will be accretive to earnings per share in the first two years.
        This
        expectation is based on important assumptions, which may be incorrect, including
        assumptions related to expected financing arrangements, regulatory treatment,
        interest rates, market prices for power, and synergies. As a result, if Ameren
        is unable to integrate its businesses effectively or to achieve the benefits
        anticipated, its results of operations, financial position, and liquidity
        may be
        materially adversely affected.
 
 65
 **The
        electric and gas rates that certain Ameren Companies are allowed to charge
        in
        Missouri and Illinois are largely set through 2006. These “rate freezes,” along
        with other actions of regulators that can significantly affect our earnings,
        liquidity and business activities, are largely outside our
        control.**
  The
        rates
        that certain Ameren Companies are allowed to charge for their services are
        the
        single most important item influencing the results of operations, financial
        position, and liquidity of the Ameren Companies. Our industry is highly
        regulated. The regulation of the rates that we charge our customers is
        determined, in large part, by governmental organizations outside of our control,
        including the MoPSC, the ICC, and the FERC. We are also subject to regulation
        by
        the SEC under the PUHCA. Decisions made by these regulators could have a
        material impact on our results of operations, financial position, and
        liquidity.
 
 As
        a part
        of the settlement of UE’s Missouri electric rate case in 2002, UE is subject to
        a rate moratorium that prohibits changes in its electric rates in Missouri
        before July 1, 2006, subject to limited statutory and other exceptions. 
        Furthermore, as part of the settlement of UE’s Missouri gas rate case, which was
        approved by the MoPSC on January 13, 2004, UE agreed to a rate moratorium.
        UE will make no changes in its gas delivery rates prior to July 1,
        2006,
        subject to certain exceptions. Also, in the order approving Ameren’s acquisition
        of IP, the ICC prohibited IP from filing for any proposed increase in gas
        delivery rates to be effective prior to January 1, 2007, beyond IP’s
        then-pending request for a gas delivery rate increase. In addition, a provision
        of the Illinois legislation related to the restructuring of the Illinois
        electric industry put a rate freeze into effect in Illinois through
        January 1, 2007, for CIPS, CILCO and IP. This Illinois legislation
        also
        requires that 50% of the earnings from each respective Illinois jurisdiction
        in
        excess of certain levels be refunded to CIPS’, CILCO’s and IP’s Illinois
        customers through 2006. The ICC conducted workshops seeking input from
        interested parties on the framework to be used for retail rate determination
        and
        for generation procurement by customers after the current Illinois rate freeze
        and supply contracts end in 2006. In 2005, CIPS, CILCO and IP have made filings
        with the ICC outlining a proposed framework for a generation procurement
        auction
        and a rate mechanism to legislators to pass generation costs through to
        customers, among other things.
 
 As
        a part
        of the settlement of UE’s Missouri electric rate case in 2002, UE also undertook
        to use commercially reasonable efforts to make critical energy infrastructure
        investments of $2.25 billion to $2.75 billion from January 1, 2002
        through
        June 30, 2006. Ameren also committed IP to make between $275 million
        and
        $325 million in energy infrastructure investments over its first two years
        of
        ownership, in conjunction with the ICC’s approval of Ameren’s acquisition of IP.
        UE’s agreement to a rate moratorium in Missouri and CIPS’, CILCO’s and IP’s rate
        freezes mean that capital expenditures will not become recoverable in rates,
        and
        will not earn a return, before July 1, 2006, for UE and January 1, 2007,
        for
        CIPS, CILCO and IP. Therefore, undertakings with respect to energy
        infrastructure investments and funding new programs, coupled with the rate
        reductions and rate moratoriums, could result in increased financing
        requirements for UE, CIPS, CILCO and IP and thus have a material impact on
        our
        results of operations, financial position, and liquidity.
 
 The
        Ameren Companies do not currently have in either Missouri or Illinois a fuel
        adjustment clause for their electric operations that would allow them to
        recover
        from customers, the costs for purchased power or increased fuel used for
        generation. Therefore, to the extent that we have not hedged our fuel and
        power
        costs, we are exposed to changes in fuel and power prices to the extent that
        fuel for our electric generating facilities and power must be purchased on
        the
        open market in order for us to serve our customers. See the Outlook section
        in
        Management’s Discussion and Analysis of Financial Condition and Results of
        Operations for a discussion of Missouri legislation enabling a fuel adjustment
        clause.
 
 Steps
        taken and being considered at the federal and state levels continue to change
        the structure of the electric industry and utility regulation. At the federal
        level, the FERC has been mandating changes in the regulatory framework for
        transmission-owning public utilities such as UE, CIPS, CILCO and IP. In
        Missouri, restructuring bills have been introduced in the past, but no
        legislation has been passed.
 
 Principally
        because of rate reductions and rate moratoriums that affect certain Ameren
        Companies, increased costs and investments have resulted in decreased returns
        in
        our distribution utility businesses. In 2005, Ameren began the process for
        preparing and submitting proposals for utility rate adjustments in Illinois
        and
        Missouri to take effect after the expiration of the applicable rate
        moratoriums.
 
 We
        are
        not able to predict what rate treatment certain Ameren Companies will receive
        after the rate moratoriums expire in Missouri and Illinois. See Note 3 -
        Rate
        and Regulatory Matters to our financial statements under Part I, Item 1,
        of this
        report. In response to competitive, economic, political, legislative and
        regulatory pressures, we may be subject to further rate moratoriums, rate
        refunds, limits on rate increases or rate reductions, any and all of which
        could
        have a significant adverse affect on our results of operations, financial
        position, and liquidity.
 
 **Increased
        federal and state environmental regulation will require UE, Genco and CILCO
        to
        incur large capital expenditures and increase operating
        costs.**
 
 Approximately
        65% of Ameren’s generating capacity is coal-fired. The balance is nuclear,
        gas-fired, hydro, and oil-
  66
  fired.
        In
        March 2005, the EPA issued final regulations with respect to SO2,
        NOx,and
        mercuryemissions from coal-fired power plants. These new rules will
        require significant additional reductions in these emissions from our power
        plants in phases, beginning in 2010. Preliminary estimates of capital costs,
        based on Ameren systems’ current technology, to comply with the EPA proposed
        SO 2 ,
        NO x, and
        mercury emission regulations, range from $1.4 billion to $1.9 billion by
        2015.
 
 Future
        initiatives regarding greenhouse gas emissions and global warming continue
        to be
        the subject of much debate. Coal-fired power plants are significant sources
        of
        carbon dioxide emissions, a principal greenhouse gas. The related Kyoto Protocol
        was signed by the United States, but it has since been rejected by the
        president, who instead has asked for an 18% voluntary decrease in carbon
        intensity. In response to the administration’s request, six electric power
        sector trade associations, including the Edison Electric Institute, of which
        Ameren is a member, and the Tennessee Valley Authority (TVA), signed a
        Memorandum of Understanding (MOU) with the DOE in December 2004 calling for
        a 3%
        - 5% decrease in carbon intensity from ****** the
        utility sector between 2002 and 2012 on a voluntary basis. Currently, Ameren
        is
        considering various initiatives to comply with the MOU. These include enhanced
        generation at our nuclear and hydro power plants, increased efficiency measures
        at our coal-fired units, and investing in renewable energy and carbon
        sequestration projects.
 
 The
        EPA
        has been conducting an enforcement initiative in an effort to determine whether
        modifications at a number of coal-fired power plants owned by electric utilities
        in the U.S. are subject to New Source Review requirements or New Source
        Performance Standards under the Clean Air Act. The EPA’s inquiries focus on
        whether the best available emission control technology was or should have
        been
        used at such power plants when major maintenance or capital improvements
        were
        made.
 
 In
        April
        2005, Genco received a request from the EPA for information pursuant to Section
        114(a) of the Clean Air Act seeking detailed operating and maintenance history
        data with respect to its Meredosia, Hutsonville, Coffeen and Newton facilities,
        EEI’s Joppa facility and AERG’s E.D. Edwards and Duck Creek facilities. All of
        these facilities are coal-fired plants. The information request requires
        Genco
        to provide responses to specific EPA questions regarding certain projects
        and
        maintenance activities in order to determine compliance with certain Illinois
        air pollution and emissions rules and with the New Source Performance Standard
        requirements of the Clean Air Act. Genco is fully complying with this
        information request, but cannot predict the outcome of this matter at this
        time.
 
 We
        are
        unable to predict the ultimate effect of any new environmental regulations,
        voluntary compliance guidelines, enforcement initiatives, or legislation
        on our
        results of operations, financial position, or liquidity. Any of these factors
        would add significant pollution control expenditures and operating costs
        to
        UE’s, Genco’s and CILCO’s generating assets and, therefore, could also increase
        financing requirements for some Ameren Companies. Although costs incurred
        by UE
        would be eligible for recovery in rates over time, subject to MoPSC approval
        in
        a rate proceeding, there is no similar mechanism for recovery of costs by
        Genco
        or CILCO in Illinois.
 
 **UE’s,
        CIPS’, CILCO’s and IP’s participation in the MISO could increase costs, reduce
        revenues, and reduce UE’s, CIPS’, CILCO’s and IP’s control over their
        transmission assets. Genco could also incur increased costs or reduced revenues
        as a result of participation in the MISO Day Two Markets.**
 
 On
        May 1,
        2004, functional control of the UE and CIPS transmission systems was transferred
        to the MISO. On September 30, 2004, IP transferred functional control of
        its
        transmission system to the MISO. CILCO had transferred functional control
        of its
        transmission system to the MISO before its acquisition. Ameren, UE, CIPS,
        CILCO
        and IP may be required to incur expenses or expand their  transmission
        systems according to decisions made by MISO rather than according to their
        internal planning process. See Note 3 - Rate and Regulatory Matters to our
        financial statements under Part II, Item 8, of the Ameren Companies’ combined
        Form 10-K for the fiscal year ended December 31, 2004.
 
 The
        MISO
        Day Two Market, which began operation on April 1, 2005, is designed to result
        in
        improved transparency of power pricing and efficiency in generation dispatch.
        Since this is a new and complex market, there could be significant initial
        price
        volatility. In addition, the movement of power could result in unanticipated
        transmission congestion charges or credits.
 
 Until
        we
        achieve some degree of operational experience participating in the MISO,
        including the MISO Day Two Market, we are unable to predict the impact that
        the
        MISO participation or ongoing RTO developments at the FERC or other regulatory
        authorities will have on our results of operations, financial position, or
        liquidity.
 
 **Increasing
        costs associated with our defined benefit retirement plans, health care plans,
        and other employee- related benefits may adversely affect our results of
        operations, financial position, and liquidity.**
 
 We
        have
        defined benefit and postretirement plans that cover substantially all of
        our
        employees. Assumptions related to future costs, returns on investments, interest
        rates, and
 67
  other
        actuarial assumptions have a significant impact on our earnings and funding
        requirements. Assuming that we continue to receive federal interest rate
        relief
        beyond 2005, we do not expect contributions to our defined benefit plans
        to be
        required until 2008 and 2009, when an aggregate $400 million is expected
        to be
        contributed. This amount is an estimate; it may change because of actual
        investment performance, changes in interest rates, or any pertinent changes
        in
        government regulations, any of which could also result in a requirement to
        record an additional minimum pension liability.
 
 In
        addition to the costs of our retirement plans, the costs of providing health
        care benefits to our employees and retirees have increased substantially
        in
        recent years. We believe that our employee benefit costs, including costs
        related to health care plans for our employees and former employees, will
        continue to rise. The increasing costs and funding requirements associated
        with
        our defined benefit retirement plans, health care plans and other employee
        benefits may adversely affect our results of operations, financial position,
        or
        liquidity.
 
 **UE’s,
        Genco’s, CILCO’s, AERG’s, Medina Valley’s and EEI’s electric generating
        facilities are subject to operational risks that could result in unscheduled
        plant outages, unanticipated operation and maintenance expenses, and increased
        purchased power costs.**
 
 UE,
        Genco, CILCO, AERG, Medina Valley, and EEI own and operate coal, nuclear,
        gas-fired, hydro, and oil-fired generating facilities. Operation of electric
        generating facilities involves certain risks that can adversely affect energy
        output and
        efficiency levels. Included among these risks are:
 
 ·
              increased
                  prices for fuel and fuel
                  transportation;
 ·
              facility
                  shutdowns due to a failure of equipment or processes or operator
                  error;
 ·
              longer-than-anticipated
                  maintenance outages;
 ·
              disruptions
                  in the delivery of fuel and lack of adequate
                  inventories;
 ·
              labor
                  disputes;
 ·
              inability
                  to comply with regulatory or permit
                  requirements;
 ·
              disruptions
                  in the delivery of electricity;
 ·
              increased
                  capital expenditures requirements, including those due to environmental
                  regulation; and
 ·
              unusual
                  or adverse weather conditions, including catastrophic events such
                  as
                  fires, explosions, floods or other similar occurrences affecting
                  electric
                  generating facilities.
 
 **A
        substantial portion of Genco’s and CILCO’s generating capacity is committed
        under affiliate contracts that expire at the end of 2006. Upon expiration
        of
        these contracts, Genco’s and CILCO’s electric generating facilities must compete
        for the sale of energy and capacity, which exposes them to price
        risk.**
 
 As
        of
        June 30, 2005, Genco and CILCO, through AERG, owned 4,199 megawatts and 1,165
        megawatts, respectively, of non-rate-regulated electric generating facilities.
        Of these non-rate-regulated electric generating facilities, approximately
        3,700
        megawatts are currently under full-requirements contracts with our affiliates.
        The remainder of the generating capacity must compete for the sale of energy
        and
        capacity.
  To
        the
        extent electric capacity generated by these facilities is not under contract
        to
        be sold, the revenues and results of operations of these non-rate-regulated
        subsidiaries will generally depend on the prices that they can obtain for
        energy
        and capacity in Illinois and adjacent markets. Among the factors that could
        influence such prices (all of which are beyond our control to a significant
        degree) are:
 
 ·
              the
                  current and future market prices for natural gas, fuel oil and
                  coal;
 ·
              current
                  and forward prices for the sale of
                  electricity;
 ·
              the
                  extent of additional supplies of electric energy from current competitors
                  or new market entrants;
 ·
              the
                  pace of deregulation in our market area and the expansion of deregulated
                  markets;
 ·
              the
                  regulatory and pricing structures developed for Midwest energy
                  markets as
                  they continue to evolve and the pace of development of regional
                  markets
                  for energy and capacity outside of bilateral
                  contracts;
 ·
              future
                  pricing for, and availability of, transmission services on transmission
                  systems, and the effect of RTOs and export energy transmission
                  constraints, which could limit the ability to sell energy in markets
                  adjacent to Illinois;
 ·
              the
                  rate of growth in electricity usage as a result of population changes,
                  regional economic conditions, and the implementation of conservation
                  programs; and
 ·
              climate
                  conditions prevailing in the Midwest
                  market.
 
 In
        a
        report issued by the ICC in late 2004, a process was outlined that would
        have
        CIPS, CILCO and IP procuring power through an auction monitored by the ICC
        after
        the current Illinois rate freeze and supply contracts end in 2006. Genco
        and
        AERG, through Marketing Company, would probably participate in this auction,
        but
        there might be a limit on the maximum amount of power they could supply to
        Ameren’s Illinois utilities. See Note 3 - Rate and Regulatory Matters to our
        financial statements under Part I, Item 1, of this report.




Genco
      and
      UE have signed an agreement to dispatch their generating facilities jointly,
      which produces benefits and efficiencies for both generating parties. Recently
      completed or future federal and state regulatory proceedings and policies may
      evolve in ways that could affect Genco’s ability to participate in these
      affiliate transactions on current terms. For example, as a result of the MoPSC
      order approving the transfer of UE’s Illinois-based utility business to CIPS,
      certain terms of the joint dispatch agreement were ordered to be






68


modified.Due to
      this MoPSC order or future regulatory proceedings, there could be changes to
      the
      joint dispatch agreement that would affect revenues and/or electric margins.
      Such changes could affect the pricing or availability of power transferred
      between Genco and UE. Based on operating performance for the past year, such
      changes would likely result in a transfer of electric margins from Genco to
      UE.
      The ultimate impact of any modifications to the joint dispatch agreement will
      be
      determined by future native load demand, the availability of electric generation
      from UE and Genco and market prices, among other things, but such impact could
      be material. Ameren’s earnings could be affected if electric rates for UE are
      adjusted by the MoPSC to reflect the provisions of the MoPSC order approving
      the
      service territory transfer and/or other changes to the joint dispatch agreement.
      See Note 3 - Rate and Regulatory Matters to our financial statements in Part
      1,
      Item 1 of this report for a discussion of modifications to the joint dispatch
      agreement ordered by the MoPSC.




**UE’s
      ownership and operation of a nuclear generating facility creates business,
      financial and waste disposal risks.**





UE
      owns
      the Callaway nuclear plant, which represents approximately 13% of UE’s
      generation capacity. Therefore, UE is subject to the risks of nuclear
      generation, which include the following:





·
            potential
                harmful effects on the environment and human health resulting from
                the
                operation of nuclear facilities and the storage, handling and disposal
                of
                radioactive materials;


·
            limitations
                on the amounts and types of insurance commercially available to cover
                losses that might arise in connection with UE’s nuclear operations or
                those of others in the United
                States;


·
            uncertainties
                with respect to contingencies and assessment amounts if insurance
                coverage
                is inadequate;


·
            increased
                public and governmental concerns over the adequacy of security at
                nuclear
                power plants;


·
            uncertainties
                with respect to the technological and financial aspects of decommissioning
                nuclear plants at the end of their licensed lives (UE’s facility operating
                license for the Callaway nuclear plant expires in 2024); and


·
            costly
                and extended outages for scheduled or unscheduled
                maintenance.





The
      NRC
      has broad authority under federal law to impose licensing and safety
      requirements for the operation of nuclear generation facilities. In the event
      of
      non-compliance, the NRC has the authority to impose fines, shut down a unit,
      or
      both, depending upon its assessment of the severity of the situation, until
      compliance is achieved. Revised safety requirements promulgated by the NRC
      could
      necessitate substantial capital expenditures at nuclear plants such as UE’s. In
      addition, if a serious nuclear incident occurred, it could have a material
      but
      indeterminable adverse effect on UE’s results of operations, financial position,
      or liquidity. A major incident at a nuclear facility anywhere in the world
      could
      cause the NRC to limit or prohibit the operation or licensing of any domestic
      nuclear unit.





Operating
      performance at UE’s Callaway nuclear plant has resulted in unscheduled or
      extended outages including the extension of Callaway’s scheduled refueling and
      maintenance outage in 2004. In addition, Ameren and UE incurred significant
      unanticipated replacement power and maintenance costs. As a result, the
      operating performance at UE’s Callaway nuclear plant has declined in comparison
      with both its past operating performance and the operating performance of other
      nuclear plants in the U.S. Ameren and UE are actively working to address the
      factors that led to the decline in Callaway’s operating performance. Management
      and supervision of operating personnel, equipment reliability, maintenance
      worker practices, engineering performance, and overall organizational
      effectiveness have been reviewed with some actions taken and other actions
      currently under consideration. However, Ameren and UE cannot predict whether
      such efforts will result in an overall improvement of operations at Callaway.
      Any actions taken are expected to result in incremental operating costs at
      Callaway. Further, additional unscheduled or extended outages at Callaway could
      have a material adverse effect on the results of operations, financial position,
      and liquidity of Ameren and UE.





**Our
      energy risk management strategies may not be effective in managing fuel and
      electricity pricing risks, which could result in unanticipated liabilities
      or
      increased volatility in our earnings.**





We
      are
      exposed to changes in market prices for natural gas, fuel, electricity, and
      emission credits. Prices for natural gas, fuel, electricity, and emission
      credits may fluctuate substantially over relatively short periods of time and
      expose us to commodity price risk. We use long-term purchase and sales contracts
      in addition to derivatives such as forward contracts, futures contracts,
      options, and swaps to manage these risks. We attempt to manage our risk
      associated with these activities through enforcement of established risk limits
      and risk management procedures. We cannot assure that these strategies will
      be
      successful in managing our pricing risk, or that they will not result in net
      liabilities to us as a result of future volatility in these
      markets.





Although
      we routinely enter into contracts to hedge our exposure to the risks of demand,
      market effects of weather, and changes in commodity prices, we do not always
      hedge the entire exposure of our operations from commodity price volatility.
      Furthermore, our ability to hedge our exposure to




69





commodity
      price volatility depends on liquid commodity markets. As a result, to the extent
      the commodity markets are illiquid, we may not be able to execute our risk
      management strategies, which could result in greater unhedged positions than
      we
      would prefer at a given time. To the extent that unhedged positions exist,
      fluctuating commodity prices can adversely affect our results of operations,
      financial position, and liquidity.





**Our
      counterparties may not meet their obligations to us.**





We
      are
      exposed to risk that counterparties who owe us money, energy or other
      commodities or services will not be able to perform their obligations. Should
      the counterparties to these arrangements (which include agreements for a
      subsidiary of Dynegy and others to supply electricity to IP during 2005 and
      2006) fail to perform, we might be forced to replace the underlying commitment
      at then-current market prices. In such event, we might incur losses in addition
      to the amounts, if any, already paid to the counterparties.




**Our
      facilities are considered critical infrastructure and may be targets for acts
      of
      terrorism.**





Like
      other electric and gas utilities, our power generation plants, fuel storage
      facilities, and transmission and distribution facilities may be targets of
      terrorist activities that could result in disruption of our ability to produce
      or distribute some portion of our energy products. Any such disruption could
      result in a significant decrease in revenues or significant additional costs
      to
      repair, which could have a material adverse effect on our results of operations,
      financial position, and liquidity.





**Our
      businesses are dependent on our ability to access the capital markets
      successfully. We may not have access to sufficient capital in the amounts and
      at
      the times needed.**




We
      use
      short-term and long-term capital markets as a significant source of liquidity
      and funding for capital requirements, including those related to future
      environmental compliance, not satisfied by our operating cash flows. The
      inability to raise capital on favorable terms, particularly during times of
      uncertainty in the capital markets, could negatively impact our ability to
      maintain and expand our businesses. Based on our current credit ratings, we
      believe that we will continue to have access to the capital markets. However,
      events beyond our control may create uncertainty in the capital markets that
      could increase our cost of capital or impair our ability to access the capital
      markets.





**REGULATORY
      MATTERS**





See
      Note
      3 - Rate and Regulatory Matters to our financial statements under Part I, Item
      1, of this report.








**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK.**




Market
      risk represents the risk of changes in value of a physical asset or a financial
      instrument, derivative or non-derivative, caused by fluctuations in market
      variables such as interest rates, commodity prices and equity security prices.
      We handle market risks in accordance with established policies, which may
      include entering into various derivative transactions. In the normal course
      of
      business, we also face risks that are either nonfinancial or nonquantifiable.
      Such risks, principally business, legal and operational risks, are not
      represented in the following discussion.





Our
      risk-management objective is to optimize our physical generating assets within
      prudent risk parameters. Our risk-management policies are set by a Risk
      Management Steering Committee, which is comprised of senior-level Ameren
      officers.





Except
      as
      discussed below, there were no material changes from the disclosures in the
      Ameren Companies’ combined Annual Report on Form 10-K for the fiscal year ended
      December 31, 2004. See the 2004 Form 10-K for a more detailed discussion of
      our
      market risks.





**Interest
      Rate Risk**




We
      are
      exposed to market risk through changes in interest rates. The following table
      presents the estimated increase (decrease) in our annual interest expense and
      net income if interest rates were to increase by 1% on variable rate debt
      outstanding at June 30, 2005:








**Interest
                  Expense**
              
              **Net
                  Income**(a)Ameren
              $
              11
              
              $
              (7
              )UE
              
              10
              
              
              (6
              )CIPS
              
              (b
              )
              
              (b
              )Genco
              
              -
              
              
              -CILCORP
              
              2
              
              
              (1
              )CILCO
              
              1
              
              
              (1
              )IP
              
              3
              
              
              (2
              )


(a)
              Calculations
                  are based on an effective tax rate of 36%.
 (b)
              Less
                than $1 million.





**Credit
      Risk**





Credit
      risk represents the loss that would be recognized if counterparties fail to
      perform as contracted. NYMEX-traded




70




futures
      contracts are supported by the financial and credit quality of the clearing
      members of the NYMEX and have nominal credit risk. On all other transactions,
      we
      are exposed to credit risk in the event of nonperformance by the counterparties
      to the transaction.





Our
      physical and financial instruments are subject to credit risk consisting of
      trade accounts receivables, executory contracts with market risk exposures,
      and
      leveraged lease investments. The risk associated with trade receivables is
      mitigated by the large number of customers in a broad range of industry groups
      who make up our customer base. At June 30, 2005, no nonaffiliated customer
      represented greater than 10%, in the aggregate, of our accounts receivable.
      Our
      revenues are primarily derived from sales of electricity and natural gas to
      customers in Missouri and Illinois. UE, Genco and Marketing Company have credit
      exposure associated with accounts receivable from nonaffiliated companies
      for interchange
      power sales. At June 30, 2005, UE’s, Genco’s and Marketing Company’s combined
      credit exposure to non-investment-grade counterparties related to interchange
      sales was less than $1 million, net of collateral (2004 - $2 million). We
      establish credit limits for these counterparties and monitor the appropriateness
      of these limits on an ongoing basis through a credit risk-management program
      that involves daily exposure reporting to senior management, master trading
      and
      netting agreements, and credit support, such as letters of credit and parental
      guarantees. We also analyze each counterparty’s financial condition prior to
      entering into sales, forwards, swaps, futures or option contracts, and we
      monitor counterparty exposure associated with our leveraged leases. We
      are
      currently evaluating our credit exposure associated with the implementation
      of
      the MISO Day Two Markets on April 1, 2005. At June 30, 2005, we estimate this
      credit exposure to be $10 million.





**Equity
      Price Risk**





Our
      costs
      of providing defined benefit retirement and postretirement benefit plans are
      dependent upon a number of factors, including the rate of return on plan assets.
      To the extent the value of plan assets declines, the effect could be reflected
      in net income and OCI, and the amount of cash required to be contributed to
      the
      plans.


**Commodity
      Price Risk**





The
      Ameren Companies are exposed to changes in market prices for natural gas, fuel
      and electricity to the extent they cannot be recovered through rates.





The
      following table presents the percentages of the projected required supply of
      coal and coal transportation for our coal-fired power plants, nuclear fuel
      for
      UE’s Callaway nuclear plant and natural gas for our gas-fired generation (CTs)
      and retail distribution, as appropriate, which are price-hedged over the
      remainder of 2005 through 2009:





**2005**
              
              **2006**
              
              **2007**-**2009****Ameren:**Coal
              
              99
              %
              
              93
              %
              
              62
              %Coal
                  transportation
              
              100
              
              
              96
              
              
              83Nuclear
                  fuel
              
              100
              
              
              100
              
              
              40Natural
                  gas for generation
              
              41
              
              
              12
              
              
              3Natural
                  gas for distribution(a)
              
              n/a
              
              
              24
              
              
              6**UE:**Coal
              
              98
              %
              
              91
              %
              
              58
              %Coal
                  transportation
              
              100
              
              
              99
              
              
              85Nuclear
                  fuel
              
              100
              
              
              100
              
              
              40Natural
                  gas for generation
              
              24
              
              
              6
              
              
              3Natural
                  gas for distribution(a)
              
              n/a
              
              
              37
              
              
              10**CIPS:**Natural
                  gas for distribution(a)
              
              n/a
              
              
              34
              %
              
              13
              %**Genco:**Coal
              
              100
              %
              
              98
              %
              
              73
              %Coal
                  transportation
              
              100
              
              
              98
              
              
              65Natural
                  gas for generation
              
              47
              
              
              13
              
              
              4**CILCORP:**Coal
              
              100
              %
              
              95
              %
              
              58
              %Coal
                  transportation
              
              100
              
              
              72
              
              
              64Natural
                  gas for distribution(a)
              
              n/a
              
              
              29
              
              
              10**CILCO:**Coal
              
              100
              %
              
              95
              %
              
              58
              %Coal
                  transportation
              
              100
              
              
              72
              
              
              64Natural
                  gas for distribution(a)
              
              n/a
              
              
              29
              
              
              10
   71
 **2005**
                    
                    **2006**
                    
                    **2007**-**2009**
 **IP:**Natural
                  gas for distribution(a)
              
              n/a
              
              
              14
              %
              
              1
              %





(a)
            Represents
                the percentage of natural gas price-hedged for the peak winter season
                which includes the months of November through March. The year 2005
                represents the period January 2005 through March 2005 and therefore
                is
                non-applicable (n/a) for this report. The year 2006 represents November
                2005 through March 2006. This continues each successive year through
                March
                2009.





The
      following table presents the estimated annual increase in our total fuel expense
      and decrease in net income if coal and coal transportation costs were to
      increase by 1% on any requirements currently not covered by fixed-price
      contracts for the remainder of 2005 through 2009:





**Coal**
            
            **Transportation****Fuel**
              **Expense**
            
            **Net**
              **Income**(a)
            
            **Fuel**
              **Expense**
            
            **Net**
              **Income**(a)Ameren
            $
            7
            
            $
            (4
            )
            $
            2
            
            $
            (1
            )UE
            
            4
            
            
            (2
            )
            
            (b
            )
            
            (b
            )Genco
            
            2
            
            
            (1
            )
            
            1
            
            
            1CILCORP
            
            1
            
            
            (b
            )
            
            1
            
            
            1CILCO
            
            1
            
            
            (b
            )
            
            1
            
            
            1





(a)
              Calculations
                  are based on an effective tax rate of
                  36%.
 (b)
              Less
                than $1 million.





In
      the
      event of a significant increase in coal prices, UE, Genco and CILCO would
      probably take actions to further mitigate their exposure to this market risk.
      However, due to the uncertainty of the specific actions that would be taken
      and
      their possible effects, the sensitivity analysis assumes no change in our
      financial structure or fuel sources.





See
      Note
      9 - Commitments and Contingencies to our financial statements under Part I,
      Item
      1, of this report for further information.





**Fair
      Value of Contracts**





Most
      of
      our commodity contracts qualify for treatment as normal purchases and normal
      sales. We use derivatives principally to manage the risk of changes in market
      prices for natural gas, fuel, electricity and emission credits. The following
      table presents the favorable (unfavorable) changes in the fair value of all
      derivative contracts marked-to-market during the three months and six months
      ended June 30, 2005. The sources used to determine the fair value of these
      contracts were primarily active market quotes and other external sources. All
      of
      these contracts have maturities of less than three years.





**Ameren**(a)
            
            **UE**
            
            **CIPS**
            
            **CILCORP**
            
            **CILCO****Three
                Months**
              Fair
                value of contracts at beginning of period, net
            $
            47
            
            $
            (5
            )
            $
            15
            
            $
            34
            
            $
            34Contracts
                realized or otherwise settled during the period
            
            (4
            )
            
            -
            
            
            (1
            )
            
            (1
            )
            
            (1
            )Changes
                in fair values attributable to changes in valuation technique and
                assumptions
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Fair
                value of new contracts entered into during the period
            
            1
            
            
            -
            
            
            -
            
            
            -
            
            
            -Other
                changes in fair value
            
            (3
            )
            
            (2
            )
            
            (2
            )
            
            (3
            )
            
            (3
            )Fair
                value of contracts outstanding at end of period, net
            $
            41
            
            $
            (7
            )
            $
            12
            
            $
            30
            
            $
            30


**Six
                Months**
              Fair
                value of contracts at beginning of period, net
            $
            21
            
            $
            (10
            )
            $
            6
            
            $
            14
            
            $
            14Contracts
                realized or otherwise settled during the period
            
            (9
            )
            
            -
            
            
            (1
            )
            
            -
            
            
            -Changes
                in fair values attributable to changes in valuation technique and
                assumptions
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Fair
                value of new contracts entered into during the period
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Other
                changes in fair value
            
            29
            
            
            3
            
            
            7
            
            
            16
            
            
            16Fair
                value of contracts outstanding at end of period, net
            $
            41
            
            $
            (7
            )
            $
            12
            
            $
            30
            
            $
            30





(a)
            Includes
                amounts for Ameren Registrant and non-Registrant subsidiaries and
                intercompany eliminations.








72


**ITEM
      4. CONTROLS AND PROCEDURES.**




(a)
                Evaluation
                    of Disclosure Controls and
                    Procedures





As
      of
      June 30, 2005, the principal executive officer and principal financial officer
      of each of the Ameren Companies have evaluated the effectiveness of the design
      and operation of such Registrant’s disclosure controls and procedures (as
      defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that
      evaluation, the principal executive officer and principal financial officer
      of
      each of the Ameren Companies have concluded that such disclosure controls and
      procedures are effective in timely alerting them to any material information
      relating to such Registrant that is required in such Registrant’s reports filed
      or submitted to the SEC under the Exchange Act and are effective in ensuring
      that information required to be disclosed in reports filed under the Exchange
      Act is recorded, processed, summarized and reported within the time periods
      specified in the SEC’s rules and forms.




(b)
              Change
                  in Internal Controls
 
 There
        has
        been no change in the Ameren Companies’ internal control over financial
        reporting during their most recent fiscal quarter that has materially affected,
        or is reasonably likely to materially affect, their internal control over
        financial reporting, except for the following. As a result of the acquisition
        of
        IP on September 30, 2004, Ameren is integrating the accounting and financial
        reporting processes of IP into certain Ameren shared service functions. In
        that
        regard, certain aspects of IP's internal control over financial reporting
        were
        modified to conform to the existing Ameren internal controls during the quarter
        ended June 30, 2005. On April 1, 2005, Ameren converted IP from its legacy
        financial information systems (excluding IP's billing system) to the financial
        information systems of Ameren. As a result of these system conversions, certain
        of Ameren's internal controls over financial reporting were modified to
        accommodate the accounting processes of IP. Additionally, on April 1, 2005,
        certain internal controls over financial reporting were implemented or modified
        in conjunction with Ameren's participation in the MISO Day Two Market. These
        internal controls primarily related to revenue and cost recognition associated
        with power sales and purchases and market administration expenses.
  
 **PART
        II. OTHER INFORMATION**
 
 
 **ITEM
        1.** **LEGAL
        PROCEEDINGS** **.**
 
 Note
        3 -
        Rate and Regulatory Matters, Note 8 - Related Party Transactions and Note
        9 -
        Commitments and Contingencies to our financial statements under Part I, Item
        1
        of this report contain information on legal and administrative proceedings
        which
        are incorporated by reference under this item.
 
 
 **ITEM
        2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
        PROCEEDS.**
 ****
 The
        following table presents Ameren Corporation's purchases of equity
        securities reportable under Item 703 of Regulation S-K:
 
 **Period**
              **(a)
                  Total Number**
                **of
                  Shares**
                **(or
                  Units) Purchased**(a)
              **(b)
                  Average Price**
                **Paid
                  per Share**
                **(or
                  Unit)**
              **(c)
                  Total Number of Shares (or Units) Purchased as Part of Publicly
                  Announced
                  Plans or Programs**
              **(d)
                  Maximum Number (or Approximate Dollar Value) of Shares (or Units)
                  that May
                  Yet Be Purchased Under the Plans or Programs**April
                  1 -
                April
                  30, 2005
              4,000
              $51.20
              -
              -May
                  1 -
                May
                  31, 2005
              64,197
              53.08
              -
              -June
                  1 -
                June
                  30, 2005
              6,250
              55.44
              -
              -Total
              74,447
              $53.18
              -
              -
 
 (a)
              These
                  shares of Ameren common stock were purchased by Ameren in open-market
                  transactions in satisfaction of Ameren’s obligations upon the exercise by
                  employees of options issued under Ameren’s Long-term Incentive Plan of
                  1998. Ameren does not have any publicly announced equity securities
                  repurchase plans or programs.
  None
        of
        the other Registrants purchased equity securities reportable under Item 703
        of
        Regulation S-K during the April 1 to June 30, 2005, period.
 
 73
 
 **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**
 
 **Ameren**
 
 At
        Ameren’s annual meeting of shareholders held on April 26, 2005, the following
        matters were presented to the meeting for a vote and the results of such
        voting
        are as follows:
 
 Item
        (1)  Election
        of 12 directors (comprising Ameren’s full Board of Directors) to serve until the
        next annual meeting of shareholders in 2006.
  
 **Name**
              **For**
              **Withheld**
              **Non-Voted
                  Brokers**(a)Susan
                  S. Elliott
              161,243,487
              2,911,323
              -Gayle
                  P.W. Jackson
              161,257,847
              2,896,963
              -James
                  C. Johnson
              161,242,998
              2,911,812
              -Richard
                  A. Liddy
              160,963,364
              3,191,446
              -Gordon
                  R. Lohman
              161,150,037
              3,004,773
              -Richard
                  A. Lumpkin
              161,178,339
              2,976,471
              -Paul
                  L. Miller, Jr.
              161,313,464
              2,841,346
              -Charles
                  W. Mueller
              161,245,972
              2,908,838
              -Douglas
                  R. Oberhelman
              155,588,964
              8,565,846
              -Gary
                  L. Rainwater
              161,091,987
              3,062,823
              -Harvey
                  Saligman
              161,166,492
              2,988,318
              -Patrick
                  T. Stokes
              161,174,647
              2,980,163
              -
 
 (a)
              Broker
                  shares included in the quorum but not voting on the
                  item.
 
 Item
        (2)  Ratification
        of PricewaterhouseCoopers LLP as Ameren’s registered independent public
        accounting firm for the fiscal year ending December 31, 2005.
  
 **For**
              **Against**
              **Abstain**
              **Non-Voted
                  Brokers****(a)**160,652,035
              1,770,125
              1,732,183
              19,227,906
 
 (a)
              Broker
                  shares included in the quorum but not voting on the
                  item.
 
 Item
        (3)  Shareholder
        proposal relating to the storage of irradiated fuel rods at UE’s Callaway
        nuclear plant.
  
 **For**
              **Against**
              **Abstain**
              **Non-Voted
                  Brokers****(a)**9,880,824
              99,773,516
              10,714,943
              63,012,966
 
 (a)
              Broker
                  shares included in the quorum but not voting on the
                  item.
 
 Item
        (4)  Shareholder
        proposal requiring an independent chairman of Ameren’s Board of
        Directors.
  
 **For**
              **Against**
              **Abstain**
              **Non-Voted
                  Brokers****(a)**26,009,212
              90,908,627
              3,451,676
              63,012,734
 
 (a)
              Broker
                  shares included in the quorum but not voting on the
                  item.
 
 **UE**
 
 At
        UE’s
        annual meeting of shareholders held on April 26, 2005, the following individuals
        (comprising UE’s full Board of Directors) were elected to serve until the next
        annual meeting of shareholders in 2006: Warner L. Baxter, Daniel F. Cole,
        Richard J. Mark, Gary L. Rainwater, Steven R. Sullivan, Thomas R. Voss and
        David
        A. Whiteley. Each individual received 102,123,834 votes for election and
        no
        withheld votes or broker non-votes.
 
 **CIPS**
 
 At
        CIPS’
        annual meeting of shareholders held on April 26, 2005, the following individuals
        (comprising CIPS’ full Board of Directors) were elected to serve until the next
        annual meeting of shareholders in 2006: Warner L. Baxter, Daniel F. Cole,
        Scott
        A. Cisel, Gary L. Rainwater, Steven R. Sullivan, Thomas R. Voss and David
        A.
        Whiteley. Each individual received 25,452,373 votes for election and no withheld
        votes or broker non-votes.
 
 **CILCO**
 
 At
        CILCO’s annual meeting of shareholders held on April 26, 2005, the following
        individuals (comprising CILCO’s full Board of Directors) were elected to serve
        until the next annual meeting of shareholders in 2006: Warner L. Baxter,
        Scott
        A. Cisel,
   74
 Daniel F.
        Cole, Gary L. Rainwater, Steven R. Sullivan, Thomas R. Voss and David A.
        Whiteley. Each individual received 13,563,871 votes for election and no withheld
        votes or broker non-votes.
 
 **IP**
 
 At
        IP’s
        annual meeting of shareholders held on April 26, 2005, the following individuals
        (comprising IP’s full Board of Directors) were elected to serve until the next
        annual meeting of shareholders in 2006: Warner L. Baxter, Scott A. Cisel,
        Daniel F.
        Cole, Gary L. Rainwater, Steven R. Sullivan, Thomas R. Voss and David A.
        Whiteley. Each individual received 23,000,000 votes for election and no withheld
        votes or broker non-votes.
  **GENCO
        and CILCORP**
 
 The
        information called for by this item is omitted in reliance on General
        Instruction H(1)(a) and (b) of Form 10-Q.
 
 **ITEM
        5.** **OTHER
        INFORMATION.**
 
 Mr.
        Paul
        L. Miller, Jr., a director of Ameren Corporation, died on July 14, 2005.
        No
        decision has been made as to who, if anyone, will be appointed to replace
        Mr.
        Miller.
  **ITEM
        6.** **EXHIBITS** **.**
 
 (a)  Exhibits. The documents listed below are being filed on behalf of Ameren,
        UE,
        CIPS, Genco, CILCORP, CILCO and IP as indicated.
 
 **Exhibit
                  Designation**
              **Registrant(s)**
              **Nature
                  of Exhibit****Rule
                  13a-14(a) / 15d-14(a) Certifications**31.1
              Ameren
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  Ameren31.2
              Ameren
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  Ameren31.3
              UE
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  UE31.4
              UE
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  UE31.5
              CIPS
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  CIPS31.6
              CIPS
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  CIPS31.7
              Genco
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  Genco31.8
              Genco
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  Genco31.9
              CILCORP
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  CILCORP31.10
              CILCORP
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  CILCORP31.11
              CILCO
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  CILCO31.12
              CILCO
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  CILCO31.13
              IP
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                  of
                  IP31.14
              IP
              Rule
                  13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                  of
                  IP**Section
                  1350 Certifications**32.1
              Ameren
              Section
                  1350 Certification of Principal Executive Officer of
                  Ameren32.2
              Ameren
              Section
                  1350 Certification of Principal Financial Officer of
                  Ameren32.3
              UE
              Section
                  1350 Certification of Principal Executive Officer of UE32.4
              UE
              Section
                  1350 Certification of Principal Financial Officer of UE32.5
              CIPS
              Section
                  1350 Certification of Principal Executive Officer of
                  CIPS32.6
              CIPS
              Section
                  1350 Certification of Principal Financial Officer of
                  CIPS32.7
              Genco
              Section
                  1350 Certification of Principal Executive Officer of
                  Genco32.8
              Genco
              Section
                  1350 Certification of Principal Financial Officer of
                  Genco32.9
              CILCORP
              Section
                  1350 Certification of Principal Executive Officer of
                  CILCORP32.10
              CILCORP
              Section
                  1350 Certification of Principal Financial Officer of
                  CILCORP32.11
              CILCO
              Section
                  1350 Certification of Principal Executive Officer of
                  CILCO32.12
              CILCO
              Section
                  1350 Certification of Principal Financial Officer of
                  CILCO32.13
              IP
              Section
                  1350 Certification of Principal Executive Officer of IP32.14
              IP
              Section
                  1350 Certification of Principal Financial Officer of
                  IP
 
 
 75
 
 **SIGNATURES**
 
 Pursuant
        to the requirements of the Exchange Act, each Registrant has duly caused
        this
        report to be signed on its behalf by the undersigned thereunto duly authorized.
        The signature for each undersigned company shall be deemed to relate only
        to
        matters having reference to such company or its subsidiaries.
 
 
 AMEREN
        CORPORATION
 (Registrant)
 
 /s/ Martin J.
        Lyons
 Martin
        J.
        Lyons
 ** Vice
        President and Controller   ****
 (Principal
        Accounting Officer)
 
 
 
 
 UNION
        ELECTRIC COMPANY
 (Registrant)
 
 /s/
        Martin J.
        Lyons
 Martin
        J.
        Lyons
 ** Vice
        President and Controller
 (Principal
        Accounting Officer)
    CENTRAL
        ILLINOIS PUBLIC SERVICE COMPANY
 (Registrant)
   /s/
          Martin J.
          Lyons
 Martin
          J.
          Lyons
 ** Vice
          President and Controller
 (Principal
          Accounting Officer)
 AMEREN
        ENERGY GENERATING COMPANY
 (Registrant)
   /s/
          Martin J.
          Lyons
 Martin
          J.
          Lyons
 ** Vice
          President and Controller
 (Principal
          Accounting Officer)
 
 76
 
 
 CILCORP INC .
 (Registrant)
   /s/
          Martin J. Lyons
 Martin
          J.
          Lyons
 ** Vice
          President and Controller
 (Principal
          Accounting Officer)
 CENTRAL
        ILLINOIS LIGHT COMPANY
 (Registrant)
 /s/
          Martin J.
          Lyons
 Martin
          J.
          Lyons
 ** Vice
          President and Controller
 (Principal
          Accounting Officer)
 ILLINOIS
        POWER COMPANY
 (Registrant)
   /s/
          Martin J.
          Lyons
 Martin
          J.
          Lyons
 ** Vice
          President and Controller
 (Principal
          Accounting Officer)
 
 Date:
        August 9, 2005
  77