UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

                   (X) Quarterly report pursuant to Section 13 or 15(d)
                       of the Securities Exchange Act of 1934
                       for the Quarterly Period Ended March 31, 2004

                                       OR

                   ( ) Transition report pursuant to Section 13 or 15(d)
                       of the Securities Exchange Act of 1934
                       for the transition period from ________to _________.

<TABLE>
<CAPTION>
        <S>                   <C>                                                      <C>
                               Exact Name of Registrant as specified in its charter;
         Commission            State of Incorporation;                                  IRS Employer
         File Number           Address and Telephone Number                             Identification No.
         -----------           ----------------------------                             -----------------

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

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

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

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

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

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

<PAGE>

     Indicate by check mark whether the  Registrants  (1) have filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
                                                  Yes (X) No ( )

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

<TABLE>
<CAPTION>
    <S>                                                      <C>                     <C>

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

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

     Ameren Corporation                                       Common stock, $.01 par value - 182,643,788

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

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

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

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

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

</TABLE>

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

     Prior to the quarterly  report on Form 10-Q for the period ended  September
30, 2003, separate filings were made by each Registrant, except CILCORP Inc. and
Central Illinois Light Company, which made a combined filing. Ameren Corporation
and its subsidiaries changed to a combined filing in order to improve disclosure
and to simplify administrative processes.

                         OMISSION OF CERTAIN INFORMATION

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



<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S><C>    <C>                                                                                  <C>
                                                                                                Page
                                                                                                ----
Glossary of Terms and Abbreviations..........................................................   5

Forward-looking Statements...................................................................   7

PART I.    Financial Information

   ITEM 1. Financial Statements (Unaudited)

           Ameren Corporation
           Consolidated Statement of Income..................................................   9
           Consolidated Balance Sheet........................................................  10
           Consolidated Statement of Cash Flows..............................................  11


           Union Electric Company
           Consolidated Statement of Income..................................................  12
           Consolidated Balance Sheet........................................................  13
           Consolidated Statement of Cash Flows..............................................  14

           Central Illinois Public Service Company
           Statement of Income...............................................................  15
           Balance Sheet.....................................................................  16
           Statement of Cash Flows...........................................................  17

           Ameren Energy Generating Company
           Statement of Income...............................................................  18
           Balance Sheet.....................................................................  19
           Statement of Cash Flows...........................................................  20

           CILCORP Inc.
           Consolidated Statement of Income..................................................  21
           Consolidated Balance Sheet........................................................  22
           Consolidated Statement of Cash Flows..............................................  23

           Central Illinois Light Company
           Consolidated Statement of Income..................................................  24
           Consolidated Balance Sheet........................................................  25
           Consolidated Statement of Cash Flows..............................................  26

                                       3
<PAGE>

           Combined Notes to Financial Statements............................................  27

   ITEM 2. Management's  Discussion  and Analysis of Financial  Condition and
           Results of Operations.............................................................  52

   ITEM 3. Quantitative and Qualitative Disclosures About Market Risk........................  71

   ITEM 4. Controls and Procedures...........................................................  75



PART II.   Other Information

   ITEM 1. Legal Proceedings.................................................................  75

   ITEM 6. Exhibits and Reports on Form 8-K..................................................  76

SIGNATURES...................................................................................  79

</TABLE>

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



                                       4

<PAGE>

                       GLOSSARY OF TERMS AND ABBREVIATIONS

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

AES - The AES Corporation.

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

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

Ameren  Companies - The individual  Registrants  within the Ameren  consolidated
group.

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

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

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

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

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

CT - Combustion turbine generation equipment.

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

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

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

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

Dynegy - Dynegy Inc., the indirect parent company of Illinois Power.

EEI - Electric Energy, Inc., a 60%-owned subsidiary of Ameren Corporation, which
is 40% owned by UE and 20% owned by Resources  Company,  which operates electric
generation and transmission facilities in Illinois.

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

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

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

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

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


                                       5
<PAGE>

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

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

Fitch - Fitch Ratings, a leading global rating agency.

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

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

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

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

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

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

IBEW - International Brotherhood of Electrical Workers.

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

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.

Illinois Power - Illinois Power Company,  a wholly owned  subsidiary of Illinova
Corporation, which is a subsidiary of Dynegy.

ITC - Independent Transmission Company.

IUOE - International Union of Operating Engineers.

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

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

Midwest ISO - Midwest Independent Transmission System Operator Inc.

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

Money  Pool -  Borrowing  arrangements  with and among the Ameren  Companies  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.


                                       6

<PAGE>

Moody's - Moody's Investors Service, Inc., a leading global rating agency.

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

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

NOx - Nitrogen oxide.

NYMEX - New York Mercantile Exchange.

OATT - Open Access Transmission Tariff.

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

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

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

RTO - Regional Transmission Organization.

S&P - Standard and Poor's Inc., a leading global rating agency.

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

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

SO2 - Sulfur dioxide.

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




--------------------------------------------------------------------------------


     When we refer  to  "our",  "we" or "us",  it  indicates  that the  referred
information  relates  to all Ameren  Companies.  When we refer to  financing  or
acquisition  activities,  we are defining Ameren as the parent holding  company.
When appropriate, subsidiaries of Ameren are specifically referenced in order to
distinguish among their different business activities.

FORWARD-LOOKING STATEMENTS

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




                                       7

<PAGE>
anticipated.  The following factors, in addition to those discussed elsewhere in
this report and in filings with the SEC,  could cause  actual  results to differ
materially from management  expectations as suggested by such  "forward-looking"
statements:
o    the closing and timing of Ameren's  acquisition  of Illinois  Power and the
     impact of any  conditions  imposed by regulators  in connection  with their
     approval thereof;
o    the effects of the  stipulation  and agreement  relating to the UE Missouri
     electric  excess  earnings  complaint  case and other  regulatory  actions,
     including changes in regulatory policy;
o    changes in laws and other  governmental  actions,  including  monetary  and
     fiscal policies;
o    the impact on us of current  regulations  related  to the  opportunity  for
     customers to choose alternative energy suppliers in Illinois;
o    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;
o    the effects of participation in the Midwest ISO;
o    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;
o    the use of financial and derivative instruments;
o    average rates for electricity in the Midwest;
o    business and economic conditions;
o    the impact of the adoption of new accounting  standards and the application
     of appropriate technical accounting rules and guidance;
o    interest  rates and the  availability  of  capital;
o    actions of ratings agencies and the effects of such actions;
o    weather conditions;
o    generation plant construction, installation and performance;
o    operation of nuclear power facilities and decommissioning costs;
o    the  effects  of  strategic   initiatives,   including   acquisitions   and
     divestitures;
o    the impact of current environmental regulations on utilities and generating
     companies and the  expectation  that more  stringent  requirements  will be
     introduced over time,  which could  potentially  have a negative  financial
     effect;
o    future wages and employee  benefits costs,  including changes in returns on
     benefit plan assets;
o    disruptions  of the  capital  markets  or other  events  making  the Ameren
     Companies' access to necessary capital more difficult or costly;
o    competition from other generating facilities, including new facilities that
     may be developed;
o    difficulties in integrating  CILCO and Illinois Power (if consummated) with
     Ameren's other businesses;
o    changes  adversely  impacting  synergy  assumptions in connection  with the
     CILCORP and Illinois Power (if consummated) acquisitions;
o    cost and availability of transmission  capacity for the energy generated by
     the Ameren Companies'  generating  facilities or required to satisfy energy
     sales made by the Ameren Companies; and
o    legal and administrative proceedings.

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



                                       8

<PAGE>



                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>

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


                                                                          Three Months Ended
                                                                               March 31,
                                                                       ----------------------
                                                                           2004         2003
<S><C>    <C>                                                          <C>          <C>
                                                                       ----------  ----------
Operating Revenues:
 Electric                                                              $     913   $     856
 Gas                                                                         301         250
 Other                                                                         2           2
                                                                       ----------  ----------
     Total operating revenues                                              1,216       1,108
                                                                       ----------  ----------
Operating Expenses:
 Fuel and purchased power                                                    271         232
 Gas purchased for resale                                                    213         181
 Other operations and maintenance                                            306         292
 Depreciation and amortization                                               130         124
 Taxes other than income taxes                                                80          78
                                                                       ----------  ----------
     Total operating expenses                                              1,000         907
                                                                       ----------  ----------
Operating Income                                                             216         201
Other Income and (Deductions):
   Miscellaneous income                                                        8           6
   Miscellaneous expense                                                      (1)         (3)
                                                                       ----------  ----------
     Total other income and (deductions)                                       7           3
                                                                       ----------  ----------
Interest Charges and Preferred Dividends:
 Interest                                                                     64          66
 Preferred dividends of subsidiaries                                           3           3
                                                                       ----------  ----------
     Net interest charges and preferred dividends                             67          69
                                                                       ----------  ----------
Income Before Income Taxes and Cumulative Effect of Change
  in Accounting Principle                                                    156         135
Income Taxes                                                                  59          52
                                                                       ----------  ----------
Income Before Cumulative Effect of Change in Accounting
  Principle                                                                   97          83
Cumulative Effect of Change in Accounting Principle,
  Net of Income Taxes of $- and $12                                            -          18
                                                                       ----------  ----------
Net Income                                                             $      97   $     101
                                                                       ==========  ==========
Earnings per Common Share - Basic and Diluted:
  Income before cumulative effect of change
    in accounting principle                                            $    0.55   $    0.52
  Cumulative effect of change in accounting
    principle, net of income taxes                                             -        0.11
                                                                       ----------  ----------
Earnings per Common Share - Basic and Diluted                          $    0.55   $    0.63
                                                                       ==========  ==========

Dividends per Common Share                                             $   0.635   $   0.635
Average Common Shares Outstanding                                          174.3       158.9


</TABLE>

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


                                       9

<PAGE>

<TABLE>
<CAPTION>

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

                                                                                 March 31,        December 31,
                                                                                   2004              2003
                                                                                ------------      ------------
                                     ASSETS
<S><C>     <C>                                                                 <C>               <C>
Current Assets:
  Cash and cash equivalents                                                     $       633       $       111
  Accounts receivables - trade (less allowance for doubtful
    accounts of $12 and $13, respectively)                                              326               326
  Unbilled revenue                                                                      199               221
  Miscellaneous accounts and notes receivable                                            63               126
  Materials and supplies, at average cost                                               412               487
  Other current assets                                                                   54                46
                                                                                ------------      ------------
   Total current assets                                                               1,687             1,317
                                                                                ------------      ------------
Property and Plant, Net                                                              10,963            10,920
Investments and Other Non-Current Assets:
  Investments in leveraged leases                                                       161               164
  Nuclear decommissioning trust fund                                                    218               212
  Goodwill and other intangibles, net                                                   565               574
  Other assets                                                                          344               320
                                                                                ------------      ------------
   Total investments and other non-current assets                                     1,288             1,270
                                                                                ------------      ------------
Regulatory Assets                                                                       701               729
                                                                                ------------      ------------
           TOTAL ASSETS                                                         $    14,639       $    14,236
                                                                                ============      ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Current maturities of long-term debt                                          $       331       $       498
  Short-term debt                                                                         2               161
  Accounts and wages payable                                                            249               480
  Taxes accrued                                                                         182               103
  Other current liabilities                                                             252               215
                                                                                ------------      ------------
   Total current liabilities                                                          1,016             1,457
                                                                                ------------      ------------
Long-term Debt, Net                                                                   4,068             4,070
Preferred Stock of Subsidiary Subject to Mandatory Redemption                            21                21
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                              1,800             1,853
  Accumulated deferred investment tax credits                                           148               151
  Regulatory liabilities                                                                832               824
  Asset retirement obligations                                                          419               413
  Accrued pension and other postretirement benefits                                     741               699
  Other deferred credits and liabilities                                                186               190
                                                                                ------------      ------------
   Total deferred credits and other non-current liabilities                           4,126             4,130
                                                                                ------------      ------------
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption                     182               182
Minority Interest in Consolidated Subsidiaries                                           23                22
Commitments and Contingencies (Note 9)
Stockholders' Equity:
  Common stock, $.01 par value, 400.0 shares authorized -
    shares outstanding of 182.5 and 162.9, respectively                                   2                 2
  Other paid-in capital, principally premium on common stock                          3,425             2,552
  Retained earnings                                                                   1,834             1,853
  Accumulated other comprehensive income (loss)                                         (44)              (44)
  Other                                                                                 (14)               (9)
                                                                                ------------      ------------
   Total stockholders' equity                                                         5,203             4,354
                                                                                ------------      ------------
           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $    14,639       $    14,236
                                                                                ============      ============

</TABLE>

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


                                       10

<PAGE>
<TABLE>
<CAPTION>

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

                                                                                      Three Months Ended
                                                                                          March 31,
                                                                                   ------------------------
                                                                                      2004         2003

                                                                                   -----------   ----------

<S><C><C>                                                                         <C>           <C>
Cash Flows From Operating Activities:
 Net income                                                                        $       97    $     101
 Adjustments to reconcile net income to net cash
   provided by operating activities:
    Cumulative effect of change in accounting principle                                     -          (18)
    Depreciation and amortization                                                         130          124
    Amortization of nuclear fuel                                                            8            7
    Amortization of debt issuance costs and premium/discounts                               3            2
    Deferred income taxes, net                                                            (24)           3
    Deferred investment tax credits, net                                                   (3)          (3)
    Coal contract settlement                                                                9            -
    Changes in assets and liabilities, excluding the effects of the acquisitions:
       Receivables, net                                                                    37           13
       Materials and supplies                                                              75           44
       Accounts and wages payable                                                        (195)        (186)
       Taxes accrued                                                                       79           68
       Assets, other                                                                      (15)           5
       Liabilities, other                                                                  55           73
       Other                                                                              (12)          (7)
                                                                                   -----------   -----------
Net cash provided by operating activities                                                 244          226
                                                                                   -----------   -----------

Cash Flows From Investing Activities:
 Construction expenditures                                                               (165)        (144)
 Acquisitions, net of cash acquired                                                         -         (488)
 Nuclear fuel expenditures                                                                 (3)           -
 Other                                                                                      7            3
                                                                                   -----------   -----------
Net cash used in investing activities                                                    (161)        (629)
                                                                                   -----------   -----------

Cash Flows From Financing Activities:
 Dividends on common stock                                                               (116)        (102)
 Capital issuance costs                                                                   (22)         (10)
 Redemptions, repurchases and maturities:
   Nuclear fuel lease                                                                     (67)          (2)
   Short-term debt                                                                       (159)        (255)
   Long-term debt                                                                        (100)         (31)
 Issuances:
   Common stock                                                                           903          285
   Long-term debt                                                                           -          184
                                                                                   -----------   -----------
Net cash provided by financing activities                                                 439           69
                                                                                   -----------   -----------

Net change in cash and cash equivalents                                                   522         (334)
Cash and cash equivalents at beginning of year                                            111          628
                                                                                   -----------   -----------
Cash and cash equivalents at end of period                                         $      633    $     294
                                                                                   ===========   ===========

Cash Paid During the Periods:
 Interest                                                                          $       45    $      45
 Income taxes, net                                                                         34           11


</TABLE>

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

                                       11

<PAGE>
<TABLE>
<CAPTION>

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


                                                                                      Three Months Ended
                                                                                           March 31,
                                                                                 -----------------------------
                                                                                      2004             2003
                                                                                 -----------      ------------
<S><C><C>                                                                       <C>              <C>
Operating Revenues:
  Electric                                                                       $       548      $       555
  Gas                                                                                     72               65
                                                                                 ------------     ------------
       Total operating revenues                                                          620              620
                                                                                 ------------     ------------

Operating Expenses:
  Fuel and purchased power                                                               143              140
  Gas purchased for resale                                                                44               39
  Other operations and maintenance                                                       193              187
  Depreciation and amortization                                                           72               70
  Taxes other than income taxes                                                           55               53
                                                                                 ------------     ------------
       Total operating expenses                                                          507              489
                                                                                 ------------     ------------

Operating Income                                                                         113              131

Other Income and (Deductions):
  Miscellaneous income                                                                     5                1
  Miscellaneous expense                                                                   (1)              (1)
                                                                                 ------------     ------------
       Total other income and (deductions)                                                 4                -
                                                                                 ------------     ------------

Interest Charges                                                                          25               25
                                                                                 ------------     ------------
Income Before Income Taxes                                                                92              106

Income Taxes                                                                              34               38
                                                                                 ------------     ------------

Net Income                                                                                58               68

Preferred Stock Dividends                                                                  1                1
                                                                                 ------------     ------------

Net Income Available to Common Stockholder                                       $        57      $        67
                                                                                 ============     ============
</TABLE>


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

                                       12

<PAGE>
<TABLE>
<CAPTION>

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

                                                                                      March 31,       December 31,
                                                                                       2004               2003
                                                                                   -------------      -------------
                                      ASSETS
<S><C>                                                                            <C>                <C>
Current Assets:
  Cash and cash equivalents                                                        $          7       $         15
  Accounts receivable - trade (less allowance for doubtful
    accounts of $5 and $6, respectively)                                                    166                172
  Unbilled revenue                                                                          101                111
  Miscellaneous accounts and notes receivable                                                61                117
  Materials and supplies, at average cost                                                   161                175
  Other current assets                                                                       21                 26
                                                                                   -------------      -------------
    Total current assets                                                                    517                616
                                                                                   -------------      -------------
Property and Plant, Net                                                                   6,819              6,758
Investments and Other Non-Current Assets:
  Nuclear decommissioning trust fund                                                        218                212
  Other assets                                                                              257                246
                                                                                   -------------      -------------
    Total investments and other non-current assets                                          475                458
                                                                                   -------------      -------------
Regulatory Assets                                                                           656                685
                                                                                   -------------      -------------
           TOTAL ASSETS                                                            $      8,467       $      8,517
                                                                                   =============      =============


                       LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
  Current maturities of long-term debt                                             $        277       $        344
  Short-term debt                                                                             -                150
  Borrowings from money pool                                                                292                  -
  Accounts and wages payable                                                                158                314
  Taxes accrued                                                                             129                 66
  Other current liabilities                                                                 102                102
                                                                                   -------------      -------------
    Total current liabilities                                                               958                976
                                                                                   -------------      -------------
Long-term Debt, Net                                                                       1,758              1,758
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                                  1,245              1,289
  Accumulated deferred investment tax credits                                               113                114
  Regulatory liabilities                                                                    657                652
  Asset retirement obligations                                                              414                408
  Accrued pension and other postretirement benefits                                         340                317
  Other deferred credits and liabilities                                                     79                 80
                                                                                   -------------      -------------
    Total deferred credits and other non-current liabilities                              2,848              2,860
                                                                                   -------------      -------------
Commitments and Contingencies (Note 9)
Stockholder's Equity:
  Common stock, $5 par value, 150.0 shares authorized - 102.1 shares outstanding            511                511
  Preferred stock not subject to mandatory redemption                                       113                113
  Other paid-in capital, principally premium on common stock                                702                702
  Retained earnings                                                                       1,608              1,630
  Accumulated other comprehensive income (loss)                                             (31)               (33)
                                                                                   -------------      -------------
    Total stockholder's equity                                                            2,903              2,923
                                                                                   -------------      -------------
           TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                              $      8,467       $      8,517
                                                                                   =============      =============

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

                                       13
<PAGE>
<TABLE>
<CAPTION>

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

                                                                                     Three Months Ended
                                                                                         March 31,
                                                                                -----------------------------
                                                                                    2004            2003
                                                                                -------------   -------------
<S><C>                                                                         <C>             <C>
Cash Flows From Operating Activities:
  Net income                                                                    $         58    $         68
  Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization                                                        72              70
     Amortization of nuclear fuel                                                          8               7
     Amortization of debt issuance costs and premium/discounts                             1               1
     Deferred income taxes, net                                                          (22)             (5)
     Deferred investment tax credits, net                                                 (1)             (1)
     Coal contract settlement                                                              9               -
     Changes in assets and liabilities:
        Receivables, net                                                                  24               7
        Materials and supplies                                                            14              15
        Accounts and wages payable                                                      (142)           (193)
        Taxes accrued                                                                     63              60
        Assets, other                                                                     15             (10)
        Liabilities, other                                                                 4              26
        Other                                                                              2              (1)
                                                                                -------------   -------------
Net cash provided by operating activities                                                105              44
                                                                                -------------   -------------

Cash Flows From Investing Activities:
  Construction expenditures                                                             (105)           (101)
  Nuclear fuel expenditures                                                               (3)              -
  Other                                                                                    -               1
                                                                                -------------   -------------
Net cash used in investing activities                                                   (108)           (100)
                                                                                -------------   -------------

Cash Flows From Financing Activities:
  Dividends on common stock                                                              (79)            (82)
  Dividends on preferred stock                                                            (1)             (1)
  Capital issuance costs                                                                   -              (1)
  Redemptions, repurchases, and maturities:
    Nuclear fuel lease                                                                   (67)             (2)
    Short-term debt                                                                     (150)           (250)
  Issuances:
    Long-term debt                                                                         -             184
    Borrowings from money pool                                                           292             317
                                                                                -------------   -------------
Net cash provided by (used in) financing activities                                       (5)            165
                                                                                -------------   -------------

Net change in cash and cash equivalents                                                   (8)            109
Cash and cash equivalents at beginning of year                                            15               9
                                                                                -------------   -------------
Cash and cash equivalents at end of period                                      $          7    $        118
                                                                                =============   =============

Cash Paid During the Periods:
  Interest                                                                      $         27    $         23
  Income taxes, net                                                                       17               7

</TABLE>

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



                                       14
<PAGE>
<TABLE>
<CAPTION>

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


                                                                Three Months Ended
                                                                     March 31,
                                                           -----------------------------
                                                               2004             2003
                                                           --------------   ------------
<S><C> <C>                                                <C>               <C>
Operating Revenues:
  Electric                                                 $         127    $       132
  Gas                                                                 85             77
                                                           --------------   ------------
     Total operating revenues                                        212            209
                                                           --------------   ------------

Operating Expenses:
  Purchased power                                                     80             86
  Gas purchased for resale                                            56             53
  Other operations and maintenance                                    37             42
  Depreciation and amortization                                       13             13
  Taxes other than income taxes                                        9              9
                                                           --------------   ------------
     Total operating expenses                                        195            203
                                                           --------------   ------------

Operating Income                                                      17              6

Other Income and (Deductions):
  Miscellaneous income                                                 7              7
  Miscellaneous expense                                                -             (1)
                                                           --------------   ------------
     Total other income and (deductions)                               7              6
                                                           --------------   ------------
                                                                       8              9
                                                           --------------   ------------

Income Before Income Taxes                                            16              3

Income Taxes                                                           6              1
                                                           --------------   ------------

Net Income                                                            10              2

Preferred Stock Dividends                                              1              1
                                                           --------------   ------------

Net Income Available to Common Stockholder                 $           9    $         1
                                                           ==============   ============

</TABLE>

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

                                       15
<PAGE>
<TABLE>
<CAPTION>


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

                                                                            March 31,        December 31,
                                                                               2004              2003
                                                                           -------------     -------------
                                     ASSETS
<S><C><C>                                                                  <C>              <C>
Current Assets:
  Cash and cash equivalents                                                 $        14      $         16
  Accounts receivable - trade (less allowance for doubtful
   accounts of $2 and $1, respectively)                                              59                48
  Unbilled revenue                                                                   54                64
  Miscellaneous accounts and notes receivable                                        14                22
  Current portion of intercompany note receivable - Genco                            49                49
  Current portion of intercompany tax receivable - Genco                             12                12
  Materials and supplies, at average cost                                            25                51
  Other current assets                                                               13                 6
                                                                           -------------     -------------
      Total current assets                                                          240               268
                                                                           -------------     -------------
Property and Plant, Net                                                             952               955
Investments and Other Non-Current Assets:
  Intercompany note receivable - Genco                                              324               324
  Intercompany tax receivable - Genco                                               147               150
  Other assets                                                                       20                17
                                                                           -------------     -------------
      Total investments and other non-current assets                                491               491
                                                                           -------------     -------------
Regulatory Assets                                                                    29                28
                                                                           -------------     -------------
         TOTAL ASSETS                                                      $      1,712      $      1,742
                                                                           =============     =============


                      LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
  Accounts and wages payable                                               $         62      $         71
  Borrowings from money pool                                                         97               121
  Taxes accrued                                                                      30                19
  Other current liabilities                                                          30                27
                                                                           -------------     -------------
      Total current liabilities                                                     219               238
                                                                           -------------     -------------
Long-term Debt, Net                                                                 485               485
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                            261               269
  Accumulated deferred investment tax credits                                        11                11
  Regulatory liabilities                                                            146               145
  Other deferred credits and liabilities                                             66                62
                                                                           -------------     -------------
      Total deferred credits and other non-current liabilities                      484               487
                                                                           -------------     -------------
Commitments and Contingencies (Note 9)
Stockholder's Equity:
  Common stock, no par value, 45.0 shares authorized - 25.5 shares outstanding      120               120
  Preferred stock not subject to mandatory redemption                                50                50
  Retained earnings                                                                 359               369
  Accumulated other comprehensive income (loss)                                      (5)               (7)
                                                                           -------------     -------------
      Total stockholder's equity                                                    524               532
                                                                           -------------     -------------
         TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                        $      1,712      $      1,742
                                                                           =============     =============
</TABLE>

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

                                       16

<PAGE>

<TABLE>
<CAPTION>

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


                                                                           Three Months Ended
                                                                                March 31,
                                                                        ---------------------
                                                                           2004         2003
                                                                        --------      -------

<S><C> <C>                                                              <C>          <C>

Cash Flows From Operating Activities:
  Net income                                                             $   10      $     2
  Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization                                           13           13
     Deferred income taxes, net                                              (9)          (5)
     Deferred investment tax credits, net                                     -           (1)
     Changes in assets and liabilities:
        Receivables, net                                                      7            1
        Materials and supplies                                               26           22
        Accounts and wages payable                                           (9)         (10)
        Taxes accrued                                                        11            6
        Assets, other                                                        (7)           4
        Liabilities, other                                                    7            9
        Other                                                                 2            -
                                                                         -------     --------
Net cash provided by operating activities                                    51           41
                                                                         -------     --------

Cash Flows From Investing Activities:
  Construction expenditures                                                  (9)         (10)
  Advances to money pool                                                      -           (7)
                                                                         -------     --------
Net cash used in investing activities                                        (9)         (17)
                                                                         -------     --------

Cash Flows From Financing Activities:
  Dividends on common stock                                                 (19)         (19)
  Dividends on preferred stock                                               (1)          (1)
  Redemptions, repurchases, and maturities:
    Long-term debt                                                            -           (5)
    Repayments to money pool                                                (24)           -
                                                                         -------     --------
Net cash used in financing activities                                       (44)         (25)
                                                                         -------     --------

Net change in cash and cash equivalents                                      (2)          (1)
Cash and cash equivalents at beginning of year                                16           17
                                                                         -------     --------
Cash and cash equivalents at end of period                                $   14      $    16
                                                                         =======     ========

Cash Paid During the Periods:
  Interest                                                               $    3      $     5
  Income taxes, net                                                           6            -

</TABLE>

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

                                       17
<PAGE>

<TABLE>
<CAPTION>

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


                                                                                  Three Months Ended
                                                                                       March 31,
                                                                              --------------------------
                                                                                 2004            2003
                                                                              ----------      -----------

<S><C><C>                                                                    <C>             <C>
Operating Revenues:
  Electric                                                                    $     216       $      206
                                                                              ----------      -----------
    Total operating revenues                                                        216              206
                                                                              ----------      -----------

Operating Expenses:
  Fuel and purchased power                                                           92               88
  Other operations and maintenance                                                   30               35
  Depreciation and amortization                                                      19               18
  Taxes other than income taxes                                                       5                7
                                                                              ----------      -----------
    Total operating expenses                                                        146              148
                                                                              ----------      -----------

Operating Income                                                                     70               58

Other Income and (Deductions):
  Miscellaneous income                                                                -                2
  Miscellaneous expense                                                              (1)               -
                                                                              ----------      -----------
    Total other income and (deductions)                                              (1)               2
                                                                              ----------      -----------

Interest Charges                                                                     23               26
                                                                              ----------      -----------

Income Before Income Taxes and Cumulative Effect of Change
  in Accounting Principle                                                            46               34

Income Taxes                                                                         17               13
                                                                              ----------      -----------

Income Before Cumulative Effect of Change in Accounting
  Principle                                                                          29               21

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

Net Income                                                                    $      29       $       39
                                                                              ==========      ===========
</TABLE>

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



                                       18

<PAGE>
<TABLE>
<CAPTION>


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

                                                                                  March 31,       December 31,
                                                                                    2004              2003
                                                                                -----------       ------------
                                   ASSETS
<S><C>    <C>                                                                   <C>              <C>
Current Assets:
  Cash and cash equivalents                                                      $       2        $        2
  Accounts receivable                                                                   93                88
  Materials and supplies, at average cost                                               88                90
  Other current assets                                                                   2                 4
                                                                                 ----------       -----------
    Total current assets                                                               185               184
Property and Plant, Net                                                              1,762             1,774
Other Non-Current Assets                                                                17                19
                                                                                 ----------       -----------
          TOTAL ASSETS                                                           $   1,964        $    1,977
                                                                                 ==========       ===========


                    LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
  Accounts and wages payable                                                     $      52        $       75
  Borrowings from money pool                                                            91               124
  Current portion of intercompany notes payable - CIPS and Ameren                       53                53
  Current portion of intercompany tax payable - CIPS                                    12                12
  Taxes accrued                                                                         46                30
  Other current liabilities                                                             35                23
                                                                                 ----------       -----------
    Total current liabilities                                                          289               317
                                                                                 ----------       -----------
Long-term Debt, Net                                                                    698               698
Intercompany Notes Payable - CIPS and Ameren                                           358               358
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                               106                99
  Accumulated deferred investment tax credits                                           13                13
  Intercompany tax payable - CIPS                                                      147               150
  Accrued pension and other postretirement benefits                                     21                19
  Other deferred credits and liabilities                                                 1                 2
                                                                                 ----------       -----------
    Total deferred credits and other non-current liabilities                           288               283
                                                                                 ----------       -----------
Commitments and Contingencies (Note 9)
Stockholder's Equity:
  Common stock, no par value, 10,000 shares authorized - 2,000 shares outstanding        -                 -
  Other paid-in capital                                                                150               150
  Retained earnings                                                                    181               170
  Accumulated other comprehensive income (loss)                                          -                 1
                                                                                 ----------       -----------
    Total stockholder's equity                                                         331               321
                                                                                 ----------       -----------
          TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                             $   1,964        $    1,977
                                                                                 ==========       ===========

</TABLE>

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


                                       19
<PAGE>
<TABLE>
<CAPTION>


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


                                                                                    Three Months Ended
                                                                                        March 31,
                                                                                --------------------------
                                                                                    2004           2003
                                                                                ----------      ----------
<S><C>                                                                         <C>             <C>
Cash Flows From Operating Activities:
  Net income                                                                    $       29      $      39
  Adjustments to reconcile net income to net cash
    provided by operating activities:
     Cumulative effect of change in accounting principle                                 -            (18)
     Depreciation and amortization                                                      19             18
     Deferred income taxes, net                                                          9             20
     Changes in assets and liabilities:
        Accounts receivable                                                             (5)           (18)
        Materials and supplies                                                           2              1
        Taxes accrued                                                                   16             (2)
        Accounts and wages payable                                                     (14)           (22)
        Assets, other                                                                    4             (1)
        Liabilities, other                                                               8             15
        Other                                                                           (1)             -
                                                                                -----------     ----------
Net cash provided by operating activities                                               67             32
                                                                                -----------     ----------

Cash Flows From Investing Activities:
  Construction expenditures                                                            (16)           (10)
                                                                                -----------     ----------
Net cash used in investing activities                                                  (16)           (10)
                                                                                -----------     ----------

Cash Flows From Financing Activities:
  Dividends on common stock                                                            (18)            (1)
  Redemptions, repurchases, and maturities:
    Repayments to money pool                                                           (33)           (21)
                                                                                -----------     ----------
Net cash used in financing activities                                                  (51)           (22)
                                                                                -----------     ----------

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

Cash Paid During the Periods:
  Interest                                                                      $       10      $      11
  Income taxes (refunded) paid                                                          (3)             -

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

</TABLE>

                                       20
<PAGE>

<TABLE>
<CAPTION>


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


                                                        ---------------Successor---------   ---Predecessor---
                                                            Three             Two
                                                            Months           Months
                                                            Ended            Ended
                                                          March 31,        March 31,           January
                                                        ---------------  ---------------    --------------
                                                            2004              2003                2003
                                                        ---------------  ---------------    --------------
<S><C>                                                 <C>              <C>                <C>
Operating Revenues:
  Electric                                              $           98   $           80     $          47
  Gas                                                              141              103                58
  Other                                                              1                1                 -
                                                        ---------------  ---------------    --------------
    Total operating revenues                                       240              184               105
                                                        ---------------  ---------------    --------------

Operating Expenses:
  Fuel and purchased power                                          45               42                24
  Gas purchased for resale                                         107               83                44
  Other operations and maintenance                                  43               22                14
  Depreciation and amortization                                     16               14                 6
  Taxes other than income taxes                                      9                8                 4
                                                        ---------------  ---------------    --------------
    Total operating expenses                                       220              169                92
                                                        ---------------  ---------------    --------------

Operating Income                                                    20               15                13

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

Interest Charges                                                    12                9                 5

Income Before Income Taxes and Cumulative Effect of
  Change in Accounting Principle                                     7                6                 8

Income Taxes                                                         3                3                 3
                                                        ---------------  ---------------    --------------

Income Before Cumulative Effect of Change in
  Accounting Principle                                               4                3                 5

Cumulative Effect of Change in Accounting Principle,
  Net of Income Taxes of $-, $- and $2                               -                -                 4
                                                        ---------------  ---------------    --------------

Net Income                                              $            4   $            3     $           9
                                                        ===============  ===============    ==============
</TABLE>

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


                                       21


<PAGE>
<TABLE>
<CAPTION>

                                CILCORP INC.
                         CONSOLIDATED BALANCE SHEET
                         (Unaudited) (In millions)

                                                                                ---------Successor------------
                                                                                   March 31,      December 31,
                                                                                    2004             2003
                                                                                ------------      ------------

                                   ASSETS
<S><C>     <C>                                                                 <C>               <C>
Current Assets:
  Cash and cash equivalents                                                     $        12       $        11
  Accounts receivables - trade (less allowance for doubtful
    accounts of $6 and $6, respectively)                                                 52                59
  Unbilled revenue                                                                       32                40
  Miscellaneous accounts and notes receivable                                            12                16
  Materials and supplies, at average cost                                               121               154
  Other current assets                                                                    3                 5
                                                                                ------------      ------------
    Total current assets                                                                232               285
                                                                                ------------      ------------
Property and Plant, Net                                                               1,136             1,127
Investments and Other Non-Current Assets:
  Investments in leveraged leases                                                       128               130
  Goodwill and other intangibles, net                                                   558               567
  Other assets                                                                           20                11
                                                                                ------------      ------------
    Total investments and other non-current assets                                      706               708
                                                                                ------------      ------------
Regulatory Assets                                                                        15                16
                                                                                ------------      ------------
           TOTAL ASSETS                                                         $     2,089       $     2,136
                                                                                ============      ============


                    LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
  Current maturities of long-term debt                                          $         -       $       100
  Borrowings from money pool                                                            192               145
  Intercompany note payable - Ameren                                                     38                46
  Accounts and wages payable                                                            102               108
  Other current liabilities                                                              48                38
                                                                                ------------      ------------
    Total current liabilities                                                           380               437
                                                                                ------------      ------------
Long-term Debt, Net                                                                     667               669
Preferred Stock of Subsidiary Subject to Mandatory Redemption                            21                21
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                                175               181
  Accumulated deferred investment tax credits                                            11                11
  Regulatory liabilities                                                                 29                24
  Accrued pension and other postretirement benefits                                     265               259
  Other deferred credits and liabilities                                                 37                37
                                                                                ------------      ------------
    Total deferred credits and other non-current liabilities                            517               512
                                                                                ------------      ------------
Preferred Stock of Subsidiary Not Subject to Mandatory Redemption                        19                19
Commitments and Contingencies (Note 9)
Stockholder's Equity:
  Common stock, no par value, 10,000 shares authorized - 1,000 shares outstanding         -                 -
  Other paid-in capital                                                                 490               490
  Retained earnings                                                                      (9)              (13)
  Accumulated other comprehensive income (loss)                                           4                 1
                                                                                ------------      ------------
    Total stockholder's equity                                                          485               478
                                                                                ------------      ------------
           TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                           $     2,089       $     2,136
                                                                                ============      ============

</TABLE>

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

                                       22

<PAGE>
<TABLE>
<CAPTION>

                                  CILCORP INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            (Unaudited) (In millions)

                                                                --------Successor--------     --Predecessor--
                                                                  Three            Two
                                                                  Months          Months
                                                                   Ended           Ended
                                                                 March 31,       March 31,        January
                                                                -----------     -----------     -------------
                                                                   2004             2003            2003
                                                                -----------     -----------     -------------
<S><C>  <C>                                                    <C>              <C>            <C>
Cash Flows From Operating Activities:
  Net income                                                    $        4      $        3      $          9
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Cumulative effect of change in accounting principle                -               -                (4)
      Depreciation and amortization                                     16              14                 6
      Deferred income taxes, net                                         2              (2)               (5)
      Changes in assets and liabilities:
         Receivables, net                                               19              (7)              (20)
         Materials and supplies                                         33               -                13
         Accounts and wages payable                                      7               1                20
         Taxes accrued                                                   1               4                11
         Assets, other                                                  (4)             18                 6
         Liabilities, other                                             14              19                (5)
         Other                                                           3             (11)                -
                                                                -----------     -----------     -------------
Net cash provided by operating activities                               95              39                31
                                                                -----------     -----------     -------------

Cash Flows From Investing Activities:
  Construction expenditures                                            (35)            (17)              (16)
  Other                                                                  2               -                 1
                                                                -----------     -----------     -------------
Net cash used in investing activities                                  (33)            (17)              (15)
                                                                -----------     -----------     -------------

Cash Flows From Financing Activities:
  Redemptions, repurchases, and maturities:
    Short-term debt                                                      -               -               (10)
    Long-term debt                                                    (100)            (26)                -
    Intercompany note payable - Ameren                                  (8)              -                 -
  Issuances:
    Borrowings from money pool                                          47               -                 -
                                                                -----------     -----------     -------------
Net cash used in financing activities                                  (61)            (26)              (10)
                                                                -----------     -----------     -------------

Net change in cash and cash equivalents                                  1              (4)                6
Cash and cash equivalents at beginning of year                          11              38                32
                                                                -----------     -----------     -------------
Cash and cash equivalents at end of period                      $       12      $       34      $         38
                                                                ===========     ===========     =============

Cash Paid During the Periods:
  Interest                                                      $        4      $        4      $          5
  Income taxes, net                                                      3               -                 -

</TABLE>

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


                                       23


<PAGE>

<TABLE>
<CAPTION>

                         CENTRAL ILLINOIS LIGHT COMPANY
                        CONSOLIDATED STATEMENT OF INCOME
                            (Unaudited) (In millions)

                                                                       Three Months Ended
                                                                          March 31,
                                                                   ----------------------------
                                                                       2004           2003
                                                                   -------------  -------------
<S><C>                                                            <C>            <C>
Operating Revenues:
  Electric                                                         $         98   $        127
  Gas                                                                       127            119
                                                                   -------------  -------------
    Total operating revenues                                                225            246
                                                                   -------------  -------------

Operating Expenses:
  Fuel and purchased power                                                   45             67
  Gas purchased for resale                                                   94             84
  Other operations and maintenance                                           47             41
  Depreciation and amortization                                              16             18
  Taxes other than income taxes                                               8             12
                                                                   -------------  -------------
    Total operating expenses                                                210            222
                                                                   -------------  -------------

Operating Income                                                             15             24

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

Interest Charges                                                              3             5
                                                                   -------------  -------------

Income Before Income Taxes and Cumulative Effect of Change
  in Accounting Principle                                                    11             19

Income Taxes                                                                  5              8
                                                                   -------------  -------------

Income Before Cumulative Effect of Change in Accounting
  Principle                                                                   6             11

Cumulative Effect of Change in Accounting Principle,
  Net of Income Taxes of $- and $16                                           -             24
                                                                   -------------  -------------

Net Income                                                                    6             35

Preferred Stock Dividends                                                     -              -
                                                                   -------------  -------------

Net Income Available to Common Stockholder                         $          6   $         35
                                                                   =============  =============

</TABLE>

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


                                       24
<PAGE>
<TABLE>
<CAPTION>
                          CENTRAL ILLINOIS LIGHT COMPANY
                            CONSOLIDATED BALANCE SHEET
                            (Unaudited) (In millions)

                                                                                     March 31,          December 31,
                                                                                       2004                2003
                                                                                   -------------      --------------
                                      ASSETS
<S><C>    <C>                                                                     <C>                <C>
Current Assets:
  Cash and cash equivalents                                                        $          3       $           8
  Accounts receivable - trade (less allowance for doubtful
    accounts of $6 and $6, respectively)                                                     52                  57
  Unbilled revenue                                                                           28                  35
  Miscellaneous accounts and notes receivable                                                12                  14
  Materials and supplies, at average cost                                                    40                  69
  Other current assets                                                                        3                   5
                                                                                   -------------      --------------
    Total current assets                                                                    138                 188
                                                                                   -------------      --------------
Property and Plant, Net                                                                   1,115               1,101
Other Non-Current Assets                                                                     27                  19
Regulatory Assets                                                                            15                  16
                                                                                   -------------      --------------
           TOTAL ASSETS                                                            $      1,295       $       1,324
                                                                                   =============      ==============


                       LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
  Current maturities of long-term debt                                             $          -       $         100
  Borrowings from money pool                                                                200                 149
  Accounts and wages payable                                                                105                 101
  Taxes accrued                                                                              13                  13
  Other current liabilities                                                                  33                  30
                                                                                   -------------      --------------
    Total current liabilities                                                               351                 393
                                                                                   -------------      --------------
Long-term Debt, Net                                                                         138                 138
Preferred Stock Subject to Mandatory Redemption                                              21                  21
Deferred Credits and Other Non-Current Liabilities:
  Accumulated deferred income taxes, net                                                     94                 101
  Accumulated deferred investment tax credits                                                11                  11
  Regulatory liabilities                                                                    169                 167
  Accrued pension and other postretirement benefits                                         138                 128
  Other deferred credits and liabilities                                                     22                  23
                                                                                   -------------      --------------
    Total deferred credits and other non-current liabilities                                434                 430
                                                                                   -------------      --------------
Commitments and Contingencies (Note 9)
Stockholder's Equity:
  Common stock, no par value, 20.0 shares authorized - 13.6 shares outstanding              186                 186
  Preferred stock not subject to mandatory redemption                                        19                  19
  Other paid-in capital                                                                      52                  52
  Retained earnings                                                                         101                  95
  Accumulated other comprehensive income (loss)                                              (7)                (10)
                                                                                   -------------      --------------
    Total stockholder's equity                                                              351                 342
                                                                                   -------------      --------------
           TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                              $      1,295       $       1,324
                                                                                   =============      ==============


</TABLE>

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

                                       25

<PAGE>

<TABLE>
<CAPTION>

                        CENTRAL ILLINOIS LIGHT COMPANY
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                           (Unaudited) (In millions)


                                                                                    Three Months Ended
                                                                                         March 31,
                                                                                ---------------------------
                                                                                    2004          2003
                                                                                ------------- -------------
<S><C>  <C>                                                                     <C>           <C>
Cash Flows From Operating Activities:
  Net income                                                                    $          6   $        35
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Cumulative effect of change in accounting principle                                  -           (24)
      Depreciation and amortization                                                       16            18
      Deferred income taxes, net                                                           2            (3)
      Changes in assets and liabilities:
         Receivables, net                                                                 14           (22)
         Materials and supplies                                                           29            16
         Accounts and wages payable                                                       11            20
         Taxes accrued                                                                     -            13
         Assets, other                                                                    (5)           12
         Liabilities, other                                                                3            11
         Other                                                                             3            (1)
                                                                                -------------  ------------
Net cash provided by operating activities                                                 79            75
                                                                                -------------  ------------

Cash Flows From Investing Activities:
  Construction expenditures                                                              (35)          (33)
                                                                                -------------  ------------
Net cash used in investing activities                                                    (35)          (33)
                                                                                -------------  ------------

Cash Flows From Financing Activities:
  Redemptions, repurchases, and maturities:
    Short-term debt                                                                        -           (10)
    Long-term debt                                                                      (100)          (26)
  Issuances:
    Borrowings from money pool                                                            51             -
                                                                                -------------  ------------
Net cash used in financing activities                                                    (49)          (36)
                                                                                -------------  ------------

Net change in cash and cash equivalents                                                   (5)            6
Cash and cash equivalents at beginning of year                                             8            22
                                                                                -------------  ------------
Cash and cash equivalents at end of period                                      $          3   $        28
                                                                                =============  ============

Cash Paid During the Periods:
  Interest                                                                      $          4   $         9
  Income taxes, net                                                                        3             -

</TABLE>

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


                                       26

<PAGE>

AMEREN CORPORATION (CONSOLIDATED)
UNION ELECTRIC COMPANY (CONSOLIDATED)
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
AMEREN ENERGY GENERATING COMPANY
CILCORP INC. (CONSOLIDATED)
CENTRAL ILLINOIS LIGHT COMPANY (CONSOLIDATED)

COMBINED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2004

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 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
operating  subsidiaries  are  listed  below.  Also see  Glossary  of  Terms  and
Abbreviations.

o    UE,  also  known as  Union  Electric  Company,  operates  a  rate-regulated
     electric  generation,   transmission  and  distribution   business,  and  a
     rate-regulated  natural gas distribution business in Missouri and Illinois.
     UE was  incorporated  in Missouri in 1922 and is  successor  to a number of
     companies,  the oldest of which was  organized  in 1881.  It is the largest
     electric  utility in the State of Missouri  and  supplies  electric and gas
     service  to a 24,500  square  mile area  located  in  central  and  eastern
     Missouri and west central Illinois.  This area has an estimated  population
     of 3 million and includes the greater St. Louis area. UE supplies  electric
     service to approximately  1.2 million  customers and natural gas service to
     approximately  130,000 customers.  See Note 3 - Rate and Regulatory Matters
     for  information  regarding the proposed  transfer in 2004 of UE's Illinois
     electric and natural gas transmission and distribution businesses to CIPS.

o    CIPS,  also known as Central  Illinois Public Service  Company,  operates a
     rate-regulated  electric  and natural  gas  transmission  and  distribution
     business  in  Illinois.  CIPS was  incorporated  in  Illinois  in 1902.  It
     supplies  electric  and gas  utility  service to  portions  of central  and
     southern Illinois having an estimated population of 1 million in an area of
     approximately  20,000  square  miles.  CIPS  supplies  electric  service to
     approximately  325,000  customers and natural gas service to  approximately
     170,000 customers.

o    Genco,  also  known as Ameren  Energy  Generating  Company,  operates a non
     rate-regulated  electric  generation  business.  Genco was  incorporated in
     Illinois in March 2000, in conjunction  with the Illinois  Customer  Choice
     Law. Genco commenced  operations on May 1, 2000, when CIPS  transferred its
     five coal-fired power plants and related liabilities to Genco at historical
     net book value. Genco is a subsidiary of Development  Company, a subsidiary
     of Resources  Company,  which is a subsidiary of Ameren.  See Note 3 - Rate
     and Regulatory  Matters for information  regarding the proposed transfer in
     2004 of Genco's CTs located in Pinckneyville and Kinmundy, Illinois to UE.

o    CILCO,  also known as Central  Illinois Light  Company,  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 distribution
     business in  Illinois.  CILCO was  incorporated  in  Illinois  in 1913.  It
     supplies  electric and gas utility  service to portions of central and east
     central  Illinois in areas of  approximately  3,700 and 4,500 square miles,
     respectively,  with an estimated  population of 1 million.  CILCO  supplies
     electric service to approximately 205,000 customers and natural gas service
     to approximately 210,000 customers.  In October 2003, CILCO transferred its
     coal-fired  plants  and  a  CT  facility,  representing  in  the  aggregate
     approximately 1,100 megawatts of electric generating capacity,  to a wholly
     owned  subsidiary,  known as AERG, as a contribution  in return for all the
     outstanding stock of AERG and AERG's assumption of certain liabilities. The
     net book value of the transferred assets was approximately $378 million and
     no gain or loss was  recognized as the  transaction  was accounted for as a
     transfer  between  entities under common control.  The transfer was made in
     conjunction with the Illinois Customer Choice Law. CILCORP was incorporated
     in Illinois in 1985.

                                       27
<PAGE>

     Ameren  has  various  other  subsidiaries  responsible  for the  short  and
long-term marketing of power, procurement of fuel, management of commodity risks
and providing other shared services. Ameren also has a 60% ownership interest in
EEI through UE, which owns 40%, and Resources  Company,  which owns 20%.  Ameren
consolidates  EEI for  financial  reporting  purposes,  while  UE and  Resources
Company report EEI under the equity method.

     When we refer to "our",  "we" or "us",  it  indicates  that the  referenced
information  relates to Ameren and its subsidiaries.  When we refer to financing
or acquisition activities, we are defining Ameren as the parent holding company.
When appropriate,  the Ameren Companies are specifically  referenced in order to
distinguish among their different business activities.

     The financial statements of Ameren are prepared on a consolidated basis and
therefore include the accounts of its  majority-owned  subsidiaries.  Results of
CILCORP  and CILCO  reflected  in  Ameren's  consolidated  financial  statements
include the period from the acquisition  date of January 31, 2003.  January 2003
data for CILCORP and CILCO are not included in Ameren's consolidated totals. See
Note 2 - Acquisitions  for further  information.  All  significant  intercompany
transactions  have been eliminated.  All tabular dollar amounts are in millions,
unless otherwise indicated.

     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 2004  reporting.  These
statements  should be read in conjunction with the financial  statements and the
notes  thereto  included in the Ameren  Companies'  2003 Annual  Reports on Form
10-K.

Earnings Per Share

     There were no differences  between the basic and diluted earnings per share
amounts for the three month periods ended March 31, 2004 and 2003. Assumed stock
option  conversions  increased the number of shares  outstanding  in the diluted
earnings  per share  calculation  by 300,333  shares for the three  months ended
March 31, 2004 (2003 - 239,883  shares).  Ameren' equity security units have no
dilutive  effect on earnings per share,  except during  periods when the average
market price of Ameren's common stock is above $46.61. As only the Ameren parent
company has publicly held common stock,  earnings per share calculations are not
relevant and are not presented for any of the subsidiary companies.

Accounting Changes and Other Matters

SFAS No.143 - "Accounting for Asset Retirement Obligations"

     We adopted the provisions of SFAS No. 143,  effective January 1, 2003. SFAS
No. 143 provides the accounting  requirements for asset  retirement  obligations
associated  with  tangible,  long-lived  assets.  Upon adoption of the standard,
Ameren and Genco  recognized  a net  after-tax  gain of $18 million in the first
quarter of 2003 for the  cumulative  effect of change in  accounting  principle.
Prior  to  Ameren's  acquisition  of  CILCORP,  predecessor  CILCORP  and  CILCO
recognized  a net  after-tax  gain upon  adoption  of SFAS No. 143 in 2003 of $4
million and $24 million,  respectively,  for the cumulative  effect of change in
accounting  principle.  In addition,  in accordance with SFAS No. 143, estimated
future  removal costs  associated  with  Ameren's,  UE's,  CIPS',  CILCORP's and
CILCO's   rate-regulated   operations  that  had  previously  been  embedded  in
accumulated depreciation were classified to a regulatory liability.

     Asset  retirement  obligations  at Ameren  and UE  increased  by $6 million
during the quarter ended March 31, 2004, to reflect the accretion of obligations
to their  present  value.  Increases  to Genco's,  CILCORP's  and CILCO's  asset
retirement  obligations were immaterial during these periods.  Substantially all
of this accretion was recorded as an increase to regulatory assets.

                                       28

<PAGE>


FIN No. 46 - "Consolidation of Variable Interest Entities"

     In  January   2003,   the  FASB  issued  FIN  No.  46,  which  changed  the
consolidation  requirements  for special purpose entities (SPEs) and non-special
purpose  entities  (non-SPEs) that meet the criteria for designation as variable
interest entities (VIEs). In December 2003, the FASB revised FIN No. 46 (FIN No.
46R) to clarify  certain aspects of FIN No. 46 and modify the effective dates of
the new guidance.  FIN No. 46R provides  guidance on the accounting for entities
that are  controlled  through means other than voting rights by another  entity.
FIN No. 46R  requires a VIE to be  consolidated  by a company if that company is
designated as the primary beneficiary.

     Ameren does not have any  interests in entities that are  considered  SPEs.
FIN No. 46R was  effective on March 31, 2004 for any  interests  Ameren holds in
non-SPEs.  The  adoption  of FIN No. 46R did not have a  material  impact on the
consolidated   financial  statements  of  the  Ameren  Companies.   However,  in
connection  with  the  adoption  of FIN No.  46R,  we have  determined  that the
following significant variable interests are held by the Ameren Companies:

o    EEI.  Ameren has a 60% ownership  interest in EEI through UE's 40% interest
     and Resources Company's 20% interest.  Under the FIN No. 46R model, Ameren,
     UE and Resources Company have a variable interest in EEI, and Ameren is the
     primary beneficiary.  Accordingly, Ameren will continue to consolidate EEI,
     and UE will continue to account for its  investment in EEI under the equity
     method of  accounting.  The  maximum  exposure to loss as a result of these
     variable  interests in EEI is limited to UE's and Resource Company's equity
     investments  in EEI and Ameren's  60%  guarantee of a $40 million bank term
     loan issued by EEI and due in 2004.

o    Tolling  agreement.  CILCO has a  significant  variable  interest in Medina
     Valley  through a tolling  agreement to purchase  steam,  chilled water and
     electricity. We have concluded that CILCO is not the primary beneficiary of
     Medina Valley,  and accordingly,  CILCO does not consolidate Medina Valley.
     The maximum  exposure to loss as a result of this variable  interest in the
     tolling agreement is not material.

o    Leveraged lease and affordable housing partnership investments. Ameren, UE,
     and CILCORP have  investments  in leveraged  lease and  affordable  housing
     partnership  arrangements  that are variable  interests.  We have concluded
     that Ameren,  UE or CILCORP are not the primary  beneficiary  of any of the
     VIEs related to these investments. The maximum exposure to loss as a result
     of  these  variable  interests  is  limited  to the  investments  in  these
     arrangements.  At March 31, 2004, Ameren and CILCORP had net investments in
     leveraged leases of $161 million and $128 million,  respectively.  At March
     31, 2004,  Ameren,  UE and CILCORP had  investments  in affordable  housing
     partnerships of $16 million, $8 million and $7 million, respectively.

FASB Staff  Position  SFAS No. 106-1 and Proposed  FASB Staff  Position SFAS No.
106-B  -  "Accounting  and  Disclosure  Requirements  Related  to  the  Medicare
Prescription Drug, Improvement and Modernization Act of 2003"

     Through its  postretirement  benefit plans,  Ameren provides  retirees with
prescription drug coverage. On December 8, 2003, the Medicare Prescription Drug,
Improvement  and  Modernization  Act of 2003  (the  Prescription  Drug  Act) was
enacted.  The Prescription Drug Act introduced a prescription drug benefit under
Medicare as well as a federal subsidy to sponsors of retiree  healthcare benefit
plans that  provide a benefit  that is at least  actuarially  equivalent  to the
Medicare  prescription  drug  benefit.  In  response  to  the  enactment  of the
Prescription  Drug Act,  the FASB issued FASB Staff  Position  SFAS No. 106-1 in
January 2004, which permitted a plan sponsor of a postretirement healthcare plan
that provides a prescription  drug benefit to make a one-time  election to defer
the accounting for the effects of the  Prescription  Drug Act.  Ameren made this
one-time  election  allowed by FASB Staff  Position  SFAS No. 106-1.  Thus,  any
measures of the accumulated  projected benefit obligation (APBO) or net periodic
postretirement benefit costs in Ameren's financial statements do not reflect the
effects of the Prescription Drug Act on Ameren's postretirement plans.

     During the first  quarter of 2004,  FASB Staff  Position SFAS No. 106-B was
issued for comment to supersede FASB Staff  Position SFAS No. 106-1.  FASB Staff
Position SFAS No. 106-B will be effective for periods  beginning  after June 15,
2004.  FASB Staff  Position  SFAS No. 106-B  provides  specific  guidance on the
accounting for the federal  subsidy.  Under this proposed Staff  Position,  if a
postretirement   drug  benefit  was  actuarially   equivalent  to  the  Medicare
prescription drug benefit on the date the Prescription Drug Act was enacted, the
employer should  recognize the subsidy in the measurement of the APBO under SFAS
No.  106,  "Employers'   Accounting  for  Postretirement   Benefits  Other  Than
Pensions." If the employer cannot conclude that the drug benefit was actuarially
equivalent,  the Staff Position  prescribes other effects the Prescription  Drug
Act can have on the  measurement  of the APBO.  Ameren is evaluating  whether it
will

                                       29
<PAGE>

be eligible for a federal subsidy under the  Prescription  Drug Act, the impact,
if  any,  on its  postretirement  benefit  plans  and  the  resulting  financial
statement impact, which we do not expect to be material.

Interchange Revenues

     The following table presents the interchange revenues included in Operating
Revenues - Electric for the three months ended March 31, 2004 and 2003. See Note
8 - Related Party Transactions for further information on affiliates.

  -----------------------------------------------------------------------------
                                                              Three Months
  -----------------------------------------------------------------------------

                                                           2004          2003
                                                           ----          ----

   Ameren(a).......................................       $  91         $  114
   UE..............................................          84            102
   CIPS............................................          10              8
   Genco...........................................          39             46
   CILCORP(b)......................................           1              5
   CILCO...........................................           1              5
   ----------------------------------------------------------------------------
     (a)  Excludes  amounts for CILCORP and CILCO prior to the acquisition  date
          of January  31,  2003;  includes  amounts  for  non-registrant  Ameren
          subsidiaries as well as intercompany eliminations.
     (b)  2003 amounts include January 2003 predecessor  information,  which was
          $3 million.  CILCORP  consolidates  CILCO and therefore includes CILCO
          amounts in its balances.

Purchased Power

     The following  table  presents the  purchased  power  expenses  included in
Operating  Expenses - Fuel and Purchased  Power for the three months ended March
31,  2004  and  2003.  See  Note 8 -  Related  Party  Transactions  for  further
information on affiliate purchased power transactions.

   ----------------------------------------------------------------------------
                                                              Three Months
   ----------------------------------------------------------------------------
                                                           2004          2003
                                                           ----          ----
   Ameren(a).......................................       $  72         $   52
   UE..............................................          50             46
   CIPS............................................          80             86
   Genco...........................................          38             41
   CILCORP(b)......................................          22             40
   CILCO...........................................          22             46
   ----------------------------------------------------------------------------
     (a)  Excludes  amounts for CILCORP and CILCO prior to the acquisition  date
          of January  31,  2003;  includes  amounts  for  non-registrant  Ameren
          subsidiaries as well as intercompany eliminations.
     (b)  2003 amounts include January 2003 predecessor  information,  which was
          $12 million.  CILCORP  consolidates CILCO and therefore includes CILCO
          amounts in its balances.

Excise Taxes

     Excise  taxes  reflected on Missouri  electric  and gas, and Illinois  gas,
customer  bills are imposed on us and are recorded  gross in Operating  Revenues
and Other Taxes.  Excise taxes reflected on Illinois electric customer bills are
imposed on the consumer and 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 ended
March 31, 2004 and 2003:

   ----------------------------------------------------------------------------
                                                              Three Months
   ----------------------------------------------------------------------------
                                                           2004          2003
                                                           ----          ----
   Ameren(a)..........................................    $  34         $   31
   UE.................................................       24             23
   CIPS...............................................        5              5
   Genco..............................................        -              -
   CILCORP(b).........................................        5              6
   CILCO..............................................        5              6
  -----------------------------------------------------------------------------
     (a)  Excludes  amounts for CILCORP and CILCO prior to the acquisition  date
          of January 31, 2003.
     (b)  2003 amounts include January 2003 predecessor information which was $2
          million.  CILCORP  consolidates  CILCO and  therefore  includes  CILCO
          amounts in its balances.


                                       30

<PAGE>

NOTE 2 - ACQUISITIONS

CILCORP and Medina Valley

     On  January  31,  2003,  Ameren  completed  the  acquisition  of all of the
outstanding  common stock of CILCORP from AES.  CILCORP is the parent company of
Peoria,  Illinois-based  CILCO.  With the acquisition,  CILCO became an indirect
Ameren  subsidiary,  but  remains  a  separate  utility  company,  operating  as
AmerenCILCO. On February 4, 2003, Ameren also completed the acquisition from AES
of Medina  Valley,  which  indirectly  owns a 40  megawatt,  gas-fired  electric
generation  plant.  The results of operations for CILCORP and Medina Valley were
included  in  Ameren's  consolidated  financial  statements  effective  with the
respective  January and February 2003 acquisition dates. See Note 1 - Summary of
Significant  Accounting  Policies for further information on the presentation of
the results of CILCORP and CILCO in Ameren's consolidated financial statements.

     Ameren  acquired  CILCORP  to  complement  its  existing  Illinois  gas and
electric operations.  The purchase included CILCO's rate-regulated  electric and
natural gas  businesses in Illinois  serving  approximately  205,000 and 210,000
customers, respectively, of which approximately 150,000 are combination electric
and gas  customers.  CILCO's  service  territory is  contiguous to CIPS' service
territory.  CILCO  also  has a non  rate-regulated  electric  and gas  marketing
business  principally  focused in the Chicago,  Illinois  region.  Finally,  the
purchase included approximately 1,200 megawatts of largely coal-fired generating
capacity,  most of which became non  rate-regulated  on October 3, 2003,  due to
CILCO's transfer on that date of 1,100 megawatts of generating capacity to AERG.

     The total acquisition cost was approximately  $1.4 billion and included the
assumption by Ameren of CILCORP and Medina  Valley debt and  preferred  stock at
closing of $895 million and  consideration  of $479 million in cash,  net of $38
million  cash  acquired.  The cash  component  of the  purchase  price came from
Ameren's  issuance  in  September  2002 of 8.05  million  common  shares and its
issuance in early 2003 of an  additional  6.325  million  common  shares,  which
together generated aggregate net proceeds of $575 million.

     The purchase  price  allocation  for the  acquisition of CILCORP and Medina
Valley was  finalized in January  2004.  As a result,  goodwill  decreased by $8
million since  December 31, 2003,  primarily due to January 2004  adjustments to
property  and plant,  income tax accounts and accrued  severance  expenses.  The
following  table presents the final estimated fair values of the assets acquired
and liabilities  assumed at the dates of our  acquisitions of CILCORP and Medina
Valley.

   ----------------------------------------------------------------------------
   Current assets..............................................       $    323
   Property and plant..........................................          1,162
   Investments and other non-current assets....................            154
   Specifically-identifiable intangible assets.................              6
   Goodwill....................................................            560
   ----------------------------------------------------------------------------
      Total assets acquired....................................          2,205
   ----------------------------------------------------------------------------
   Current liabilities.........................................            189
   Long-term debt, including current maturities................            937
   Other non-current liabilities...............................            521
   ----------------------------------------------------------------------------
      Total liabilities assumed................................          1,647
   ----------------------------------------------------------------------------
   Preferred stock assumed.....................................             41
   ----------------------------------------------------------------------------
      Net assets acquired......................................       $    517
   ----------------------------------------------------------------------------

     Specifically-identifiable  intangible assets of $6 million are comprised of
retail customer  contracts,  which are subject to  amortization  with an average
life of 10 years.

     Goodwill  of $560  million  (CILCORP  - $553  million;  Medina  Valley - $7
million)  was  recognized  in  connection  with the  CILCORP  and Medina  Valley
acquisitions.  None  of this  goodwill  is  expected  to be  deductible  for tax
purposes.

Illinois Power

     On  February  2, 2004,  Ameren  entered  into an  agreement  with Dynegy to
purchase the stock of Decatur,  Illinois-based  Illinois  Power and Dynegy's 20%
ownership interest in EEI. Illinois Power operates a rate-regulated electric and
natural gas transmission and distribution business serving approximately 600,000
electric and 415,000 gas customers in



                                       31

<PAGE>

areas contiguous to our existing Illinois utility service territories. The total
transaction  value is  approximately  $2.3 billion,  including the assumption of
approximately  $1.8 billion of Illinois Power debt and preferred stock, with the
balance of the purchase  price to be paid in cash at closing.  Ameren will place
$100  million of the cash  portion of the  purchase  price in a six-year  escrow
pending resolution of certain contingent  environmental  obligations of Illinois
Power  and  other  Dynegy   affiliates   for  which  Ameren  has  been  provided
indemnification by Dynegy.

     Ameren's  financing plan for this transaction  includes the issuance of new
Ameren  common stock,  which in total,  is expected to equal at least 50% of the
transaction  value.  In February 2004,  Ameren issued 19.1 million common shares
that generated net proceeds of $853 million.  Proceeds from this sale and future
offerings  are  expected to be used to finance the cash  portion of the purchase
price, to reduce Illinois Power debt assumed as part of this transaction, to pay
any  related  premiums  and  possibly to reduce  present or future  indebtedness
and/or repurchase securities of Ameren or our subsidiaries.

     Upon completion of the acquisition,  expected by the end of 2004,  Illinois
Power will become an Ameren subsidiary operating as AmerenIP. The transaction is
subject to the approval of the ICC, the SEC, the FERC,  the FCC, the  expiration
of the  waiting  period  under the  Hart-Scott-Rodino  Act and  other  customary
closing  conditions.  In March 2004, all necessary  regulatory filings were made
for approval of the  transaction.  See Note 3 - Rate and Regulatory  Matters for
further  information  on  these  regulatory   proceedings.   In  addition,  this
transaction  includes a firm capacity power supply contract for Illinois Power's
annual purchase of 2,800  megawatts of electricity  from a subsidiary of Dynegy.
This  contract  will extend  through 2006 and is expected to supply about 75% of
Illinois Power's customer requirements.

     According to Illinois Power's Annual Report on Form 10-K for the year ended
December 31, 2003, Illinois Power had revenues of $1.6 billion, operating income
of $166 million,  and net income  applicable to its common  shareholder  of $115
million,  and at December 31, 2003, had total assets of $2.8 billion,  excluding
an intercompany  note receivable from its parent company of  approximately  $2.3
billion. Illinois Power files quarterly, annual and current reports with the SEC
pursuant to the Exchange Act.


NOTE 3 - RATE AND REGULATORY MATTERS

Illinois Power Acquisition

     On March 24, 2004,  Ameren and Illinois Power filed an application with the
ICC for approval of Ameren's acquisition of Illinois Power as discussed above in
Note  2  -  Acquisitions.  The  application  seeks  expedited  approval  of  the
acquisition  by September  15,  2004. A procedural  schedule has been adopted in
this  proceeding  which can permit an order to be issued by the ICC by September
15, 2004. On March 25, 2004, Ameren and Illinois Power filed an application with
the FERC for  approval of Ameren's  acquisition  of Illinois  Power and Dynegy's
interest in EEI. The  application  seeks approval of the acquisition by July 28,
2004. On March 29, 2004, Ameren and Dynegy filed an application with the FCC for
approval of the  transfer of control of FCC licenses  held by Illinois  Power to
Ameren.  On April 14, 2004,  the FCC  consented  to the transfer of control.  On
March 30,  2004,  pursuant to the  requirements  of the  Hart-Scott-Rodino  Act,
Ameren and Dynegy  filed  notices with  respect to the  acquisition  of Illinois
Power with the FTC and the Antitrust Division of the DOJ. On April 30, 2004, the
initial 30 calendar day waiting period  expired  without a request by the FTC or
DOJ for additional information or documents.  As a result, Ameren and Dynegy are
allowed  to  conclude  the  acquisition  as soon  as all  other  conditions  are
satisfied.  On March 31, 2004,  Ameren and Illinois  Power filed an  application
with the SEC under the PUHCA for  approval of Ameren'  acquisition  of Illinois
Power.

     We  are  unable  to  predict  the  ultimate  outcome  of  these  regulatory
proceedings or the timing of the final decisions of the various agencies.

Intercompany  Transfer of Electric  Generating  Facilities and Illinois  Service
Territory

     As a part of the settlement of the Missouri  electric rate case in 2002, UE
committed  to making  certain  infrastructure  investments  from January 1, 2002
through June 30, 2006 of $2.25 billion to $2.75 billion,  including the addition
of 700  megawatts  of  generation  capacity.  The new  capacity  requirement  is
expected to be  satisfied  by the  additions  in 2002 of 240  megawatts  and the
proposed  transfer  from  Genco to UE,  at net book  value  (approximately  $250
million),  of

                                       32

<PAGE>

approximately 550 megawatts of CTs at Pinckneyville and Kinmundy,  Illinois. The
transfer is subject to receipt of FERC and SEC approval.  Approval of the ICC is
not required  contingent  upon prior  approval and execution of UE's transfer of
its Illinois public utility  operations to CIPS as discussed below.  Approval by
the MoPSC is not  required  in order for this  transfer to occur.  However,  the
MoPSC has jurisdiction  over UE's ability to recover the cost of the transferred
generating  facilities from its electric  customers in its rates. As part of the
settlement  of the Missouri  electric rate case in 2002, UE is subject to a rate
moratorium  providing for no changes in its electric rates before June 30, 2006,
subject to certain statutory and other exceptions.

     In  February  2003,  UE  sought  approval  from  the FERC to  transfer  the
Pinckneyville  and  Kinmundy  CTs from Genco to UE.  Certain  independent  power
producers  objected to UE's request  based on a claim that the transfer may harm
competition for the sale of electricity at wholesale and the FERC set the matter
for hearing.  In February  2004, the  Administrative  Law Judge hearing the case
issued a  preliminary  order  supporting  the transfer.  However,  the FERC must
approve the order for it to become  effective.  The MoPSC has  supported  the CT
transfer.

     In May 2003, UE announced its plan to limit its public  utility  operations
to the  state of  Missouri  and to  discontinue  operating  as a public  utility
subject to ICC  regulation.  UE intends to accomplish  this plan by transferring
its   Illinois-based   electric  and  natural  gas  businesses,   including  its
Illinois-based  distribution  assets and certain of its transmission  assets, to
CIPS.  In 2003,  UE's  Illinois  electric  and gas service  territory  generated
revenues of $155  million  and had a net book value of $122  million at December
31, 2003. UE's electric generating  facilities and a certain minor amount of its
electric transmission  facilities in Illinois would not be part of the transfer.
The  transfer was  approved by the FERC in December  2003.  The transfer of UE's
Illinois-based utility businesses will also require the approval of the ICC, the
MoPSC and the SEC under the  provisions  of the PUHCA.  In August 2003, UE filed
with the MoPSC, and in October and November 2003, filed with the ICC and the SEC
for authority to transfer UE's Illinois-based  utility  businesses,  at net book
value,  to CIPS.  The filing with the ICC seeks  approval to transfer  only UE's
Illinois-based  natural  gas  utility  business  since  the ICC  authorized  the
transfer of UE's  Illinois-based  electric  utility business to CIPS in 2000. UE
proposes to transfer  approximately  one-half of the assets  directly to CIPS in
consideration  for  a  CIPS  subordinated  promissory  note,  and  approximately
one-half  of the assets by means of a dividend  in kind to Ameren  followed by a
capital contribution by Ameren to CIPS.

     A filing  seeking  approval  of both the  transfer  of UE's  Illinois-based
utility  businesses  and Genco's CTs was made with the SEC in October  2003.  If
completed,  the  transfers  will be accounted  for at book value with no gain or
loss recognition,  which is appropriate  treatment for transactions of this type
by two entities under common  control.  In January 2004, the MoPSC staff and the
Missouri  Office of  Public  Counsel  filed  rebuttal  testimony  with the MoPSC
expressing concerns that the transfers of UE's Illinois-based utility businesses
may be detrimental to the public in Missouri and recommended  that the transfers
be denied.  Hearings occurred in late March and early April, 2004.  Post-hearing
briefs will be filed by May 25, 2004, after which time the MoPSC will deliberate
on this  matter  and issue an order in due  course.  See Note 8 - Related  Party
Transactions  for a discussion of an amendment to the joint  dispatch  agreement
among UE, Genco and CIPS,  which was proposed to address  concerns raised before
the MoPSC in this proceeding.

     We  are  unable  to  predict   the ultimate  outcome  of  these  regulatory
proceedings or the timing of the final decisions of the various agencies.

Federal - Electric Transmission

Regional Transmission Organization

     In  December  1999,  the FERC issued  Order 2000  requiring  all  utilities
subject to FERC  jurisdiction  to state their  intentions for joining a RTO. The
MoPSC issued an order in early 2004 authorizing UE to participate in the Midwest
ISO for a five year  period,  with  participation  after that period  subject to
further  approvals  by the MoPSC.  Subsequently,  the FERC  issued a final order
allowing UE's and CIPS'  participation  in the Midwest ISO.  Under these orders,
the MoPSC continues to set the transmission component of UE's rates to serve its
bundled retail load. CILCO is already a member of the Midwest ISO and previously
transferred  functional  control of its transmission  system to the Midwest ISO.
Genco does not own  transmission  assets,  but pays the  Midwest  ISO to use the
transmission system to transmit power from the Genco generating plants.

                                       33

<PAGE>


     On May 1, 2004,  functional control of the UE and CIPS transmission systems
was transferred to the Midwest ISO through GridAmerica LLC, or Grid America. The
participation  by UE and CIPS in the Midwest ISO is expected to increase  annual
costs by $5  million  to $10  million  in the  aggregate  and could  result in a
decrease  in annual  revenues of  anywhere  between  zero and $10 million in the
aggregate. UE and CIPS may also be required to expand their transmission systems
according  to  decisions  made by the  Midwest  ISO rather  than their  internal
planning process.

     As a  part  of the  transfer  of  functional  control  of  UE's  and  CIPS'
transmission  systems to the Midwest ISO,  Ameren  received  $26 million,  which
represented the refund of the $13 million exit fee paid by UE and the $5 million
exit  fee  paid  by  CIPS  when  they  left  the  Midwest  ISO in  2001  and the
reimbursement  of funds that were invested in the proposed  Alliance RTO.  These
refunds will result in after-tax gains of approximately $11 million,  $8 million
and $3 million for Ameren, UE and CIPS, respectively.

     Through orders issued during late 2003 and early 2004, the FERC had ordered
the  elimination of  regional-through-and-out  rates assessed by the Midwest ISO
that  involves  transmission  service  from the Midwest ISO regions into the PJM
region,  to be  effective  May 1, 2004.  However,  on March 19,  2004,  the FERC
accepted an  agreement  among  affected  transmission  owners  that  retains the
regional  through-and-out  rates  until  December  1,  2004,  and  provides  for
continued  negotiations  aimed at  developing a long-term  transmission  pricing
structure to eliminate  seams  between the PJM and Midwest ISO regions  based on
specified pricing principles. Until the long-term transmission pricing structure
has been  established,  UE and CIPS cannot predict the ultimate impact that such
structure will have on their costs and revenues.

     On March 31,  2004,  the  Midwest  ISO  tendered  for  filing at the FERC a
proposed Open Access Transmission and Energy Markets Tariff (the "Energy Markets
Tariff"),  which is intended to supercede its existing Open Access  Transmission
Tariff.  The Energy  Markets  Tariff  establishes  rates,  terms and  conditions
necessary  for  implementation  of a centralized  security-constrained  economic
dispatch  platform  supported by a day-ahead and real-time energy market design,
including Locational Marginal-Cost Pricing and Financial Transmission Rights for
transmission  service  within the Midwest ISO region.  The Energy Markets Tariff
also  establishes  market  monitoring  and  mitigation  procedures  and codifies
existing resource adequacy  requirements  placed on Midwest ISO members by their
states or  applicable  regional  reliability  organization.  The Midwest ISO has
proposed  to make the Energy  Markets  Tariff  effective  on  December  1, 2004,
subject  to its  ability to  implement  the Energy  Markets  Tariff.  The Energy
Markets  Tariff  has not yet been  accepted  for  filing by the FERC.  Ameren is
unable to  determine  the full impact that the Energy  Markets  Tariff will have
until  further  information  is available  regarding the  implementation  of the
Energy Markets Tariff.

     Until  UE  and  CIPS   achieve  some  degree  of   operational   experience
participating in the Midwest ISO through  GridAmerica,  we are unable to predict
the ultimate impact that such  participation  or ongoing RTO developments at the
FERC or  other  regulatory  authorities  will  have on our  financial  position,
results of operations or liquidity.

New Market Power Analysis Screen Order

     In an order  issued  April 14, 2004,  the FERC  replaced the Supply  Margin
Assessment  Screen  previously  used  to  review   applications  by  sellers  of
electricity at wholesale for  authorization to sell power at market-based  rates
with two  alternative  measures  of market  power:  (a) an  uncommitted  pivotal
supplier  analysis,  and (b) an uncommitted market share analysis which is to be
prepared on a seasonal basis. If an applicant passes both screens,  a rebuttable
presumption will exist that it lacks  generation  market power. If the applicant
fails  either  screen,  a rebuttable  presumption  will exist that it has market
power.  Under such  circumstances,  the  applicant  may either seek to rebut the
presumption  by  preparing a  delivered  price test  (identifying  the amount of
economic  capacity from  neighboring  areas that can be delivered to the control
area) or propose  mitigation  measures.  Unless some other mitigation measure is
adopted, the applicant's  authority to sell power at market-based rates in areas
in which it has market power will be revoked, and the applicant will be required
to sell at cost-based rates in those areas.

     UE, CIPS, Genco,  CILCO,  AERG,  Development  Company,  Marketing  Company,
Medina Valley and EEI currently have  authorization from the FERC to continue to
sell power at market-based  rates.  However,  the FERC indicated in its April 14
order that it would apply the new market analysis  screens to pending and future
market-based rate applications,  including three-year market-based rate reviews.
All of the aforementioned Ameren entities currently have three-year market-based
rate reviews  pending at the FERC.  Until Ameren has evaluated the impact of the
FERC's  order with  respect to the Ameren  system,  we are unable to predict the
ultimate impact that the new market power analysis screens will have on Ameren's
ability to sell power at market-based rates.


                                       34

<PAGE>

NOTE 4 - SHORT-TERM BORROWINGS AND LIQUIDITY

     Short-term   borrowings   consist  of  commercial   paper  and  bank  loans
(maturities  generally  within 1 to 45 days).  As of March 31, 2004,  short-term
borrowings at Ameren and UE totaled $2 million. UE had no short-term  borrowings
outstanding  at March 31,  2004,  compared to $150 million at December 31, 2003.
CIPS, Genco, CILCORP and CILCO had no short-term borrowings as of March 31, 2004
and December 31, 2003. The average short-term  borrowings at UE were $74 million
for the quarter ended March 31, 2004, with a  weighted-average  interest rate of
1.05%. Peak short-term borrowings for UE were $224 million for the quarter ended
March 31, 2004, with a weighted-average interest rate of 1.06%.

     At March 31,  2004,  certain of the Ameren  Companies  had  committed  bank
credit facilities totaling $829 million,  all of which were available for use by
UE, CIPS, CILCO and Ameren Services through a utility money pool arrangement. In
addition,  $600 million of the $829  million may be used by Ameren  directly and
most  of the non  rate-regulated  affiliates  including,  but  not  limited  to,
Resources Company, Genco, Marketing Company, AFS, AERG and Ameren Energy through
a non  state-regulated  subsidiary  money  pool  agreement.  We have  money pool
agreements with and among our 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. See Note 8
- Related  Party  Transactions  for a  detailed  explanation  of the money  pool
arrangements.  The  committed  bank  credit  facilities  are used to support our
commercial  paper programs under which no amounts were  outstanding at March 31,
2004 (December 31, 2003 - $150 million). Access to our credit facilities for any
of our subsidiaries is subject to reduction based on use by affiliates.

     EEI  also  has  two  bank  credit  agreements  totaling  $45  million  with
maturities  through  June 2004,  all of which was  available  at March 31, 2004.
Ameren guarantees $24 million of these facilities. The facilities,  which expire
in 2004,  will be  replaced or renewed by the Ameren  Companies  and EEI as they
mature on terms  consistent with current market  conditions for borrowings based
on the credit worthiness of the Ameren Companies and EEI.

     Borrowings  under  Ameren's non  state-regulated  subsidiary  money pool by
Genco,  Development  Company  and  Medina  Valley,  each  an  "exempt  wholesale
generator,"  are  considered  investments  for purposes of the 50% SEC aggregate
investment  limitation.  Based on Ameren's aggregate investment in these "exempt
wholesale  generators" as of March 31, 2004, the maximum permissible  borrowings
under  Ameren's  non  state-regulated  subsidiary  money pool  pursuant  to this
limitation for these entities was $665 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.  Certain of these credit  agreements
also contain a provision that limits Ameren's,  UE's, CIPS' and/or CILCO's total
indebtedness to 60% of total capitalization pursuant to a calculation defined in
the related agreement.  As of March 31, 2004, the ratio of total indebtedness to
total capitalization  (calculated in accordance with this provision) for Ameren,
UE, CIPS and CILCO was 46%, 45%, 53% and 49%, respectively. In addition, certain
of these credit agreements  contain  indebtedness  cross-default  provisions and
material  adverse  change  clauses,  which 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  agreements
contain credit rating triggers. A $100 million CILCO bank term loan containing a
credit ratings trigger was repaid in February 2004.

     At March 31, 2004,  Ameren and its  subsidiaries  were in  compliance  with
their credit agreement provisions and covenants.



                                       35

<PAGE>

NOTE 5 - LONG-TERM DEBT AND EQUITY FINANCINGS

Ameren

     In February 2004, Ameren issued,  pursuant to an August 2002 Form S-3 shelf
registration  statement,  19.1 million  shares of its common stock at $45.90 per
share for net proceeds of $853 million. This issuance substantially depleted all
of the capacity under the August 2002 shelf registration statement. The proceeds
from this  offering  are  expected  to provide  funds  required  to pay the cash
portion of the purchase price for our acquisition of Illinois Power and Dynegy's
20%  interest in EEI and to reduce  Illinois  Power debt assumed as part of this
transaction  and  pay  related  premiums.   Pending  such  use,  and/or  if  the
acquisition is not completed,  we plan to use the net proceeds to reduce present
or  future   indebtedness   and/or  repurchase   securities  of  Ameren  or  its
subsidiaries.  A portion of the net proceeds may also be temporarily invested in
short-term  instruments.  See Note 2 - Acquisitions for further information.  In
the first  quarter of 2004,  Ameren also  issued 0.5  million new common  shares
valued at $28  million  under  its  DRPlus  and its  401(k)  plans  for  general
corporate purposes.

     In March 2004, the SEC declared effective a Form S-3 registration statement
filed by Ameren in  February  2004,  authorizing  the  offering  of six  million
additional  shares of its common stock under the DRPlus.  Shares of common stock
sold under the DRPlus are, at Ameren's  option,  newly issued shares or treasury
shares,  or  shares  purchased  in the open  market or in  privately  negotiated
transactions.  Ameren is currently  selling  newly  issued  shares of its common
stock under the DRPlus.

     On April 7, 2004, a new Form S-3 shelf registration  statement was filed by
Ameren with the SEC. This registration statement,  upon being declared effective
by the SEC, will authorize the offering from time to time of up to $2 billion of
various forms of securities including long-term debt, trust preferred securities
and equity securities to finance ongoing construction and maintenance  programs,
to redeem,  repurchase,  repay, or retire outstanding debt, to finance strategic
investments,  including  our pending  acquisition  of  Illinois  Power and a 20%
interest in EEI, and for other general corporate purposes.

UE

     In  February  and March  2004,  in  connection  with the  delivery  of bond
insurance policies to secure the environmental improvement and pollution control
revenue bonds (Series 1991, 1992, 1998A,  1998B,  1998C, 2000A, 2000B and 2000C)
previously issued by the Missouri Environmental Authority, UE delivered separate
series of its first mortgage bonds (which are subject to fallaway provisions, as
defined in the  indenture  agreements,  similar to those  included  in its first
mortgage  bonds which secure UE's senior secured notes) to secure its respective
obligations  under the existing loan agreements with the Missouri  Environmental
Authority  relating to such  environmental  improvement  and  pollution  control
revenue bonds. As a result, the environmental  improvement and pollution control
revenue bonds were classified as Aaa, AAA and AAA by Moody's, S&P's and Fitch's,
respectively.

     UE had a lease agreement, which was scheduled to expire on August 31, 2031,
that  provided  for the  financing  of a portion  of its  nuclear  fuel that was
processed for use or was consumed at UE's Callaway  Nuclear  Plant.  In February
2004, UE terminated this lease with a final payment of $67 million.

CILCORP and CILCO

     In February  2004,  CILCO repaid its secured bank term loan  totaling  $100
million with available cash and borrowings from the utility money pool.

     The amortization related to the fair value adjustments was approximately $2
million for the three months ended March 31, 2004,  and was recorded in interest
expense in the Statement of Income for Ameren and CILCORP.



                                       36

<PAGE>
Amortization of Interest-related Costs

     The following  table presents the  amortization  of debt issuance costs and
any premium or discounts  included in interest  expense for the Ameren Companies
for the three months ended March 31, 2004 and 2003, respectively:

   ----------------------------------------------------------------------------
                                                                Three Months
   ----------------------------------------------------------------------------
                                                              2004       2003
                                                              ----       ----
   Ameren(a)(c)........................................      $   5      $   2
   UE..................................................          1          1
   CIPS................................................          -          -
   Genco...............................................          -          -
   CILCORP(b)(c) ......................................          2          -
   CILCO...............................................          -          -
   ----------------------------------------------------------------------------
     (a)  Excludes  amounts for CILCORP and CILCO prior to the acquisition  date
          of January  31,  2003;  includes  amounts  for  non-registrant  Ameren
          subsidiaries as well as intercompany eliminations.
     (b)  January 2003 predecessor amounts were zero. CILCORP consolidates CILCO
          and therefore includes CILCO amounts in its balances.
     (c)  In  conjunction  with the  acquisition  of CILCORP in 2003,  CILCORP's
          long-term debt was adjusted to fair value.

Indenture Provisions and Other Covenants

UE

     UE's indenture  agreements and Articles of Incorporation  include covenants
and  provisions  which must be complied  with in order to issue  first  mortgage
bonds and preferred  stock.  UE must comply with earnings tests contained in its
respective mortgage indenture and Articles of Incorporation. For the issuance of
additional first mortgage bonds,  earnings coverage of twice the annual interest
charges on first mortgage bonds  outstanding  and to be issued is required.  For
the 12 months  ended March 31,  2004,  UE had a coverage  ratio of 8.5 times the
annual  interest  charges on the first mortgage bonds  outstanding,  which would
permit  UE to issue an  additional  $4  billion  of first  mortgage  bonds at an
assumed  interest  rate of 7%. For the issuance of additional  preferred  stock,
earnings  coverage of at least 2.5 times the annual  dividend on preferred stock
outstanding  and to be issued is required under UE's Articles of  Incorporation.
For the 12 months  ended March 31, 2004,  UE had a coverage  ratio of 72.4 times
the annual  dividend  requirement  on preferred  stock  outstanding  which would
permit UE to issue an additional  $2.4 billion in preferred  stock at an assumed
dividend  rate of 7%. The  ability to issue such  securities  in the future will
depend on such tests at that time.

     In addition,  UE's mortgage  indenture  contains  certain  provisions which
restrict  the  amount of common  dividends  that can be paid by UE.  Under  this
mortgage  indenture,  $31  million of total  retained  earnings  was  restricted
against the payment of common  dividends,  except for those dividends payable in
common stock, leaving $1.6 billion of free and unrestricted retained earnings at
March 31, 2004.

CIPS

     CIPS' indenture agreements and Articles of Incorporation  include covenants
which must be complied with in order to issue first mortgage bonds and preferred
stock. CIPS must comply with earnings tests contained in its respective mortgage
indenture and Articles of  Incorporation.  For the issuance of additional  first
mortgage bonds,  earnings coverage of twice the annual interest charges on first
mortgage bonds outstanding and to be issued is required. For the 12 months ended
March 31,  2004,  CIPS had a  coverage  ratio of 3.1 times the  annual  interest
charges  for  one  year  on  the  aggregate   amount  of  first  mortgage  bonds
outstanding,  and  subsequently,  the most  restrictive test under the indenture
agreements  would  allow  CIPS to  issue an  additional  $121  million  of first
mortgage  bonds.  For the  issuance  of  additional  preferred  stock,  earnings
coverage of 1.5 times annual interest  charges on all long-term debt outstanding
and the annual  preferred  stock  dividends is required  under CIPS' Articles of
Incorporation. For the 12 months ended March 31, 2004, CIPS had a coverage ratio
of 2.0 times the sum of the annual interest charges and dividend requirements on
all long-term  debt and preferred  stock  outstanding  as of March 31, 2004, and
consequently  had the  availability  to  issue an  additional  $162  million  of
preferred  stock at an assumed  dividend  rate of 7%. The  ability to issue such
securities in the future will depend on coverage ratios at that time.


                                       37
<PAGE>

Genco

     Genco's  senior  note  indenture  includes  provisions  that  require it to
maintain a senior debt  service  coverage  ratio of at least 1.75 to 1 (for both
the prior four  fiscal  quarters  and  projected  for the next  succeeding  four
six-month  periods) in order to pay  dividends to Ameren or to make  payments of
principal or interest under certain subordinated  indebtedness excluding amounts
payable  under its  intercompany  note  payable with CIPS.  Genco's  senior debt
service  coverage  ratio  exceeded  1.75 to 1 in each of the  last  four  fiscal
quarters.  For the 12 months ended March 31, 2004,  this ratio was 3.96 to 1. In
addition,  the indenture  also  restricts  Genco from  incurring any  additional
indebtedness, with the exception of certain permitted indebtedness as defined in
the indenture, unless its senior debt service coverage ratio equals at least 2.5
to 1 for the most  recently  ended four fiscal  quarters  and its senior debt to
total  capital  ratio  would not exceed  60%,  both after  giving  effect to the
additional  indebtedness on a pro-forma basis. This debt incurrence  requirement
is  disregarded  in the event certain  rating  agencies  reaffirm the ratings of
Genco after  considering  the  additional  indebtedness.  As of March 31,  2004,
Genco's senior debt to total capital ratio was 52%.

CILCORP

     Covenants  in CILCORP's  indenture  governing  its $475  million  (original
issuance  amount)  senior notes and bonds require  CILCORP to maintain a debt to
capital ratio of no greater than 0.67 to 1 and an interest  coverage ratio of at
least 2.2 to 1 in order to make any payment of dividends or  intercompany  loans
to  affiliates  other than to its direct and  indirect  subsidiaries,  including
CILCO.  However,  in the event  CILCORP is not in  compliance  with these tests,
CILCORP may only make such  payments of dividends or  intercompany  loans if its
senior long-term debt rating is at least BB+ from S&P, Baa2 from Moody's and BBB
from Fitch.  For the 12 months ended March 31, 2004,  CILCORP's  debt to capital
ratio was 0.61 to 1 and its interest  coverage ratio was 2.8 to 1, calculated in
accordance with related provisions in this indenture.  The common stock of CILCO
is pledged as security to the holders of these senior notes and bonds.

Off-Balance Sheet Arrangements

     At March 31,  2004,  neither  Ameren  nor any of its  subsidiaries  had any
off-balance  sheet financing  arrangements,  other than operating leases entered
into  in  the  ordinary  course  of  business.  Neither  Ameren  nor  any of its
subsidiaries  expects to engage in any significant  off-balance  sheet financing
arrangements in the near future.


NOTE 6 - Other Income and Deductions

     The following  table  presents  Other Income and Deductions for each of the
Ameren Companies for the three months ended March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                          Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                   2004                  2003
                                                                                   ----                  ----
<S>                                                                            <C>
   Ameren:(a)
   Miscellaneous income:
      Interest and dividend income.......................................       $     2             $     1
      Allowance for equity funds used during construction................             3                   -
      Other..............................................................             3                   5
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous income............................................       $     8             $     6
   -------------------------------------------------------------------------------------------------------------------
   Miscellaneous expense:
      Minority interest in subsidiary....................................       $    (1)            $    (1)
      Other..............................................................             -                  (2)
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................       $    (1)            $    (3)
   ===================================================================================================================
   UE:
   Miscellaneous income:
      Interest and dividend income.......................................        $    1              $    -
      Equity in earnings of subsidiary...................................             1                   1
      Allowance for equity funds used during construction................             3                   -
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous income............................................        $    5              $    1
   -------------------------------------------------------------------------------------------------------------------
   Miscellaneous expense:
      Other..............................................................        $   (1)             $   (1)
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................        $   (1)             $   (1)
   -------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       38

<PAGE>
<TABLE>
<CAPTION>

   -------------------------------------------------------------------------------------------------------------------
                                                                                          Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                   2004                  2003
                                                                                   ----                  ----
<S>                                                                             <C>                 <C>
   CIPS:
   Miscellaneous income:
      Interest and dividend income.......................................        $    7              $    7
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous income............................................        $    7              $    7
   -------------------------------------------------------------------------------------------------------------------
   Miscellaneous expense:
      Other..............................................................        $    -              $   (1)
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................        $    -              $   (1)
   ===================================================================================================================
   Genco:
   Miscellaneous income:
     Other...............................................................        $    -              $    2
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous income............................................        $    -              $    2
   -------------------------------------------------------------------------------------------------------------------
   Miscellaneous expense:
      Loss on disposition of property....................................        $   (1)             $    -
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................        $   (1)             $    -
   ===================================================================================================================
   CILCORP:(b)
   Miscellaneous expense:
      Other..............................................................        $   (1)             $    -
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................        $   (1)             $    -
   ===================================================================================================================
   CILCO:
   Miscellaneous expense:
      Other..............................................................        $   (1)             $    -
   -------------------------------------------------------------------------------------------------------------------
   Total miscellaneous expense...........................................        $   (1)             $    -
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  January 2003 predecessor amounts were zero. CILCORP  consolidates CILCO and
     therefore includes CILCO amounts in its balances.


NOTE 7 - Derivative Financial Instruments

Cash Flow Hedges

     The following  table  presents  balances in certain  accounts for cash flow
hedges as of March 31, 2004:

<TABLE>
<CAPTION>
   ===================================================================================================================
                                                  Ameren       UE      CIPS     Genco      CILCORP(a)        CILCO
   -------------------------------------------------------------------------------------------------------------------
<S>                                               <C>       <C>      <C>        <C>       <C>                <C>
   Balance Sheet:
      Other assets...........................      $  24     $  5     $  4       $  5      $  10              $ 10
      Other deferred credits and liabilities.          7        6        -          1          -                 -
   Accumulated OCI:
     Power forwards(b).......................         (1)      (1)       -          -          -                 -
     Interest rate swaps(c)..................          5        -        -          5          -                 -
     Gas swaps and futures contracts(d)......         16        2        4          -         10                10
     Call options(e).........................          3        3        -          -          -                 -
   ===================================================================================================================
</TABLE>
(a)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.
(b)  Represents  the  mark-to-market  loss 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 five
     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
     October  2007.  CILCO amount  represents a gain  associated  with a partial
     hedge of natural gas requirements through October 2007.
(e)  Represents  the  mark-to-market  gain of two call options  accounted for as
     cash flow hedges for coal held with two suppliers.  One of these options to
     purchase coal expires in October 2004 and the other option  expires in July
     2005.

     The  pre-tax  net  gain or loss on  power  forward  derivative  instruments
included in Other Income and Deductions at UE and Genco,  which  represented the
impact of discontinued  cash flow hedges,  the ineffective  portion of cash flow
hedges,  as well as the  reversal of amounts  previously  recorded in OCI due to
transactions  going to delivery or  settlement,

                                       39

<PAGE>


was less than a $1 million  loss for UE and was less than a $1 million  gain for
Genco for the quarter ended March 31, 2004 (2003 - less than $1 million loss for
UE, less than $1 million loss for Genco).

Other Derivatives

     The following  table  represents  for the three months ended March 31, 2004
and 2003, the net change in market value of option transactions,  which are used
to manage our positions in SO2 allowances,  coal, heating oil and electricity or
power. Certain of these transactions are treated as non-hedge transactions under
SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities."
The net  change in the market  value of SO2  options is  recorded  in  Operating
Revenues - Electric,  while the net change in the market value of coal,  heating
oil and  electricity  or power options is recorded as Operating  Expenses - Fuel
and Purchased Power.

<TABLE>
<CAPTION>

   ===================================================================================================================
                               Gains (Losses)(a)                                            Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                      2004                2003
                                                                                      ----                ----
<S>                                                                               <C>                 <C>
   SO2 options:
       Ameren(b).............................................................      $   (1)             $    1
       UE....................................................................          (3)                  -
       CIPS..................................................................           -                   -
       Genco.................................................................           2                   1
       CILCORP(c)............................................................           -                   -
       CILCO(c)..............................................................           -                   -
   ===================================================================================================================
</TABLE>
(a)  Coal,  power and  heating  oil option  gains and  losses  were less than $1
     million for the periods shown above.
(b)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(c)  January 2003 predecessor amounts were zero.


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, 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, 2003.  Below are descriptions of material changes to the
joint dispatch  agreement which were recently  proposed and of activities  under
the money pool  arrangements  which occurred during the three months ended March
31, 2004.

Joint Dispatch Agreement

     UE and Genco jointly  dispatch  electric  generation under an amended joint
dispatch agreement. Under the agreement, each affiliate is required to serve its
load  requirements  from its own generation  first, and then allow access to any
available  generation  to its  affiliate.  The joint  dispatch  agreement can be
terminated  by either party by giving one year's  notice on or after  January 1,
2004. To address concerns raised before the MoPSC in the proceeding  relating to
the transfer of UE's  Illinois-based  utility  businesses  to CIPS (see Note 3 -
Rate and  Regulatory  Matters),  UE offered to seek to amend the joint  dispatch
agreement  so as to provide UE with a larger  share of the margins on short term
sales of power from the combined  generation of UE and Genco. In particular,  UE
offered to use its best efforts to obtain all required regulatory  approvals for
such an  amendment,  but only if the MoPSC  concluded  that this was a necessary
condition  for its  approval  of the  transfer  of UE's  Illinois-based  utility
businesses.  If made,  such an amendment is expected to provide to UE additional
annual  margins  ranging from  approximately  $7 million to $24 million for UE's
share of short term power  sales.  Such an  amendment is expected to result in a
corresponding  reduction  in Genco's  margins from its share of short term power
sales. However, this reduction is expected to be offset by margins received from
additional power sales by Genco (through Marketing Company) to CIPS to serve the
transferred UE  Illinois-based  electric utility  business.  Also as part of the
proceeding before the MoPSC, UE offered to study alternatives to the current use
of incremental  costs to price system energy  transfers under the joint dispatch
agreement between UE and Genco, if the MoPSC concluded that this was a necessary
condition for its approval. As a result of the foregoing, there is

                                       40

<PAGE>


uncertainty as to the terms of the joint  dispatch  agreement and also as to its
duration. The termination of the agreement, or modifications to it, could have a
material adverse effect on UE or Genco. Modifications to, or termination of, the
agreement  would not have an  immediate  impact on Ameren  due to UE's  Missouri
electric rate moratorium, which ends June 30, 2006.

Money Pools

     Through the utility money pool, the pool  participants can access committed
credit  facilities at Ameren which totaled $600 million at March 31, 2004. These
facilities  are in addition to UE's $154 million,  CIPS' $15 million and CILCO's
$60 million in  committed  credit  facilities  which are also  available  to the
utility  money  pool  participants.  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 March 31, 2004 was 1.0% (2003 - 1.3%).

     At  March  31,   2004,   $600  million  was   available   through  the  non
state-regulated  subsidiary  money pool,  excluding  additional  funds available
through excess cash balances.  The average interest rate for borrowing under the
non  state-regulated  subsidiary money pool for the three months ended March 31,
2004 was 8.8% (2003 - 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.

UE

     The following  tables present the impact of related party  transactions  on
UE's  Consolidated  Statement of Income and  Consolidated  Balance Sheet,  based
primarily  on the  agreements  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, 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                           Statement of Income                                   Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                                 2004                   2003
                                                                                 ----                   ----
<S>                                                                          <C>                    <C>
   Operating revenues from affiliates:
        Power supply agreement with EEI................................       $     -                $     -
        Joint dispatch agreement with Genco............................            30                     32
        Agency agreement with Ameren Energy............................            53                     71
        Gas transportation agreement with Genco........................             -                      -
   -------------------------------------------------------------------------------------------------------------------
        Total operating revenues.......................................       $    83                $   103
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power expenses from affiliates:
        Power supply agreements:
          EEI..........................................................       $    16                $    13
          Marketing Company............................................             2                      2
        Joint dispatch agreement with Genco............................            12                     11
        Agency agreement with Ameren Energy............................            19                     17
   -------------------------------------------------------------------------------------------------------------------
        Total fuel and purchased power expenses........................       $    49                $    43
   -------------------------------------------------------------------------------------------------------------------
   Other operating expenses:
        Support service agreements:
          Ameren Services..............................................       $    38                $    45
          Ameren Energy................................................             3                      5
          AFS..........................................................             1                      2
   -------------------------------------------------------------------------------------------------------------------
          Total other operating expenses...............................       $    42                $    52
   -------------------------------------------------------------------------------------------------------------------
   Interest expense:
          Borrowings (advances) related to money pool..................       $     -                $     1
   ===================================================================================================================
</TABLE>


                                       41

<PAGE>
<TABLE>
<CAPTION>

   ===================================================================================================================
                              Balance Sheet                                 March 31, 2004          December 31, 2003
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                    <C>
   Assets:
        Miscellaneous accounts and notes receivable......................     $    24                $    16
        Advances to money pool...........................................           -                     12
   Liabilities:
        Accounts payable and wages payable...............................     $    42                $    46
        Borrowings from money pool.......................................         292                      -
   ===================================================================================================================
</TABLE>


CIPS

     The following  tables present the impact of related party  transactions  on
CIPS'  Statement of Income and Balance Sheet,  based primarily on the agreements
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, 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                           Statement of Income                                   Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                                 2004                   2003
                                                                                 ----                   ----
<S>                                                                           <C>                   <C>
   Operating revenues from affiliates:
        Power supply agreements:
          Marketing Company............................................        $     8               $     7
          CILCO........................................................              -                     1
   -------------------------------------------------------------------------------------------------------------------
        Total operating revenues.......................................        $     8               $     8
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power expenses from affiliates:
        Power supply agreements:
          Marketing Company............................................        $    72               $    80
          EEI..........................................................              8                     7
   -------------------------------------------------------------------------------------------------------------------
        Total fuel and purchased power expenses........................        $    80               $    87
   -------------------------------------------------------------------------------------------------------------------
   Other operating expenses:
        Support service agreements:
          Ameren Services..............................................        $    12               $    15
          AFS..........................................................              -                     -
   -------------------------------------------------------------------------------------------------------------------
        Total other operating expenses.................................        $    12               $    15
   -------------------------------------------------------------------------------------------------------------------
   Interest (expense) income:
        Note receivable from Genco.....................................        $     7               $     7
        Borrowings (advances) related to money pool....................              -                     -
   ===================================================================================================================
   ===================================================================================================================
                              Balance Sheet                                 March 31, 2004          December 31, 2003
   -------------------------------------------------------------------------------------------------------------------
   Assets:
        Miscellaneous accounts and notes receivable...................         $    12               $    10
        Advances to money pool.........................................              -                     -
        Promissory note receivable from Genco(a).......................            373                   373
        Tax receivable from Genco......................................            159                   162
   Liabilities:
        Accounts payable and wages payable.............................        $    41               $    43
        Borrowings from money pool.....................................             97                   121
   ===================================================================================================================
</TABLE>
(a)  Amount includes  current portion of $49 million as of December 31, 2003 and
     March 31, 2004.


                                       42

<PAGE>

Genco

     The following  tables present the impact of related party  transactions  on
Genco's Statement of Income and Balance Sheet, based primarily on the agreements
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, 2003:

<TABLE>
<CAPTION>
   ===================================================================================================================
                         Statement of Income                                   Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                             2004                     2003
                                                                             ----                     ----
<S>                                                                      <C>                      <C>
   Operating revenues from affiliates:
        Power supply agreements:
          Marketing Company........................................       $    173                 $   157
          EEI......................................................              -                       -
        Joint dispatch agreement with UE...........................             12                      11
        Agency agreement with Ameren Energy........................             27                      35
        Operating lease with Development Company...................              3                       3
   -------------------------------------------------------------------------------------------------------------------
        Total operating revenues ..................................       $    215                 $   206
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power expenses from affiliates:
        Joint dispatch agreement with UE...........................       $     30                 $    32
        Agency agreement with Ameren Energy........................              7                       8
        Power purchase agreement with Marketing Company............              -                       -
        Gas transportation agreement with UE.......................              -                       -
   -------------------------------------------------------------------------------------------------------------------
        Total fuel and purchased power expenses....................       $     37                 $    40
   -------------------------------------------------------------------------------------------------------------------
   Other operating expenses:
        Support service agreements:
          Ameren Services..........................................       $      4                 $     5
          Ameren Energy............................................              1                       3
          AFS......................................................              -                       1
   -------------------------------------------------------------------------------------------------------------------
        Total other operating expenses.............................       $      5                 $     9
   -------------------------------------------------------------------------------------------------------------------
   Interest expense:
        Borrowings (advances) related to money pool................       $      3                 $     5
        Note payable to CIPS.......................................              7                       7
        Note payable to Ameren.....................................              1                       1
   ===================================================================================================================
   ===================================================================================================================
                            Balance Sheet                               March 31, 2004         December 31, 2003
   -------------------------------------------------------------------------------------------------------------------
   Assets:
        Miscellaneous accounts and notes receivable................       $     81                 $    78
   Liabilities:
        Accounts payable and wages payable.........................             25                      22
        Interest payable...........................................              6                       7
        Promissory note payable to CIPS(a).........................            373                     373
        Promissory note payable to Ameren(b).......................             38                      38
        Tax payable to CIPS........................................            159                     162
        Borrowings from money pool.................................             91                     124
   ===================================================================================================================
</TABLE>
(a)  Amount includes  current portion of $49 million as of December 31, 2003 and
     March 31, 2004.
(b)  Amount  includes  current portion of $4 million as of December 31, 2003 and
     March 31, 2004.


                                       43

<PAGE>

CILCORP

     The following  tables present the impact of related party  transactions  on
CILCORP's Consolidated Statement of Income and Consolidated Balance Sheet, based
primarily  on the  agreements  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, 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                        Statement of Income(a)(b)                                Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                                2004                   2003
                                                                                ----                   ----
<S>                                                                          <C>                    <C>
   Operating revenues from affiliates:
        Gas supply and services agreement with Medina Valley...........       $    -                 $    6
   -------------------------------------------------------------------------------------------------------------------
        Total operating revenues.......................................       $    -                 $    6
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power expenses from affiliates:
        Executory tolling agreement with Medina Valley.................       $   10                 $    9
        Power purchase agreement with CIPS.............................            -                      1
        Bilateral supply agreement with Marketing Company..............            -                      -
   -------------------------------------------------------------------------------------------------------------------
        Total fuel and purchased power expenses........................       $   10                 $   10
   -------------------------------------------------------------------------------------------------------------------
   Other operating expenses:
        Support services agreements:
          Ameren Services..............................................       $   13                 $    -
          AFS..........................................................            -                      -
   -------------------------------------------------------------------------------------------------------------------
        Total other operating expenses.................................       $   13                 $    -
   -------------------------------------------------------------------------------------------------------------------
   Interest expense:
        Note payable to Ameren.........................................       $    1                 $    -
        Borrowings related to money pool...............................       $    1                 $    -
   ===================================================================================================================
</TABLE>
(a)  2003 amounts include January 2003 predecessor information which included $2
     million in operating  revenues and $3 million in purchased power associated
     with the executory tolling agreement with Medina Valley.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

<TABLE>
<CAPTION>

   ===================================================================================================================
                             Balance Sheet(a)                              March 31, 2004        December 31, 2003
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                    <C>
   Assets:
        Miscellaneous accounts and notes receivable....................        $   13                 $    8
   Liabilities:
        Accounts payable...............................................       $    46                $    16
        Note payable to Ameren.........................................            38                     46
        Borrowings from money pool.....................................           192                    145
   -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

CILCO

     The following  tables present the impact of related party  transactions  on
CILCO's Consolidated  Statement of Income and on the Consolidated Balance Sheet,
based  primarily  on the  various  agreements  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, 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                        Statement of Income                                  Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                             2004                      2003
                                                                             ----                      ----
<S>                                                                       <C>                      <C>
   Operating revenues from affiliates:
        Gas transportation agreement with Medina Valley.........           $    -                   $     -
   -------------------------------------------------------------------------------------------------------------------
        Total operating revenues................................           $    -                   $     -
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power expenses from affiliates:
        Executory tolling agreement with Medina Valley..........           $   10                   $     9
        Power purchase agreement with CIPS......................                -                         1
        Bilateral supply agreement with Marketing Company.......                -                         -
   -------------------------------------------------------------------------------------------------------------------
        Total fuel and purchased power expenses.................           $   10                   $    10
   -------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       44

<PAGE>
<TABLE>
<CAPTION>

   -------------------------------------------------------------------------------------------------------------------
                        Statement of Income                                  Three Months Ended March 31,
   -------------------------------------------------------------------------------------------------------------------
                                                                             2004                      2003
                                                                             ----                      ----
<S>                                                                       <C>                      <C>
   Other operating expenses:
        Support services agreements:
          Ameren Services.......................................           $   12                   $     -
          AFS...................................................                -                         -
   -------------------------------------------------------------------------------------------------------------------
        Total other operating expenses..........................           $   12                   $     -
   -------------------------------------------------------------------------------------------------------------------
   Interest expense:
        Borrowings related to money pool........................           $    1                   $     -
   ===================================================================================================================
   ===================================================================================================================
                           Balance Sheet                                March 31, 2004           December 31, 2003
   -------------------------------------------------------------------------------------------------------------------
   Assets:
        Miscellaneous accounts and notes receivable.............           $    5                   $     6
   Liabilities:
        Accounts payable .......................................           $   54                   $    23
        Borrowings from money pool..............................              200                       149
   ===================================================================================================================
</TABLE>

NOTE 9 - Commitments and Contingencies

Callaway Nuclear Plant

     The following table presents  insurance  coverage at UE's Callaway  Nuclear
Plant at March 31, 2004:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                  Maximum                  Maximum Assessments
                Type and Source of Coverage                      Coverages                for Single Incidents
   -------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                          <C>
   Public liability:
        American Nuclear Insurers......................       $      300                   $          -
        Pool participation.............................           10,562                            101(a)
                                                          ------------------------------------------------------------
                                                              $   10,862(b)                $        101
   Nuclear worker liability:
        American Nuclear Insurers......................       $      300(c)                $          4
   Property damage:
        Nuclear Electric Insurance Ltd.................       $    2,750(d)                $         21
   Replacement power:
        Nuclear Electric Insurance Ltd.................       $      490(e)                $          7
   ===================================================================================================================
</TABLE>
(a)  Retrospective premium under the Price-Anderson  liability provisions of the
     Atomic Energy Act of 1954, as amended (Price-Anderson).  This is subject to
     retrospective  assessment with respect to loss from an incident at any U.S.
     reactor, payable at $10 million per year.  Price-Anderson expired in August
     2002  and the  temporary  extension  expired  December  31,  2003.  Renewal
     legislation is pending before Congress.  Until  Price-Anderson  is renewed,
     its provisions continue to apply to existing nuclear plants.
(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 $3.5 million for 52 weeks,  which  commences after the
     first  eight weeks of an outage,  plus $2.8  million per week for 110 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 based on 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 not available, we
self-insure the risk. Although we have no reason to anticipate a serious nuclear
incident,  if one did  occur,  it could  have a  material,  but  indeterminable,
adverse effect on our financial position, results of operations or liquidity.

                                       45

<PAGE>

Environmental Matters

Clean Air Act

     In mid-December  2003, the EPA issued proposed  regulations with respect to
SO2 and NOx emissions (the "Interstate Air Quality Rule") and mercury  emissions
from  coal-fired  power  plants.  The  new  rules,  if  adopted,   will  require
significant  additional  reductions in these  emissions from our power plants in
phases,  beginning in 2010.  The rules are  currently  under a public review and
comment period and may change before being issued as final.  The following table
presents preliminary  estimated capital costs based on current technology on the
Ameren systems to comply with the SO2 and NOx rules, as proposed:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                              By 2010                          2011 - 2015
   -------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                                <C>
   Ameren......................................    $400 million to $600 million       $500 million to $800 million
   UE..........................................    $250 million to $350 million       $300 million to $500 million
   CIPS........................................                  -                                  -
   Genco.......................................    $140 million to $220 million       $150 million to $200 million
   CILCORP(a)..................................     $10 million to $30 million         $50 million to $100 million
   CILCO.......................................     $10 million to $30 million         $50 million to $100 million
   ===================================================================================================================
</TABLE>
(a)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     The proposed mercury  regulations contain a number of options and the final
control requirements are highly uncertain. Ameren anticipates additional capital
costs to comply  with the mercury  rules  could range from $300  million to $500
million by 2010,  with UE  incurring  approximately  half of the costs and Genco
incurring most of the remaining costs.  Additional  amounts could be required to
comply with mercury rules by 2018.

Remediation

     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's)  former  chemical  waste
landfill and the resulting  impact area in the  Mississippi  River.  UE is being
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 approximately $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  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  and  scope of  future
remediation at Sauget Area 2 is uncertain, we are unable to predict the ultimate
impact  of the  Sauget  Area  2  site  on our  financial  position,  results  of
operations or liquidity.

Asbestos-Related Litigation

     Ameren,  UE,  CIPS,  Genco and CILCO have been named,  along with  numerous
other  parties,  in a number  of  lawsuits  which  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  with as many as 110 parties named
in a case to as few as six. However,  the average number of parties is 61 in the
cases that were pending as of March 31, 2004.

     The claims filed against  Ameren,  UE, CIPS,  Genco and CILCO allege injury
from  asbestos  exposure  during  the  plaintiffs'  activities  at our  electric
generating  plants.  In the case of CIPS,  its  former  plants  are now owned by
Genco,  and in the case of CILCO,  most of its  former  plants  are now owned by
AERG.  As a part of the  transfer of  ownership of the  generating  plants,  the
transferor (CIPS or CILCO) has contractually  agreed to indemnify the transferee
(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.

                                       46

<PAGE>


     From December 31, 2003 through March 31, 2004, 10 additional  lawsuits were
filed  against  Ameren,  UE and CIPS,  mostly in the  Circuit  Court of  Madison
County,  Illinois,  three  lawsuits were  dismissed  and six were  settled.  The
following   table   presents   the  status  as  of  March  31,   2004,   of  the
asbestos-related lawsuits that have been filed against the Ameren Companies:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                  Specifically Named as Defendant
                                               -----------------------------------------------------------------------
                                    Total(a)       Ameren        UE          CIPS           Genco           CILCO
   -------------------------------------------------------------------------------------------------------------------
<S>                                     <C>        <C>         <C>           <C>            <C>              <C>
     Filed..........................     188         16         128           74              2               13
     Settled........................      37          -          27           13              -                1
     Dismissed......................      70          3          51           22              -                2
     Pending........................      81         13          50           39              2               10
   ===================================================================================================================
</TABLE>
(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.

     Ameren,  UE, CIPS,  Genco and CILCO believe that the final  disposition  of
these  proceedings  will not have a material  adverse effect on their  financial
position, results of operations or liquidity.

Other Matters

     On June 18, 2003, 20 retirees and surviving  spouses of retirees of various
Ameren companies (the plaintiffs)  filed a complaint in the U.S. District Court,
Southern  District of  Illinois,  against  Ameren,  UE,  CIPS,  Genco and Ameren
Services,  and against our Retiree Medical Plan (the  defendants).  The retirees
were  members  of  various  local  labor  unions of the IBEW and the  IUOE.  The
complaint, referred to as Barnett, et al. vs Ameren Corporation, et al., alleges
the following:

o    the labor  organizations which represented the plaintiffs have historically
     negotiated  retiree medical  benefits with the defendants and that pursuant
     to the negotiated  collective  bargaining  agreements and other  negotiated
     documents,  the plaintiffs are guaranteed medical benefits at no cost or at
     a fixed maximum cost during their retirement;
o    Ameren has unilaterally  announced that,  beginning in 2004,  retirees must
     pay a portion of their own  healthcare  premiums  and either an  increasing
     portion  of  their  dependents'   premiums  or  newly  imposed  dependents'
     premiums,  and that surviving  spouses will be paying increased amounts for
     their medical benefits;
o    the defendants'  actions deprive the plaintiffs of vested benefits and thus
     violate  ERISA  and  the  Labor  Management  Relations  Act  of  1947,  and
     constitute a breach of the defendants' fiduciary duties; and
o    the  defendants  are  estopped  from  changing  the  plan  benefits.  (This
     allegation was subsequently dropped from the amended complaints referred to
     below).

     The plaintiffs filed the complaint on behalf of themselves, other similarly
situated former non-management employees and their surviving spouses who retired
from January 1, 1992 through  October 1, 2002,  and on behalf of all  subsequent
non-management  retirees and their surviving  spouses whose medical benefits are
reduced or are  threatened  with  reduction.  The  plaintiffs  seek to have this
lawsuit  certified as a class action,  seek  injunctive  relief and  declaratory
relief,  seek actual damages for any amounts they are made to pay as a result of
the defendants' actions, and seek payment of attorney fees and costs. An amended
complaint  that added three  plaintiffs  was filed July 15, 2003. In response to
the Court's ruling on the  defendants'  motions to dismiss various counts of the
complaint, a second amended complaint was filed on December 15, 2003, clarifying
some of the allegations,  adding two and dropping two plaintiffs, and adding the
Ameren Group Medical Plan as a defendant.  On April 27, 2004,  the Court granted
the defendants  motion to dismiss one of the counts  brought in connection  with
the amended  complaint  which alleges the defendants  breached  their  fiduciary
duties under ERISA.  We are unable to predict the outcome of this lawsuit or the
impact of the  outcome  on our  financial  position,  results of  operations  or
liquidity.

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
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 2015. UE has
sufficient storage capacity at its Callaway Nuclear Plant until 2019 and has the
capability  for  additional  storage  capacity  through the licensed life of the
plant. The delayed availability of the DOE's disposal facility

                                       47

<PAGE>

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 over the life of the plant, based
on an assumed  40-year life,  ending with  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.
Decommissioning   costs,   including   decontamination,   dismantling  and  site
restoration,  are  estimated  to be $536 million in current year dollars and are
expected  to  escalate   approximately   3.5%  per  year   through  the  end  of
decommissioning  activity in 2033.  Decommissioning costs are charged to cost of
services  used to establish  electric  rates for UE's  customers and amounted to
approximately  $7 million in each of the years 2003, 2002 and 2001.  Every three
years,  the  MoPSC  and  ICC  require  UE  to  file  updated  cost  studies  for
decommissioning  its Callaway  Nuclear Plant, and electric rates may be adjusted
at such times to reflect  changed  estimates.  The latest  studies were filed in
2002.  Costs collected from customers are deposited in an external trust fund to
provide for the Callaway  Nuclear  Plant's  decommissioning.  Fund  earnings are
expected  to  average   approximately   8.6%   annually   through  the  date  of
decommissioning. If the assumed return on trust assets is not earned, we believe
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 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.  Upon the  completion  of UE's  transfer of its  Illinois  electric and gas
utility  businesses  to CIPS,  which is  subject to the  receipt  of  regulatory
approvals,  the assets and  liabilities  related to the Illinois  portion of the
decommissioning  trust fund will be transferred  to Missouri.  See Note 3 - Rate
and Regulatory Matters for further information.



NOTE 11 - Stockholders' Equity

Paid-In Capital

     Ameren's  paid-in  capital  increased  by $873 million as of March 31, 2004
compared to December 31, 2003. Ameren received net proceeds of $853 million from
the  issuance of 19.1 million  shares of its common stock in February  2004 at a
price of $45.90  per  share,  pursuant  to an  August  2002  shelf  registration
statement.  In the first  quarter of 2004,  Ameren  also  issued 0.5 million new
shares  valued at $28 million  under its DRPlus and its 401(k)  plans.  Ameren's
paid-in  capital  decreased  $8 million  due to the  cashless  exercise of stock
options in the first quarter of 2004.

Other Comprehensive Income

     Comprehensive  income  includes net income as reported in the  accompanying
consolidated  statements of income and all other changes in common stockholders'
equity,  except those resulting from  transactions with common  stockholders.  A
reconciliation of net income to comprehensive  income for the three months ended
March 31, 2004 and 2003 is shown below for the Ameren Companies:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                             Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                        2004              2003
                                                                                        ----              ----
<S>                                                                                <C>                <C>
   Ameren:(a)
   Net income...................................................................    $     97           $   101
   Unrealized loss on derivative hedging instruments,
     net of taxes of $- and $-, respectively....................................           -                (1)
   Reclassification adjustments for losses included in net income,
     net of taxes of $- and $(1), respectively..................................           -                (2)
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................    $     97           $    98
   ===================================================================================================================
   ===================================================================================================================
   UE:
   Net income...................................................................    $     58           $    68
   Unrealized gain on derivative hedging instruments,
     net of taxes of $1 and $-, respectively....................................           2                 -
   Reclassification adjustments for losses included in net income,
     net of taxes of $- and $-, respectively....................................           -                (1)
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................    $     60           $    67
   -------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       48

<PAGE>
<TABLE>
<CAPTION>

   -------------------------------------------------------------------------------------------------------------------
                                                                                             Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                        2004              2003
                                                                                        ----              ----
<S>                                                                                 <C>              <C>
   CIPS:
   Net income...................................................................     $    10          $     2
   Unrealized gain on derivative hedging instruments,
     net of taxes of $1 and $-, respectively....................................           3                -
   Reclassification adjustments for losses included in net income,
     net of taxes of $- and $-, respectively....................................          (1)               -
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................     $    12          $     2
   ===================================================================================================================
   ===================================================================================================================
   Genco:
   Net income...................................................................     $    29          $    39
   Unrealized loss on derivative hedging instruments,
     net of taxes of $1 and $-, respectively....................................          (1)               -
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................     $    28          $    39
   ===================================================================================================================
   ===================================================================================================================
   CILCORP:(b)
   Net income...................................................................     $     4          $     3
   Unrealized gain (loss) on derivative hedging instruments,
     net of taxes of $1 and $(1), respectively..................................           3               (1)
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................     $     7          $     2
   ===================================================================================================================
   ===================================================================================================================
   CILCO:
   Net income...................................................................     $     6          $    35
   Unrealized gain (loss) on derivative hedging instruments,
     net of taxes of $1 and $(1), respectively..................................           3               (1)
   -------------------------------------------------------------------------------------------------------------------
        Total comprehensive income, net of taxes................................     $     9          $    34
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January  31,  2003  and   includes   amounts  for   non-registrant   Ameren
     subsidiaries as well as intercompany eliminations.
(b)  2003  amounts  exclude  January  2003  predecessor   information.   CILCORP
     consolidates CILCO and therefore includes CILCO amounts in its balances.

Outstanding Shares of Common Stock

     The following  table  reconciles  the  outstanding  shares of Ameren common
stock for the three months ended March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                              Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                            2004             2003
                                                                                            ----             ----
<S>                                                                                       <C>              <C>
     Shares outstanding at beginning of period....................................         162.9            154.1
     Shares issued................................................................          19.6              7.0
   -------------------------------------------------------------------------------------------------------------------
          Shares outstanding at end of period.....................................         182.5            161.1
   ===================================================================================================================
</TABLE>

NOTE 12 - PENSION AND OTHER POSTRETIREMENT BENEFITS

     In December 2003, the FASB issued SFAS No. 132 (Revised 2003),  "Employers'
Disclosures about Pensions and Other  Postretirement  Benefits (SFAS No. 132R),"
which  retains  the  disclosure  requirements  in  SFAS  No.  132  and  contains
additional requirements. These additional requirements include disclosures about
a plan sponsor's  investment  strategies,  detailed  information of plan assets,
expected  future  cash flow  requirements,  and interim  disclosures  related to
periodic  benefit  cost.  The  following  table  presents  Ameren's net periodic
benefit costs (and the components of those


                                       49

<PAGE>


costs) for pension and other postretirement  benefits for the three months ended
March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                   Pension Benefits                    Postretirement Benefits
   -------------------------------------------------------------------------------------------------------------------
                                                2004                2003               2004                2003
                                                ----                ----               ----                ----
<S>                                          <C>               <C>                  <C>                <C>
   Service cost........................       $   11            $     10             $    4             $     3
   Interest cost.......................           32                  34                 16                  15
   Expected return on plan assets......          (30)                (33)                (9)                 (8)
   Amortization cost:
     Transition obligation.............            -                   -                  1                   1
     Prior service cost................            3                   2                 (1)                 (1)
     Losses............................            6                   2                 10                   9
   -------------------------------------------------------------------------------------------------------------------
   Net periodic benefit cost...........       $   22            $     15             $   21             $    19
   ===================================================================================================================
</TABLE>

     The total amount of our contributions paid, and expected to be paid, do not
differ significantly from amounts previously disclosed.

     UE, CIPS,  Genco,  CILCORP and CILCO are participants in Ameren's plans and
are responsible for their  proportional  share of the pension benefit costs. The
following  table  presents the pension costs incurred for the three months ended
March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                2004                    2003
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                      <C>
   Ameren(a)........................................................         $    22                  $   15
   UE...............................................................              13                      10
   CIPS.............................................................               3                       2
   Genco............................................................               2                       1
   CILCORP(b).......................................................               3                       1
   CILCO............................................................               7                       3
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003; includes amounts for non-registrant Ameren subsidiaries.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     UE, CIPS,  Genco,  CILCORP and CILCO are participants in Ameren's plans and
are  responsible  for their  proportional  share of the  postretirement  benefit
costs.  The following table presents the  postretirement  costs incurred for the
three months ended March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                2004                    2003
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                      <C>
   Ameren(a)........................................................         $    21                  $   19
   UE...............................................................              14                      13
   CIPS.............................................................               2                       2
   Genco............................................................               1                       1
   CILCORP(b).......................................................               3                       2
   CILCO............................................................               5                       3
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003; includes amounts for non-registrant Ameren subsidiaries.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.


NOTE 13 - Segment Information

     Ameren's  reportable  segment,  Utility  Operations,  is  comprised  of its
electric   generation  and  electric  and  gas   transmission  and  distribution
operations.  Ameren's  reportable  segment,  Other,  is  comprised of the parent
holding company, Ameren Corporation.

     The accounting policies for segment data are the same as those described in
Note 1 - Summary of  Significant  Accounting  Policies.  Segment  data  includes
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.

                                       50

<PAGE>

     The table below presents segment  information  about the reported  revenues
and net income of Ameren for the three months ended March 31, 2004 and 2003:

<TABLE>
<CAPTION>
   ===================================================================================================================
                                                                             Reconciling
                               Utility Operations          Other               Items(b)                  Total
   -------------------------------------------------------------------------------------------------------------------
<S>                                <C>                   <C>                  <C>                     <C>
    2004:
    Operating revenues.......       $   1,513             $       -            $   (297)               $    1,216
    Net income...............              97                     -(c)                -                        97
   -------------------------------------------------------------------------------------------------------------------
    2003: (a)
    Operating revenues.......       $   1,382             $       -            $   (274)               $    1,108
    Net income...............             107                    (6)                  -                       101
   -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  Elimination of intercompany revenues.
(c)  Increased investment and other non-operating income ($2 million) offset the
     corporate general and administrative expenses for the current quarter.


                                       51

<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

OVERVIEW

Executive Summary

     Despite mild winter weather, Ameren was able to produce solid earnings this
quarter.  Excluding  first quarter 2003 gains  associated with the adoption of a
new  accounting  standard,  2004 first quarter  earnings for Ameren were up over
first quarter 2003. The CILCORP acquisition, higher emission credit sales, sales
growth due to a  recovering  economy and results  from our focus on cost control
positively affected 2004 first quarter earnings. These benefits more than offset
the negative  effects of milder winter weather,  higher fuel and purchased power
costs,  weaker energy  markets and earnings per share  dilution  resulting  from
increased common shares outstanding.

     In early February,  Ameren announced the signing of a definitive  agreement
to purchase  Illinois  Power and an increased  interest in EEI in a  transaction
valued at  approximately  $2.3  billion.  In late March,  Ameren  completed  the
initial filings required for regulatory  approval.  This acquisition  remains on
target  to close by the end of this  year.  Following  the  announcement  of the
acquisition,  Ameren quickly moved to sell common stock,  generating proceeds of
approximately  $850  million  in order to secure a  significant  portion  of the
equity  financing  planned for the Illinois Power  transaction.  In total,  that
equity  financing  is expected  to equal at least 50 percent of the  transaction
value.

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 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.  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 our  principal  operating
subsidiaries. Also see the Glossary of Terms and Abbreviations.

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

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

o    Genco,  also  known as Ameren  Energy  Generating  Company,  operates a non
     rate-regulated electric generation business.

o    CILCO,  also known as Central  Illinois Light  Company,  is a subsidiary of
     CILCORP (a holding  company)  and was  acquired  on January  31,  2003.  It
     operates a rate-regulated  electric transmission and distribution business,
     a  primarily  non  rate-regulated   electric   generation  business  and  a
     rate-regulated natural gas distribution business in Illinois.

     On  February  2, 2004,  Ameren  entered  into an  agreement  with Dynegy to
purchase the stock of Decatur,  Illinois-based  Illinois  Power and Dynegy's 20%
ownership  interest in EEI. See also Note 2 - Acquisitions and Note 3 - Rate and
Regulatory  Matters  to our  financial  statements  under Part I, Item 1 of this
report for further information.  Illinois Power also files quarterly, annual and
current reports with the SEC, pursuant to the Exchange Act.

     When  we  refer  to  our,  we or  us,  it  indicates  that  the  referenced
information  relates to Ameren and its subsidiaries.  When we refer to financing
or acquisition activities, we are defining Ameren as the parent holding company.
When appropriate,  the Ameren Companies are specifically  referenced in order to
distinguish among their different business activities.

                                       52

<PAGE>

     The financial statements of Ameren are prepared on a consolidated basis and
therefore include the accounts of its  majority-owned  subsidiaries.  Results of
CILCORP  and CILCO  reflected  in  Ameren's  consolidated  financial  statements
include the period from the acquisition  date of January 31, 2003.  January 2003
data for CILCORP and CILCO is not included in Ameren's  consolidated totals. See
Note 2 - Acquisitions to our financial  statements  under Part I, Item 1 of this
report for further information.  All significant intercompany  transactions have
been  eliminated.  All tabular dollar amounts are in millions,  unless otherwise
indicated.


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  impact the demand for our services.  Our results
are also affected by seasonal  fluctuations  caused by winter heating and summer
cooling  demand.  With  over  90%  of  Ameren's  revenues  directly  subject  to
regulation by various state and federal  agencies,  decisions by regulators  can
have a  material  impact  on the  price  we  charge  for our  services.  Our non
rate-regulated  sales are subject to market conditions for power. We principally
utilize 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 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 in each state for our gas utility businesses.  The electric rates for
UE,  CIPS and CILCO are largely set  through  2006 such that cost  decreases  or
increases  will not be  immediately  reflected in rates.  In  addition,  the gas
delivery  rates for UE in Missouri  are set through June 2006.  Fluctuations  in
interest  rates  impact 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 operating and  administrative  costs and capital investment are key
factors that we seek to control in order to optimize our results of  operations,
cash flows and financial position.

     Ameren's net income  decreased  $4 million to $97 million,  or 55 cents per
share, in the first quarter of 2004 from $101 million, or 63 cents per share, in
the  first  quarter  of 2003.  In  2003,  Ameren's  net  income  included  a net
cumulative  effect  after-tax  gain  of $18  million,  or 11  cents  per  share,
associated with the adoption of SFAS No. 143,  "Accounting for Asset  Retirement
Obligations."  The  SFAS  No.  143  net  gain  resulted   principally  from  the
elimination  of  non-legal  obligation  costs of removal for non  rate-regulated
assets from accumulated depreciation.

     The following  table  presents the net  cumulative  effect  after-tax  gain
recorded at each of the Ameren Companies upon adoption of SFAS No. 143:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                          Net Cumulative Effect After-Tax Gain
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>
   Ameren(a)...............................................................................           $   18
   UE......................................................................................                -
   CIPS....................................................................................                -
   Genco...................................................................................               18
   CILCORP(b)..............................................................................                4
   CILCO...................................................................................               24
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  Represents  predecessor  information  recorded in January 2003 prior to the
     acquisition  date of  January  31,  2003.  CILCORP  consolidates  CILCO and
     therefore includes CILCO amounts in its balances.

     Excluding  the  net  cumulative  effect  after-tax  gain  discussed  above,
Ameren's net income  increased $14 million,  and earnings per share  increased 3
cents,  for the first  three  months of 2004 as  compared  to the same period in
2003.  The change in net income was primarily due to organic  growth in revenues
due to a recovering economy,  increased sales of emission credits, favorable gas
margins  resulting from rate increases and results of CILCORP being included for
an additional  month in the current year.  Partially  offsetting  these benefits
were  increased  fuel and  purchased  power  costs as a  result  of power  plant
outages,  increased  employee benefit costs,  lower margins on interchange sales
due to weaker

                                       53

<PAGE>

power prices and lower sales and mild winter  weather  conditions in the current
year.  Increased  common  shares  outstanding,  primarily  due to an offering to
prefund a portion  of the  expected  equity  financing  for the  Illinois  Power
acquisition, also reduced earnings per share.

     As a holding  company,  Ameren's  net income  and cash flows are  primarily
generated  by its  principal  subsidiaries,  UE, CIPS,  Genco and  CILCORP.  The
following table presents the contribution by Ameren's principal  subsidiaries to
Ameren's  consolidated  net income for the three months ended March 31, 2004 and
2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                            Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                      2004                2003
                                                                                      ----                ----
<S>                                                                               <C>                  <C>
   Net income:
         UE(a)...............................................................      $    57              $    67
         CIPS................................................................            9                    1
         Genco(a)............................................................           29                   39
         CILCORP(b)..........................................................            4                    3
         Other(c)............................................................           (2)                  (9)
   -------------------------------------------------------------------------------------------------------------------
   Ameren net income.........................................................      $    97              $   101
   ===================================================================================================================
</TABLE>
(a)  Includes  earnings  from  interchange  sales by Ameren Energy that provided
     approximately  $17  million  (2003 - $22  million)  of UE's net  income and
     approximately $10 million (2003 - $12 million) of Genco's net income in the
     first quarter of 2004.
(b)  Excludes  net income  prior to the  acquisition  date of January 31,  2003.
     January 2003 predecessor amount was $9 million.  CILCORP consolidates CILCO
     and therefore includes CILCO amounts in its balances.
(c)  Includes  corporate general and administrative  expenses,  transition costs
     associated  with the  CILCORP  acquisition  and  other  non  rate-regulated
     operations.

Electric Operations

     The  following  table  presents the favorable  (unfavorable)  variations in
electric  margins,  defined as electric  revenues less fuel and purchased power,
for the three  months ended March 31, 2004 from the  comparable  period in 2003.
Although electric margin may be considered a non-GAAP measure,  we believe it is
a useful  measure  to  analyze  the  change  in  profitability  of our  electric
operations  between periods.  The variation for Ameren reflects the contribution
from CILCORP for the January 2004 period as a separate  line item,  which allows
for other margin  components to be comparable year over year as we owned CILCORP
for only two months in the prior year  period.  The  variations  in CILCORP  and
CILCO  electric  margins  are for the three  months  ended  March 31,  2004,  as
compared to the same period in 2003.

<TABLE>
<CAPTION>

   ===================================================================================================================
                 Three Months                  Ameren(a)      UE       CIPS      Genco       CILCORP(b)       CILCO
   -------------------------------------------------------------------------------------------------------------------
<S>                                           <C>          <C>       <C>      <C>           <C>             <C>
   Electric revenue change:
      CILCORP - January 2004...............    $    47      $   -     $   -    $     -       $     -         $     -
      Effect of weather (estimate).........        (14)       (10)       (2)         -            (1)             (1)
      Growth and other (estimate)..........         55         28        (4)        16           (28)            (28)
      Rate reductions......................         (7)        (7)        -          -             -               -
      Interchange revenues.................        (25)       (18)        1         (6)            -               -
      EEI..................................          1          -         -          -             -               -
   -------------------------------------------------------------------------------------------------------------------
   Total ..................................    $    57      $  (7)    $  (5)   $    10       $   (29)        $   (29)
   -------------------------------------------------------------------------------------------------------------------
   Fuel and purchased power change:
      CILCORP - January 2004...............    $   (24)     $   -     $   -    $     -       $     -         $     -
      Fuel:
          Generation and other.............         (1)         6         -         (5)           (6)             (5)
          Price............................         (5)        (4)        -         (2)            7               7
      Purchased power......................         (6)        (5)        6          3            20              20
      EEI .................................         (3)         -         -          -             -               -
   -------------------------------------------------------------------------------------------------------------------
   Total ..................................    $   (39)     $  (3)    $   6    $    (4)      $    21         $    22
   -------------------------------------------------------------------------------------------------------------------
   Net change in electric margins..........    $    18      $ (10)    $   1    $     6       $    (8)        $    (7)
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  Includes  predecessor  information for January 2003.  CILCORP  consolidates
     CILCO and therefore includes CILCO amounts in its balances.


                                       54

<PAGE>

Ameren

     Ameren's  electric margin  increased $18 million for the first three months
of 2004, compared to the same period in 2003.  Excluding the additional month of
CILCORP  results in the current  year,  electric  margin  decreased  $5 million.
Decreases in electric margin were primarily  attributable to unfavorable weather
conditions,  rate reductions,  decreased interchange margins, and an increase in
fuel and purchased power.  Partially  offsetting these reductions were increased
sales of emission credits, increased industrial,  commercial and wholesale sales
resulting  from  improved  economic  conditions  and  increased  sales  into the
deregulated  Illinois  marketplace.  Industrial and commercial sales rose 4% and
1%, respectively, during the quarter.

     The  unfavorable  weather  conditions  were  primarily due to warmer winter
weather in the first  quarter of 2004  versus  2003.  Heating  degree  days were
approximately  9% less in the first three months of 2004 in our overall  service
territory compared to the same period in 2003 and approximately 6% less compared
to normal conditions.

     Annual  rate  reductions  as a result  of the 2002 UE  electric  rate  case
settlement in Missouri  negatively  impacted  electric revenues during the first
quarter.  Reductions of $50 million were effective April 1, 2002 and $30 million
were effective  April 1, 2003. An additional $30 million of annual electric rate
reductions became effective April 1, 2004.

     Interchange  margins  decreased  $14 million for the first three  months of
2004,  compared  to the same period in 2003,  due to lower  power  prices in the
energy markets and decreased low-cost  generation  availability due to unplanned
outages at the  Callaway  Nuclear  Plant and other  fossil  power  plants at UE,
despite  fewer  outages at the Genco plants.  Average  realized  power prices on
interchange  sales decreased to approximately  $34 per megawatthour in the first
three months of 2004 from  approximately $42 per megawatthour in the first three
months of 2003. Power prices in the first quarter of 2003 were unusually strong.

     Ameren's fuel and purchased power  increased by $15 million,  excluding the
additional month of CILCORP,  in the first three months of 2004, compared to the
same period of 2003,  due to increased  power  purchases  necessitated  by plant
outages and increased fuel prices.

UE

     UE's  electric  margin  decreased $10 million for the first three months of
2004,  as compared to the same period in 2003.  Decreases in electric  margin in
the first  three  months  of 2004 were  primarily  attributable  to  unfavorable
weather  conditions,  rate reductions  resulting from the 2002 Missouri electric
rate  case  settlement  mentioned  above  and  decreased   interchange  margins.
Interchange margins decreased $10 million for the first three months of 2004 due
to lower power prices in the energy  markets and decreased  low-cost  generation
availability  as mentioned  above.  Partially  offsetting  these  decreases were
higher  emission  sales in the first quarter of 2004.  Fuel and purchased  power
increased  $3 million in the first  quarter of 2004  primarily  due to increased
power purchases as a result of plant outages.

CIPS

     CIPS'  electric  margin was  comparable in the first quarter of 2004 to the
same period in 2003.

Genco

     Genco's  electric margin increased $6 million for the first three months of
2004, as compared to the same period in 2003.  Increases in electric margin were
primarily attributable to higher wholesale margins due to increased sales to new
customers coupled with increased use of lower cost generation due to fewer plant
outages,  partially  offset by  decreased  interchange  margins  resulting  from
reduced sales and lower power prices.

CILCORP and CILCO

     Electric margin decreased $8 million at CILCORP and $7 million at CILCO for
the  first  three  months  of 2004,  as  compared  to the same  period  in 2003.
Decreases in electric  margin were primarily  attributable  to the switch of two
large CILCO industrial customers to Marketing Company in July and October, 2003,
transfers of non  rate-regulated  customers to Marketing Company and unfavorable
weather  conditions.  Fuel and purchased  power also  decreased due to customers
switching.

                                       55

<PAGE>

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 ended March 31, 2004,  from the comparable  period in 2003.  Although gas
margin may be considered a non-GAAP  measure,  we believe it is a useful measure
to analyze the change in profitability of gas operations between periods.

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                            Three Months
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>
     Ameren(a)...........................................................                    $    19
     UE..................................................................                          2
     CIPS................................................................                          5
     Genco...............................................................                          -
     CILCORP(b)..........................................................                          -
     CILCO...............................................................                         (2)
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  Includes  predecessor  information for January 2003.  CILCORP  consolidates
     CILCO and therefore includes CILCO amounts in its balances.

     Ameren's,  UE's and CIPS' gas margins  increased  primarily due to delivery
rate increases,  partially offset by milder winter weather. Ameren's margin also
increased  due to the  additional  month of CILCORP  results in the current year
($13  million).  CILCO's gas margin  decreased in the first  quarter of 2004, as
compared to the same period of 2003,  as the mild winter  weather  conditions in
CILCO's  service  territory  more than offset the benefit of the  delivery  rate
increases.  CILCORP's gas margin was  comparable in the first quarter of 2004 to
the same period in 2003. The effect of all rate increases was  approximately  $9
million.

Operating Expenses and Other Statement of Income Items


     The  following  table  presents the favorable  (unfavorable)  variations in
operating and other expenses for the three months ended March 31, 2004, from the
comparable period in 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                  Three Months                  Ameren(a)      UE      CIPS     Genco    CILCORP(b)          CILCO
   -------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>      <C>      <C>          <C>            <C>
      Other operations and maintenance.......  $   (14)      $   (6)  $   5    $    5       $  (7)         $    (6)
      Depreciation and amortization..........       (6)          (2)      -        (1)          4                2
      Taxes other than income taxes..........       (2)          (2)      -         2           3                4
      Other income and deductions............        4            4       1        (3)         (1)              (1)
      Interest...............................        2            -       1         3           2                2
      Income taxes...........................       (7)           4      (5)       (4)          3                3
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003.  Includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.

(b)  Includes predecessor information for January 2003.

Other Operations and Maintenance

     Ameren's other operations and maintenance expenses increased $14 million in
the first quarter of 2004 as compared to the same period in 2003.  Excluding the
additional month of CILCORP results in the current year of $15 million, expenses
decreased  $1 million.  Expenses  at Ameren and UE  increased  primarily  due to
higher employee benefit costs and increased power plant maintenance  expenses as
a result of the number and timing of outages, but were more than offset by lower
labor  costs.  See Outlook  below for a  discussion  of the  Callaway  refueling
outage, which began in early April 2004.

     CIPS' and Genco's other  operations and maintenance  expenses  decreased in
the first quarter of 2004, as compared to the same period in 2003, primarily due
to  decreased  overhead  costs and lower  labor  costs.  Genco's  expenses  also
decreased due to lower power plant maintenance costs.

     CILCORP's and CILCO's other operations and maintenance  expenses  increased
in the first  three  months of 2004,  as  compared  to the same  period in 2003,
primarily due to higher employee benefit costs and increased overhead costs.

                                       56

<PAGE>

Depreciation and Amortization

     Ameren's depreciation and amortization expenses increased $6 million in the
first  quarter of 2004,  as compared to the same period in 2003.  Excluding  the
additional  month of  CILCORP  depreciation  and  amortization  expenses  in the
current year ($6 million), expenses were comparable to the same period in 2003.

     UE's  depreciation  and  amortization  expenses  increased  in the  current
quarter,  as  compared  to the same  period in 2003,  primarily  due to  capital
additions.

     Depreciation  and  amortization  expenses at CILCORP and CILCO decreased in
the first quarter of 2004, as compared to the same period in 2003, primarily due
to the write-off of software subsequent to our acquisition of CILCORP.

     Depreciation and amortization expenses at CIPS and Genco were comparable in
the first quarter of 2004 to the same period in 2003.

Taxes Other Than Income Taxes

     Taxes other than income taxes  increased at both Ameren and UE in the first
quarter of 2004,  as  compared  to 2003,  primarily  due to an increase in gross
receipts taxes.

     Genco's  taxes other than income taxes  decreased in the first three months
of  2004,  as  compared  to  2003,  primarily  due  to  favorable  property  tax
assessments in the current year.

     Taxes other than income  taxes  decreased at CILCORP and CILCO in the first
quarter of 2004, as compared to 2003,  primarily  due to reduced gross  receipts
taxes.

     Taxes other than income taxes at CIPS were  comparable in the first quarter
of 2004 to the same period in 2003.

Other Income and Deductions

     Ameren's  and UE's  other  income  and  deductions  increased  in the first
quarter  of 2004,  as  compared  to the same  period in 2003,  primarily  due to
increased  interest and dividend  income and an increase in allowance  for funds
used during construction.  Ameren's increased interest and dividend income was a
result of investing the proceeds from the February 2004 equity offering.

     Other income and deductions at Genco decreased in the first quarter of 2004
as compared to the same period in 2003,  primarily due to losses on dispositions
of property.

     Other income and deductions at CIPS,  CILCORP and CILCO were  comparable in
the first quarter of 2004 to the same period in 2003.

Interest

     Interest  expense  decreased at Ameren  primarily due to the  redemption of
Ameren  floating  rate  notes  at the end of  2003,  as well as  redemptions  of
long-term debt during 2003 at its subsidiaries as noted below.

     Interest  expense  decreased  at CIPS in the  first  quarter  of  2004,  as
compared to the same period of 2003, primarily due to the maturity or redemption
of first mortgage bonds in the second quarter of 2003.

     Genco's  interest  expense  was  reduced in the first  quarter of 2004,  as
compared to the same period of 2003,  primarily due to decreased borrowings from
Ameren's non state-regulated subsidiary money pool.

     Interest  expense  decreased  at CILCO in the  first  quarter  of 2004,  as
compared  to the  same  period  of  2003,  primarily  due to the  redemption  of
long-term  debt in the second  quarter of 2003,  and decreased at CILCORP due to
the redemption of long-term debt in the third quarter of 2003.

                                       57

<PAGE>


     UE's  interest  expense was  comparable in the first quarter of 2004 to the
same period in 2003.

Income Taxes

     Income tax expense increased at Ameren, CIPS and Genco in the first quarter
of 2004, as compared to the same period in 2003, primarily due to higher pre-tax
income.  Income tax expense  decreased at UE, CILCORP and CILCO primarily due to
lower pre-tax income.


LIQUIDITY AND CAPITAL RESOURCES

     The tariff-based gross margins of Ameren's rate-regulated utility operating
companies 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. In addition, we plan to utilize short-term debt to support
normal operations and other temporary capital requirements.

     The  following  tables  present net cash  provided by (used in)  operating,
investing and financing activities for the three months ended March 31, 2004 and
2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                          Net Cash Provided By               Net Cash Used In                Net Cash Provided By
                          Operating Activities             Investing Activities        (Used In) Financing Activities
   -------------------------------------------------------------------------------------------------------------------
                       2004       2003     Variance      2004      2003    Variance      2004       2003     Variance
                    --------------------------------------------------------------------------------------------------
<S>                 <C>        <C>         <C>       <C>       <C>        <C>         <C>       <C>        <C>
    Ameren(a)......  $  244     $  226      $    18   $  (161)  $  (629)   $   468     $  439    $    69    $    370
    UE.............     105         44           61      (108)     (100)        (8)        (5)       165        (170)
    CIPS...........      51         41           10        (9)      (17)         8        (44)       (25)        (19)
    Genco..........      67         32           35       (16)      (10)        (6)       (51)       (22)        (29)
    CILCORP(b).....      95         70           25       (33)      (32)        (1)       (61)       (36)        (25)
    CILCO..........      79         75            4       (35)      (33)        (2)       (49)       (36)        (13)
   ===================================================================================================================
</TABLE>
(a)  Excludes  amounts for CILCORP  and CILCO prior to the  acquisition  date of
     January 31, 2003;  includes amounts for non-registrant  Ameren subsidiaries
     as well as intercompany eliminations.
(b)  2003  amounts  include  January  2003  predecessor   information.   CILCORP
     consolidates CILCO and therefore includes CILCO amounts in its balances.

Cash Flows from Operating Activities

     Cash flows  provided  by  operating  activities  increased  for each of the
Ameren  Companies  for the three  months ended March 31, 2004 as compared to the
same period in 2003. The increase in cash flows provided by operating activities
for Ameren,  CIPS and Genco was primarily a result of increased  earnings before
the noncash gain from a change in  accounting  principle  discussed  above under
Results  of  Operations.  Ameren's  cash flows from  operating  activities  also
increased  due to cash received in the first quarter of 2004 totaling $9 million
related to UE's settlement of a dispute over mine reclamation issues with a coal
supplier.  Genco's cash flows from  operating  activities  also increased in the
first quarter of 2004, compared to the same period in 2003, due to the timing of
receipts of receivables and payments on accounts and wages payable.

     UE's,  CILCORP's and CILCO's cash flows from operating activities increased
for the three months ended March 31, 2004,  compared to the same period in 2003,
due to the timing of receipts of receivables  and payments on accounts and wages
payable  offset by  decreased  net  earnings  discussed  above under  Results of
Operations.  This  increase   at UE  was  supplemented  by the  coal  settlement
payments received in the first quarter of 2004 as discussed above.

Cash Flows from Investing Activities

     Cash flows used in investing  activities  decreased for Ameren and CIPS and
increased for UE, Genco,  CILCORP and CILCO for the three months ended March 31,
2004 as compared to the same period in 2003.  Ameren's  decrease in cash used in
investing  activities  was  primarily  due to $488  million in cash paid for the
acquisitions  of CILCORP  and  Medina  Valley in early  2003.  The  decrease  in
investing  activities  for Ameren was  partially  offset by higher  construction
expenditures  at UE,  Genco,  CILCORP and CILCO for the three months ended March
31, 2004 as compared  to the same

                                       58

<PAGE>

period in 2003.  Cash  flows used in  investing  activities  for CIPS  decreased
primarily due to  intercompany  money pool  investments  in the first quarter of
2003  totaling $7 million  compared to no  investments  in the first  quarter of
2004.  UE's,  Genco's,  CILCORP's  and  CILCO's  increase  in cash flows used in
investing activities was primarily related to increased capital expenditures.

Cash Flows from Financing Activities

Ameren

     Ameren's  cash  flows from  financing  activities  increased  for the three
months  ended March 31, 2004,  as compared to the same period in 2003  primarily
due to an increase in proceeds  received from the sale of common shares,  net of
issuance  costs,  in the first  quarter of 2004  compared  to the same period in
2003.  Proceeds of $853 million  received in the first  quarter of 2004 from the
issuance of 19.1 million  shares are  ultimately  expected to be utilized to pay
the cash portion of the  purchase  price for  Ameren's  acquisition  of Illinois
Power and Dynegy's 20% interest in EEI and to reduce Illinois Power debt assumed
as part of this transaction and pay related premiums.  The common stock proceeds
received  in the  first  quarter  of 2003  were  used to fund a  portion  of the
acquisitions  of CILCORP in January 2003 and Medina Valley in February 2003. See
Note 2 - Acquisitions to our financial  statements  under Part I, Item 1 of this
report for further explanation.

     The increase in cash flows from  financing  activities at Ameren was offset
by an increase in UE's  redemptions,  repurchases  and  maturities of short-term
debt and long-term  debt, as well as the termination of UE's nuclear fuel lease,
totaling  $326 million in the first  quarter of 2004 compared to $288 million in
the same period in 2003.  Additionally,  an increase in payment of  dividends on
common  stock,  totaling  $116 million in the first  quarter of 2004 compared to
$102 million in the same period in 2003,  due to the increased  number of shares
outstanding, offset the  increase  in cash flows from  financing  activities  at
Ameren. There were no debt issuances in the current quarter.

UE

     UE's cash flows from  financing  activities  decreased for the three months
ended March 31, 2004, as compared to the same period in 2003, primarily due to a
decrease in proceeds received from the issuance of long-term debt and borrowings
from the utility  money pool which  totaled $292 million in the first quarter of
2004 compared to $501 million in 2003. The decrease in cash flows from financing
activities was partially  offset by decreased  payments on UE's  short-term debt
and the  termination  of the nuclear fuel lease,  totaling  $217 million in 2004
compared to $252 million in 2003.

CIPS

     CIPS' cash  flows  used in  financing  activities  increased  for the three
months ended March 31, 2004, as compared to the same period in 2003, principally
due to the  repayment of utility  money pool  borrowings in the first quarter of
2004,  partially offset by the redemption of long-term debt in the first quarter
of 2003.

Genco

     Genco's cash flows used in  financing  activities  increased  for the three
months ended March 31, 2004,  as compared to the same period in 2003,  primarily
due to the  repayment of the  non-utility  money pool  borrowings,  totaling $33
million in 2004  compared to $21 million in 2003,  and an increase in  dividends
paid to Ameren of $17 million.

CILCORP and CILCO

     CILCORP's and CILCO's cash flows used in financing activities increased for
the three months  ended March 31, 2004,  as compared to the same period in 2003,
primarily  due to the  repayments  of CILCO's $100 million bank term loan in the
first  quarter of 2004 compared to repayment of  short-term  and long-term  debt
totaling $36 million in the same period in 2003. The increase in cash flows used
in financing activities was partially offset by borrowings from the intercompany
money pool in the first quarter of 2004. The proceeds received by CILCO from the
money pool  borrowings  in the first  quarter of 2004 were used to repay CILCO's
$100 million bank term loan facility.

                                       59

<PAGE>

Short-term Borrowings and Liquidity

     Short-term   borrowings   consist  of  commercial   paper  and  bank  loans
(maturities  generally  within 1 to 45 days).  As of March 31, 2004,  short-term
borrowings  at  Ameren  totaled  $2  million.  UE had no  short-term  borrowings
outstanding  at March 31,  2004,  compared to $150 million at December 31, 2003.
CIPS, Genco, CILCORP and CILCO had no short-term borrowings as of March 31, 2004
and December 31, 2003. The average short-term  borrowings at UE were $74 million
for the quarter ended March 31, 2004, with a  weighted-average  interest rate of
1.05%. Peak short-term borrowings for UE were $224 million for the quarter ended
March 31, 2004, with a weighted-average interest rate of 1.06%.

     The following table presents the various committed credit facilities of the
Ameren Companies and EEI as of March 31, 2004:

<TABLE>
<CAPTION>

   ===================================================================================================================
             Credit Facility                    Expiration            Amount Committed           Amount Available
   -------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                         <C>                       <C>
   Ameren:(a)
       364-day revolving...............          July 2004              $      235                 $    235
       Multi-year revolving............          July 2005                     130                      130
       Multi-year revolving............          July 2006                     235                      235
   -------------------------------------------------------------------------------------------------------------------
   UE:
       Various 364-day revolving.......      through May 2004                  154                      154
   -------------------------------------------------------------------------------------------------------------------
   CIPS:
       Two 364-day revolving...........      through July 2004                  15                       15
   -------------------------------------------------------------------------------------------------------------------
   CILCO:
       Three 364-day revolving.........     through August 2004                 60                       60
   -------------------------------------------------------------------------------------------------------------------
   EEI:
       Two bank credit facilities......      through June 2004                  45                       45
   -------------------------------------------------------------------------------------------------------------------
         Total ........................                                 $      874                 $    874
   ===================================================================================================================
</TABLE>
(a)  CILCORP  and Genco may access the credit  facilities  through  intercompany
     borrowing arrangements.

     At March 31,  2004,  certain of the Ameren  Companies  had  committed  bank
credit facilities totaling $829 million,  all of which were available for use by
UE, CIPS, CILCO and Ameren Services through a utility money pool arrangement. In
addition,  $600 million of the $829  million may be used by Ameren  directly and
most  of the non  rate-regulated  affiliates  including,  but  not  limited  to,
Resources Company, Genco, Marketing Company, AFS, AERG and Ameren Energy through
a non  state-regulated  subsidiary  money  pool  agreement.  We have  money pool
agreements with and among our 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. See Note 8
- Related Party Transactions to our financial statements under Part I, Item 1 of
this  report for a detailed  explanation  of the money  pool  arrangements.  The
committed  bank  credit  facilities  are used to support  our  commercial  paper
programs  under  which  there  were no  amounts  outstanding  at March 31,  2004
(December 31, 2003 - $150 million).  Access to our credit  facilities for any of
our subsidiaries is subject to reduction based on use by affiliates.

     EEI  also  has  two  bank  credit  agreements  totaling  $45  million  with
maturities  through  June 2004,  all of which was  available  at March 31, 2004.
Ameren guarantees $24 million of these facilities. The facilities,  which expire
in 2004,  will be  replaced or renewed by the Ameren  Companies  and EEI as they
mature on terms  consistent with current market  conditions for borrowings based
on the credit worthiness of the Ameren Companies and EEI.

     In addition to committed credit  facilities,  a further source of liquidity
for the Ameren Companies is available cash and cash  equivalents.

                                       60

<PAGE>

     Ameren  and UE are  authorized  by the  SEC  under  PUHCA  to have up to an
aggregate of $1.5 billion and $1 billion,  respectively, of short-term unsecured
debt instruments  outstanding at any time. In addition,  CIPS, CILCORP and CILCO
each have PUHCA  authority  to have up to an  aggregate  of $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 for the
three months ended March 31, 2004 and 2003. For additional  information  related
to the terms and uses of these  issuances and the sources of funds and terms for
the  redemptions,  see  Note 5 - Debt and  Equity  Financings  to our  financial
statements under Part I, Item 1 of this report.

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                                   Three Months
                                                               Month Issued, Redeemed,      --------------------------
                                                                Repurchased or Matured          2004           2003
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                   <C>           <C>
     Issuances
     Long-term debt
     UE:
         5.50% Senior secured notes due 2034................              March               $    -        $   184
   -------------------------------------------------------------------------------------------------------------------
     Total Ameren long-term debt issuances..................                                  $    -        $   184
   -------------------------------------------------------------------------------------------------------------------
     Common stock
     Ameren:
         6,325,000 Shares at $40.50.........................             January              $    -        $   256
         19,063,181 Shares at $45.90........................             February                875              -
         DRPlus and 401(k)(a)...............................             Various                  28             29
   -------------------------------------------------------------------------------------------------------------------
     Total Ameren common stock issuances....................                                  $  903        $   285
   -------------------------------------------------------------------------------------------------------------------
     Total Ameren long-term debt and common stock issuances.                                  $  903        $   469
   ===================================================================================================================
     Redemptions, Repurchases and Maturities
     Long-term debt
     CIPS:
         6.99% Series 97-1 first mortgage bonds due 2003....              March               $    -        $     5
     CILCO:
         Secured bank term loan.............................             February                100              -
         6.82% First mortgage bonds due 2003................             February                  -             26
   -------------------------------------------------------------------------------------------------------------------
          Total Ameren long-term debt redemptions,
             repurchases and maturities.....................                                  $  100        $    31
   ===================================================================================================================
</TABLE>
(a)  Includes  issuances of common  stock of 0.5 million  shares in 2004 and 0.8
     million  shares in 2003 under our DRPlus  plan and in  connection  with our
     401(k) plans.

     Ameren

     In February 2004, Ameren issued,  pursuant to an August 2002 Form S-3 shelf
registration  statement,  19.1 million  shares of its common stock at $45.90 per
share for net proceeds of $853 million. This issuance substantially depleted all
of the capacity under the August 2002 shelf registration statement. The proceeds
from this  offering  are  expected  to provide  funds  required  to pay the cash
portion of the purchase price for our acquisition of Illinois Power and Dynegy's
20%  interest in EEI and to reduce  Illinois  Power debt assumed as part of this
transaction  and  pay  related  premiums.   Pending  such  use,  and/or  if  the
acquisition is not completed,  we plan to use the net proceeds to reduce present
or  future   indebtedness   and/or  repurchase   securities  of  Ameren  or  its
subsidiaries.  A portion of the net proceeds may also be temporarily invested in
short-term  instruments.  See Note 2 - Acquisitions to our financial  statements
under  Part I,  Item 1 of this  report  for  further  information.  In the first
quarter of 2004,  Ameren also  received  net  proceeds  of $28 million  from the
issuance of 0.5 million new common  shares under its DRPlus and its 401(k) plans
for general corporate purposes.

     In March 2004, the SEC declared effective a Form S-3 registration statement
filed by Ameren in  February  2004,  authorizing  the  offering  of six  million
additional shares of its common stock under DRPlus.  Shares of common stock

                                       61

<PAGE>

sold under the DRPlus are, at Ameren's  option,  newly issued shares or treasury
shares,  or  shares  purchased  in the open  market or in  privately  negotiated
transactions.  Ameren is currently  selling  newly  issued  shares of its common
stock under DRPlus.

     On April 7, 2004, a new Form S-3 shelf registration  statement was filed by
Ameren with the SEC. This registration statement,  upon being declared effective
by the SEC, will authorize the offering from time to time of up to $2 billion of
various forms of securities including long-term debt, trust preferred securities
and equity securities to finance ongoing construction and maintenance  programs,
to redeem,  repurchase,  repay, or retire outstanding debt, to finance strategic
investments,  including  our pending  acquisition  of  Illinois  Power and a 20%
interest in EEI, and for other general corporate purposes.

     UE

     In  February  and March  2004,  in  connection  with the  delivery  of bond
insurance policies to secure the environmental improvement and pollution control
revenue bonds (Series 1991, 1992, 1998A,  1998B,  1998C, 2000A, 2000B and 2000C)
previously issued by the Missouri Environmental Authority, UE delivered separate
series of its first mortgage bonds (which are subject to fallaway provisions, as
defined in the  indenture  agreements,  similar to those  included  in its first
mortgage  bonds which secure UE's senior secured notes) to secure its respective
obligations  under the existing loan agreements with the Missouri  Environmental
Authority  relating to such  environmental  improvement  and  pollution  control
revenue bonds. As a result, the environmental  improvement and pollution control
revenue bonds were classified as Aaa, AAA and AAA by Moody's, S&P's and Fitch's,
respectively.

     UE had a lease agreement, which was scheduled to expire on August 31, 2031,
that  provided  for the  financing  of a portion  of its  nuclear  fuel that was
processed for use or was consumed at UE's Callaway  Nuclear  Plant.  In February
2004, UE terminated this lease with a final payment of $67 million.

     CILCORP and CILCO

     In February 2004, CILCO repaid its secured bank term loan totaling $100
million with available cash and borrowings from the utility money pool.

     In conjunction with the acquisition of CILCORP in 2003, CILCORP's long-term
debt was adjusted to fair value. The amortization related to the fair value
adjustments was approximately $2 million for the three months ended March 31,
2004 and was recorded in interest expense in the Consolidated Statements of
Income for Ameren and CILCORP.

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
indebtedness  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 the covenants and provisions  contained in
certain  of  the  Ameren  Companies'   indenture   agreements  and  Articles  of
Incorporation.

     At March 31, 2004,  Ameren and its  subsidiaries  were in  compliance  with
their credit agreement provisions and covenants.

     We rely on our  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 or grow 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 such
that our cost of capital  would  increase or our inability to access the capital
markets would be adversely affected.  All of the Ameren Companies expect to fund
maturities of long-term debt and contractual  obligations  through a combination
of cash flow from operations and external financing.

                                       62

<PAGE>



Dividends

     The amount and timing of  dividends  payable on Ameren's  common  stock are
within the sole  discretion of Ameren's  Board of Directors.  Ameren's  Board of
Directors  has not set  specific  targets or payout  parameters  when  declaring
common stock dividends.  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 three
months of 2004 totaled $116 million or 63.5 cents per share (2003 - $102 million
or 63.5  cents  per  share).  On April 27,  2004,  Ameren's  Board of  Directors
declared a quarterly  common stock  dividend of 63.5 cents per share  payable on
June 30, 2004, to stockholders of record on June 9, 2004.

     UE's preferred  stock dividend is payable August 15, 2004, to  shareholders
of record on July 20, 2004. CIPS' preferred stock dividend is payable  September
30, 2004, to  shareholders  of record on September 15, 2004.  CILCO's  preferred
stock dividend was paid on April 1, 2004, to  shareholders of record on March 5,
2004.

     Certain of our financial agreements and corporate  organizational documents
contain covenants and conditions that, among other things,  provide restrictions
on  the  Ameren  Companies'  payment  of  dividends.   Ameren  would  experience
restrictions  on  dividend  payments  if it were to  defer  contract  adjustment
payments on its equity  security  units.  UE would  experience  restrictions  on
dividend  payments  if it were to  extend  or  defer  interest  payments  on its
subordinated debentures. CIPS has provisions restricting dividend payments based
on ratios of common stock to total  capitalization along with provisions related
to certain  operating  expenses and  accumulations  of earned  surplus.  Genco's
indenture  includes  restrictions which prohibit making any dividend payments if
debt  service  coverage  ratios  are  below a  defined  threshold.  CILCORP  has
restrictions in the event 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.

     The  following  table  presents  dividends  paid  directly or indirectly to
Ameren by its subsidiaries for the three months ended March 31, 2004 and 2003:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                           Three Months
   -------------------------------------------------------------------------------------------------------------------
                                                                                   2004                   2003
                                                                                   ----                   ----
<S>                                                                           <C>                    <C>
     UE..................................................................      $     79               $     82
     CIPS................................................................            19                     19
     Genco...............................................................            18                      1
     CILCORP (parent company only).......................................             -                      -
     CILCO...............................................................             -                      -
     Non-registrants.....................................................             -                      -
   -------------------------------------------------------------------------------------------------------------------
     Dividends paid to Ameren............................................      $    116                    102
   ===================================================================================================================
</TABLE>

Credit Ratings

     As a result of the announcement of Ameren signing a definitive agreement to
acquire  Illinois  Power and a 20% interest in EEI from Dynegy in February 2004,
credit rating agencies placed Ameren  Corporation's and its  subsidiaries'  debt
under review for a possible downgrade.

     Any adverse change in the Ameren Companies' credit ratings may reduce their
access to  capital  and/or  increase  the  costs of  borrowings  resulting  in a
negative impact on earnings.  At March 31, 2004, if the Ameren Companies were to
receive a  sub-investment  grade  rating (less than BBB- or Baa3),  Ameren,  UE,
CIPS,  Genco,  CILCORP and CILCO could have been required to post collateral for
certain  trade  obligations  amounting to $46 million,  $12  million,  none,  $2
million,  $10 million and $10 million,  respectively.  In addition,  the cost of
borrowing under our credit facilities would increase or decrease based on credit
ratings. A credit rating is not a recommendation to buy, sell or hold securities
and should be evaluated  independently of any other rating.  Ratings are subject
to revision or  withdrawal  at any time by the  assigning  rating  organization.

                                       63

<PAGE>

OUTLOOK

     We expect the following industry-wide trends and company-specific issues to
impact earnings in 2004 and beyond:

o    Economic   conditions,   which  principally   impact  native  load  demand,
     particularly from our industrial customers, have been weak for the past few
     years, but improved in 2003 and early 2004.
o    Ameren, UE and CIPS have historically achieved  weather-adjusted  growth in
     their native electric  residential and commercial load of  approximately 2%
     per year and expect this trend to continue for at least the next few years.
o    Electric rates in UE's, CIPS' and CILCO's Illinois service  territories are
     legislatively  fixed  through  January  1,  2007.  An  electric  rate  case
     settlement  in UE's  Missouri  service  territory  has  resulted  in annual
     reductions of $50 million  beginning on April 1, 2002, $30 million on April
     1, 2003,  and $30 million on April 1, 2004. In addition,  electric rates in
     Missouri cannot change prior to July 1, 2006, subject to certain exclusions
     outlined in UE's rate settlement.
o    Power  prices in the Midwest  impact the amount of revenues  UE,  Genco and
     AERG can  generate  by  marketing  any excess  power  into the  interchange
     markets.  Power  prices in the  Midwest  also  impact  the cost of power we
     purchase in the interchange markets.  Long-term power prices continue to be
     generally  soft in the  Midwest,  despite a  significant  increase in power
     prices in 2003  relative to 2002,  due in part to higher prices for natural
     gas.
o    Increased expenses associated with rising employee benefit costs and higher
     insurance and security costs  associated  with  additional  measures UE has
     taken,  or may  have to take,  at its  Callaway  Nuclear  Plant  and  other
     operating plants related to world events.
o    UE's Callaway  Nuclear Plant is undergoing an extended  refueling outage in
     the second  quarter of 2004,  which  includes the  replacement of condenser
     bundles.  This outage is expected to last 45 - 50 days and cost $40 million
     to $55 million for maintenance and purchased power costs. In addition,  the
     amount of excess  power  available  for sale from UE's power plants will be
     reduced.   Refueling  outages  occur  approximately  every  18  months  and
     typically   include  the   replacement  of  fuel  and  the  performance  of
     maintenance and inspections.  Routine  refueling  outages have historically
     lasted 30 - 35 days. If  inspections  discover items  requiring  additional
     maintenance,  the outage  period  could be longer,  and cost  significantly
     more, than expected. UE's fall 2005 refueling outage is expected to last 70
     days due to the  installation  of new  steam  generator  units  during  the
     refueling and is expected to be higher in cost.
o    In January 2004,  the MoPSC  approved a settlement  with UE  authorizing an
     annual gas delivery rate increase of approximately $13 million,  which went
     into effect on February 15, 2004. The settlement provides that gas delivery
     rates cannot change prior to July 1, 2006,  subject to certain  exclusions.
     In October 2003, the ICC issued orders awarding CILCO an increase in annual
     gas  delivery  rates of $9 million and  awarding  CIPS and UE  increases in
     annual gas delivery rates of $7 million and $2 million,  respectively  that
     went into effect in November 2003.
o    In the second quarter of 2004, UE received a refund of $13 million and CIPS
     received  a refund of $5 million  upon  entering  the  Midwest  ISO.  These
     refunds were for fees  previously  paid to exit the Midwest  ISO.  However,
     Ameren,  UE and CIPS will incur higher ongoing operation costs and may lose
     some revenue as a result of  participating in the Midwest ISO. See Note 3 -
     Rate and Regulatory Matters to our financial  statements under Part I, Item
     1 of this report for additional information.
o    Ameren,  CILCORP and CILCO expect to realize  further  CILCORP  integration
     synergies associated with reduced overhead expenses and lower fuel costs.
o    Ameren  expects  the  acquisition  of  Illinois  Power to be  accretive  to
     earnings in the first two years of  ownership.  In February  2004,  we sold
     19.1 million shares of new Ameren common stock. Proceeds from this sale and
     future  offerings  are expected to  ultimately  be used to finance the cash
     portion of the purchase  price of Illinois  Power and Dynegy's 20% interest
     in EEI  and  to  reduce  Illinois  Power  debt  assumed  as  part  of  this
     transaction and pay any related premiums.  However, prior to the closing of
     the  acquisition of Illinois  Power,  we expect the new common shares to be
     dilutive to earnings per share.

     In the ordinary course of business,  we evaluate  strategies to enhance our
financial  position,  results of operations and liquidity.  These strategies may
include potential acquisitions,  divestitures, and opportunities to reduce costs
or  increase  revenues,  and other  strategic  initiatives  in order to increase
Ameren's  shareholder  value.  We are unable to predict which,  if any, of these
initiatives will be executed,  as well as the impact these  initiatives may have
on our future financial  position,  results of operations or liquidity,  however
the impact could be material.

                                       64

<PAGE>

RISK FACTORS

     Ameren may not be able to complete its  acquisition of Illinois  Power.  If
Ameren does not  complete  the  acquisition,  dilution to its earnings per share
will result  unless Ameren is able to otherwise use the proceeds from the common
stock it issued in February 2004, so as to avoid or mitigate such dilution.

     On  February  2, 2004,  Ameren  entered  into an  agreement  with Dynegy to
purchase the stock of Illinois Power and Dynegy's 20% ownership interest in EEI.
The  total  transaction  value is  approximately  $2.3  billion,  including  the
assumption of  approximately  $1.8 billion of Illinois  Power debt and preferred
stock. Ameren's financing plan for this transaction includes the issuance of new
Ameren  common stock,  which in total,  is expected to equal at least 50% of the
transaction value. Ameren currently expects to issue common stock to finance the
cash portion of the purchase  price,  to reduce  Illinois  Power debt assumed as
part of this  transaction  and pay any related  premiums  and possibly to reduce
present or future  indebtedness  and/or  repurchase  securities of Ameren or its
subsidiaries.  Ameren  issued and sold 19.1  million  shares of common  stock on
February  6,  2004,  for this  purpose.  The  acquisition  is subject to various
regulatory  approvals,  including  the  ICC,  the  SEC and the  FERC  and  other
customary closing  conditions.  See Note 3 - Rate and Regulatory  Matters to our
financial  statements  under Part I. Item 1 of this report for information as to
the  status of these  regulatory  proceedings.  On April 14,  2004,  the FCC has
consented  to the  transfer of control  and, on April 30,  2004,  the initial 30
calendar  day  waiting  period  expired  without a request by the FTC or DOJ for
additional  information or documents under the  Hart-Scott-Rodino  Act. Although
Ameren  expects to complete  the  transaction  by the end of 2004,  it cannot be
certain  that all of the  required  approvals  will be  obtained,  or the  other
closing  conditions  will be  satisfied,  within that time frame,  if at all, or
without  terms and  conditions  that may have a material  adverse  effect on our
operations. Ameren is also relying on the ability of Dynegy to close the sale of
Illinois Power when the required approvals are received.  If Ameren is unable to
complete the acquisition,  the issuance of the common stock on February 6, 2004,
and any other common stock issued with respect to the  acquisition  prior to its
closing will result in dilution to Ameren's earnings per share unless it is able
to otherwise use the proceeds from the common stock it issued in February  2004,
in a manner that will avoid or mitigate such dilution.

     If Ameren is able to complete its acquisition of Illinois Power, Ameren may
not be able to  successfully  integrate it into its other  businesses or achieve
the benefits it anticipates.

     If Ameren completes the acquisition of Illinois Power, it cannot assure you
that it will be able to  successfully  integrate  Illinois  Power with its other
businesses.  The  integration of Illinois Power with its other  businesses  will
present  significant  challenges  and,  as a result,  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 may not be able to achieve those benefits at all.
While  Ameren  expects that this  acquisition  will be accretive to earnings per
share in the first full year of operation  after the  transaction  is completed,
this  expectation  is  based on  important  assumptions,  including  assumptions
related to interest  rates and market prices for power,  which may ultimately be
incorrect.  As a  result,  if  Ameren is  unable  to  integrate  its  businesses
effectively or achieve the benefits anticipated, our financial position, results
of operations and liquidity may be materially adversely affected.

     The electric and gas rates that certain of the Ameren Companies are allowed
to charge in Missouri  and  Illinois  are largely set through  2006.  This "rate
freeze," along with other actions of regulators,  can  significantly  affect our
earnings, liquidity and business activities and are largely outside our control.

     The rates that  certain of the Ameren  Companies  are allowed to charge for
their  services are the single most  important  item  influencing  the financial
position,  results of operations and liquidity of the Ameren  Companies.  We are
highly regulated and the regulation of the rates that we charge our customers is
determined, in large part, outside of our control by governmental organizations,
including the MoPSC, the ICC and the FERC.  Ameren,  UE, CIPS, Genco and CILCORP
are also subject to  regulation  by the SEC under the PUHCA.  Decisions  made by
these regulators could have a material impact on our financial position, results
of operations and liquidity.

     As a part of the settlement of UE's Missouri electric rate case in 2002, UE
is subject to a rate  moratorium  providing for no changes in its electric rates
in  Missouri  before  July 1,  2006,  subject  to  limited  statutory  and other
exceptions.  A rate  reduction of $30 million went into effect on April 1, 2004,
which is the last  portion of the $110 million  rate  reduction  included in the
stipulation entered into as part of the settlement of the Missouri electric rate
case.  In addition,  as a provision of the Illinois  legislation  related to the
restructuring of the Illinois electric industry, a rate freeze is in

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effect in Illinois  through  January 1, 2007.  This  Illinois  legislation  also
contains a provision  requiring that earnings from the Illinois  jurisdiction in
excess of certain levels be shared equally with UE's, CIPS' and CILCO's Illinois
customers through 2006. This Illinois legislation is also applicable to Illinois
Power.  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  providing for no changes in its gas delivery  rates prior to July 1,
2006, subject to certain exceptions (the increased rates approved as part of the
settlement became effective on February 15, 2004).

     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, including,  among other things, the addition of more
than 700 megawatts of new generation  capacity (240 megawatts of which was added
in 2002) and the replacement of steam generators at UE's Callaway Nuclear Plant.
The amount of energy infrastructure  investment through June 2006,  described in
the  settlement  is  consistent  with  UE's  previously  disclosed  estimate  of
construction expenditures UE expects to make over the same time period. However,
UE's agreement to a rate  moratorium  will result in these capital  expenditures
not becoming  recoverable  in rates,  or earning a return,  before July 1, 2006.
Therefore,  UE's  undertakings  with  respect  to making  energy  infrastructure
investments and funding new programs,  coupled with the rate reductions and rate
moratorium described above, could result in increased financing requirements for
UE and thus have a material impact on our liquidity.

     The Ameren Companies do not have the benefit of a fuel adjustment clause in
either Missouri or Illinois for their electric  operations that would allow them
to recover  increased  fuel and power costs from  customers.  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 fuel for our electric  generating
facilities  and power must be  purchased  on the open  market in order for us to
serve our customers.

     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
in which  transmission-owning  public  utilities,  such as UE,  CIPS  and  CILCO
operate.  In  Missouri,  where a majority of our retail  electric  revenues  are
derived,   restructuring  bills  have  been  introduced  in  the  past,  but  no
legislation  has been  passed.  The  Illinois  Customer  Choice Law provides for
electric utility  restructuring and retail direct access.  Retail direct access,
which allows customers to choose their electric generation  supplier,  was first
offered to Illinois residential customers on May 1, 2002. Although retail direct
access in  Illinois  has not had a  negative  effect  on  Ameren's  revenues  or
liquidity,  we expect  competitive  forces in the electric supply segment of our
business to continue to increase.

     The  potential  negative  consequences  associated  with  further  electric
industry  restructuring  in our  service  territories,  if it  occurs,  could be
significant  and could include the impairment  and writedown of certain  assets,
including  generation related plant and net regulatory  assets,  lower revenues,
reduced profit margins and increased costs of capital and operations expenses.

     Increased  federal and state  environmental  regulation  could  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-fired. The EPA has recently issued
proposed  regulations  with  respect  to SO2,  NOx and  mercury  emissions  from
coal-fired power plants. These new rules, if adopted,  would require significant
additional  reductions  in these  emissions  from our power  plants  in  phases,
beginning in 2010.  The rules are  currently  under a public  review and comment
period,  and may change before being issued as final late in 2004 or early 2005.
Preliminary estimates of capital costs based on current technology on the Ameren
systems  to comply  with the SO2 and NOx  rules,  as  proposed,  range from $400
million to $600 million by 2010, with an additional $500 million to $800 million
by 2015. The proposed  mercury  regulations  contain a number of options and the
final control requirements are highly uncertain.  Ameren anticipates  additional
capital  costs to comply with the mercury rules could range from $300 million to
$500  million by 2010,  with UE  incurring  approximately  half of the costs and
Genco  incurring most of the remaining  costs.  Depending upon the final mercury
rules,  additional  amounts  could be required to comply with  mercury  rules by
2018.

     In addition,  Illinois has developed a NOx control  regulation  for utility
generating plant boilers  consistent with an EPA program aimed at reducing ozone
levels in the eastern United States. In February 2002, the EPA proposed similar

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rules for  Missouri.  Ameren  currently  estimates  that the  remaining  capital
expenditures could range from $210 million to $250 million between 2004 and 2008
in order to comply with the final NOx regulations in Missouri and Illinois. This
estimate  includes the assumption that these rules will require the installation
of selective catalytic reduction technology on some units, as well as additional
controls.

     We are  unable to  predict  the  ultimate  effect of any new  environmental
regulations, guidelines, enforcement initiatives or legislation on our financial
position,  results of operations  or  liquidity.  Any of these factors would add
significant  pollution  control  costs to UE's,  Genco's and CILCO's  generating
assets and therefore, could also increase financing requirements for some of the
Ameren  Companies.  While costs incurred by UE would be eligible for recovery in
rates,  subject to MoPSC or ICC  approval,  as  applicable,  there is no similar
mechanism for recovery of costs by Genco or CILCO in Illinois.

     UE's and CIPS' participation in a RTO could increase costs, reduce revenues
and reduce UE's and CIPS' control over their transmission assets.

     In  December  1999,  the FERC issued  Order 2000  requiring  all  utilities
subject to FERC  jurisdiction  to state their  intentions for joining a RTO. The
MoPSC issued an order in early 2004 authorizing UE to participate in the Midwest
ISO for a five year  period,  with  participation  after that period  subject to
further  approvals  by the MoPSC.  Subsequently,  the FERC  issued a final order
allowing UE's and CIPS'  participation  in the Midwest ISO.  Under these orders,
the MoPSC continues to set the transmission component of UE's rates to serve its
bundled retail load. CILCO is already a member of the Midwest ISO and previously
transferred functional control of its transmission system to the Midwest ISO.

     On May 1, 2004,  functional control of the UE and CIPS transmission systems
was transferred to the Midwest ISO through GridAmerica LLC, or Grid America. The
participation  by UE and CIPS in the Midwest ISO is expected to increase  annual
costs by $5  million  to $10  million  in the  aggregate  and could  result in a
decrease  in annual  revenues of  anywhere  between  zero and $10 million in the
aggregate. UE and CIPS may also be required to expand their transmission systems
according  to  decisions  made by a RTO  rather  than  their  internal  planning
process.  In addition,  we are unable to determine the full impact of the Energy
Markets Tariff  tendered by the Midwest ISO for filing at the FERC in March 2004
(discussed in Note 3 - Rate and Regulatory  Matters to our financial  statements
under Part I, Item 1 of this  report)  until  further  information  is available
regarding the implementation of the Energy Markets Tariff.

     Until  UE  and  CIPS   achieve  some  degree  of   operational   experience
participating in the Midwest ISO through  GridAmerica,  we are unable to predict
the ultimate impact that such  participation  or ongoing RTO developments at the
FERC or  other  regulatory  authorities  will  have on our  financial  position,
results of operations or liquidity.

     The  inability  of UE and CIPS to recover  "through  and out"  transmission
revenues could result in a material net revenue reduction.

     Through orders issued during late 2003 and early 2004, the FERC had ordered
the  elimination of  regional-through-and-out  rates assessed by the Midwest ISO
that  involved  transmission  service  from the Midwest ISO regions into the PJM
Interconnection  LLC (PJM) region to be effective May 1, 2004. However, on March
19, 2004, the FERC accepted an agreement among affected transmission owners that
retains the regional-through-and-out  rates until December 1, 2004, and provides
for continued  negotiations aimed at developing a long-term transmission pricing
structure to eliminate  seams  between the PJM and Midwest ISO regions  based on
specified pricing principles. Until the long-term transmission pricing structure
has been  established,  UE and CIPS cannot predict the ultimate impact that such
structure will have on their costs and revenues.

     The substance  and  implementation  of standard  market design rules by the
FERC is uncertain and may  adversely  affect the way in which UE, CIPS and CILCO
operate their transmission assets.

     On July 31, 2002, the FERC issued its standard market design NOPR. The NOPR
proposes  a number of  changes  to the way the  current  wholesale  transmission
service and energy  markets are operated.  Specifically,  the NOPR proposes that
all  jurisdictional  transmission  facilities  be placed under the control of an
independent   transmission   provider  (similar  to  a  RTO),   proposes  a  new
transmission  service tariff that provides a single form of transmission service
for all users of the  transmission  system  including  bundled  retail load, and
proposes  a new  energy  market  and  congestion  management  system  that  uses
locational  marginal  pricing as its basis. In our initial comments on the NOPR,
which were filed at the FERC on November 15, 2002, we expressed our concern with
the potential impact of the proposed rules in their current form on the cost and
reliability  of service  to retail  customers.  We also  proposed  that  certain
modifications  be made to

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the proposed rules in order to protect  transmission owners from the possibility
of trapped transmission costs that might not be recoverable from ratepayers as a
result of inconsistent  regulatory policies. We filed additional comments on the
remaining sections of the NOPR during the first quarter of 2003.

     In April 2003, the FERC issued a "white paper" reflecting comments received
in response to the NOPR. More  specifically,  the white paper indicated that the
FERC will not  assert  jurisdiction  over the  transmission  rate  component  of
bundled  retail service and will insure that existing  bundled retail  customers
retain  their  existing  transmission  rights and retain  rights for future load
growth in its final rule. Moreover,  the white paper acknowledged that the final
rule will  provide  the states  with input on  resource  adequacy  requirements,
allocation of firm transmission rights, and transmission planning. The FERC also
requested   input  on  the   flexibility   and   timing  of  the  final   rule's
implementation.

     Although  issuance of the final rule is  uncertain  and its  implementation
schedule is still unknown,  the Midwest ISO was in the process of implementing a
separate  market  design  similar to the proposed  market design in the NOPR. In
July 2003,  the Midwest  ISO filed with the FERC a revised  OATT  codifying  the
terms and  conditions  under  which it will  implement  the new  market  design.
Thereafter,  on October 17, 2003, the Midwest ISO filed a motion to withdraw its
revised OATT. On October 29, 2003,  the FERC issued a series of orders  granting
the motion for  withdrawal  of the  revised  OATT and  providing  guidance to be
followed by the  Midwest ISO in  developing  a new energy  market  design in the
future.  In March  2004,  the  Midwest  ISO  tendered  for  filing at the FERC a
proposed Energy Markets Tariff, which is intended to supercede its existing OATT
(see Note 3 - Rate and Regulatory Matters to our financial statements under Item
I, Part 1 of this  report).  Until the FERC  issues a final rule and the Midwest
ISO  finalizes  its new market  design,  we are unable to predict  the  ultimate
impact of the NOPR or the Midwest ISO new market design on our future  financial
position, results of operations or liquidity.

     Increasing  costs  associated  with our defined benefit  retirement  plans,
healthcare  plans and other employee  related  benefits may adversely affect our
results of operations, liquidity and financial position.

     The Ameren Companies made cash  contributions  totaling $25 million and $31
million to defined benefit retirement plans during 2003 and 2002,  respectively.
In  addition,  a minimum  pension  liability  was recorded at December 31, 2002,
which  resulted in an after-tax  charge to OCI and a reduction in  stockholders'
equity for Ameren of $102  million.  At December 31, 2003,  the minimum  pension
liability  was  reduced,  resulting  in OCI of $46  million  and an  increase in
stockholders' equity. The Ameren Companies expect to be required under the ERISA
to fund an average of  approximately  $115  million  annually  from 2005 through
2008, in order to maintain  minimum funding levels for our pension plans.  These
amounts are estimates  and may change based on actual stock market  performance,
changes in interest rates, and any pertinent changes in government  regulations,
each of which could also result in a requirement to record an additional minimum
pension liability.  Furthermore, if Ameren completes its acquisition of Illinois
Power,  we could incur material  funding  requirements  with respect to Illinois
Power's existing defined benefit retirement plans.

     In  addition  to the  costs of our  retirement  plans,  the  costs to us of
providing  healthcare  benefits to our  employees  and retirees  have  increased
substantially  in recent  years.  We believe  that our employee  benefit  costs,
including  costs  related  to  healthcare  plans for our  employees  and  former
employees,  will continue to rise. The increasing costs and funding requirements
associated with our defined benefit retirement plans, healthcare plans and other
employee  benefits may adversely affect our results of operations,  liquidity or
financial position.

     UE's,  Genco's  and CILCO's electric  generating facilities  are subject to
operational risks that could result in unscheduled plant outages,  unanticipated
operation and maintenance expenses and increased power purchase costs.

     UE,  CILCO,  Genco,  AERG,  Medina  Valley,  and EEI own and operate  coal,
nuclear,  gas-fired,  hydro and  oil-fired  generating  facilities  constituting
approximately  14,600  megawatts  (net) of  installed  capability.  Operation of
electric generating facilities involves certain risks which can adversely affect
energy output and efficiency levels. Included among these risks are:

o    increased  prices for fuel and fuel  transportation  as existing  contracts
     expire,
o    facility shutdowns due to a breakdown or failure of equipment or processes,

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o    disruptions in the delivery of fuel and lack of adequate inventories,
o    labor disputes,
o    inability to comply with regulatory or permit requirements,
o    disruptions in the delivery of electricity,
o    increased  capital  expenditures  requirements,   including  those  due  to
     environmental regulation,
o    operator error, and
o    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 which expire over the next several years.

     Genco and CILCO have several  electric power supply  agreements under which
Genco and CILCO directly or indirectly  supply the full requirements of UE, CIPS
and CILCO, including the following:

o    Under two electric power supply agreements, Genco is obligated to supply to
     Marketing Company,  and Marketing Company,  in turn, is obligated to supply
     to CIPS, all of the energy and capacity needed by CIPS to offer service for
     resale to its native load customers and to fulfill CIPS' other  obligations
     under all applicable federal and state tariffs or contracts.  Any power not
     used by CIPS is sold by Marketing Company under various long-term wholesale
     and retail  contracts.  The agreement  between CIPS and  Marketing  Company
     expires on  December 31,  2004.  The agreement  between Genco and Marketing
     Company can be terminated by either party upon at least one year's  notice,
     but may not be terminated prior to December 31, 2004.

o    AERG has an  electric  power  supply  agreement  with  CILCO to  supply  it
     sufficient  power to meet its  native  load  requirements.  This  agreement
     expires on December 31, 2004.

     The  affected  Ameren  Companies  currently  plan  to  pursue  renewals  or
extensions of these full requirements  agreements as they expire.  Such renewals
or  extensions  will depend on  compliance  with  federal  and state  regulatory
requirements in effect at the time. Extensions through December 31, 2006, of the
agreements  to which CIPS and CILCO are a party have been required by the ICC in
its order approving our acquisition of CILCORP and CILCO;  however,  approval by
the FERC is also required.

     Midwest  power  markets  have  experienced  high  levels  of  new  capacity
development  over the last several years,  which, in part,  have  contributed to
soft long-term power prices in this region. Owners of generating capacity in the
Midwest are  actively  seeking  markets for their  energy and  capacity and have
asked our regulators to closely  scrutinize power supply  arrangements among our
subsidiaries  when we have sought  approval to enter into them.  Even though the
ICC has required  those  extensions,  it cannot be predicted  whether  obtaining
extensions  of these  agreements,  described  above,  when they  expire  will be
successful.  To the extent  Genco or CILCO  cannot  secure  extensions  or other
long-term replacement power sale contracts for the energy and capacity currently
committed  under these  agreements,  our generating  subsidiaries  and Marketing
Company will face competition from other power suppliers in the Midwest and will
be exposed to price risk.

     Genco  participates  with  UE in  an  agreement  to  jointly  dispatch  its
generating  facilities  with those of UE, which  thereby  produces  benefits and
efficiencies  for both generating  parties.  Pending or future federal and state
regulatory proceedings and policies may evolve in ways that could impact Genco's
ability to continue to participate in these  affiliate  transactions  on current
terms. For example,  as a result of the pending MoPSC proceeding relating to the
transfer of UE's Illinois-based utility business, there is uncertainty as to the
terms  of  the  joint  dispatch  agreement  and  also  as to its  duration.  The
termination  of the  agreement,  or  modifications  to it, could have a material
adverse effect on UE or Genco.

     Genco's and CILCO's  electric  generating  facilities  must compete for the
sale of energy and capacity, which exposes them to price risk.

     As owners  of non  rate-regulated  electric  generating  facilities,  Genco
(4,800  megawatts)  and CILCO  (1,100  megawatts)  will not have any recovery of
their costs or any specified  rate of return set by a regulatory  body. Of these
non rate-regulated electric generating facilities, approximately 3,500 megawatts
are currently under full requirements  contracts with our affiliates,  including
the  contracts  referred  to in  the  immediately  preceding  risk  factor.  The
remainder

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of the generating capacity must compete for the sale of energy and capacity.  UE
is  currently  seeking  regulatory  approval  of the  transfer by Genco to it of
approximately  550 megawatts of CTs at  Pinckneyville  and  Kinmundy,  Illinois,
which transfer is expected to occur in 2004, with the result that those CTs will
no longer be non rate-regulated.

     To the extent electric capacity  generated by these facilities is not under
contract to be sold,  either now or in the future,  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:

o    the current and future market prices for natural gas, fuel oil and coal,
o    current and forward prices for the sale of electricity,
o    the  extent  of  additional   supplies  of  electric  energy  from  current
     competitors or new market entrants,
o    the pace of  deregulation  in our market area and the slowing  expansion of
     deregulated markets,
o    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,
o    future  pricing  for,  and  availability  of,   transmission   services  on
     transmission  systems,  the effect of RTOs,  development  and export energy
     transmission  constraints,  which could limit the ability to sell energy in
     markets adjacent to Illinois,
o    the rate of growth in electricity usage as a result of population  changes,
     regional  economic   conditions  and  the  implementation  of  conservation
     programs, and
o    climate conditions prevailing in the Midwest market from time to time.

     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 14% of
UE's  generation  capability.  Therefore,  UE is subject to the risks of nuclear
generation, which include the following:

o    the 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,
o    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,
o    uncertainties  with  respect to  contingencies  and  assessment  amounts if
     insurance coverage is inadequate,
o    increased public and governmental concerns over the adequacy of security at
     nuclear power plants, and
o    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).

     The NRC has broad  authority  under  federal  law to impose  licensing  and
safety related requirements for the operation of nuclear generation  facilities.
In the event of  non-compliance,  the NRC has the  authority  to impose fines or
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,  although UE has no reason to  anticipate a serious
nuclear  incident  at its plant,  if an incident  did occur,  it could harm UE's
results of  operations  or  financial  position.  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.

     Our energy risk management strategies may not be effective in managing fuel
and electricity  pricing risks, which could result in unanticipated  liabilities
to us or increased volatility of 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 utilize  derivatives  such as
forward contracts,  futures contracts,  options and swaps to manage these risks.
We attempt to manage our exposure from these activities  through  enforcement of
established  risk limits and risk  management  procedures.  We cannot assure you
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.

                                       70

<PAGE>

     In  addition,  although we  routinely  enter into  contracts  to offset our
positions (i.e., 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 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 open  positions than we would prefer at a given time. To
the extent that open positions exist,  fluctuating  commodity prices can improve
or diminish our financial results and financial position.

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

     We  rely on  access  to  short-term  and  long-term  capital  markets  as a
significant  source of  liquidity  and  funding  for  capital  requirements  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  grow  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  such that our cost of
capital  would  increase or our ability to access the capital  markets  would be
adversely affected.


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.  The following  discussion of our risk
management activities includes  "forward-looking"  statements that involve risks
and  uncertainties.  Actual results could differ materially from those projected
in the "forward-looking"  statements.  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  non-financial  or  non-quantifiable.   Such  risks  principally  include
business,  legal and operational  risks and 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.

Interest Rate Risk

     We are exposed to market risk through changes in interest rates  associated
with:

o    long-term and short-term variable-rate debt;
o    fixed-rate debt;
o    commercial paper;
o    auction-rate long-term debt; and
o    auction-rate preferred stock.

     We manage our interest  rate  exposure by  controlling  the amount of these
instruments we hold within our total capitalization  portfolio and by monitoring
the effects of market changes in interest rates.

                                       71

<PAGE>

     The  following  table  presents the  estimated  increase  (decrease) in our
annual interest expense and net income if interest rates were to change by 1% on
variable rate debt outstanding at March 31, 2004:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                              Interest Expense        Net Income(a)
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                     <C>
   Ameren..............................................................          $    6                  $  (4)
   UE..................................................................               7                     (4)
   CIPS................................................................               1                     (1)
   Genco...............................................................               1                     (1)
   CILCORP(b)..........................................................               2                     (1)
   CILCO...............................................................               2                     (1)
   ===================================================================================================================
</TABLE>
(a)  Calculations are based on an effective tax rate of 37%.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     The model does not consider  the effects of the reduced  level of potential
overall economic activity that would exist in such an environment.  In the event
of a significant change in interest rates,  management would likely take actions
to further  mitigate  our  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.

Credit Risk

     Credit risk represents the loss that would be recognized if  counterparties
fail to perform as contracted.  NYMEX-traded  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  comprising  our  customer  base.  No  non-affiliated  customer
represents 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 and Genco have credit exposure associated
with accounts  receivables from non-affiliated  companies for interchange sales.
At March 31,  2004,  UE's,  Genco's  and  Marketing  Company's  combined  credit
exposure to non-investment grade counterparties related to interchange sales was
$4  million,   net  of  collateral.   We  establish   credit  limits  for  these
counterparties  and monitor the  appropriateness  of these  limits on an ongoing
basis through a credit risk  management  program which  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 monitor counterparty  exposure
associated with our leveraged leases.

Equity Price Risk

     Our costs of providing  non-contributory  defined  benefit  retirement  and
postretirement benefit plans are dependent upon a number of factors, such as the
rate of return on plan assets, discount rate, the rate of increase in healthcare
costs and  contributions  made to the plans. The market value of our plan assets
was  affected  by declines in the equity  market for 2000  through  2002 for the
pension and  postretirement  plans. As a result, a minimum pension liability was
recorded at December 31, 2002, which resulted in a charge to OCI and a reduction
in stockholders' equity. At December 31, 2003, the minimum pension liability was
reduced resulting in OCI of $46 million and an increase in stockholders' equity.
The  minimum  pension  liability  has not  changed  as of March  31,  2004.

     The amount of the pension liability as of March 31, 2004, was the result of
asset returns, interest rates and our contributions to the plans during 2003. In
future years, the liability recorded,  the costs reflected in net income or OCI,
or cash contributions to the plans could increase  materially without a recovery
in equity markets in excess of our assumed return on plan assets of 8.5%. If the
fair value of the plan  assets were to grow and exceed the  accumulated  benefit
obligations in the future,  the recorded  liability  would then be reduced and a
corresponding amount of equity would be restored, net of taxes.

                                       72

<PAGE>

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.
For a more detailed  discussion of our commodity price risk, see Commodity Price
Risk under Part II, Item 7A of the Ameren Companies'  combined Form 10-K for the
fiscal year ended December 31, 2003. Below are tables  presenting the percentage
of fuel price hedged and the effects a material change in price will have on our
coal costs not  currently  covered under  fixed-price  contracts as of March 31,
2004.

     The following table presents the percentages of the required supply of coal
for our  coal-fired  power plants,  nuclear fuel and natural gas for our CTs and
distribution,  as appropriate,  that are  price-hedged for the remainder of 2004
through 2008:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                      2004                2005          2006 - 2008
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                 <C>               <C>
   Ameren:
     Coal.....................................................         98%                 90%              55%
     Nuclear fuel.............................................        100                 100               32
     Natural gas for generation...............................         34                  15                5
     Natural gas for distribution.............................         31                  12                5
   ===================================================================================================================
   UE:
     Coal.....................................................         98%                 86%              48%
     Nuclear fuel.............................................        100                 100               32
     Natural gas for generation...............................         31                  12                4
     Natural gas for distribution.............................         36                  13                5
   ===================================================================================================================
   CIPS:
     Natural gas for distribution.............................         25%                 14%               4%
   ===================================================================================================================
   Genco:
     Coal.....................................................        100%                100%              77%
     Natural gas for generation...............................         25                  15                5
   ===================================================================================================================
   CILCORP:(a)
     Coal.....................................................        100%                 81%              49%
     Natural gas for distribution.............................         34                  11                5
   ===================================================================================================================
   CILCO:
     Coal.....................................................        100%                 81%              49%
     Natural gas for distribution.............................         34                  11                5
   ===================================================================================================================
</TABLE>
(a)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     The  following  table  presents the  estimated  increase or decrease in our
total  fuel  expense  and net  income if coal  costs were to change by 1% on any
requirements currently not covered by fixed-price contracts for the remainder of
2004 through 2008:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                                                    Fuel Expense       Net Income(a)
   -------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                <C>
   Ameren.....................................................................         $   6              $   4
   UE.........................................................................             3                  2
   CIPS.......................................................................             -                  -
   Genco......................................................................             1                  1
   CILCORP(b).................................................................             1                  -
   CILCO......................................................................             1                  -
   ===================================================================================================================
</TABLE>
(a)  Calculations are based on an effective tax rate of 38%.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     In the event of a significant  change in coal prices,  we would likely take
actions to further  mitigate our 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.

                                       73

<PAGE>

Fair Value of Contracts

     Most of our commodity  contracts  qualify for treatment as normal purchases
and normal sales. However, we utilize derivatives principally to manage the risk
of changes in market  prices for natural  gas,  fuel,  electricity  and emission
credits. Price fluctuations in natural gas, fuel and electricity cause:

o    an unrealized  appreciation  or  depreciation  of our firm  commitments  to
     purchase or sell when  purchase or sales prices  under the firm  commitment
     are compared with current commodity prices;
o    market  values of fuel and natural gas  inventories  or purchased  power to
     differ  from  the  cost  of  those  commodities  in  inventory  under  firm
     commitment; and
o    actual cash  outlays for the purchase of these  commodities  to differ from
     anticipated cash outlays.

     The  derivatives  that we use to hedge  these  risks are  dictated  by risk
management  policies and include forward contracts,  futures contracts,  options
and swaps. We continually  assess our supply and delivery  commitment  positions
against  forward  market  prices and  internally-forecasted  forward  prices and
modify our  exposure to market,  credit and  operational  risk by entering  into
various offsetting transactions. In general, we believe these transactions serve
to reduce our price risk. See Note 7 - Derivative  Financial  Instruments to our
financial   statements  under  Part  I,  Item  1  of  this  report  for  further
information.

     The following  table  presents the favorable  (unfavorable)  changes in the
fair value of all contracts marked-to-market during the three months ended March
31, 2004:

<TABLE>
<CAPTION>

   ===================================================================================================================
                                                               Ameren(a)    UE      CIPS      CILCORP(b)      CILCO
   -------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>         <C>      <C>         <C>            <C>
   Fair value of contracts at beginning of period, net.....   $   12      $  (1)   $  1        $   6          $   6
     Contracts realized or otherwise settled during the
         period............................................        2          1       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............................................        -          -       -            -              -
     Other changes in fair value...........................        4         (2)      2            4              4
   -------------------------------------------------------------------------------------------------------------------
   Fair value of contracts outstanding at end                 $   18      $  (2)   $  4        $  11          $  11
         of period, net....................................
   ===================================================================================================================
</TABLE>
(a)  Includes  amounts  for  non-registrant   Ameren  subsidiaries  as  well  as
     intercompany  eliminations.
(b)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.

     The following table presents maturities of contracts as of March 31, 2004:

<TABLE>
<CAPTION>

   ===================================================================================================================
                  Sources                   Maturity       Maturity       Maturity      Maturity in        Total
                    of                      Less than         1-3            4-5         Excess of          Fair
                Fair Value                   1 Year          Years          Years         5 Years        Value(a)
   -------------------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>            <C>            <C>             <C>
   Ameren:
   Prices actively quoted...............     $   4          $    -         $    -         $    -          $    4
   Prices provided by other external
      sources(b)........................         6               6              -              -              12
   Prices based on models and other
      valuation methods(c)..............         1               2             (1)             -               2
   -------------------------------------------------------------------------------------------------------------------
   Total................................     $  11          $    8         $   (1)        $    -          $   18
   ===================================================================================================================
   UE :
   Prices actively quoted...............     $   -          $    -         $    -         $    -          $    -
   Prices provided by other external
      sources(b)........................         -               1              -              -               1
   Prices based on models and other
      valuation methods(c)..............        (4)              2             (1)             -              (3)
   -------------------------------------------------------------------------------------------------------------------
   Total................................     $  (4)         $    3         $   (1)        $    -          $   (2)
   -------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       74

<PAGE>
<TABLE>
<CAPTION>

   -------------------------------------------------------------------------------------------------------------------
                  Sources                   Maturity       Maturity       Maturity      Maturity in        Total
                    of                      Less than         1-3            4-5         Excess of          Fair
                Fair Value                   1 Year          Years          Years         5 Years        Value(a)
   -------------------------------------------------------------------------------------------------------------------
<S>                                         <C>            <C>            <C>            <C>             <C>
   CIPS:
   Prices actively quoted...............     $   -          $    -         $    -         $    -          $    -
   Prices provided by other external
      sources(b)........................         2               2              -              -               4
   Prices based on models and other
      valuation methods(c)..............         -               -              -              -               -
   -------------------------------------------------------------------------------------------------------------------
   Total................................     $   2          $    2         $    -         $    -          $    4
   ===================================================================================================================
   CILCORP(d):
   Prices actively quoted ..............     $   4          $    -         $    -         $    -          $    4
   Prices provided by other external
      sources(b)........................         3               4              -              -               7
   Prices based on models and other
      valuation methods(c)..............         -               -              -              -               -
   -------------------------------------------------------------------------------------------------------------------
   Total ...............................     $   7          $    4         $    -         $    -          $   11
   ===================================================================================================================
   CILCO:
   Prices actively quoted ..............     $   4          $    -         $    -         $    -          $    4
   Prices provided by other external
      sources(b)........................         3               4              -              -               7
   Prices based on models and other
      valuation methods(c)..............         -               -              -              -               -
   -------------------------------------------------------------------------------------------------------------------
   Total ...............................     $   7          $    4         $    -         $    -          $   11
   ===================================================================================================================
</TABLE>
(a)  Contracts  of less than $3  million  were with  non-investment-grade  rated
     counterparties.
(b)  Principally power forward values based on NYMEX prices for over-the-counter
     contracts and natural gas swap values based primarily on Inside FERC.
(c)  Principally coal and SO2 option values based on a Black-Scholes  model that
     includes information from external sources and our estimates. Also includes
     power forward contract values based on our estimates.
(d)  CILCORP  consolidates  CILCO and  therefore  includes  CILCO amounts in its
     balances.


ITEM 4. Controls and Procedures.

     (a) Evaluation of Disclosure Controls and Procedures

     As of March  31,  2004,  the  principal  executive  officer  and  principal
financial  officer of each  Registrant 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 such  Registrant  have  concluded  that  such  disclosure  controls  and
procedures  are effective in timely  alerting  them to any material  information
relating  to  such  Registrant,  which  is  required  to  be  included  in  such
Registrant's reports filed or submitted with the SEC under the Exchange Act.

     (b) Change in Internal Controls

     There  has  been  no  change  in the  Registrants'  internal  control  over
financial  reporting that occurred  during their most recent fiscal quarter that
has materially  affected,  or is reasonably likely to materially  affect,  their
internal control over financial reporting.


                           PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings.

     Note  3 -  Rate  and  Regulatory  Matters  and  Note  9 -  Commitments  and
Contingencies to our financial statements under Part I, Item 1 of Part I of this
report contain  information on legal and  administrative  proceedings  which are
incorporated by reference under this item.


                                       75

<PAGE>


ITEM 6. Exhibits and Reports on Form 8-K.

     (a)  Exhibits.  The  documents  listed  below are being  filed on behalf of
Ameren,   UE,  CIPS,  Genco,   CILCORP  and  CILCO   (collectively  the  "Ameren
Companies").

<TABLE>
<CAPTION>

   -----------------------------------------------------------------------------------------------------------------------
           Exhibit           Registrant(s)                                Nature of Exhibit
         Designation
   -----------------------------------------------------------------------------------------------------------------------
<S>                        <C>              <C>
    Instruments Defining
     Rights of Security
           Holders
   -----------------------------------------------------------------------------------------------------------------------
             4.1            Ameren           Supplemental Indenture dated as of February 1, 2004, to the Indenture of
                            UE               Mortgage and Deed of Trust dated June 15, 1937 (UE Mortgage) relative to
                                             Series 2004A (1998A) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.2            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004B (1998B) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.3            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004C (1998C) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.4            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004D (2000B) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.5            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004E (2000A) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.6            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004F (2000C) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.7            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004G (1991) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.8            Ameren           Supplemental Indenture dated as of February 1, 2004 to the UE Mortgage
                            UE               relative to Series 2004A (1992) Bonds
   -----------------------------------------------------------------------------------------------------------------------
             4.9            Ameren           First Amendment dated as of February 1, 2004 to Loan Agreement dated as of
                            UE               December 1, 1991, between the Missouri Environmental Authority and UE
   -----------------------------------------------------------------------------------------------------------------------
            4.10            Ameren           First Amendment dated as of February 1, 2004 to Loan Agreement dated as of
                            UE               December 1, 1992, between the Missouri Environmental Authority and UE
   -----------------------------------------------------------------------------------------------------------------------
            4.11            Ameren           First Amendment dated as of February 1, 2004 to Series 1998A Loan
                            UE               Agreement dated as of September 1, 1998, between the Missouri
                                             Environmental Authority and UE
   -----------------------------------------------------------------------------------------------------------------------
            4.12            Ameren           First Amendment dated as of February 1, 2004 to Series 1998B Loan
                            UE               Agreement dated as of September 1, 1998, between the Missouri
                                             Environmental Authority and UE
   -----------------------------------------------------------------------------------------------------------------------
            4.13            Ameren           First Amendment dated as of February 1, 2004 to Series 1998C Loan
                            UE               Agreement dated as of September 1, 1998, between the Missouri
                                             Environmental Authority and UE
   -----------------------------------------------------------------------------------------------------------------------
      Rule 13a-14(a) /
          15d-14(a)
       Certifications
   -----------------------------------------------------------------------------------------------------------------------
            31.1            Ameren           Rule13a-14(a)/15d-14(a) Certification of Principal Executive Officer of
                                             Ameren
   -----------------------------------------------------------------------------------------------------------------------
            31.2            Ameren           Rule 13a-14(a)/15d-14(a) Certification of Principal  Financial Officer of
                                             Ameren
   -----------------------------------------------------------------------------------------------------------------------
            31.3            UE               Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of UE
   -----------------------------------------------------------------------------------------------------------------------
            31.4            UE               Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of UE
   -----------------------------------------------------------------------------------------------------------------------
            31.5            CIPS             Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of
                                             CIPS
   -----------------------------------------------------------------------------------------------------------------------
            31.6            CIPS             Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of
                                             CIPS
   -----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       76

<PAGE>

<TABLE>
<CAPTION>

   -----------------------------------------------------------------------------------------------------------------------
           Exhibit           Registrant(s)                                Nature of Exhibit
         Designation
   -----------------------------------------------------------------------------------------------------------------------
<S>                        <C>              <C>
            31.7            Genco            Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of
                                             Genco
   -----------------------------------------------------------------------------------------------------------------------
            31.8            Genco            Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of
                                             Genco
   -----------------------------------------------------------------------------------------------------------------------
            31.9            CILCORP          Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of
                                             CILCORP
   -----------------------------------------------------------------------------------------------------------------------
            31.10           CILCORP          Rule13a-14(a)/15d-14(a) Certification of Principal Financial Officer of
                                             CILCORP
   -----------------------------------------------------------------------------------------------------------------------
            31.11           CILCO            Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer of
                                             CILCO
   -----------------------------------------------------------------------------------------------------------------------
            31.12           CILCO            Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of
                                             CILCO
   -----------------------------------------------------------------------------------------------------------------------
        Section 1350
       Certifications
   -----------------------------------------------------------------------------------------------------------------------
            32.1            Ameren           Section 1350 Certification of Principal Executive Officer of Ameren
   -----------------------------------------------------------------------------------------------------------------------
            32.2            Ameren           Section 1350 Certification of Principal Financial Officer of Ameren
   -----------------------------------------------------------------------------------------------------------------------
            32.3            UE               Section 1350 Certification of Principal Executive Officer of UE
   -----------------------------------------------------------------------------------------------------------------------
            32.4            UE               Section 1350 Certification of Principal Financial Officer of UE
   -----------------------------------------------------------------------------------------------------------------------
            32.5            CIPS             Section 1350 Certification of Principal Executive Officer of CIPS
   -----------------------------------------------------------------------------------------------------------------------
            32.6            CIPS             Section1350 Certification of Principal Financial Officer of CIPS
   -----------------------------------------------------------------------------------------------------------------------
            32.7            Genco            Section 1350 Certification of Principal Executive Officer of Genco
   -----------------------------------------------------------------------------------------------------------------------
            32.8            Genco            Section 1350 Certification of Principal Financial Officer of Genco
   -----------------------------------------------------------------------------------------------------------------------
            32.9            CILCORP          Section 1350 Certification of Principal Executive Officer of CILCORP
   -----------------------------------------------------------------------------------------------------------------------
            32.10           CILCORP          Section 1350 Certification of Principal Financial Officer of CILCORP
   -----------------------------------------------------------------------------------------------------------------------
            32.11           CILCO            Section 1350 Certification of Principal Executive Officer of CILCO
   -----------------------------------------------------------------------------------------------------------------------
            32.12           CILCO            Section 1350 Certification of Principal Financial Officer of CILCO
   -----------------------------------------------------------------------------------------------------------------------
</TABLE>

          (b)  Reports on Form 8-K.  The Ameren  Companies  filed the  following
               reports on Form 8-K during the  quarterly  period ended March 31,
               2004:

<TABLE>
<CAPTION>

                  Date of Report                            Items Reported              Financial Statements Filed
                  --------------                            --------------              --------------------------
<S>                                                             <C>                            <C>
                  Ameren:
                  January 14, 2004                               5, 7                           None
                  February 3, 2004                               5, 7, 12                       None
                  February 10, 2004 (a)                          7, 12                          (b)
                  March 23, 2004                                 5, 7                           None

                  UE:
                  January 14, 2004                               5, 7                           None
                  February 3, 2004                               5, 7, 12                       None
                  March 23, 2004                                 5, 7                           None

                  CIPS:
                  February 3, 2004                               5, 7, 12                       None
                  March 23, 2004                                 5, 7                           None

                  Genco:
                  February 3, 2004                               5, 7, 12                       None
                  March 23, 2004                                 5, 7                           None

</TABLE>

                                       77

<PAGE>
<TABLE>
<CAPTION>




                  Date of Report                            Items Reported              Financial Statements Filed
                  --------------                            --------------              --------------------------
<S>                                                             <C>                            <C>
                  CILCORP:
                  February 3, 2004                               5, 7, 12                       None
                  March 23, 2004                                 5, 7                           None

                  CILCO:
                  February 3, 2004                               5, 7, 12                       None
                  March 23, 2004                                 5, 7                           None

</TABLE>

                    (a)  This report was  furnished  pursuant to Item 12 and not
                         deemed  "filed"  for  purposes  of  Section  18 of  the
                         Exchange Act.
                    (b)  Consolidated  operating  statistics  for  three  months
                         ended   December  31,  2003,  and  December  31,  2002,
                         unaudited consolidated balance sheet as of December 31,
                         2003,  and December 31,  2002,  unaudited  consolidated
                         statement of income for three months ended December 31,
                         2003,  and December 31, 2002,  and twelve  months ended
                         December 31, 2003, and December 31, 2002, and unaudited
                         consolidated  statement of cash flows for twelve months
                         ended December 31, 2003 and December 31, 2002.

                                       78


<PAGE>



                                   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)



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<PAGE>



                                           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)






Date:  May 10, 2004





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