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, 2003

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
               For the Transition period from ........ to ........


Commission        Registrant; State of Incorporation;         IRS Employer
File Number       Address; and Telephone Number            Identification No.
  2-95569                          CILCORP Inc.                 37-1169387
                           (An Illinois Corporation)
                              300 Liberty Street
                           Peoria, Illinois  61602
                                (309) 677-5230

  1-2732                 CENTRAL ILLINOIS LIGHT COMPANY        37-0211050
                            (An Illinois Corporation)
                               300 Liberty Street
                             Peoria, Illinois  61602
                                 (309) 677-5230

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
Registrants  were 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  the  registrants  are  accelerated  filers (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [ ]. No [X].

Indicate the number of shares  outstanding  of each of the  issuer's  respective
classes of common stock, as of the latest practicable date:


CILCORP Inc.      Common stock, no par value,
                  shares outstanding and privately
                  held by Ameren Corporation
                  at May 15, 2003                                     1,000

CENTRAL ILLINOIS LIGHT COMPANY
                  Common stock, no par value,
                  shares outstanding and privately
                  held by CILCORP Inc. at May 15, 2003           13,563,871


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                                  CILCORP INC.
                                       AND
                         CENTRAL ILLINOIS LIGHT COMPANY
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003
                                TABLE OF CONTENTS

                                                                       Page No.
<S>        <C>                                                        <C>
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

            CILCORP INC.

               Consolidated Balance Sheets                              3-4

               Consolidated Statements of Income and
               Comprehensive Income                                     5-6

               Consolidated Statements of Cash Flows                    7-8

            CENTRAL ILLINOIS LIGHT COMPANY

               Consolidated Balance Sheets                              9-10

               Consolidated Statements of Income and
               Comprehensive Income                                      11

               Consolidated Statements of Cash Flows                   12-13

            Notes to Consolidated Financial Statements
            CILCORP Inc. and Central Illinois Light Company            14-27

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations
              CILCORP Inc. and Central Illinois Light Company          28-47

Item 3.     Quantitative and Qualitative Disclosures about
              Market Risk                                              47-49

Item 4.     Controls and Procedures                                      49

Forward-Looking Statements                                             49-50

PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                            51

Item 6.     Exhibits and Reports on Form 8-K                             51

Signatures and Certifications                                          52-59
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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  at  Part I  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.

                                       2
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                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                          CILCORP INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)
                                                          Successor              Predecessor
                                                          March 31,              December 31,
                                                            2003                     2002
ASSETS
<S>                                                      <C>                    <C>
 Current Assets:
 Cash and cash equivalents                                $   34,148      |      $   31,821
 Receivables, less allowance for                                          |
   uncollectible accounts of $3,672 and $1,989                82,227      |          52,982
 Receivables, miscellaneous                                    9,037      |           7,932
 Accrued unbilled revenue                                     33,667      |          37,256
 Fuel, at average cost                                        62,502      |          16,459
 Materials and supplies, at average cost                      18,497      |          17,691
 Gas in underground storage, at average cost                  12,545      |          27,209
 Prepayments and other                                         7,579      |          23,748
                                                          ----------      |      ----------
   Total Current Assets                                      260,202      |         215,098
                                                          ----------      |      ----------
 Investments and Other Property:                                          |
 Investment in leveraged leases                              131,820      |         132,874
 Other investments                                            18,396      |          17,850
                                                          ----------      |      ----------
   Total Investments and Other Property                      150,216      |         150,724
                                                          ----------      |      ----------
 Property, Plant and Equipment:                                           |
 Utility plant, at original cost                                          |
   Electric                                                  860,655      |         739,779
   Gas                                                       184,706      |         245,944
                                                          ----------      |      ----------
                                                           1,045,361      |         985,723
 Less - accumulated provision for depreciation                13,718      |         175,972
                                                          ----------      |      ----------
                                                           1,031,643      |         809,751
 Construction work in progress                               129,111      |         104,571
 Other, net of depreciation                                       --      |              22
                                                          ----------      |      ----------
   Total Property, Plant and Equipment                     1,160,754      |         914,344
                                                          ----------      |      ----------
 Other Assets:                                                            |
 Goodwill, net of accumulated amortization                                |
   of $0 and $33,753                                         594,765      |         580,748
 Regulatory assets                                            11,175      |           7,732
 Other assets                                                 36,257      |          32,398
                                                          ----------      |      ----------
   Total Other Assets                                        642,197      |         620,878
                                                          ----------      |      ----------
   Total Assets                                           $2,213,369      |      $1,901,044
                                                          ==========      |      ==========

See Notes to Consolidated Financial Statements.

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                                       3
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                          CILCORP INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)
                                                          Successor              Predecessor
                                                          March 31,              December 31,
                                                            2003                     2002
LIABILITIES AND STOCKHOLDER'S EQUITY
<S>                                                      <C>                    <C>
Current Liabilities:
Current portion of long-term debt                         $    1,400      |      $   26,750
Notes payable                                                     --      |          10,000
Accounts payable                                             111,165      |          76,332
Accrued taxes                                                 23,098      |           8,105
Accrued interest                                              27,256      |          18,712
Other                                                         23,933      |          21,427
                                                          ----------      |      ----------
  Total Current Liabilities                                  186,852      |         161,326
                                                          ----------      |      ----------
Long-term debt                                               856,256      |         791,028
                                                          ----------      |      ----------
Deferred Credits and Other Liabilities:                                   |
Deferred income taxes                                        306,817      |         189,977
Regulatory liability of regulated subsidiary                  18,614      |          19,230
Deferred investment tax credit                                12,561      |          12,958
Pension liabilities                                          129,839      |         106,797
Postretirement health care liabilities                       121,539      |          61,513
Other                                                         43,801      |          22,536
                                                          ----------      |      ----------
  Total Deferred Credits and Other Liabilities               633,171      |         413,011
                                                          ----------      |      ----------
Preferred stock of subsidiary without                                     |
  mandatory redemption                                        19,120      |          19,120
Preferred stock of subsidiary with                                        |
  mandatory redemption                                        22,000      |          22,000
                                                          ----------      |      ----------
Total Preferred Stock of Subsidiary                           41,120      |          41,120
                                                          ----------      |      ----------
Stockholder's Equity:                                                     |
Common stock, no par value; authorized 10,000                             |
  outstanding 1,000                                               --      |              --
Additional paid-in capital                                   494,205      |         519,433
Retained earnings                                              3,077      |          34,688
Accumulated other comprehensive income (loss)                 (1,312)     |         (59,562)
                                                          ----------      |      ----------
  Total Stockholder's Equity                                 495,970      |         494,559
                                                          ----------      |      ----------
  Total Liabilities and Stockholder's Equity              $2,213,369      |      $1,901,044
                                                          ==========      |      ==========

See Notes to Consolidated Financial Statements.


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                                       4
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<CAPTION>


                          CILCORP INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                            and Comprehensive Income
                                 (In thousands)
                                   (Unaudited)

                                                                  Successor                   Predecessor
                                                                 Two Months                          Three Months
                                                                    Ended            January             Ended
                                                                March 31, 2003         2003         March 31,2002
<S>                                                             <C>                <C>                 <C>
Operating Revenues:
CILCO Electric                                                   $ 59,266   |       $ 35,305            $ 84,113
CILCO Gas                                                          69,143   |         44,270              80,018
CILCO Other                                                        21,104   |         11,975              21,750
CILCORP Other                                                      30,631   |         12,373              18,001
                                                                 --------   |       --------            --------
   Total operating revenues                                       180,144   |        103,923             203,882
                                                                 --------   |       --------            --------
Operating expenses:                                                         |
Fuel and purchased power                                           43,854   |         24,702              53,460
Gas                                                                79,766   |         42,410              65,891
Other operations and maintenance                                   19,418   |         12,965              32,799
Depreciation and amortization                                      13,998   |          5,941              18,011
Taxes, other than income taxes                                      8,315   |          4,299              11,760
                                                                 --------   |       --------            --------
   Total operating expenses                                       165,351   |         90,317             181,921
                                                                 --------   |       --------            --------
Operating income                                                   14,793   |         13,606              21,961
                                                                 --------   |       --------            --------
Other income and (deductions):                                              |
Allowance for equity funds used                                             |
  during construction                                                  12   |              5                  --
Miscellaneous income                                                   93   |             46                 300
Miscellaneous expense                                                (290)  |           (154)               (717)
Income taxes                                                          399   |            206                 687
                                                                 --------   |       --------            --------
   Total other income and (deductions)                                214   |            103                 270
                                                                 --------   |       --------            --------
Interest charges and preferred                                              |
  dividends:                                                                |
Interest expense                                                    9,804   |          5,203              16,266
Allowance for borrowed funds used                                           |
  during construction                                                (458)  |           (187)               (238)
Preferred stock dividends of                                                |
  subsidiary                                                          360   |            180                 540
                                                                 --------   |       --------            --------
   Total                                                            9,706   |          5,196              16,568
                                                                 --------   |       --------            --------
Income from continuing                                                      |
    operations before income taxes                                  5,301   |          8,513               5,663
Income taxes                                                        2,224   |          3,128               1,648
                                                                 --------   |       --------            --------


                                       5
<PAGE>


Net income from continuing operations
  before cumulative effect of change
  in accounting principle                                           3,077   |          5,385               4,015
Loss from operations of discontinued                                        |
   businesses, net of tax of $(5)                                      --   |             --                  (9)
Cumulative effect of change in                                              |
   accounting principle, net of                                             |
   income taxes                                                        --   |          3,818                  --
                                                                 --------   |       --------            --------
Net income                                                       $  3,077   |       $  9,203            $  4,006
                                                                            |
Other comprehensive income (loss)                                  (1,312)  |            350               5,464
                                                                 --------   |       --------            --------
Comprehensive income                                             $  1,765   |       $  9,553            $  9,470
                                                                 ========   |       ========            ========

See Notes to Consolidated Financial Statements.

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                                       6
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<CAPTION>



                          CILCORP INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)


                                                                  Successor                       Predecessor
                                                                  Two Months                          Three Months
                                                                    Ended            January            Ended
                                                               March 31, 2003          2003         March 31, 2002
<S>                                                             <C>                <C>                <C>
Cash flows from operating:
Net income                                                       $  3,077    |      $  9,203           $  4,006
Adjustments to reconcile net income to net                                   |
  cash provided by operating activities:                                     |
  Cumulative effect of change in                                             |
    accounting principle                                               --    |        (3,818)                --
  Depreciation and amortization                                    13,998    |         5,941             18,011
  Allowance for funds used during                                            |
    construction                                                     (470)   |          (192)              (238)
  Non-cash leveraged lease and                                               |
    affordable housing income                                        (580)   |          (297)            (1,048)
  Cash receipts in excess of debt service                                    |
    on leases                                                         784    |         1,410              1,715
  Deferred income taxes, net                                       (2,691)   |        (6,824)             8,361
  Deferred investment tax credits, net                               (265)   |          (132)              (399)
  Other                                                            (1,470)   |            --                 --
Changes in assets and liabilities:                                           |
  Accounts receivable and                                                    |
    unbilled revenue                                               (1,860)   |       (24,901)            (1,748)
  Inventories                                                       3,270    |        10,740             18,563
  Accounts payable                                                  5,658    |        15,168            (20,816)
  Accrued taxes                                                     3,921    |        11,073             (2,324)
  Assets, other                                                     1,641    |        11,709               (571)
  Liabilities, other                                               14,605    |         2,722              7,184
                                                                 --------    |      --------           --------
  Net cash provided by operating                                             |
    activities from continuing                                               |
    operations                                                     39,618    |        31,802             30,696
                                                                 --------    |      --------           --------
  Net cash provided by (used in)                                             |
    operating activities of                                                  |
    discontinued operations                                            --    |            --                  6
                                                                 --------    |      --------           --------
  Net cash provided by operating                                             |
    activities                                                     39,618    |        31,802             30,702
                                                                 --------    |      --------           --------
Cash flows from investing:                                                   |
Construction expenditures                                         (17,155)   |       (15,906)           (32,605)
Allowance for funds used during                                              |
  construction                                                        470    |           192                238
Other                                                              (1,039)   |          (305)            (2,096)
                                                                 --------    |      --------           --------
Net cash used in investing activities                             (17,724)   |       (16,019)           (34,463)
                                                                 --------    |      --------           --------
                                                                             |
                                       7
<PAGE>


Cash flows from financing:                                                   |
  Redemptions:                                                               |
    Short-term debt                                                    --    |       (10,000)           (5,000)
    Long-term debt                                                (25,350)   |            --
                                                                 --------    |      --------          --------
Net cash provided by (used in)                                               |
  financing activities                                            (25,350)   |       (10,000)           (5,000)
                                                                             |
Net change in cash and                                                       |
  cash equivalents                                                 (3,456)   |         5,783            (8,761)
Cash and cash equivalents                                                    |
  at beginning of period                                           37,604    |        31,821            18,182
                                                                 --------    |      --------          --------
Cash and cash equivalents at                                                 |
  end of period                                                  $ 34,148    |      $ 37,604          $  9,421
                                                                 ========    |      ========          ========
                                                                             |
Cash paid during the period for:                                             |
                                                                             |
   Interest                                                      $  3,784    |      $  5,413          $  8,719
                                                                             |
   Income taxes                                                  $     --    |      $     --          $     88

See Notes to Consolidated Financial Statements.
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                                       8

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<CAPTION>

                         CENTRAL ILLINOIS LIGHT COMPANY
                           Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)

                                                       March 31,            December 31,
ASSETS                                                    2003                 2002

<S>                                                   <C>                   <C>
Utility Plant, At Original Cost:
  Electric                                             $1,364,898            $1,349,153
  Gas                                                     468,066               469,831
                                                       ----------            ----------
                                                        1,832,964             1,818,984
  Less - accumulated provision for depreciation         1,011,021             1,033,095
                                                       ----------            ----------
                                                          821,943               785,889
Construction work in progress                             129,111               104,571
                                                       ----------            ----------
    Total Utility Plant                                   951,054               890,460
                                                       ----------            ----------
Other Property and Investments:
Cash surrender value of corporate-owned life
  insurance (net of related policy loans of
  $69,634)                                                  5,259                 4,268
Other                                                         892                   892
                                                       ----------            ----------
    Total Other Property and Investments                    6,151                 5,160
                                                       ----------            ----------
Current Assets:
Cash and temporary cash investments                        28,105                22,256
Receivables, less allowance for
  uncollectible accounts of $3,669 and $1,989              71,523                47,179
Receivables, miscellaneous                                  8,829                 7,136
Accrued unbilled revenue                                   26,887                32,162
Fuel, at average cost                                      16,307                16,459
Materials and supplies, at average cost                    16,200                16,411
Gas in underground storage, at average cost                12,545                27,209
Prepaid taxes                                                 636                   886
Other                                                       7,525                23,679
                                                       ----------            ----------
    Total Current Assets                                  188,557               193,377
                                                       ----------            ----------
Deferred Debits:
Regulatory assets                                          11,175                 7,732
Unamortized debt expense                                    1,491                 1,581
Prepaid pension cost                                        7,250                 7,250
Other                                                       3,401                 3,441
                                                       ----------            ----------
    Total Deferred Debits                                  23,317                20,004
                                                       ----------            ----------
Total Assets                                           $1,169,079            $1,109,001
                                                       ==========            ==========

See Notes to Consolidated Financial Statements.

</TABLE>

                                       9
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<CAPTION>



                         CENTRAL ILLINOIS LIGHT COMPANY
                           Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)

                                                       March 31,            December 31,
CAPITALIZATION AND LIABILITIES                           2003                  2002
<S>                                                   <C>                    <C>
Capitalization:
Common Stockholder's Equity:
  Common stock, no par value; authorized
    20,000,000 shares; outstanding
    13,563,871 shares                                  $  185,661            $  185,661
  Additional paid-in capital                               52,000                52,000
  Retained earnings                                       149,395               113,775
  Accumulated other comprehensive income (loss)           (29,684)              (28,722)
                                                       ----------            ----------
    Total Common Stockholder's Equity                     357,372               322,714

Preferred stock without mandatory redemption               19,120                19,120
Preferred stock with mandatory redemption                  22,000                22,000
Long-term debt                                            316,041               316,028
                                                       ----------            ----------
    Total Capitalization                                  714,533               679,862
                                                       ----------            ----------
Current Liabilities:
Current maturities of long-term debt                        1,400                26,750
Notes payable                                                  --                10,000
Accounts payable                                           87,724                67,950
Accrued taxes                                              30,628                17,607
Accrued interest                                            7,542                 9,437
Other                                                      23,933                21,427
                                                       ----------            ----------
    Total Current Liabilities                             151,227               153,171
                                                       ----------            ----------
Deferred Liabilities and Credits:
Accumulated deferred income taxes                         106,233                95,389
Regulatory liability                                       18,614                19,230
Investment tax credits                                     12,561                12,958
Pension liabilities                                        89,153                85,056
Postretirement health care liability                       45,684                41,333
Other                                                      31,074                22,002
                                                       ----------            ----------
    Total Deferred Liabilities and Credits                303,319               275,968
                                                       ----------            ----------
Total Capitalization and Liabilities                   $1,169,079            $1,109,001
                                                       ==========            ==========

See Notes to Consolidated Financial Statements.

</TABLE>

                                       10
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<CAPTION>


                         CENTRAL ILLINOIS LIGHT COMPANY
                        Consolidated Statements of Income
                            and Comprehensive Income
                                 (In thousands)
                                   (Unaudited)
                                                           Three Months Ended
                                                              March 31,
                                                         2003            2002
<S>                                                 <C>               <C>
Operating revenues:
Electric                                             $ 94,571          $ 84,113
Gas                                                   113,413            80,018
                                                     --------          --------
      Total operating revenues                        207,984           164,131
                                                     --------          --------
Operating expenses:
Fuel                                                   25,656            22,030
Gas                                                    80,212            49,608
Purchased power                                        12,343            11,530
Other operations and maintenance                       34,836            31,446
Depreciation and amortization                          18,126            17,664
Income taxes                                            7,759             5,512
Other taxes                                            12,590            11,740
                                                     --------          --------
      Total operating expenses                        191,522           149,530
                                                     --------          --------
Operating income                                       16,462            14,601
                                                     --------          --------
Other income and deductions:
Cost of equity funds capitalized                           17                --
Corporate-owned life insurance, net                      (371)             (342)
Other, net                                                642               804
                                                     --------          --------
      Total other income and
        deductions                                        288               462
                                                     --------          --------
Interest expenses:
Interest on long-term debt                              4,799             4,367
Cost of borrowed funds
  capitalized                                            (645)             (238)
Other                                                     516             1,050
                                                     --------          --------
      Total interest expense                            4,670             5,179
                                                     --------          --------
Net income before preferred dividends                  12,080             9,884
                                                     --------          --------
Dividends on preferred stock                              540               540
                                                     --------          --------
Income available for common stock
  before cumulative effect of
  change in accounting principle                       11,540             9,344
Cumulative effect of change in accounting
  principle, net of income taxes                       24,080                --
                                                     --------          --------
Income available for common stock                    $ 35,620          $  9,344

Other comprehensive income (loss)                        (962)            5,464
                                                     --------          --------
Comprehensive income                                 $ 34,658          $ 14,808
                                                     ========          ========
See Notes to Consolidated Financial Statements.

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                                       11
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<CAPTION>
                         CENTRAL ILLINOIS LIGHT COMPANY
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)

                                                                 Three Months Ended
                                                                      March 31,
                                                               2003             2002
<S>                                                         <C>                <C>
Cash flows from operating:
Net income                                                  $ 35,620          $  9,344

Adjustments to reconcile net income to net
 cash provided by operating activities:
Cumulative effect of change in accounting principle          (24,080)               --
Depreciation and amortization                                 18,126            17,664
Allowance for funds used during construction                    (662)             (238)
Deferred income taxes, net                                    10,143             9,912
Deferred investment tax credits, net                            (397)             (399)
Changes in assets and liabilities:
Receivables, net                                             (26,037)          (12,760)
Inventories                                                   15,027            16,421
Unbilled revenue                                               5,275             6,502
Accounts payable                                              19,774           (34,329)
Accrued taxes and interest                                    (4,708)           (2,355)
Assets, other                                                 13,621             4,841
Liabilities, other                                            13,296             1,831
                                                            --------          --------
Net cash provided by operating activities                     74,998            16,434
                                                            --------          --------
Cash flows from investing:
Construction expenditures                                    (33,061)          (32,605)
Allowance for funds used during construction                     662               238
Other                                                         (1,400)           (1,808)
                                                            --------          --------
Net cash used in investing activities                        (33,799)          (34,175)
                                                            --------          --------
Cash flows from financing:
Dividends on common stock                                         --            (8,000)
Redemptions:
  Short-term debt                                            (10,000)               --
  Long-term debt                                             (25,350)               --
Issuances:
  Short-term debt                                                 --            15,000
                                                            --------          --------
Net cash provided by (used in) financing activities          (35,350)            7,000
                                                            --------          --------


                                       12

<PAGE>

Net change in cash and
  cash equivalents                                             5,849           (10,741)

Cash and cash equivalents at
  beginning of period                                         22,256            12,454
                                                            --------          --------
Cash and cash equivalents at
  end of period                                             $ 28,105          $  1,713
                                                            ========          ========

Cash paid during the periods:

       Interest                                             $  9,197          $  8,648

   Income taxes, net                                        $     --          $     --

See Notes to Consolidated Financial Statements.

</TABLE>

                                       13
<PAGE>

                 CILCORP INC. AND CENTRAL ILLINOIS LIGHT COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1.  Summary of Significant Accounting Policies

General

The consolidated  financial statements include the accounts of CILCORP Inc. (the
Holding  Company),  Central Illinois Light Company (CILCO or  AmerenCILCO),  QST
Enterprises  Inc.  (QST) and its  subsidiaries  QST Energy Inc. (QST Energy) and
CILCORP  Infraservices  Inc. (CILCORP  Infraservices),  and CILCORP Inc.'s other
subsidiaries  (collectively,  CILCORP  or  the  Company)  after  elimination  of
significant  intercompany  transactions.  In the  fourth  quarter  of 1998,  the
operations  of QST and its  subsidiaries  (excluding  ESE Land  Corporation  and
CILCORP  Infraservices) were discontinued and, therefore,  are being reported as
discontinued  operations  in the financial  statements.  Prior year amounts have
been reclassified on a basis consistent with the 2003 presentation.

CILCO, the Holding Company's  principal business  subsidiary,  is engaged in the
generation, transmission, distribution and sale of electric energy in an area of
approximately 3,700 square miles in central and east-central  Illinois,  and the
purchase,  distribution,  transportation  and sale of natural  gas in an area of
approximately  4,500 square miles in central and  east-central  Illinois.  Other
Holding Company first-tier  subsidiaries are CILCORP Investment  Management Inc.
(CIM),  which manages the Company's  investment  portfolio and CILCORP  Ventures
Inc. (CVI),  which pursues investment  opportunities in energy-related  products
and services.

The Holding Company is a wholly-owned subsidiary of Ameren Corporation (Ameren).
Ameren is a public utility  holding  company  registered with the Securities and
Exchange  Commission  (SEC) under the Public Utility Holding Company Act of 1935
(PUHCA) and is headquartered in St. Louis, Missouri. Ameren's principal business
is the  generation,  transmission  and  distribution  of  electricity,  and  the
distribution of natural gas to residential, commercial, industrial and wholesale
users in the central United States.  Ameren's  primary  subsidiaries,  including
Central Illinois Light Company, are as follows:

o    Union  Electric   Company,   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.
o    Central  Illinois Public Service  Company,  which operates a rate-regulated
     electric and natural gas transmission and distribution business in Illinois
     as AmerenCIPS.
o    Central  Illinois  Light  Company,  a  subsidiary  of CILCORP  Inc.,  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.

                                       14

<PAGE>
o    AmerenEnergy  Resources Company (Resources Company),  which consists of non
     rate-regulated  electric  operations.   Subsidiaries  include  AmerenEnergy
     Generating  Company  (Generating   Company)  which  operates  Ameren's  non
     rate-regulated  electric generation in Missouri and Illinois,  AmerenEnergy
     Marketing Company (Marketing Company), which markets power for periods over
     one year,  AmerenEnergy Fuels and Services Company, which procures fuel and
     manages  the  related  risks  for  Ameren's   affiliated   companies,   and
     AmerenEnergy  Medina Valley Cogen (No. 4), LLC, which  indirectly owns a 40
     megawatt,  gas-fired electric generation plant. On February 4, 2003, Ameren
     completed  the  acquisition  of AES Medina  Valley  Cogen (No.  4), LLC and
     renamed it AmerenEnergy Medina Valley Cogen (No. 4), LLC.
o    AmerenEnergy,  Inc.  (AmerenEnergy)  which serves as a power  marketing and
     risk management agent for Ameren  affiliated  companies for transactions of
     primarily less than one year.
o    Electric  Energy,  Inc.  (EEI),  which  operates  electric  generation  and
     transmission facilities in Illinois. Ameren has a 60% ownership interest in
     EEI, 40% owned by AmerenUE and 20% owned by Resources Company.
o    Ameren Services  Company (Ameren  Services),  which provides shared support
     services to Ameren and its  subsidiaries,  including  CILCORP.  Charges are
     based upon the actual costs incurred by Ameren  Services as required by the
     PUHCA.

Throughout this document,  CILCORP or the Company refers to CILCORP Inc. and its
subsidiaries  on a consolidated  basis.  CILCO refers to Central  Illinois Light
Company.

Acquisition

On January 31, 2003,  Ameren completed its acquisition of all of the outstanding
common stock of CILCORP Inc. from The AES Corporation (AES). CILCORP Inc. is the
parent company of Central  Illinois Light Company which operated as CILCO.  With
the  acquisition,  CILCO  became an Ameren  subsidiary,  but  remains a separate
utility company, operating as AmerenCILCO. The results of operations for CILCORP
(including  its  subsidiaries)  were included in Ameren's  financial  statements
effective with the January acquisition date.

Ameren  acquired  CILCORP to complement  its existing  Illinois gas and electric
operations.  The purchase included CILCO's  rate-regulated  electric and natural
gas business in Illinois serving  approximately  200,000 and 205,000  customers,
respectively,  of which approximately  150,000 are combination  electric and gas
customers.   CILCO's  service   territory  is  contiguous  to  Ameren's  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 CILCO's  approximately  1,200 megawatts of largely  coal-fired
generating  capacity,  most of which is expected to become non rate-regulated in
2003.

The  total  purchase  price  was  approximately   $1.34  billion  including  the
assumption of CILCORP debt and preferred stock. The purchase price is subject to
certain   adjustments   for  working  capital  and  other  changes  pending  the
finalization of CILCORP's closing balance sheet.


Financial Statement Presentation

The acquisition was accounted for using the purchase method of accounting. Under
this method,  the purchase  price was  allocated to the fair market value of the
assets acquired and the liabilities  assumed. The excess purchase price over the
fair value of the assets acquired and the  liabilities  assumed was allocated to
goodwill  at CILCORP  Inc.  As a result,  CILCORP  Inc.  has

                                       15

<PAGE>

recorded  purchase  accounting  fair  value  adjustments  to  electric  plant in
service, pension and other postretirement liabilities,  long-term debt, emission
allowances,  coal  contracts,  and other balance  sheet items.  Ameren is in the
process of completing a third party valuation of acquired property and plant and
intangible  assets.  Therefore,  the  allocation  of the  purchase  price to the
acquired net assets is subject to  refinement.  The excess of the purchase price
over tangible net assets acquired has been allocated  preliminarily  to goodwill
in the amount of $595 million at CILCORP.

The purchase accounting entries are reflected on CILCORP's financial  statements
as of the purchase  date.  As permitted by rules of the SEC, the Company did not
"push down" the effects of purchase  accounting to the  financial  statements of
any of Holding Company's subsidiaries,  including CILCO. Accordingly,  CILCORP's
post-acquisition  financial  statements  reflect a new basis of accounting,  and
separate financial  statements are presented for  pre-acquisition  (predecessor)
and  post-acquisition  (successor)  periods,  separated  by a heavy  black line.
CILCO's  financial  statements  are  presented  on  their  historical  basis  of
accounting for all periods presented.


Goodwill

The excess  purchase  price over the fair value of the assets  acquired  and the
liabilities  assumed by Ameren in its January 31, 2003,  acquisition  of CILCORP
was allocated to goodwill at the Holding Company.  The Company does not amortize
goodwill  under the provisions of SFAS No. 142,  "Goodwill and Other  Intangible
Assets" (SFAS 142).  SFAS 142 requires the evaluation of goodwill for impairment
at least annually or more frequently if events and  circumstances  indicate that
the asset might be impaired.


Accounting Changes and Other Matters

Statement of Financial  Accounting  Standards  (SFAS) No. 143 - "Accounting  for
Asset Retirement Obligations" (SFAS 143)

The Company  adopted  the  provisions  of SFAS 143 on January 1, 2003.  SFAS 143
provides the accounting requirements for asset retirement obligations associated
with  tangible,  long-lived  assets.  SFAS 143  requires  CILCORP  to record the
estimated  fair value of legal  obligations  associated  with the  retirement of
tangible  long-lived  assets in the period in which the liabilities are incurred
and to  capitalize  a  corresponding  amount  as part of the  book  value of the
related  long-lived  asset.  In subsequent  periods,  the Company is required to
adjust asset  retirement  obligations  based on changes in estimated fair value,
and the  corresponding  increases in asset book values are depreciated  over the
useful life of the related asset. Uncertainties as to the probability, timing or
cash flows associated with an asset retirement  obligation  affect the Company's
estimate of fair value.

Upon adoption of this standard, CILCO recognized asset retirement obligations of
approximately  $5.6 million related  primarily to retirement costs for ash ponds
at the Duck Creek power  plant,  and a net increase in net property and plant of
approximately $45.6 million due to elimination of non-legal  obligation costs of
removal  for non  rate-regulated  assets  from  accumulated  depreciation.  As a
result, CILCO recognized a net after-tax gain upon adoption of $24.1 million.

Upon  adoption of this  standard on January 1, 2003,  CILCORP  recognized  asset
retirement obligations of approximately $5.6 million related to retirement costs
for ash ponds at the Duck Creek power plant,  and a net increase in net property
and  plant of  approximately  $11.9  million  due to  elimination  of  non-


                                       16
<PAGE>

legal obligation costs of removal for non rate-regulated assets from accumulated
depreciation.  As a result,  predecessor CILCORP recognized a net after-tax gain
upon adoption of $3.8 million. Similar to the treatment applied by Ameren in the
acquisition of CILCORP,  AES recorded  purchase  accounting at the CILCORP level
following its 1999 acquisition of CILCORP,  but did not "push down" the purchase
accounting  to any of  the  Holding  Company's  subsidiaries,  including  CILCO.
Accordingly,  accumulated  depreciation,  including the embedded cost of removal
liabilities,  was reset to zero in purchase  accounting  for CILCORP while CILCO
continued to carry  property,  plant and equipment  and the related  accumulated
depreciation on a historical basis. As a result,  the gain upon adoption of SFAS
143 recognized by CILCO  exceeded the gain  recognized by CILCORP as the cost of
removal liabilities  reversed by CILCORP upon adoption of SFAS 143 included only
those liabilities recorded since the 1999 AES acquisition.

In addition to those  obligations  that were identified and valued,  the Company
determined  that certain  other asset  retirement  obligations  exist.  However,
management is unable to estimate the fair value of those obligations because the
probability,   timing  or  cash  flows   associated  with  the  obligations  are
indeterminable.  Management  does  not  believe  that  these  obligations,  when
incurred,  will have a material adverse impact on CILCORP's  financial position,
results of operations or liquidity.

SFAS  143  required  a  change  in  the  depreciation  methodology  the  Company
historically utilized for non-regulated  operations.  Historically,  the Company
included an estimated cost of  dismantling  and removing plant from service upon
retirement in the basis upon which depreciation rates were determined.  SFAS 143
required the Company to exclude costs of dismantling and removal upon retirement
from the  depreciation  rates  applied  to non  rate-regulated  plant  balances.
Further,  the  Company  was  required  to  remove  accumulated   provisions  for
dismantling  and removal costs from  accumulated  depreciation,  where they were
embedded,  and reflect such adjustment as a gain upon adoption of this standard,
to the extent such  dismantling and removal  activities are not considered legal
asset  retirement  obligations as defined by SFAS 143. At CILCO, the elimination
of cost of removal in excess of anticipated  salvage  proceeds from  accumulated
depreciation resulted in a gain, as noted above, of $24.1 million, net of taxes,
for a change  in  accounting  principle.  As noted  above,  the gain at  CILCORP
consolidated  was  only  $3.8  million,  net  of  taxes,  due to  the  reset  of
accumulated  depreciation  at the time of AES'  acquisition  of CILCORP in 1999.
Beginning in January 2003, depreciation rates for non rate-regulated assets were
reduced to reflect the discontinuation of the accrual of dismantling and removal
costs. In addition, non rate-regulated asset removal costs will prospectively be
expensed as incurred.  As a result, the impact of this change in accounting will
result in a decrease in  depreciation  expense and an increase in operations and
maintenance expense, the net impact of which is indeterminable, but not expected
to be material.

Like  the  non   rate-regulated   operations,   the   depreciation   methodology
historically utilized by the rate-regulated operations has included an estimated
cost of  dismantling  and removing plant from service upon  retirement.  Because
these  estimated costs of removal have been included in the cost of service upon
which CILCO's  present utility rates are based,  and with the  expectation  that
this  practice  will  continue in the  jurisdictions  in which  CILCO  operates,
adoption of SFAS 143 did not result in any change in the depreciation accounting
practices of CILCO's rate regulated operations. CILCO's estimated future removal
costs  embedded in  accumulated  depreciation  related to  rate-regulated  plant
assets were  approximately  $143 million at March 31,  2003.  As a result of the
reset of accumulated depreciation at Ameren's acquisition of CILCORP,  estimated
future   removal  costs  embedded  in   accumulated   depreciation   at  CILCORP
consolidated are only $1.7 million at March 31, 2003.


                                       17

<PAGE>

SFAS No.  148 -  "Accounting  for  Stock-Based  Compensation  -  Transition  and
Disclosures" (SFAS 148)

In  December  2002,  the FASB  issued  SFAS 148.  SFAS 148 amends  SFAS No. 123,
"Accounting for  Stock-Based  Compensation"  (SFAS 123), to provide  alternative
methods of transition for an entity that  voluntarily  changes to the fair value
based method of accounting for stock-based employee compensation. It also amends
the disclosure  provisions to require  disclosure  about the effects on reported
net  income  of  an  entity's   accounting  policy  decisions  with  respect  to
stock-based employee compensation.

Employees of the Company  previously  participated  in the AES Stock Option Plan
that provided for grants of stock options to eligible participants. As permitted
under SFAS 123, the Company  applies APB Opinion No. 25,  "Accounting  for Stock
Issued to Employees" in accounting  for this plan. As the exercise  price of all
stock  options are equal to their fair market  value at the time the options are
granted,  the Company did not recognize any compensation  expense related to the
plan using the  intrinsic  value based  method.  Had  compensation  expense been
recognized  using the fair value  based  method  under SFAS 123,  the  Company's
consolidated  earnings would have decreased by $2.7 million,  $1.4 million,  and
$.3 million in 2002, 2001, and 2000,  respectively.  Effective  January 1, 2003,
the Company adopted the fair value  recognition  provisions of SFAS 123 by using
the prospective method of adoption under SFAS 148. Because no stock options have
been  granted  since  January 1,  2003,  SFAS 148 did not have any effect on the
Company's  financial  position,  results of operations or liquidity in the first
quarter of 2003.


FASB Interpretation No. 45 - "Guarantor's Accounting and Disclosure Requirements
for Guarantees,  Including  Indirect  Guarantees of Indebtedness of Others" (FIN
45)

FIN 45 was issued in November  2002,  and requires that upon issuance of certain
guarantees,  a guarantor  must  recognize a liability  for the fair value of the
obligation assumed under the guarantee.  These recognition  provisions of FIN 45
are to be applied on a prospective  basis to guarantees issued or modified after
December 31, 2002,  irrespective of the guarantor's fiscal year-end. FIN 45 also
requires  additional  disclosures  by a  guarantor  in its  interim  and  annual
financial  statements for periods  ending after  December 15, 2002.  Because the
Company does not have such obligations, the recognition provisions of FIN 45 did
not  have any  effect  on our  financial  position,  results  of  operations  or
liquidity in the first quarter of 2003.


SFAS No. 149 - "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" (SFAS 149)

In April 2003, SFAS 149 was issued.  SFAS 149 clarifies under what circumstances
a contract with initial net investment meets the  characteristic of a derivative
as discussed in SFAS 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities."  SFAS 149 is effective  for hedging  relationships  designated  and
contracts  entered  into or  modified  after June 30,  2003.  At this time,  the
Company is assessing the impact of SFAS 149 on its financial  position,  results
of operations and liquidity upon adoption.

The  accounting  policies of CILCORP  conform to generally  accepted  accounting
principles in the United States (GAAP).  CILCORP's financial  statements reflect
all adjustments (which include normal,  recurring adjustments) necessary, in the
Company's opinion, for a fair presentation of interim results.  These statements
should  be read in  conjunction  with the  financial

                                       18

<PAGE>

statements  and the notes  thereto  included in CILCORP and CILCO's  2002 Annual
Report on Form 10-K.

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

NOTE 2.  Contingencies

On May 11, 2001, CILCO and Enron Power  Marketing,  Inc. (EPMI), a subsidiary of
Enron Corp. (Enron),  entered into a new Master Agreement for electric purchases
and sales, which covered energy transactions scheduled for deliveries during the
period of  2001-2003.  On November 28, 200l,  EPMI  demanded that CILCO post $28
million in collateral based on mark-to-market exposure of open transactions.  On
November 30, 2001, CILCO notified EPMI that events of default had occurred under
the Master  Agreement and pursuant to the  termination  provisions of the Master
Agreement declared the Master Agreement  terminated effective December 20, 2001.
Due to contractual  provisions and EPMI's and Enron's  actions,  management does
not believe that it is probable that CILCO will be required to pay any amount to
Enron or its affiliates and has therefore  recorded no liability for undelivered
electric  purchases.  Enron and EPMI filed  Chapter 11  bankruptcy  petitions on
December 2, 2001, in the U. S. Bankruptcy Court for the Southern District of New
York.  Thereafter,  CILCO  purchased  replacement  power  to  serve  its  retail
customers,   which  had  previously   been  partially   supported  by  the  EPMI
transactions.  While the ultimate outcome is unpredictable,  management does not
believe  that  EPMI's  defaults  under the  Master  Agreement,  its  filing  for
bankruptcy protection,  CILCO's termination of the Master Agreement,  or CILCO's
purchase  of  replacement  electricity  will have a material  adverse  effect on
CILCORP's financial position, cash flows or results of operations.

On May 4, 2001,  CILCO and Enron  subsidiary  Enron North  America  Corp.  (ENA)
entered into a natural gas transaction for daily deliveries not to exceed 10,000
MMBtu  per day  during  calendar  year  2002.  CILCO  received  no  natural  gas
deliveries  pursuant to this transaction in 2002. On October 24, 2001, CILCO and
ENA entered into a short-term  natural gas transaction giving CILCO the right to
call upon ENA for the  delivery  of 10,000  MMBtu per day during the period from
November 1, 2001, through March 31, 2002. Since late November 2001, ENA has been
unable to  deliver  natural  gas when  called  upon by CILCO.  ENA's  failure to
deliver natural gas is an event of default under the Master Firm Sales Agreement
governing the October  transaction.  On December 2, 2001, ENA filed a Chapter 11
bankruptcy  petition in the U. S. Bankruptcy Court for the Southern  District of
New  York.  To the  extent  that it has  been  necessary,  CILCO  has  purchased
replacement  natural gas.  Because these  transactions  are part of a larger and
more  diversified  natural gas supply portfolio and are subject to the Purchased
Gas  Adjustment  clause,  management  does not believe  ENA's  failure to supply
natural gas or its  subsequent  bankruptcy  filing will have a material  adverse
effect on CILCORP's financial position, cash flows or results of operations.

On December 10, 2002,  EPMI filed a complaint  against  AES,  Constellation  New
Energy,  Inc.,  f/k/a  AES New  Energy  Inc.  and  CILCO  in the  United  States
Bankruptcy  Court for the Southern  District of New York. With respect to CILCO,
EPMI alleges that it is owed $31.2  million  under the Master  Agreement.  CILCO
disputes that any amount is owed EPMI based on the clear  language of the Master
Agreement,  Section 553 of the Bankruptcy  Code and EPMI's

                                       19

<PAGE>
misconduct  prior to entering the Master  Agreement and  continuing  through the
date of its bankruptcy  filing.  AES has agreed to undertake  CILCO's defense in
this proceeding and intends to vigorously  contest these claims.  Due to CILCO's
contractual and other defenses to EPMI's claims,  as well as certain  provisions
related to the sale of CILCO to Ameren,  management does not believe the results
of this  litigation will have a material  adverse effect on CILCORP's  financial
position, cash flows or results of operation.


NOTE 3.  Rate and Regulatory Matters

Gas Rate Case

In November 2002,  CILCO filed a request with the Illinois  Commerce  Commission
(ICC) to increase  annual  rates for natural  gas service by  approximately  $14
million.  The ICC has until  October 2003 to render a decision in this gas case;
however, the ICC Staff has recommended the annual increase to be $9 million.


Standard Market Design Notice of Proposed Rulemaking (NOPR)

On July 31, 2002,  the Federal  Energy  Regulatory  Commission  (FERC)  issued a
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 calls for all jurisdictional  transmission facilities to
be placed under the control of an independent  transmission provider (similar to
a Regional Transmission Organization (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. On November 15, 2002,  Ameren filed its initial  comments on the NOPR
with the FERC expressing concern with the potential impact of the proposed rules
in  their  current  form on the  cost  and  reliability  of  service  to  retail
customers.  Ameren  also  proposed  that  certain  modifications  be made to 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.  Ameren filed additional comments on
the remaining sections of the NOPR during the first quarter of 2003.

On April 28, 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.

Even though issuance of the final rule and its implementation schedule are still
unknown, the Midwest Independent System Operator (Midwest ISO) is already in the
process of implementing a market design similar to the proposed market design in
the  NOPR.  The  Midwest  ISO has  targeted  March  2004 as the  start  date for
implementation.  The Company is in the  process of  reviewing  the FERC's  white
paper.  Until the FERC issues a final rule, the Company is unable to predict the
ultimate  impact on its future  financial  position,  results of  operations  or
liquidity.

                                       20

<PAGE>


NOTE 4.  Accounting for Price Risk Management Activities

Gains/losses  on  derivatives  that  hedge  non  rate-regulated  activities  are
reflected in operating results when the hedged transaction affects earnings. The
net gain reflected in operating  results from derivative  financial  instruments
for non rate-regulated activities for the quarter ended March 31, 2003, was $4.4
million for natural gas  (included  in Gas  operating  expenses).  There were no
outstanding  derivative financial instruments for electricity during the quarter
ended March 31, 2003. The previously  recorded  gain/loss  associated with these
settled derivative  financial  instruments was removed from Other  Comprehensive
Income (OCI) when hedged  transactions  affected  earnings.  All open derivative
positions hedging anticipated  transactions are then  marked-to-market  with the
change in fair value being recorded in OCI. The net effect of these  adjustments
was to record an  after-tax  loss in OCI in the amount of $1.0  million  for the
quarter ended March 31, 2003. The after-tax balance in OCI associated with these
open  derivative  positions and  unrealized  gains/losses  on settled  positions
related to hedged  anticipated  transactions  at March 31, 2003, was a credit of
$0.3  million.  The  corresponding  asset is reflected  on the balance  sheet in
Prepayments and Other. The portion of OCI for open positions  reflects hedges of
natural  gas  sales of  1,670,000  MMBtu for  commitments  through  March  2004.
Approximately $0.3 million of OCI related to derivative financial instruments as
of March 31,  2003,  is expected to be  recognized  as an increase to  operating
earnings  over the next  twelve  months  based on market  prices as of March 31,
2003.  The actual  amount  recognized  in  earnings  will be based on the market
conditions at the time the derivatives are settled.

During the first  quarter  of 2003,  the  Company  utilized  derivatives  in its
rate-regulated  gas business to manage the  volatility of cash flows relative to
customers charged the Purchased Gas Adjustment  (PGA). The derivatives  utilized
included collars (a combination of a put option and a call option) and financial
futures contracts.  Marked-to-market  gains and losses on PGA-related  positions
are recorded as regulatory assets or liabilities in accordance with Statement of
Financial  Accounting  Standards No. 71,  "Accounting for the Effects of Certain
Types of  Regulation"  (SFAS 71). All  remaining  PGA-related  derivatives  were
settled  during  the  quarter  ended  March  31,  2003,  therefore  there  is no
outstanding regulatory asset or liability balance at March 31, 2003.

                                       21

<PAGE>

NOTE 5.  Other Comprehensive Income

<TABLE>
<CAPTION>

Rollforward of Accumulated Other Comprehensive Income -
CILCORP.

                                                                    Pension            SFAS 133       Total
                                                                                  (In thousands)
<S>                                                              <C>                  <C>            <C>
Predecessor
Accumulated other comprehensive income
  (loss) - December 31, 2002 balance                               $(60,866)           $  1,304       $(59,562)

Other comprehensive income - January 2003                                --                 350            350
                                                                   --------            --------       --------
Accumulated other comprehensive income
  (loss) - January 31, 2003 balance                                $(60,866)           $  1,654       $(59,212)
                                                                   ========            ========       ========
---------------------------------------------------------------------------------------------------------------
Successor
Accumulated other comprehensive income
  (loss) - January 31, 2003 balance                                $     --            $     --       $     --

Other comprehensive income - Two Months
  ended March 31, 2003                                                   --              (1,312)        (1,312)
                                                                   --------            --------       --------
Accumulated other comprehensive income
  (loss) - March 31, 2003                                          $     --            $ (1,312)      $ (1,312)
                                                                   ========            ========       ========

Rollforward of Accumulated Other Comprehensive Income -
CILCO
                                                                   Pension             SFAS 133       Total
                                                                                   (In thousands)

Accumulated other comprehensive income
  (loss) - December 31, 2002 balance                               $(30,026)           $  1,304       $(28,722)

Other comprehensive income - Three
  months ended March 31, 2003                                            --                (962)          (962)
                                                                   --------            --------       --------
Accumulated other comprehensive income
  (loss) - March 31, 2003 balance                                  $(30,026)           $    342       $(29,684)
                                                                   ========            ========       ========

</TABLE>

                                       22

<PAGE>


NOTE 6. Statements of Segments of Business

The Company has five  reportable  segments:  CILCO  Electric,  CILCO Gas,  CILCO
Other,  CILCORP Other and  Discontinued  Operations.  The CILCO Electric segment
contains the rate-regulated  portions of the utility's  electric  business.  The
CILCO Gas segment  contains the  rate-regulated  portions of the  utility's  gas
business.  The CILCO Other segment contains the non  rate-regulated  portions of
the utility's business. The CILCORP Other segment includes the activities of the
Holding  Company,  its leasing and investing  subsidiaries,  CILCORP  Investment
Management Inc. and CILCORP Ventures Inc., and QST Enterprises Inc. subsidiaries
ESE Land  Corporation and CILCORP  Infraservices  Inc. The CILCORP Other segment
also includes the affects of purchase  accounting  fair value  adjustments,  the
elimination of all intercompany transactions,  and long-term debt outstanding at
the  Holding  Company.  Amortization  of these  purchase  accounting  fair value
adjustments  relates primarily to pension and postretirement  liabilities,  coal
contract  liabilities,  long-term  debt,  electric plant in service and emission
allowance  assets.  The  Discontinued  Operations  segment  includes  activities
related  to  certain  discontinued  subsidiaries  of QST  Enterprises  Inc.  The
Company's  reportable  segments are strategic  business units managed separately
primarily  due  to  the  rate-regulated  or  non  rate-regulated  nature  of the
businesses, or due to the type of business activity involved.


                                       23
<PAGE>
<TABLE>
<CAPTION>


                          CILCORP Inc. and Subsidiaries
                       Statements of Segments of Business

Two Months Ended March 31, 2003 (Successor)

                                    CILCO           CILCO         CILCO         CILCORP
                                    Electric        Gas           Other          Other              Total
                                                              (In thousands)
<S>                              <C>             <C>            <C>            <C>               <C>
Operating revenues                $ 59,266        $ 69,143       $21,104        $  30,631         $180,144
Operating expenses                  55,007          62,874        20,992           26,478          165,351
                                  --------        --------       -------        ---------         --------
Operating income                     4,259           6,269           112            4,153           14,793
Other income and
  (deductions)                          12              --           190               12              214
Interest charges
  and preferred
  dividends                         (2,159)           (777)         (360)          (6,410)          (9,706)
                                  --------        --------       -------        ---------         --------
Income before
  income taxes                       2,112           5,492           (58)          (2,245)           5,301
Income taxes                           935           2,160            45             (916)           2,224
                                  --------        --------       -------        ---------         --------
Net income
  (loss) before
  cumulative effect
  of change in
  accounting
  principle                       $  1,177        $  3,332       $  (103)       $  (1,329)        $  3,077
                                  ========        ========       =======        =========         ========

</TABLE>
                                       24

<PAGE>
<TABLE>
<CAPTION>
                          CILCORP Inc. and Subsidiaries
                       Statements of Segments of Business

January 2003 (Predecessor)

                                    CILCO           CILCO         CILCO          CILCORP
                                    Electric        Gas           Other            Other            Total
                                                              (In thousands)
<S>                              <C>             <C>            <C>            <C>               <C>
Operating revenues                $ 35,305        $ 44,270       $11,975        $  12,373         $103,923
Operating expenses                  28,739          37,143        12,107           12,328           90,317
                                  --------        --------       -------        ---------         --------
Operating income                     6,566           7,127          (132)              45           13,606
Other income and
  (deductions)                           5              --            93                5              103
Interest charges
  and preferred
  dividends                         (1,294)           (440)         (180)          (3,282)          (5,196)
                                  --------        --------       -------        ---------         --------
Income before
  income taxes                       5,277           6,687          (219)          (3,232)           8,513
Income taxes                         2,029           2,635           (53)          (1,483)           3,128
                                  --------        --------       -------        ---------         --------
Net income (loss)
  before cumulative
  effect of change
  in accounting
  principle                       $  3,248        $  4,052       $  (166)       $  (1,749)        $  5,385
                                  ========        ========       =======        =========         ========

</TABLE>
                                       25

<PAGE>
<TABLE>
<CAPTION>


                          CILCORP Inc. and Subsidiaries
                       Statements of Segments of Business

Three Months Ended March 31, 2002 (Predecessor)

                                    CILCO         CILCO         CILCO        CILCORP       Discont.
                                    Electric      Gas           Other          Other        Oper.         Total
                                                             (In thousands)
<S>                              <C>           <C>            <C>           <C>           <C>          <C>
Operating revenues                $ 84,113      $ 80,018       $21,750       $ 18,001      $   --       $203,882
Operating expenses                  75,695        68,323        20,948         16,955          --        181,921
                                  --------      --------       -------       --------      ------       --------
Operating income                     8,418        11,695           802          1,046          --         21,961
Other income and
  (deductions)                          --            --           (20)           290          --            270
Interest charges
  and preferred
  dividends                         (3,694)       (1,485)         (540)       (10,849)         --        (16,568)
                                  --------      --------       -------       --------      ------       --------
Income from
  continuing
  operations before
  income taxes                       4,724        10,210           242         (9,513)         --          5,663
Income taxes                         1,471         4,041           320         (4,184)         --          1,648
                                  --------      --------       -------       --------      ------       --------
Net income from
  continuing
  operations                         3,253         6,169           (78)        (5,329)         --          4,015
Effect of
  discontinued
  operations                            --            --            --             --          (9)            (9)
                                  --------      --------       -------       --------      ------       --------
Net income (loss)
  before cumulative
  effect of change
  in accounting
  principle                       $  3,253      $  6,169       $   (78)      $ (5,329)     $   (9)      $  4,006
                                  ========      ========       =======       ========      ======       ========
</TABLE>

                                       26

<PAGE>

NOTE 7.  Miscellaneous

The following table summarizes miscellaneous income and expense by component.
<TABLE>
<CAPTION>

                                         Successor             Predecessor
                                         Two Months                 Three Months
                                          Ended          January      Ended
                                       March 31, 2003     2003    March 31, 2002
                                                     (In thousands)
<S>                                     <C>              <C>           <C>
Miscellaneous income:
  Interest and dividend income           $  93      |     $  46         $ 300
                                         -----      |     -----         -----
Total miscellaneous income               $  93      |     $  46         $ 300
                                         =====      |     =====         =====
                                                    |
Miscellaneous expense:                              |
  Corporate-owned life insurance         $(243)     |     $(128)        $(342)
  Donations                                (29)     |        (5)         (226)
  Other                                    (18)     |       (21)         (149)
                                         -----      |     -----         -----
Total miscellaneous expense              $(290)     |     $(154)        $(717)
                                         =====      |     =====         =====
</TABLE>

NOTE 8.  Related Party Transactions

CILCORP has  transactions  in the normal  course of business with Ameren and its
other  subsidiaries.  The  transactions  are  primarily  comprised  of  gas  and
electricity purchases and sales.

Under a non-derivative,  executory tolling agreement and gas sales and transport
agreements,  CILCORP sells and transports gas to, and purchases  steam,  chilled
water and  electricity  from,  AmerenEnergy  Medina  Valley  Cogen (No. 4), LLC.
During the first quarter of 2003,  CILCORP  purchased $9.0 million and sold $5.9
million  under these  agreements.  As of March 31,  2003,  CILCORP had  recorded
Accounts  Payable of $2.4 million and  Receivables  of $2.0 million,  related to
these  transactions.  The current  receivable  was recorded in Accrued  Unbilled
Revenue on the CILCORP Balance Sheet.

CILCO also has a power purchase agreement with AmerenCIPS for 100 MW of capacity
and firm energy for the months of January and June through September 2003. CILCO
purchased $1.3 million of power under this agreement in January 2003. CILCO also
had power  purchases  ($.6  million) and sales ($.1 million)  transactions  with
AmerenEnergy  in the first quarter of 2003. At March 31, 2003,  CILCO recorded a
liability of $.3 million, included in Accounts Payable on the balance sheet.

Additionally,  CILCORP had Accounts Payable of $0.6 million related to a deposit
received from  AmerenEnergy  Medina Valley Cogen (No. 4), LLC for future work to
be performed by a Holding Company subsidiary.

Subject to the receipt of regulatory  approval,  which is being  pursued,  CILCO
will  participate  in  Ameren's  utility  money  pool  arrangement.  Under  this
arrangement,  CILCO  will  have  access  to up to  $694  million  of  additional
committed  liquidity,  subject to reduction  based on use by other utility money
pool  participants,  but  increased to the extent other pool  participants  have
surplus  cash  balances,   which  may  be  used  to  fund  pool  needs.  CILCORP
participates in Ameren's  non-utility money pool arrangement,  which provides it
access to up to $600 million of committed liquidity,  subject to reduction based
on use by other pool  participants,  which may also be supplemented by available
cash balances among pool participants.

                                       27
<PAGE>


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

OVERVIEW

The consolidated  financial statements include the accounts of CILCORP Inc. (the
Holding  Company),  Central Illinois Light Company (CILCO or  AmerenCILCO),  QST
Enterprises  Inc.  (QST) and its  subsidiaries  QST Energy Inc. (QST Energy) and
CILCORP  Infraservices  Inc. (CILCORP  Infraservices),  and CILCORP Inc.'s other
subsidiaries  (collectively,  CILCORP  or  the  Company)  after  elimination  of
significant  intercompany  transactions.  In the  fourth  quarter  of 1998,  the
operations  of QST and its  subsidiaries  (excluding  ESE Land  Corporation  and
CILCORP  Infraservices) were discontinued and, therefore,  are being reported as
discontinued  operations  in the financial  statements.  Prior year amounts have
been reclassified on a basis consistent with the 2003 presentation.

CILCO, the Holding Company's  principal business  subsidiary,  is engaged in the
generation, transmission, distribution and sale of electric energy in an area of
approximately 3,700 square miles in central and east-central  Illinois,  and the
purchase,  distribution,  transportation  and sale of natural  gas in an area of
approximately  4,500 square miles in central and  east-central  Illinois.  Other
Holding Company first-tier  subsidiaries are CILCORP Investment  Management Inc.
(CIM),  which manages the Company's  investment  portfolio and CILCORP  Ventures
Inc. (CVI),  which pursues investment  opportunities in energy-related  products
and services.

The Holding Company is a wholly-owned subsidiary of Ameren Corporation (Ameren).
Ameren is a public utility  holding  company  registered with the Securities and
Exchange  Commission  (SEC) under the Public Utility Holding Company Act of 1935
(PUHCA) and is headquartered in St. Louis, Missouri. Ameren's principal business
is the  generation,  transmission  and  distribution  of  electricity,  and  the
distribution of natural gas to residential, commercial, industrial and wholesale
users in the central United States.  Ameren's  primary  subsidiaries,  including
Central Illinois Light Company, are as follows:

o    Union  Electric   Company,   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.
o    Central  Illinois Public Service  Company,  which operates a rate-regulated
     electric and natural gas transmission and distribution business in Illinois
     as AmerenCIPS.
o    Central  Illinois  Light  Company,  a  subsidiary  of CILCORP  Inc.,  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.
o    AmerenEnergy  Resources Company (Resources Company),  which consists of non
     rate-regulated  electric  operations.   Subsidiaries  include  AmerenEnergy
     Generating  Company  (Generating   Company)  which  operates  Ameren's  non
     rate-regulated  electric generation in Missouri and Illinois,  AmerenEnergy
     Marketing Company (Marketing Company), which markets power for periods over
     one year,  AmerenEnergy Fuels and Services Company, which procures fuel and
     manages  the  related  risks  for  Ameren's   affiliated   companies,   and
     AmerenEnergy  Medina Valley Cogen (No. 4), LLC, which  indirectly owns a 40
     megawatt,  gas-fired electric generation plant. On February 4, 2003, Ameren
     completed the  acquisition of AES Medina Valley Cogen (No. 4), LLC from AES
     and renamed it AmerenEnergy Medina Valley Cogen (No. 4), LLC.
o    AmerenEnergy,  Inc.  (AmerenEnergy)  which serves as a power  marketing and
     risk management agent for Ameren  affiliated  companies for transactions of
     primarily less than one year.


                                       28
<PAGE>


o    Electric  Energy,  Inc.  (EEI),  which  operates  electric  generation  and
     transmission facilities in Illinois. Ameren has a 60% ownership interest in
     EEI, 40% owned by AmerenUE and 20% owned by Resources Company.
o    Ameren Services  Company (Ameren  Services),  which provides shared support
     services to Ameren and its  subsidiaries,  including  CILCORP.  Charges are
     based upon the actual costs incurred by Ameren  Services as required by the
     PUHCA.

The following discussion and analysis should be read in conjunction with:
o    The  financial  statements  and related  notes  included in this  Quarterly
     Report on Form 10-Q.
o    Management's Discussion and Analysis of Financial Conditions and Results of
     Operations  in  CILCORP's  and CILCO's  Annual  Report on Form 10-K for the
     period ended December 31, 2002.
o    The audited financial statements and related notes in CILCORP's and CILCO's
     Annual Report on Form 10-K for the period ending December 31, 2002.

Throughout this document,  CILCORP or the Company refers to CILCORP Inc. and its
subsidiaries  on a consolidated  basis.  CILCO refers to Central  Illinois Light
Company.  All  tabular  dollar  amounts  are  in  thousands,   unless  otherwise
indicated.

The acquisition was accounted for using the purchase method of accounting. Under
this method,  the purchase  price was  allocated to the fair market value of the
assets acquired and the liabilities  assumed. The excess purchase price over the
fair value of the assets acquired and the  liabilities  assumed was allocated to
goodwill  at CILCORP  Inc.  As a result,  CILCORP  Inc.  has  recorded  purchase
accounting  fair value  adjustments  to electric  plant in service,  pension and
other  postretirement  liabilities,  long-term debt, emission  allowances,  coal
contracts, and other balance sheet items. Ameren is in the process of completing
a third party  valuation of acquired  property and plant and intangible  assets.
Therefore,  the  allocation of the purchase  price to the acquired net assets is
subject to refinement. The excess of the purchase price over tangible net assets
acquired  has been  allocated  preliminarily  to  goodwill in the amount of $595
million at CILCORP.

The purchase accounting entries are reflected on CILCORP's financial  statements
as of the purchase  date.  As permitted by rules of the SEC, the Company did not
"push down" the effects of purchase  accounting to the  financial  statements of
any of Holding Company's subsidiaries,  including CILCO. Accordingly,  CILCORP's
post-acquisition  financial  statements  reflect a new basis of accounting,  and
separate financial  statements are presented for  pre-acquisition  (predecessor)
and  post-acquisition  (successor)  periods,  separated  by a heavy  black line.
CILCO's  financial  statements  are  presented  on  their  historical  basis  of
accounting for all periods presented.  For discussion  throughout this document,
the 2003  pre-acquisition  and  post-acquisition  periods have been combined for
comparison in total to other periods  presented for categories and segments that
were substantially unaffected by the acquisition and the related pre-acquisition
and post-acquisition accounting events.

The results of operations and financial  position of the Company are impacted by
many factors,  including both controllable and uncontrollable factors.  Weather,
economic  conditions  and  the  actions  of key  customers  or  competitors  can
significantly  impact the  demand  for the  Company's  services.  The  Company's
results are also impacted by seasonal  fluctuations caused by winter heating and
summer  cooling  demand.  With a substantial  portion of the Company's  revenues
directly subject to regulation by various state and federal agencies,  decisions
by regulators can have a material  impact on the price that the Company  charges
for its services.  The Company principally utilizes coal,

                                       29

<PAGE>

natural  gas and oil in its  operations.  The prices for these  commodities  can
fluctuate  significantly  due to the world  economic and political  environment,
weather,  production levels and many other factors.  The Company does not have a
fuel cost recovery mechanism for its electric utility business,  but does have a
gas cost  recovery  mechanism  for its gas  distribution  utility  business.  In
addition, the Company's electric rates are largely set through 2006. The Company
employs  various  risk  management  strategies  in  order to try to  reduce  its
exposure to  commodity  risks and other  risks  inherent  in its  business.  The
reliability of the Company's power plants,  and  transmission  and  distribution
systems,  and the level of  operating  and  administrative  costs,  and  capital
investment  are key  factors  that  the  Company  seeks to  control  in order to
optimize its results of operations, cash flows and financial position.

The financial  condition and operating  results of the Company primarily reflect
the operations of its subsidiary  CILCO.  The CILCORP Other segment includes the
activities of the Holding Company  itself,  its investment  subsidiary,  CILCORP
Investment  Management  Inc.  (CIM),  CILCORP  Ventures  Inc.  (CVI),  ESE  Land
Corporation,   and  CILCORP   Infraservices   Inc.,   which   provides   utility
infrastructure  operation and  maintenance  services.  The CILCORP Other segment
also includes the affects of purchase  accounting fair value adjustments and the
elimination of all  intercompany  transactions.  Amortization  of these purchase
accounting   fair  value   adjustments   relates   primarily   to  pension   and
postretirement liabilities, coal contract liabilities,  long-term debt, electric
plant in service and emission  allowance assets.  The results of QST Enterprises
Inc.  (QST) and its  subsidiaries  (excluding ESE Land  Corporation  and CILCORP
Infraservices Inc.) have been reported as discontinued  operations through 2002.
All  operations  had  ceased at QST prior to the  first  quarter  of 2003 and no
further gains or losses  associated with these  discontinued  operations will be
presented in future periods.


RESULTS OF OPERATIONS

Earnings Summary

The Company's net income increased to $12.3 million in the first quarter of 2003
from $4.0 million in the first quarter of 2002.  Net income in the first quarter
of 2003 included a net cumulative  effect gain of $3.8 million  associated  with
the adoption of Statement of Financial Accounting Standards No. 143, "Accounting
for Asset Retirement  Obligations" (SFAS 143). The net gain resulted principally
from  the  elimination  of  non-legal   obligation  costs  of  removal  for  non
rate-regulated assets from accumulated depreciation.  This net gain was recorded
in January 2003, prior to the acquisition of the Company by Ameren.  See Note 1.
Summary  of  Significant  Accounting  Policies  to  the  Consolidated  Financial
Statements under Item 1 of Part I of this report.

Excluding the  cumulative  effect of change in accounting  principle  related to
SFAS 143, the Company's net income  increased  $4.4 million in the first quarter
of 2003  compared to the prior year  period.  In  addition  to the $2.2  million
increase at CILCO  discussed  below,  the  Company's net income  increased  $2.2
million in the first quarter of 2003,  compared to the prior year period, due to
the  amortization of purchase  accounting fair value  adjustments at the Holding
Company.  The  amortization of the fair value  adjustments  that increase income
related  primarily  to pension and  postretirement  liabilities,  coal  contract
liabilities  and long-term  debt.  Amortization  of fair value  adjustments  for
electric  plant in service and  emission  allowances  increased  expenses in the
first quarter of 2003 compared to the first quarter of 2002. Purchase accounting
adjustments  in 2002  relate  to  AES'  1999  acquisition  of the  Company.  The
following table summarizes the impact on net income of the amortization of these
purchase  accounting fair value adjustments during the first quarter of 2003 and
2002:

                                       30

<PAGE>

Income Statement Line Item                                2003         2002
                                                           (In thousands)
                                                            (Unaudited)

Other operations and maintenance                        $ 4,123       $  463
Interest expense                                            784           --
Fuel and purchased power                                    558           --
Depreciation and amortization                            (1,792)        (355)
Income taxes                                             (1,457)         (43)
                                                        -------       ------
Impact on net income                                    $ 2,216       $   65
                                                        =======       ======


CILCO's  income  available  for common stock  increased to $35.6  million in the
first quarter of 2003 from $9.3 million in the first quarter of 2002. Net income
in the first  quarter of 2003  included a net  cumulative  effect  gain of $24.1
million  associated  with  the  adoption  of SFAS  143.  The net  gain  resulted
principally  from the elimination of non-legal  obligation  costs of removal for
non rate-regulated assets from accumulated depreciation.

Excluding the  cumulative  effect of change in accounting  principle  related to
SFAS 143,  CILCO's income  available for common stock  increased $2.2 million in
the first  quarter of 2003  compared to the prior year period.  The increase was
primarily due to favorable weather  conditions,  with regulated electric and gas
gross  margins  increasing  $3.5  million  (net of tax) and $1.5 million (net of
tax),   respectively.   Retail  electric   kilowatt-hour   sales  increased  8%,
residential  gas  sales  volume  increased  16%  and  commercial  sales  volumes
increased  17% in the first  quarter of 2003  compared  to the first  quarter of
2002.  Partially  offsetting  the  benefit on net income of weather in the first
quarter of 2003 was increased employee benefit costs ($2.7 million,  net of tax)
related to plan performance and increasing health care costs.


Recent Developments

Acquisition

On January 31, 2003,  Ameren completed its acquisition of all of the outstanding
common stock of CILCORP  Inc.  from AES.  CILCORP Inc. is the parent  company of
Central  Illinois Light Company which operated as CILCO.  With the  acquisition,
CILCO  became an Ameren  subsidiary,  but  remains a separate  utility  company,
operating as  AmerenCILCO.  The results of  operations  for CILCORP Inc. and its
subsidiaries  (CILCORP) were included in Ameren's financial statements effective
with the January acquisition date.

Ameren  acquired  CILCORP to complement  its existing  Illinois gas and electric
operations.  The purchase included CILCO's  rate-regulated  electric and natural
gas business in Illinois serving  approximately  200,000 and 205,000  customers,
respectively,  of which approximately  150,000 are combination  electric and gas
customers.   CILCO's  service   territory  is  contiguous  to  Ameren's  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 CILCO's  approximately  1,200 megawatts of largely  coal-fired
generating  capacity,  most of which is expected to become non rate-regulated in
2003.

The total  purchase  price was  approximately  $1.34  billion and  included  the
assumption of CILCORP debt and preferred stock. The purchase price is subject

                                       31

<PAGE>

to certain  adjustments  for  working  capital  and other  changes  pending  the
finalization  of CILCORP's  closing  balance sheet.  Ameren is in the process of
completing a third party valuation of acquired property and plant and intangible
assets.  Therefore,  the  allocation  of the purchase  price to the acquired net
assets is subject to refinement.  The excess of the purchase price over tangible
net assets acquired has been allocated  preliminarily  to goodwill in the amount
of $595 million.

In the first  quarter of 2003,  CILCORP has recorded  purchase  accounting  fair
value adjustments to electric plant in service, pension and other postretirement
liabilities,  long-term debt, emissions  allowances,  coal contract liabilities,
and other balance sheet items.  The  amortization  of purchase  accounting  fair
value adjustments  increased earnings by approximately $2.2 million, net of tax,
in the first quarter of 2003.  Amortization  of  adjustments  that increased net
income  primarily  related  to  pension  and  postretirement  liabilities  ($2.5
million,  net of tax), coal contract  liabilities ($.8 million, net of tax), and
long-term  debt ($.5 million,  net of tax).  Amortization  of  adjustments  that
decreased  net income  primarily  related  to  electric  plant in service  ($1.1
million, net of tax) and emission allowance assets ($.5 million, net of tax).

                                       32
<PAGE>


Credit Ratings

In April 2002, as a result of AmerenUE's then pending Missouri electric earnings
complaint  case and the  CILCORP  transaction  and related  assumption  of debt,
credit rating agencies placed Ameren's and its subsidiaries'  debt under review.
Following the completion of the acquisition of CILCORP in January 2003, Standard
& Poor's  lowered the ratings of Ameren,  AmerenUE and  AmerenCIPS and increased
the ratings of Generating Company, CILCORP and CILCO. At the same time, Standard
& Poor's  changed  the outlook  assigned  to all of Ameren's  ratings to stable.
Moody's also lowered Ameren and AmerenUE's ratings subsequent to the acquisition
and  changed  the  outlook  on these  ratings  to  stable.  These  actions  were
consistent with the actions the rating agencies  disclosed they were considering
following the announcement of the CILCORP acquisition.

As of April 30, 2003, the selected ratings by Moody's and Standard & Poor's were
as follows:

                                                                       Standard
                                                    Moody's            & Poor's
Ameren Corporation:
Issuer/Corporate credit rating                      A3                 A-
Unsecured debt                                      A3                 BBB+
Commercial paper                                    P-2                A-2

AmerenUE:
Secured debt                                        A1                 A-
Unsecured debt                                      A2                 BBB+
Commercial paper                                    P-1                A-2

CILCORP:
Unsecured debt                                      Baa2               BBB+

AmerenCILCO:
Secured debt                                        A2                 A-

AmerenCIPS:
Secured debt                                        A1                 A-
Unsecured debt                                      A2                 BBB+

Generating Company:
Unsecured debt                                      A3/Baa2            A-


Any adverse change in the ratings may reduce access to capital  and/or  increase
the costs of  borrowings  resulting in a negative  impact on earnings.  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.

                                       33
<PAGE>


CILCO Electric Operations

     The following table summarizes  electric  operating revenue and expenses by
     component.
<TABLE>
<CAPTION>

                                                        Three Months Ended
                                                            March 31,
Components of Electric Income                           2003         2002
                                                         (In thousands)
                                                           (Unaudited)
<S> <C>                                            <C>            <C>
Revenue:
     Electric retail                                $89,564        $82,110
     Sales for resale                                 5,007          2,003
                                                    -------        -------
        Total revenue                                94,571         84,113
                                                    -------        -------
Cost of sales:
     Fuel                                            25,656         22,030
     Purchased power                                 12,343         11,530
     Revenue taxes                                    5,131          4,902
                                                    -------        -------
        Total cost of sales                          43,130         38,462
                                                    -------        -------
Gross margin                                         51,441         45,651
                                                    -------        -------
Operating expenses:
     Operation and maintenance expenses              25,427         22,577
     Depreciation and amortization                   12,399         12,067
     Other taxes                                      2,790          2,589
                                                    -------        -------
        Total operating expenses                     40,616         37,233
                                                    -------        -------
Other income and (deductions):
   Allowance for equity funds used
    during construction                                  17             --
                                                    -------        -------
        Total                                            17             --
                                                    -------        -------
Interest charges:
     Interest on long-term debt                       3,700          3,170
     Cost of borrowed funds capitalized                (645)          (238)
     Other interest                                     398            762
                                                    -------        -------
        Total                                         3,453          3,694
                                                    -------        -------
Income before taxes                                   7,389          4,724
     Income taxes                                     2,964          1,471
                                                    -------        -------
Net income before cumulative effect of
  change in accounting principle                    $ 4,425        $ 3,253
                                                    =======        =======

</TABLE>

Electric  gross margin  increased  $5.8 million (13%) for the three months ended
March 31, 2003, compared to the same period in 2002. Retail  kilowatt-hour (kWh)
sales  increased 8% for the three  months ended March 31, 2003,  compared to the
first quarter of 2002. Residential and commercial sales volumes increased 6% and
4%, respectively. Heating degree days were 20% higher for the three months ended
March 31, 2003,  compared to the same period in 2002.  Industrial  sales volumes
increased 12% compared to the first quarter of 2002.

                                       34
<PAGE>

Sales for resale  increased  $3.0 million  (150%) for the first quarter of 2003,
compared to the same period in 2002.  The increase was  primarily due to greater
sales in January 2003, as a result of higher wholesale prices.  Sales for resale
vary based on the energy  requirements  of native  load  customers,  neighboring
utilities and power marketers,  CILCO's available capacity for bulk power sales,
and the price of power available for sale.

Electric operation and maintenance  expense increased $2.9 million (13%) for the
three  months  ended March 31,  2003,  compared to the same period in 2002.  The
increase for the quarter was mainly due to  increased  employee  benefit  costs,
including pension and postretirement health care benefits ($2.9 million). At the
Holding  Company  (included in the CILCORP Other  segment),  approximately  $2.6
million  of  pre-tax  income  was  recorded  in the  first  quarter  of  2003 as
amortization  of a  purchase  accounting  fair value  adjustment  related to the
electric  portion  of  the  pension  and  postretirement   health  care  benefit
liabilities.

Interest charges decreased $.2 million (7%) for the three months ended March 31,
2003,  compared  to  the  same  period  in  2002,  primarily  due  to  increased
capitalized  interest related to NOx reduction projects at the power plants ($.4
million).

Income taxes  increased  for the three  months  ended March 31,  2003,  due to a
higher pre-tax income.



                                       35

<PAGE>
CILCO Gas Operations

The following table summarizes gas operating revenue and expenses by component.
<TABLE>
<CAPTION>

                                                        Three Months Ended
                                                            March 31,
Components of Gas Income                                2003          2002
                                                          (In thousands)
                                                            (Unaudited)
<S> <C>                                            <C>             <C>
Revenue:
     Sale of gas                                    $111,669       $ 78,292
     Transportation services                           1,744          1,726
                                                    --------       --------
        Total revenue                                113,413         80,018
                                                    --------       --------
Cost of sales:
     Gas                                              80,212         49,608
     Revenue taxes                                     3,973          3,620
                                                    --------       --------
        Total cost of sales                           84,185         53,228
                                                    --------       --------
Gross margin                                          29,228         26,790
                                                    --------       --------
Operating expenses:
     Operation and maintenance expenses                9,409          8,869
     Depreciation and amortization                     5,727          5,597
     Other taxes                                         696            629
                                                    --------       --------
        Total operating expenses                      15,832         15,095
                                                    --------       --------
Interest charges:
     Interest on long-term debt                        1,099          1,197
     Other interest                                      118            288
                                                    --------       --------
        Total                                          1,217          1,485

Income before taxes                                   12,179         10,210
     Income taxes                                      4,795          4,041
                                                    --------       --------
Net income before cumulative effect
  of change in accounting principle                 $  7,384       $  6,169
                                                    ========       ========

</TABLE>

Gas gross margin increased  approximately $2.4 million (9%) for the three months
ended  March 31,  2003,  compared to the same  period in 2002.  Residential  and
commercial  sales  volumes  increased 16% and 17%,  respectively,  for the three
months ended March 31, 2003,  primarily due to colder  weather.  Heating  degree
days were 20% higher for the three months ended March 31, 2003,  compared to the
same period in 2002.

The cost of gas  increased  $30.6 million (62%) for the three months ended March
31, 2003,  compared to the same period in 2002,  primarily due to higher natural
gas prices and increased gas sales. These costs were passed through to customers
via the Purchased Gas Adjustment (PGA).

Gas operation and maintenance  expense  increased $.5 million (6%) for the three
months ended March 31, 2003,  compared to the same period in 2002.  The increase
for the three  months  ended March 31,  2003,  was  primarily  due to

                                       36

<PAGE>

increased employee benefit costs,  including pension and  postretirement  health
care benefits ($1.6 million).  At the Holding  Company  (included in the CILCORP
Other segment), approximately $1.6 million of pre-tax income was recorded in the
first  quarter  of 2003 as  amortization  of a  purchase  accounting  fair value
adjustment related to the gas portion of the pension and  postretirement  health
care benefit liabilities.

Interest  charges  decreased  $.3 million (18%) for the three months ended March
31,  2003,  compared  to the same  period in 2002,  primarily  due to  decreased
short-term borrowings.

The  increase in income tax expense for the three  months  ended March 31, 2003,
was primarily due to higher pre-tax income.


CILCO Other

The following table summarizes CILCO Other's income and deductions.
<TABLE>
<CAPTION>


Components of CILCO Other                              Three Months Ended
  Income (Loss)                                             March 31,
                                                        2003            2002
                                                           (In thousands)
                                                            (Unaudited)
<S>                                                 <C>             <C>
Revenue                                              $ 33,079        $ 21,750
Expense                                                31,323          20,043
                                                     --------        --------
Gross margin                                            1,756           1,707
                                                     --------        --------
Operating expenses                                      1,776             905
                                                     --------        --------
Other income and (deductions):
  Miscellaneous income                                    122              10
  Miscellaneous expense                                  (444)           (717)
  Income taxes                                            605             687
                                                     --------        --------
Total other income and (deductions)                       283             (20)
                                                     --------        --------
Preferred stock dividends                                 540             540
                                                     --------        --------
Income (loss) before taxes                               (277)            242
  Income taxes                                             (8)            320
                                                     --------        --------
Net loss before cumulative effect of
  change in accounting principle                     $   (269)       $    (78)
                                                     ========        ========
</TABLE>

Operating  expenses  increased  $.9 million for the three months ended March 31,
2003,  primarily  due to severance  costs  associated  with the  acquisition  by
Ameren.

                                       37
<PAGE>

CILCORP Other

The following  table  summarizes  CILCORP  Other's  revenue and expenses for the
three  months ended March 31, 2003 and 2002.  CILCORP  Other's  results  include
income earned and expenses  incurred at the Holding Company,  CIM, CVI, ESE Land
Corporation  and CILCORP  Infraservices  Inc.  The CILCORP  Other  segment  also
includes  the  affects of purchase  accounting  fair value  adjustments  and the
elimination of all  intercompany  transactions.  Amortization  of these purchase
accounting   fair  value   adjustments   relates   primarily   to  pension   and
postretirement liabilities, coal contract liabilities,  long-term debt, electric
plant in service and emission allowance assets.
<TABLE>
<CAPTION>


Components of CILCORP Other                            Three Months Ended
Net Loss                                                    March 31,
                                                       2003             2002
                                                         (In thousands)
                                                          (Unaudited)
<S>                                                 <C>             <C>
Revenue:
Leveraged lease revenue                              $  1,141        $  1,326
Gas marketing revenue                                  42,112          16,314
Other revenue                                            (249)            361
                                                     --------        --------
   Total revenue                                       43,004          18,001
                                                     --------        --------
Operating Expenses:
Gas                                                    41,964          16,283
Fuel and purchased power                                 (558)             --
Other operations                                       (4,437)            305
Depreciation and amortization                           1,813             347
Taxes, other than income taxes                             24              20
                                                     --------        --------
     Total operating expenses                          38,806          16,955
                                                     --------        --------
Other income and (deductions):
  Miscellaneous income                                     17             290
                                                     --------        --------
  Total other income and (deductions)                      17             290
                                                     --------        --------
Interest charges:
  Interest expense                                      9,692          10,849
                                                     --------        --------
  Total interest charges                                9,692          10,849
                                                     --------        --------
Loss before income taxes                               (5,477)         (9,513)
  Income taxes                                         (2,399)         (4,184)
                                                     --------        --------
Net loss before cumulative effect of
  change in accounting principle                     $ (3,078)       $ (5,329)
                                                     ========        ========

</TABLE>

Leveraged  lease revenue  decreased $.2 million (14%) for the three months ended
March  31,  2003,  compared  to the same  period  in 2002,  due  primarily  to a
reduction in the residual value of one of the leveraged leases in 2002.

Gas marketing revenue and cost of gas increased $25.8 million and $25.7 million,
respectively,  in the first  quarter of 2003,  compared to the first  quarter of
2002, due to increases in gas marketing  sales at CVI subsidiary  CILCORP Energy
Services Inc. and higher natural gas prices.

                                       38
<PAGE>


Other revenue  decreased  $.6 million in the first quarter of 2003,  compared to
the first quarter of 2002,  mainly due to the expiration of a services  contract
in 2002.

In  2003,  the  $.6  million  credit  to fuel  and  purchased  power  represents
amortization of the value of coal contract  liabilities and emission  credits at
the power plants that were fair valued through purchase accounting.

Other  operations  expenses for the first quarter of 2003 represent $4.4 million
of income at the Holding Company due primarily to purchase accounting fair value
adjustments  to  the  pension  and  postretirement   benefit  liabilities  ($4.2
million).  CILCORP consolidated pension and postretirement  benefit expenses are
lower  than  CILCO's  expenses  due  to  the  fair  value  adjustment  to  these
liabilities.

Depreciation and amortization  increased $1.5 million for the three months ended
March 31, 2003,  compared to the same period in 2002,  due primarily to purchase
accounting  adjustments  increasing  the fair market value of the Duck Creek and
Edwards power plants ($1.8 million).  The increase in value is being depreciated
over the estimated remaining lives of the power plants.

Interest  expense  decreased  $1.2 million  (11%) in the first  quarter of 2003,
compared  to the first  quarter  of 2002,  primarily  as a result of a  purchase
accounting fair value  adjustment to the CILCORP  long-term debt. The fair value
increase in long-term  debt ($.8  million) is being  amortized as a reduction in
interest expense over the remaining life of the debt.

The income tax benefit  decreased  significantly  for the first quarter of 2003,
compared to the first quarter of 2002, due to a lower loss before income taxes.

                                       39


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Operating

CILCORP's net cash flows provided by operating  activities totaled $71.4 million
in the first quarter of 2003, compared to $30.7 million for the first quarter of
2002.  Cash  provided  from  operations  increased in the first quarter of 2003,
primarily due to higher cash earnings  resulting from favorable  weather and the
timing of payments on accounts  payable and accrued taxes,  partially  offset by
the timing of receipts on accounts receivable.

CILCO's net cash flows provided by operating activities totaled $75.0 million in
the first  quarter of 2003,  compared to $16.4  million in the first  quarter of
2002.  Cash  provided  from  operations  increased in the first quarter of 2003,
primarily due to higher cash earnings  resulting from favorable  weather and the
timing of  payments  on  accounts  payable,  partially  offset by the  timing of
receipts on accounts receivable.

The tariff-based  gross margin of CILCO (the  rate-regulated  utility  operating
company) continues to be the principal source of cash from operating activities.
CILCO's 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.


Investing

CILCORP's net cash used in investing  activities  was $33.7 million in the first
quarter of 2003, compared to $34.5 million in the first quarter of 2002. CILCO's
net cash used in investing  activities was $33.8 million in the first quarter of
2003,  compared  to $34.2  million in the first  quarter  of 2002.  In the first
quarter of 2003,  construction  expenditures  were $33.1  million  (2002 - $32.6
million),  consisting  primarily  of nitrogen  oxide (NOx)  reduction  equipment
expenditures  at the  Edwards  and Duck Creek  power  plants,  replacements  and
improvements to the existing electric  transmission and distribution and natural
gas  distribution  systems.  Capital  expenditures  relating  to  the  Company's
rate-regulated  and non  rate-regulated  operations  are expected to approximate
$100 million in 2003.

CILCORP and CILCO's  capital  expenditure  program is subject to periodic review
and  revision,  and actual  capital  expenditures  may vary  because of numerous
factors.  These  factors  include,  but are not limited to,  changes in business
conditions,  changes  in  environmental  regulations,  changes  in  load  growth
estimates,  increasing  costs of labor,  equipment  and  materials,  and cost of
capital.


Financing

CILCORP's cash flows used in financing  activities  totaled $35.4 million in the
first  quarter of 2003,  compared to $5.0 million in the first  quarter of 2002.
CILCO's cash flows used in financing  activities  totaled  $35.4  million in the
first quarter of 2003,  compared to cash flows provided by financing  activities
of $7.0  million  in the first  quarter of 2002.  In the first  quarter of 2003,
$25.4  million of long-term  debt at CILCO matured and $10 million of short-term
debt was repaid.  No common dividends were paid by CILCO or CILCORP in the first
quarter of 2003.

                                       40

<PAGE>
In April 2003,  three series of CILCO's first  mortgage bonds were redeemed with
cash on hand prior to maturity.  These  included  CILCO's $65 million  principal
amount of 8.20%  series due January 15, 2022,  at a redemption  price of 103.29%
and two 7.8% series totaling $10 million  principal amount due February 9, 2023,
at a redemption price of 103.90%.

Ameren  and  AmerenUE  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,  AmerenCIPS,  CILCO and
CILCORP have PUHCA  authority to have up to an aggregate of $250 million each of
short-term  unsecured  debt  instruments  outstanding  at any  time.  Generating
Company is authorized by the Federal Energy Regulatory Commission (FERC) to have
up to $300 million of short-term debt outstanding at any time.


Short-Term Debt and Liquidity

At March 31, 2003,  CILCO had committed credit  facilities,  expiring at various
dates during 2003, totaling $60 million, all of which were unused. Subsequent to
this date,  one of these  facilities  totaling  $25 million was renewed to 2004.
These credit facilities  support CILCO's commercial paper program under which no
amounts were  outstanding  at March 31, 2003. At March 31, 2003,  Ameren and its
subsidiaries had committed credit facilities,  expiring at various dates between
2003 and 2005,  totaling $694 million,  excluding  separate credit facilities of
CILCO of $60  million,  EEI of $45 million  and  AmerenUE's  nuclear  fuel lease
facilities of $120 million.  All of these amounts were  available for use by two
of Ameren's rate-regulated  subsidiaries,  (AmerenUE and AmerenCIPS), and Ameren
Services  Company,  and $600  million of this  amount was  available  for use by
Ameren  and  most  of its non  rate-regulated  subsidiaries  including,  but not
limited  to,  Resources   Company,   Generating   Company,   Marketing  Company,
AmerenEnergy Fuels and Services Company and AmerenEnergy.  CILCO may also access
$600 million of these facilities  through direct  borrowings from Ameren.  These
committed credit facilities are used to support  commercial paper programs under
which no amounts were  outstanding  at March 31, 2003.  At March 31, 2003,  $694
million was unused and available under these committed credit facilities.

Subject to the receipt of regulatory  approval,  which is being  pursued,  CILCO
will  participate  in  Ameren's  utility  money  pool  arrangement.  Under  this
arrangement,  CILCO  will  have  access  to up to  $694  million  of  additional
committed  liquidity,  subject to reduction  based on use by other utility money
pool  participants,  but  increased to the extent other pool  participants  have
surplus  cash  balances,   which  may  be  used  to  fund  pool  needs.  CILCORP
participates in Ameren's  non-utility money pool arrangement,  which provides it
access to up to $600 million of committed liquidity,  subject to reduction based
on use by other pool  participants,  which may also be supplemented by available
cash balances among pool participants.

In addition to committed  credit  facilities,  a further source of liquidity for
Ameren is available  cash and cash  equivalents.  At March 31, 2003,  Ameren had
$294  million  of cash.  In the first  quarter of 2003,  Ameren  paid a total of
approximately $488 million of cash on hand, including related acquisition costs,
net of cash acquired to acquire CILCORP and Medina Valley.

CILCORP and CILCO rely on access to short-term and long-term  capital markets as
a  significant  source of funding  for capital  requirements  not  satisfied  by
operating  cash  flows.  The  inability  to raise  capital on  favorable  terms,
particularly  during  times  of  uncertainty  in  the  capital  markets,   could
negatively  impact  CILCORP  and  CILCO's  ability  to  maintain  and  grow  the
businesses. Based on current credit ratings, CILCORP and CILCO believe that they
will continue to have access to the capital markets.  However, events

                                       41
<PAGE>
beyond the Company's control may create  uncertainty in the capital markets such
that the cost of capital  would  increase  or the  ability to access the capital
markets would be adversely affected.


Indenture and Credit Agreement Provisions and Covenants

CILCORP's and CILCO's  financial  agreements  include customary default or cross
default  provisions  that could impact the continued  availability  of credit or
result in the acceleration of repayment.  Many of Ameren's and its subsidiaries'
committed  credit  facilities  require the borrower to represent,  in connection
with any  borrowing  under the  facility,  that no material  adverse  change has
occurred  since  certain  dates.   Ameren's  and  its  subsidiaries'   financing
arrangements do not contain credit rating triggers with the exception of certain
triggers within CILCO's agreements covering $105 million of bank term loans.

Ameren and its  subsidiaries'  committed credit  facilities  include  provisions
related to the funded status of Ameren's pension plan.  These provisions  either
require Ameren to meet minimum ERISA funding  requirements or limit the unfunded
liability  status of the plan.  Under the most  restrictive of these  provisions
impacting  Ameren  facilities  totaling $400  million,  an event of default will
result if the unfunded  liability  status (as defined in the  underlying  credit
agreements)  of Ameren's  pension plan  exceeds  $300 million in the  aggregate.
Based on the most recent  valuation  report  available to Ameren at December 31,
2002,  which was based on  January  2002  asset and  liability  valuations,  the
unfunded  liability  status  (as  defined)  was $31  million.  While an  updated
valuation  report will not be  available  until the second half of 2003,  Ameren
believes  that the unfunded  liability  status of its pension plans (as defined)
could exceed $300 million  based on the  investment  performance  of the pension
plan assets and interest rate changes since January 1, 2002. As a result, Ameren
may need to  renegotiate  the  facility  provisions,  terminate  or replace  the
affected  facilities,  or fund any unfunded liability  shortfall.  Should Ameren
elect to terminate  these  facilities,  Ameren  believes it would otherwise have
sufficient liquidity to manage short-term funding requirements.

At March 31,  2003,  Ameren and its  subsidiaries,  including  CILCORP  Inc. and
CILCO,  were in compliance with their indenture and credit agreement  provisions
and covenants.


Off-Balance Sheet Arrangements

At March 31, 2003,  neither CILCORP Inc., nor any of its  subsidiaries,  had any
off-balance  sheet financing  arrangements,  other than operating leases entered
into in the ordinary course of business. At this time, neither CILCORP Inc., nor
any of its subsidiaries,  expects to engage in any significant off-balance sheet
financing arrangements.

                                       42


<PAGE>


OUTLOOK

The Company believes there will be challenges to earnings in 2003 and beyond due
to industry-wide trends and company-specific  issues. The following are expected
to put pressure on earnings in 2003 and beyond:

o    Weak economic conditions, which impact native load demand,
o    Power  prices in the  Midwest  will  impact  the cost of power the  Company
     purchases  in the  interchange  markets.  Although  long-term  power prices
     continue to be generally soft,  short-term  power prices have  strengthened
     significantly  from  the  prior  year in the  first  quarter  of  2003  due
     primarily to higher prices for natural gas,
o    Cost of  fuel,  which  impacts  electric  gross  margin.  The  Company  has
     eliminated its fuel adjustment clause so increases in fuel costs may not be
     passed on to consumers,
o    The adverse effects of rising employee  benefit costs and higher  insurance
     costs, and
o    An assumed return to more normal weather patterns.

CILCO is pursuing a gas rate increase of approximately  $14 million in Illinois,
which it expects to be ruled upon by the Illinois  Commerce  Commission (ICC) by
the end of  2003.  Ameren  is also  considering  additional  actions,  including
modifications to active employee  benefits,  staffing  reductions,  accelerating
synergy  opportunities  related  to  CILCORP's  acquisition  by Ameren and other
initiatives.

In early May 2003, CILCO's service territory  experienced  several severe storms
that damaged parts of the  transmission and  distribution  system.  As a result,
CILCO expects to incur  increased costs in the quarter ending June 30, 2003, for
repairs required to the system.  The Company is currently unable to estimate the
impact on its future financial position, results of operations or cash flows.

In the ordinary course of business,  the Company and Ameren evaluate  strategies
to enhance their 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  shareholder  value. The Company is 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.


REGULATORY MATTERS

See Note 3. Rate and Regulatory Matters to our Consolidated Financial Statements
under Item 1 of Part I of this report for information.


                                       43


<PAGE>

ACCOUNTING MATTERS

Critical Accounting Policies

Preparation of the financial  statements  and related  disclosures in compliance
with  generally  accepted  accounting  principles  requires the  application  of
appropriate  technical  accounting  rules  and  guidance,  as well as the use of
estimates.  The  Company's  application  of these  policies  involves  judgments
regarding many factors, which, in and of themselves, could materially impact the
financial  statements  and  disclosures.  A future change in the  assumptions or
judgments applied in determining the following matters, among others, could have
a material impact on future financial  results.  In the table below, the Company
has outlined  those  accounting  policies  that it believes are most  difficult,
subjective or complex:
<TABLE>
<CAPTION>


                  Accounting Policy                    Uncertainties Affecting Application
<S>   <C>        <C>                                  <C>
       Regulatory Mechanisms and Cost
                  Recovery                             o Regulatory environment, external
The Company defers costs as                              regulatory decisions and requirements
regulatory assets in accordance                        o Anticipated future regulatory decisions
with SFAS 71 and makes investments                       and their impact
that it is assumed will be                             o Impact of deregulation and competition
collected in future rates.                               on ratemaking process and ability to
                                                         recover costs


Basis for Judgment
The Company  determines that costs are recoverable  based on previous rulings by
state  regulatory  authorities in  jurisdictions  where the Company  operates or
other factors that lead it to believe that cost recovery is probable.  CILCO has
no  stranded  costs  as a result  of  deregulation  of  electric  generation  in
Illinois.


         Environmental and Legal
               Obligations                             o Extent of contamination
The Company accrues for all known                      o Responsible party determination
environmental contamination where                      o Approved methods for cleanup
remediation can be reasonably                          o Present and future legislation and
estimated, but some of the                               governmental regulations and standards
Company's operations have existed                      o Results of ongoing research and
for over 85 years and previous                           development regarding environmental
contamination may be unknown.  The                       impacts
Company accrues for legal                              o Probability of settlement or outcomes of
obligations when it is believed                          litigation
the probability of the obligation                      o Estimation of legal obligation costs
occurring is more likely than not,
and a range of costs can be
determined.

Basis for Judgment
The  Company   determines  the  proper  amounts  to  accrue  for   environmental
contamination and legal obligations based on internal and third party estimates.
Environmental  obligations are based on clean-up costs in the context of current
remediation standards and available  technology.  Legal obligations are based on
the Company's prior experience and an analysis of similar obligations with other
companies.

                                       44

<PAGE>

    Accounting Policy (Continued)                      Uncertainties Affecting Application (Continued)

         Unbilled Revenue
At the end of each period, the
Company estimates, based on                            o Projecting customer energy usage
expected usage, the amount of                          o Estimating impacts of weather and other
revenue to record for services                           usage-affecting factors for the unbilled
that have been provided to                               period
customers, but not billed. This
period can be up to one month.

Basis for Judgment
The Company  determines  the proper  amount of  unbilled  revenue to accrue each
period  based on the volume of energy  delivered as valued by a model of billing
cycles and  historical  usage rates and growth by customer class for its service
area,  as adjusted  for the modeled  impact of seasonal  and weather  variations
based on historical results.

       Benefit Plan Accounting
Based on actuarial calculations,
the Company accrues costs of                           o Future rate of return on pension and
providing future employee benefits                       other plan assets
in accordance with SFAS 87, 106                        o Interest rates used in valuing benefit
and 112. See Note 3 -                                    obligations
Postemployment and Postretirement                      o Health care cost trend rates
Benefits to the Consolidated                           o Timing of employee retirements
Financial Statements in the                            o Future plan designs
CILCORP/CILCO 2002 Annual
Report on Form 10-K.

Basis for Judgment
The Company  utilizes a third party  consultant to assist it in  evaluating  and
recording the proper amount for future employee benefits. The ultimate selection
of the  discount  rate,  health care trend rate and  expected  rate of return on
pension  assets is based on the  review of  available  current,  historical  and
projected rates, as applicable.

                 Derivative Financial
                      Instruments
The Company records all                                o Market conditions in the energy
derivatives at their fair market                         industry, especially the effects of
value in accordance with SFAS 133.                       price volatility on contractual
The identification and                                   commodity commitments
classification of a derivative and                     o Regulatory and political environments
the fair value of such derivative                        and requirements
must be determined.  The Company                       o Fair value estimations on longer term
designates certain derivatives as                        contracts
hedges of future cash flows. See                       o Complexity of financial instruments and
Note 4 - Accounting for Price Risk                       accounting rules
Management Activities to the                           o Effectiveness of derivatives that have
Consolidated Financial Statements                        been designated as hedges
under Item 1 of Part I of this
report.


                                       45

<PAGE>


       Accounting Policy (Continued)                   Uncertainties Affecting Application (Continued)

Basis for Judgment
The Company  determines  whether a transaction  is a derivative  versus a normal
purchase or sale based on historical practice and the Company's intention at the
time it enters a  transaction.  The Company  utilizes  actively  quoted  prices,
prices provided by external  sources,  and prices based on internal models,  and
other  valuation  methods  to  determine  the fair  market  value of  derivative
financial instruments.

                      Goodwill
The Company follows the                                o Method for determining fair value
nonamortization approach for                           o Market prices for equity securities or
purchased goodwill and certain                           assets and liabilities
intangibles in accordance with                         o Projections of future cash flows
SFAS 142, "Goodwill and Other                          o Interest rates used in valuing goodwill
Intangible Assets."  The Company
annually assesses whether its
goodwill is impaired and performs
an assessment more frequently if
events occur indicating possible
impairment.  As of March 31, 2003,
CILCORP had goodwill of
approximately $595 million.

Basis for Judgment
The Company  determines whether goodwill is impaired based on internal and third
party estimates of the value of its assets and liabilities.

                Leveraged Leases                       o Market conditions of the industry of the
The Company accounts for its                             leased asset that might affect the
investments in leveraged leases in                       residual value at the end of the lease
accordance with SFAS 13,                                 terms.  This would include:  the real
"Accounting for Leases."  As                             estate markets where each of the assets
required by SFAS 13, the Company                         are located; the rail industry; the
reviews its estimated residual                           aerospace industry and energy market
value as well as all other                               where the asset is located.
important assumptions affecting
estimated total net income from
the leases.  SFAS 13 requires the
rate of return and total income of
a lease to be recalculated if
there is a permanent decline in
the estimated residual value below
the value currently used to
calculate income.
</TABLE>

Basis for Judgment
The  Company  determines  whether  the  residual  value  has  been  "permanently
impaired"  based on an internal review as well as periodic third party review of
the residual value.

In addition to the above  Critical  Accounting  Policies,  CILCO has a policy to
expense as incurred all costs associated with major maintenance projects.

                                       46

<PAGE>


Impact of Future Accounting Pronouncements

See Note 1.  Summary of  Significant  Accounting  Policies  to the  Consolidated
Financial Statements under Item 1 of Part I 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  (e.g.,  interest rates,  etc.).  The following  discussion of
CILCORP's 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.  CILCORP  handles market
risks in accordance with established  policies,  which may include entering into
various derivative transactions.  In the normal course of business, CILCORP also
faces  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.

CILCORP's  risk  management  objective is to optimize  its  physical  generating
assets within prudent risk parameters and to maintain a highly hedged  portfolio
of gas and electric purchases and sales outside of its service territory.


Fair Value of Contracts

The  Company  is  exposed  to  non-trading  risks  through  its  daily  business
activities.  These  non-trading  activities  may include the market or commodity
price risk  related to CILCO's  retail  tariff  activity and the  Company's  non
rate-regulated commodity marketing activities.

The majority of the Company's electricity sales during 2003 were to CILCO retail
customers in Illinois under tariffs  regulated by the ICC. Gas costs,  prudently
incurred in connection  with sales to customers  under tariffs  regulated by the
ICC, are recovered  through the Company's  Purchased Gas Adjustment  (PGA).  The
Company is exposed to  electricity  price risk since the  Company  mainly  sells
electricity  to  customers  at fixed  prices.  To limit  this  risk,  sufficient
purchased  power has been placed under contract to limit the Company's  exposure
to market risk at any given time. When this supply is added to CILCO  generation
capacity,  a reserve  margin in excess of 16%  results,  based on a peak load of
1,270 MW during the 2002 summer cooling season. Since CILCO supplies over 90% of
its native load with its  generation  capacity,  generation can be adjusted on a
real-time basis to match actual load at any given time.  CILCO is subject to the
risk that generation  becomes  unavailable due to forced outages.  The Company's
historical unplanned outage rate is 5.4%. In the event that CILCO generation and
purchased  supply is insufficient to meet load  requirements,  CILCO may have to
purchase power from the market at prevailing market rates.

The market risk inherent in the Company's non  rate-regulated  activities is the
potential  loss  arising  from  adverse  changes  in  natural  gas and  electric
commodity  prices  relative to the physical  and  financial  positions  that the
Company  maintains.  The prices of natural  gas and  electricity  are subject to
fluctuations resulting from changes in supply and demand. The Company is engaged
in non rate-regulated electric retail and natural gas sales throughout Illinois,
including wholesale power purchases and sales to utilize its electric generating
capability.  At March 31, 2003, these non rate-regulated activities had net open
market price risk  positions of  approximately  250,000 MWh of  electricity  and
14,000  Mcf of  natural  gas.  A market  price  sensitivity


                                       47
<PAGE>

of 10% applied to  positions  open in the next twelve  months is not material to
the  Company.  See Note 4 for a  discussion  of the  Company's  use of financial
derivatives  for  hedging  purposes.  Due to the high  correlation  between  the
changes in the value of the financial  instrument  positions held by the Company
and the  change  in price of the  underlying  commodity,  the net  effect on the
Company's  net  income  resulting  from the  change in value of these  financial
instruments is not expected to be material.

The following table summarizes the favorable  (unfavorable)  changes in the fair
value of all the Company's derivatives marked to market during the first quarter
of 2003:

                                                               (In thousands)
Fair value of contracts at beginning of period, net                $  1,951
  Contracts which were realized or otherwise settled
    during the period                                                (6,767)
  Changes in fair values attributable to changes in
    valuation techniques and assumptions                                 --
  Fair value of new contracts entered during
    the period                                                           --
  Other changes in fair value                                         5,437
                                                                   --------
Fair value of contracts outstanding at end of period, net          $    621
                                                                   ========

Maturities of all derivative  contracts as of March 31, 2003, were less than one
year and were all with  investment-grade  counterparties.  Fair  values  are all
determined based on actively quoted prices.


Interest Rate Risk

The Company is exposed to interest  rate risk as a result of changes in interest
rates on borrowings  under secured bank loans which have interest rates that are
indexed  to  short-term  market  interest  rates,  and  refinancing  risk in the
commercial  paper  markets.  CILCORP  manages  its  interest  rate  exposure  by
controlling the amount of these instruments held within its total capitalization
portfolio and by monitoring the effects of market changes in interest rates.

Utilizing the Company's  debt  outstanding  at March 31, 2003, if interest rates
increased  by 1%, the  Company's  annual  interest  expense  would  increase  by
approximately  $1 million and net income  would  decrease by  approximately  $.6
million.  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

As of March 31, 2003,  the Company had  approximately  $132 million  invested in
seven  leveraged  leases.  The Company  analyzes each  counterparty's  financial
condition  prior to entering  into  sales,  forwards,  swaps,  futures or option
contracts  and monitors  counterparty  exposure  associated  with our  leveraged
leases. The Company also establishes credit limits for these  counterparties and
monitors  the  appropriateness  of these  limits on an ongoing  basis  through a
credit risk management program which involves daily exposure reporting to


                                       48

<PAGE>

senior  management,  master trading and netting  agreements,  and credit support
management such as letters of credit and parental guarantees.


Item 4.  Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Within 90 days prior to the date of this report,  CILCORP and CILCO  carried out
an evaluation, under the supervision and with participation of their management,
including their chief  executive  officer and chief  financial  officer,  of the
effectiveness  of the design and operation of CILCORP's  and CILCO's  disclosure
controls and procedures  pursuant to Rule 13a-14 under the  Securities  Exchange
Act of 1934, as amended. Based upon that evaluation, the chief executive officer
and chief  financial  officer  concluded that  CILCORP's and CILCO's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information  relating to CILCORP and CILCO,  which is required to be included in
their periodic SEC filings.

(b) Change in Internal Controls

There  have been no  significant  changes  in  CILCORP's  and  CILCO's  internal
controls or in other factors which could significantly  affect internal controls
subsequent to the date the evaluation was carried out.


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,  CILCORP is providing  this
cautionary  statement  to identify  important  factors  that could cause  actual
results to differ materially from those anticipated.  The following factors,  in
addition  to  those  discussed  elsewhere  in  this  report  and  in  subsequent
securities  filings,  could cause results to differ  materially  from management
expectations as suggested by such "forward-looking" statements:

     o    changes in laws and other governmental actions, including monetary and
          fiscal policies;
     o    the  impact  on  CILCORP  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 CILCORP's business at both
          the state and federal levels;
     o    the effects of participation in a FERC-approved  Regional Transmission
          Organization,   including  activities   associated  with  the  Midwest
          Independent Transmission System Operator, Inc.;
     o    availability  and future market  prices for fuel and purchased  power,
          electricity  and  natural  gas,  including  the use of  financial  and
          derivative  instruments and volatility of changes in market prices;
     o    average rates for electricity in the Midwest;
     o    business and economic conditions;
     o    the  impact  of  the  adoption  of  new  accounting  standards  on the
          application of appropriate technical accounting rules and guidance;

                                       49
<PAGE>


     o    interest rates and the availability of capital;
     o    actions of rating agencies and the effects of such actions;
     o    weather conditions;
     o    the  effects of  strategic  initiatives,  including  acquisitions  and
          divestitures;
     o    the impact of current  environmental  regulations on utilities 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 benefit costs,  including changes in returns
          on benefit plan assets;
     o    disruptions  of the capital  markets or other events making  CILCORP's
          access to necessary capital more difficult or costly;
     o    competition from other generating facilities, including new facilities
          that may be developed in the future;
     o    difficulties in integrating CILCO with Ameren's other businesses;
     o    changes in the coal  markets,  environmental  laws or  regulations  or
          other factors adversely  impacting  synergy  assumptions in connection
          with Ameren's acquisition of CILCORP;
     o    cost  and  availability  of  transmission   capacity  for  the  energy
          generated by CILCO's generating  facilities or required to satisfy its
          energy sales; 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,  neither CILCORP nor CILCO undertakes an obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.


                                       50
<PAGE>


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Note  2.   Contingencies  and  Note  3.  Rate  and  Regulatory  Matters  to  the
Consolidated  Financial  Statements of CILCORP Inc. and Central  Illinois  Light
Company under Item 1 of Part I of this report  contain  information on legal and
administrative proceedings which are incorporated by reference under this item.

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

(a)(i)     Exhibits filed herewith.

          99.1 Certificate of Chief Executive  Officer of CILCORP Inc.  required
               by Section 906 of the Sarbanes-Oxley Act of 2002.

          99.2 Certificate of Chief Executive  Officer of Central Illinois Light
               Company  required  by Section  906 of the  Sarbanes-Oxley  Act of
               2002.

          99.3 Certificate of Chief Financial  Officer of CILCORP Inc.  required
               by Section 906 of the Sarbanes-Oxley Act of 2002.

          99.4 Certificate of Chief Financial  Officer of Central Illinois Light
               Company  required  by Section  906 of the  Sarbanes-Oxley  Act of
               2002.

(a)(ii)    Exhibits incorporated by reference.

          10.1 *2003  Ameren  Executive   Incentive  Plan  (Ameren   Corporation
               quarterly  report on Form 10-Q for the  quarter  ended  March 31,
               2003, Exhibit 10.1).

               *Management compensatory plan or arrangement

(b)       Reports on Form 8-K. CILCORP Inc. and Central Illinois Light Company
          filed the following reports during the three months ended March 31,
          2003:

                                           Items             Financial
          Date of Report                   Reported        Statements Filed
          --------------                   ---------       ----------------
          January 31, 2003                  1, 5, 7             None

          March 14, 2003, as amended
             April 22, 2003                   4, 7              None


Note:     Reports of Ameren Corporation on Forms 8-K, 10-Q and 10-K are on file
          with the SEC under File Number 1-14756.

          Reports of Union  Electric  Company on Forms 8-K, 10-Q and 10-K are on
          file with the SEC under File Number 1-2967.

          Reports of Ameren  Energy  Generating  Company on Forms 8-K,  10-Q and
          10-K are on file with the SEC under File Number 333-56594.

          Reports of Central  Illinois Public Service Company on Forms 8-K, 10-Q
          and 10-K are on file with the SEC under File Number 1-3672.


                                       51

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                             CILCORP INC.
                                             (Registrant)


May 15, 2003                                 By /s/ Martin J. Lyons
                                               -----------------------------
                                                    Martin J. Lyons
                                              Vice President and Controller
                                              (Principal Accounting Officer)


                                 CERTIFICATIONS

     I, Gary L. Rainwater, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of CILCORP Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

         5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):


                                       52
<PAGE>

                           CERTIFICATIONS (CONTINUED)

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and


     6. The registrant's  other certifying  officer and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003
                                               /s/ Gary L. Rainwater
                                               -----------------------------
                                                   Gary L. Rainwater
                                                       President
                                               (Principal Executive Officer)

                                       53
<PAGE>

                           CERTIFICATIONS (CONTINUED)

        I, Warner L. Baxter, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of CILCORP Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
functions):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

                                       54
<PAGE>


                           CERTIFICATIONS (CONTINUED)

     6. The registrant's  other certifying  officer and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003
                                              /s/ Warner L. Baxter
                                              ------------------------------
                                                  Warner L. Baxter
                                              Senior Vice President, Finance
                                               (Principal Financial Officer)


                                      55

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                              CENTRAL ILLINOIS LIGHT COMPANY
                                                     (Registrant)


May 15, 2003                                  By /s/ Martin J. Lyons
                                                -----------------------------
                                                     Martin J. Lyons
                                                Vice President and Controller
                                                (Principal Accounting Officer)


                                 CERTIFICATIONS

     I, Gary L. Rainwater, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Central  Illinois
Light Company;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
functions):

                                       56

<PAGE>


                           CERTIFICATIONS (CONTINUED)

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and


     6. The registrant's  other certifying  officer and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003
                                                /s/ Gary L. Rainwater
                                                -----------------------------
                                                    Gary L. Rainwater
                                                       President
                                                (Principal Executive Officer)


                                       57
<PAGE>


                           CERTIFICATIONS (CONTINUED)

     I, Warner L. Baxter, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Central  Illinois
Light Company;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  performing  the  equivalent
functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

                                       58
<PAGE>


                           CERTIFICATIONS (CONTINUED)

     6. The registrant's  other certifying  officer and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003
                                                /s/ Warner L. Baxter
                                                ----------------------------
                                                    Warner L. Baxter
                                               Senior Vice President, Finance
                                                (Principal Financial Officer)


                                       59